<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 17, 1998.
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
APCOA, INC.*
(EXACT NAME OF REGISTRANT SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 7521 16-1171179
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
800 SUPERIOR AVENUE
CLEVELAND, OHIO 44114-2601
(216) 522-0700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF THE COMPANY'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
<TABLE>
<S> <C>
Copies of all communications to:
ROBERT N. SACKS, ESQ. ADAM O. EMMERICH, ESQ.
EXECUTIVE VICE PRESIDENT WACHTELL, LIPTON, ROSEN & KATZ
AND GENERAL COUNSEL 51 WEST 52ND STREET
800 SUPERIOR AVENUE NEW YORK, NEW YORK 10019
CLEVELAND, OHIO 44114-2601 (212) 403-1000
(216) 522-0700
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: Upon
consummation of the Exchange Offer referred to herein.
------------------------
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER NOTE(1) OFFERING PRICE REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
9 1/4% New Senior Subordinated Notes
due 2008................................ $140,000,000 100% $140,000,000 $42,424.25
- ------------------------------------------------------------------------------------------------------------
Guarantees for the New Senior Subordinated
Notes due 2008(2)(3).................... $0 0% $0(2) $0
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee.
(2) Calculated pursuant to Rule 457.
(3) Pursuant to Rule 457(n), no registration fee is required with respect to the
guarantees.
------------------------
THE REGISTRANTS HEREBY AMEND THE REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
*TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
STATE OR OTHER
JURISDICTION OF PRIMARY STANDARD I.R.S. EMPLOYER
INCORPORATION OR INDUSTRY IDENTIFICATION
NAME, ADDRESS AND TELEPHONE NUMBER ORGANIZATION CLASSIFICATION NUMBER NUMBER
---------------------------------- ---------------- --------------------- ----------------
<S> <C> <C> <C>
Tower Parking, Inc.(1).......................... Ohio 7521 31-0878291
Graelic, Inc.(1)................................ Ohio 7521 34-1327948
APCOA Capital Corporation(1).................... Delaware 7521 06-1334158
A-1 Auto Park, Inc.(1).......................... Georgia 7521 58-1336837
Metropolitan Parking System, Inc.(1)............ Massachusetts 7521 04-2607263
Events Parking Company, Inc.(1)................. Massachusetts 7521 04-3223993
Standard Parking, L.P.(2)....................... Delaware 7521 36-3922900
Standard Parking Corporation(2)................. Illinois 7521 36-2932936
Standard Parking Corporation MW(2).............. Illinois 7521 36-3880813
Standard Parking Corporation IL(2).............. Illinois 7521 36-3880811
Standard Auto Park, Inc.(2)..................... Illinois 7521 36-2439841
Standard/Wabash Parking Corporation(2).......... Illinois 7521 36-3485873
Standard Parking of Canada, L.P.(2)............. Illinois 7521 36-4093705
Standard Parking I, L.L.C.(2)................... Delaware 7521 36-4015802
Standard Parking II, L.L.C.(2).................. Delaware 7521 36-4015804
</TABLE>
- ---------------
(1) The address and telephone number of these additional registrants is the same
as that of APCOA, Inc.
(2) The address of these additional registrants is 200 East Randolph Drive,
Suite 4800, Chicago, Illinois 60601. Their telephone number is (312)
696-4000.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED APRIL 17, 1998
[STANDARD PARKING LOGO] [APCOA LOGO]
OFFER TO EXCHANGE
ALL OUTSTANDING
9 1/4% SENIOR SUBORDINATED NOTES DUE 2008
($140,000,000 PRINCIPAL AMOUNT OUTSTANDING)
FOR
9 1/4% NEW SENIOR SUBORDINATED NOTES DUE 2008
($140,000,000 PRINCIPAL AMOUNT)
OF
APCOA, INC.
THE EXCHANGE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON , 1998, UNLESS EXTENDED
APCOA, Inc., a Delaware corporation (the "Company"), hereby offers (the
"Exchange Offer"), upon the terms and subject to the conditions set forth in
this Prospectus and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), to exchange up to an aggregate principal amount of $140,000,000
of its 9 1/4% New Senior Subordinated Notes due 2008 (the "New Notes") for an
equal principal amount of its outstanding 9 1/4% Senior Subordinated Notes due
2008 (the "Notes"), in integral multiples of $1,000. The New Notes will be fully
and unconditionally guaranteed on an unsecured basis (the "New Note Guarantees")
by, and will be joint and several obligations of, the following subsidiaries of
the Company: Tower Parking, Inc., an Ohio corporation, Graelic, Inc., an Ohio
corporation, APCOA Capital Corporation, a Delaware corporation, A-1 Auto Park
Inc., a Georgia corporation, Metropolitan Parking System, Inc., a Massachusetts
corporation, Events Parking Company, Inc., a Massachusetts corporation, Standard
Parking, L.P., a Delaware limited partnership, Standard Parking Corporation, an
Illinois corporation, Standard Parking Corporation MW, an Illinois corporation,
Standard Parking Corporation IL, an Illinois Corporation, Standard Auto Park,
Inc., an Illinois corporation, Standard/Wabash Parking Corporation, an Illinois
corporation, Standard Parking of Canada, L.P., an Illinois limited partnership,
Standard Parking I, L.L.C., a Delaware limited liability company and Standard
Parking II, L.L.C., a Delaware limited liability company (the "Subsidiary
Guarantors"). The New Notes will be general unsecured obligations of the Company
and are substantially identical (including principal amount, interest rate,
maturity and redemption rights) to the Notes for which they may be exchanged
pursuant to this offer, except that (i) the offering and sale of the New Notes
will have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), and (ii) holders of New Notes will not be entitled to certain
rights of holders under a Registration Rights Agreement of the Company and the
Subsidiary Guarantors dated as of March 30, 1998 (the "Registration Rights
Agreement"). The Notes have been, and the New Notes will be, issued under an
Indenture dated as of March 30, 1998 (the "Indenture"), among the Company, the
Subsidiary Guarantors and State Street Bank & Trust Company, as trustee (the
"Trustee"). See "Description of New Notes." There will be no proceeds to the
Company from this offering; however, pursuant to the Registration Rights
Agreement, the Company will bear certain offering expenses.
------------------------
SEE "RISK FACTORS," COMMENCING ON PAGE 15, FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY HOLDERS WHO TENDER NOTES IN THE EXCHANGE OFFER.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 1998.
(cover page continued)
<PAGE> 4
The Company will accept for exchange any and all validly tendered Notes on
or prior to 12:00 midnight New York City time, on , 1998; unless the
Exchange Offer is extended (the "Expiration Date"). Tenders of Notes may be
withdrawn at any time prior to 12:00 midnight, New York City time, on the
Expiration Date; otherwise such tenders are irrevocable. State Street Bank &
Trust Company will act as Exchange Agent with respect to the Notes (in such
capacity, the "Exchange Agent") in connection with the Exchange Offer. The
Exchange Offer is not conditioned upon any minimum principal amount of Notes
being tendered for exchange, but is otherwise subject to certain customary
conditions.
The Notes were sold by the Company on March 25, 1998 in transactions not
registered under the Securities Act in reliance upon the exemption provided in
Section 4(2) of the Securities Act. A portion of the Notes were subsequently
resold to qualified institutional buyers in reliance upon Rule 144A under the
Securities Act, to a limited number of institutional accredited investors in a
manner exempt from registration under the Securities Act and to persons outside
the United States in reliance on Regulation S under the Securities Act.
Accordingly, the Notes may not be reoffered, resold or otherwise transferred in
the United States unless registered under the Securities Act or unless an
applicable exemption from the registration requirements of the Securities Act is
available. The New Notes are being offered hereunder in order to satisfy certain
obligations of the Company under the Registration Rights Agreement. See "The
Exchange Offer."
The New Notes will bear interest from March 25, 1998, the date of issuance
of the Notes that are tendered in exchange for the New Notes (or the most recent
Interest Payment Date (as defined herein) to which interest on such Notes has
been paid), at a rate equal to 9 1/4% per annum. Interest on the New Notes will
be payable semiannually on March 15 and September 15 of each year, commencing
September 15, 1998. The New Notes are redeemable at the option of the Company,
in whole or in part, at any time on or after March 15, 2003, at the redemption
prices set forth herein, plus accrued and unpaid interest and liquidated
damages, if any, thereon to the date of redemption. See "Description of New
Notes -- Optional Redemption," and "Prospectus Summary -- Summary of Terms of
New Notes."
At any time prior to March 15, 2001, the Company may redeem up to 35% of
the initially outstanding aggregate principal amount of New Notes at a
redemption price equal to 109.25% of the principal amount thereof, plus accrued
and unpaid interest, and Liquidated Damages, if any, thereon to the date of
redemption, with the net cash proceeds, of a Public Equity Offering; provided
that, in each case, at least 65% of the initially outstanding aggregate
principal amount of New Notes remains outstanding immediately after any such
redemption. Upon the occurrence of a Change of Control (as defined in the
Indenture), each Holder (as defined herein) of New Notes may require the Company
to repurchase all or a portion of such Holder's New Notes at 101% of the
aggregate principal amount of the New Notes, together with accrued and unpaid
interest, and Liquidated Damages, if any, to the date of repurchase. There can
be no assurance that sufficient funds will be available at the time of any
Change of Control to make any required repurchase of the New Notes tendered. See
"Risk Factors -- Payment Upon a Change of Control" and "Description of New
Notes -- Repurchase at the Option of Holders."
The New Notes will be general unsecured obligations of the Company, will
rank subordinate in right of payment to all Senior Debt of the Company and
senior or pari passu in right of payment to all existing and future subordinated
indebtedness of the Company. The New Note Guarantees will be general unsecured
obligations of the Subsidiary Guarantors, will rank subordinate in right of
payment to all Senior Debt of the Subsidiary Guarantors and senior or pari passu
in right of payment to all existing and future subordinated indebtedness of the
Subsidiary Guarantors. The New Notes and the New Note Guarantees will be
effectively Subordinated to all indebtedness, including trade payables, of the
Company's subsidiaries that are not Subsidiary Guarantors. As of December 31,
1997, on a pro forma basis, after giving effect to the Combination and the
related financings and other transactions described herein, there would have
been no Senior Debt outstanding. Upon the closing of the Offering, the Company
entered into a $40.0 million revolving credit facility pursuant to which $4.9
million in letters of credit were issued as of the closing of the Offering. See
"Capitalization" and "Risk Factors -- Subordination."
Based on an interpretation by the staff of the SEC (as defined herein) set
forth in no-action letters issued to third parties, the Company believes that
New Notes issued pursuant to the Exchange Offer in exchange for Notes may be
offered for resale, resold and otherwise transferred by any holder thereof
(other than any such holder which is an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
(cover page continued)
2
<PAGE> 5
that such New Notes are acquired in the ordinary course of such holder's
business and that such holder does not intend to participate in the distribution
of such New Notes.
Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with the initial resale of such New Notes. The Letter of Transmittal
delivered with this Prospectus states that by so acknowledging and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of New Notes received in exchange for Notes where
such Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that for a period
of 120 days after the consummation of the Exchange Offer, it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale.
Any Holder who tenders in the Exchange Offer with the intention to
participate, or for purpose of participating, in a distribution of the New Notes
cannot rely on the position of the staff of the SEC enunciated in Exxon Capital
Holdings Corporation (available April 13, 1989), or Morgan Stanley & Co., Inc.
(available June 5, 1991) or similar no-action letters and, in the absence of an
exemption therefrom, must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with the resale of the New
Notes. Failure to comply with such requirements in such instance may result in
such Holder incurring liability under the Securities Act for which the Holder is
not indemnified by the Company.
The Company does not intend to list the New Notes on any securities
exchange, or to seek admission thereof to trading in the National Association of
Securities Dealers Automated Quotation System. Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ") and First Chicago Capital Market, Inc. ("First
Chicago" and, together with DLJ, the "Initial Purchasers") have advised the
Company that they intend to make a market in the New Notes; however, they are
not obligated to do so and any market-making may be discontinued at any time. As
a result, the Company cannot determine whether an active public market will
develop for the New Notes.
ANY NOTES NOT TENDERED AND ACCEPTED IN THE EXCHANGE OFFER WILL REMAIN
OUTSTANDING. TO THE EXTENT ANY NOTES ARE TENDERED AND ACCEPTED IN THE EXCHANGE
OFFER, A HOLDER'S ABILITY TO SELL UNTENDERED NOTES COULD BE ADVERSELY AFFECTED.
FOLLOWING CONSUMMATION OF THE EXCHANGE OFFER, THE HOLDERS OF NOTES WILL CONTINUE
TO BE SUBJECT TO THE EXISTING RESTRICTIONS UPON TRANSFER THEREOF AND THE COMPANY
WILL HAVE FULFILLED ONE OF ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS
AGREEMENT. HOLDERS OF NOTES WHO DO NOT TENDER THEIR NOTES GENERALLY WILL NOT
HAVE ANY FURTHER REGISTRATION RIGHTS UNDER THE REGISTRATION RIGHTS AGREEMENT OR
OTHERWISE. SEE "THE EXCHANGE OFFER -- CONSEQUENCES OF FAILURE TO EXCHANGE."
The New Notes issued pursuant to this Exchange Offer generally will be
issued in the form of Global New Notes (as defined herein), which will be
deposited with, or on behalf of, The Depository Trust Company (the "Depository"
or "DTC") and registered in its name or in the name of Cede & Co., its nominee.
Beneficial interests in the Global New Notes representing the New Notes will be
shown on, and transfers thereof will be effected through, records maintained by
the Depository and its participants. Notwithstanding the foregoing, Notes held
in certificated form will be exchanged solely for New Notes in certificated
form. After the initial issuance of the Global New Notes, New Notes in
certificated form will be issued in exchange for the Global New Notes only on
the terms set forth in the Indenture. See "Description of New Notes --
Book-Entry, Delivery and Form."
------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITY
OTHER THAN THE NEW NOTES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY ANY OF THE NEW NOTES TO ANY PERSON IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION TO
SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
UNTIL , 1998 (90 DAYS AFTER COMMENCEMENT OF THIS OFFERING), ALL
DEALERS EFFECTING TRANSACTIONS IN THE NEW NOTES, WHETHER OR NOT PARTICIPATING IN
THE EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
3
<PAGE> 6
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"SEC" or the "Commission") a Registration Statement on Form S-4 under the
Securities Act for the registration of the New Notes offered hereby (the
"Registration Statement"). This Prospectus, which constitutes a part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement, certain items of which are contained in exhibits and
schedules to the Registration Statement as permitted by the rules and
regulations of the SEC. For further information with respect to the Company or
the New Notes offered hereby, reference is made to the Registration Statement,
including the exhibits and financial statement schedules thereto, which may be
inspected without charge at the public reference facility maintained by the SEC
at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and copies of
which may be obtained from the SEC at prescribed rates. Statements made in this
Prospectus concerning the contents of any document referred to herein are not
necessarily complete. With respect to each such document filed with the SEC as
an exhibit to the Registration Statement, reference is made to the exhibit for a
more complete description of the matter involved, and each such statement shall
be deemed qualified in its entirety by such reference.
Such documents and other information filed by the Company can be inspected
and copied at the public reference facilities of the SEC at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, at the web site maintained by the SEC
(http://www.sec.gov) and at the regional offices of the SEC located at 7 World
Trade Center, 13th Floor, New York, New York 10048 and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such materials may be obtained
from the Public Reference Section of the SEC, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at its public reference facilities in New York,
New York and Chicago, Illinois at prescribed rates.
The Company and the Subsidiary Guarantors are not currently subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). As a result of the offering of the New Notes, each of the
Company and the Subsidiary Guarantors will become subject to the informational
requirements of the Exchange Act. The Company will fulfill its obligations with
respect to such requirements by filing periodic reports with the Commission on
its own behalf or, in the case of the Subsidiary Guarantors, by including
information regarding the Subsidiary Guarantors in the Company's periodic
reports. In addition, the Company will send to each holder of New Notes copies
of annual reports and quarterly reports containing the information required to
be filed under the Exchange Act.
So long as the Company is subject to the periodic reporting requirements of
the Exchange Act, it is required to furnish the information required to be filed
with the SEC to the Trustees and the holders of the Notes and the New Notes. The
Company has agreed that, even if it is not required under the Exchange Act to
furnish such information to the SEC, it will nonetheless continue to furnish
information that would be required to be furnished by the Company by Section 13
of the Exchange Act to the Trustees and the holders of the Notes or New Notes as
if it were subject to such periodic reporting requirements.
In addition, the Company and the Subsidiary Guarantors have agreed that,
for so long as any of the Notes remain outstanding, they will make available to
any prospective purchaser of the Notes or Holder of the Notes in connection with
any sale thereof, the information required by Rule 144A(d)(4) under the
Securities Act.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
APCOA INC., 800 SUPERIOR AVENUE, CLEVELAND, OHIO 44114-2601, (216) 522-0700;
ATTENTION: ROBERT N. SACKS. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS,
ANY REQUEST SHOULD BE MADE BY , 1998.
4
<PAGE> 7
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to and
should be read in conjunction with the more detailed information and financial
statements, including the notes thereto, appearing elsewhere in this Prospectus.
Unless otherwise indicated, all references in this Prospectus to the Company's
business and all pro forma data give effect to the Transactions described below.
An index of certain defined terms used herein can be found on page 97. Unless
the context indicates or otherwise requires, (i) references in this Prospectus
to "APCOA" are to APCOA, Inc., and its subsidiaries; (ii) references in this
Prospectus to "Standard" are to the combined operations of the group of
affiliated entities controlled by the Standard Owners as defined in "The
Transactions -- The Combination"; and (iii) references in this Prospectus to the
"Company" are to APCOA and Standard, on a combined basis after giving effect to
the Combination.
THE COMPANY
The Company is a leading national provider of parking facility management
services. The Company provides on-site management services at multi-level and
surface parking facilities in the two major markets of the parking industry:
urban parking and airport parking. Following consummation of the Combination,
the Company manages approximately 1,100 parking facilities, containing
approximately 580,000 parking spaces in over 45 cities across the United States
and Canada. The Company's pro forma gross customer collections, pro forma
parking services revenue, pro forma EBITDA and pro forma net loss for the year
ended December 31, 1997 were $948.6 million, $186.1 million, $19.9 million and
$2.8 million, respectively.
The Company believes that its superior management services coupled with its
focus on increasing market share in select core cities leads to higher
profitability per parking facility than its competitors. The Company believes
that it enhances its leading position by providing: (i) Ambiance in Parking(R),
an approach to parking that includes a number of premium, on-site, value-added
services and amenities; (ii) state-of-the-art information technology, including
Client View(C), a proprietary client reporting system which allows the Company
to provide clients with real-time access to site-level financial and operating
information; and (iii) award-winning training programs for on-site employees
that promote customer service and client retention. In addition, the Company
believes that it distinguishes itself from its competitors because of its
ability to leverage its long-standing experience in securing contracts,
particularly with regard to the airport parking market.
The Company's diversified client base includes some of the nation's largest
owners and developers of major office building complexes, shopping centers,
sports complexes, hotels and hospitals. In addition, the Company manages parking
operations at many of the major airports in North America. In the urban parking
market, the Company's clients include CB Commercial Real Estate Group, Equity
Office Properties, the Taubman Company, Harvard Medical School, Northwestern
University, Children's Memorial Medical Center in Chicago and Cedars Sinai
Medical Center in Los Angeles. Parking facilities managed by the Company include
the CNN Center in Atlanta, the Kennedy Center for the Performing Arts in
Washington, D.C. and the Gateway Sports Complex in Cleveland. In the airport
parking market, the Company's clients include Chicago O'Hare International and
Chicago Midway, Cleveland-Hopkins International, Minneapolis-St. Paul
International and Detroit Metropolitan airports.
The Company operates its clients' parking properties through two types of
arrangements: management contracts and leases. The Company does not own any
parking facilities and, as a result, the Company assumes fewer of the risks of
real estate ownership. Under a management contract, the Company typically
receives a base monthly fee for managing the property, and may also receive an
incentive fee based on the achievement of facility revenues above a base amount.
In some instances, the Company also receives certain fees for ancillary
services. Typically, all of the underlying revenues and expenses under a
management contract flow through to the property owner, not to the Company.
Under lease arrangements, the Company generally pays either a fixed annual
rental, a percentage of gross customer collections, or a combination thereof to
the property owner. The Company collects all revenues under lease arrangements
and is responsible for most operating expenses, but it is typically not
responsible for major maintenance or capital expenditures. As of December 31,
1997, the Company operated approximately 72% of its approximately 1,100 parking
facilities
5
<PAGE> 8
under management contracts and approximately 28% under leases. Renewal rates for
the Company's management contracts and leases were approximately 96% for each of
the last three years.
THE INDUSTRY
The International Parking Institute, a trade organization of parking
professionals, estimates that there are 35,000 parking facilities in the United
States generating over $26.0 billion in gross customer collections. The parking
industry is highly fragmented, with over 1,700 commercial parking operators in
the United States, as estimated by the Parking Market Research Company, an
independent research company. Industry participants, the vast majority of which
are privately-held companies, consist of relatively few nationwide companies and
a large number of small regional or local operators, including a substantial
number of companies providing parking as an ancillary service in connection with
property management or ownership. Clients of parking facility managers include
the owners of office buildings, major airports, shopping centers, sports
complexes, hotels and hospitals, which provide parking to customers.
The parking industry is comprised of two major markets: urban parking and
airport parking. The urban parking market consists of many sub-markets with
differing clients including commercial, office, residential, event,
entertainment, retail, shopping centers, hospitals and hotels. In contrast, the
airport parking market consists of a relatively small number of clients with
large revenue-generating parking operations and similar needs that are unique to
airport parking facilities.
THE COMBINATION AND EXPECTED BENEFITS
Pursuant to the terms of the Combination Agreement, APCOA has combined its
operations with the operations of Standard. After consummation of the
Combination, the Company is one of the largest parking facility managers in the
United States, operating approximately 1,100 parking locations, providing
first-class, customer-oriented parking services, and using proprietary,
award-winning management information systems and technology to improve services
and reduce costs. Through the Combination, the Company believes that it will be
able to achieve approximately $6.3 million of annualized cost savings within 12
to 18 months following the Combination as a result of the elimination of certain
duplicative costs and achievement of operating efficiencies. Specific
anticipated benefits include:
- Reduced Personnel Expenses. Subsequent to the Combination, the Company
intends to consolidate headquarters in Chicago and eliminate redundant
corporate functions. In addition, the Company expects to reduce the
number of field managers and administrative staff with overlapping
functions in certain core cities. The Company also expects to realize
additional net savings from the restructuring of certain executive
compensation packages.
- Operational Improvements and Elimination of Redundant Services Provided
by Third Parties. The Company plans to rely on APCOA's state-of-the-art
proprietary management information and reporting systems to perform many
services which Standard previously outsourced to third parties, such as
payroll and accounts receivable processing. The Company also expects to
realize purchasing economies and eliminate redundant services from
consolidating certain third-party service providers.
In addition, since January 1, 1997, the Company completed four small
acquisitions and entered into a binding letter of intent to acquire a fifth
company (the "Other Acquisitions" as defined below under "Management's
Discussion and Analysis of Financial Condition and Results of Operations of
APCOA"). The Company expects to realize $1.9 million of cost savings related to
the Other Acquisitions.
Of the aggregate potential $8.2 million in annualized cost savings
discussed above, approximately $4.9 million are reflected in the Pro Forma
Condensed Consolidated Financial Statements included elsewhere herein. Actual
cost savings achieved by the Company may vary considerably from the estimates
discussed above. See "Summary Unaudited Pro Forma Consolidated Financial Data"
and "Risk Factors--Ability to Integrate Acquisitions."
6
<PAGE> 9
BUSINESS STRATEGY & COMPETITIVE ADVANTAGES
The Company believes its innovative parking facility amenities, services
and management, coupled with its state-of-the-art information technology and
reporting systems, position the Company to enhance its standing as a leading
provider of parking services. Specific elements of the Company's business
strategy and competitive advantages include:
- Focus on Core Cities. Part of the Company's business strategy is to
focus on increasing system-wide profitability by maximizing operating
leverage. As part of this strategy, the Company operates in certain core
cities and realizes certain economies of scale, including the ability to
spread administrative overhead costs across a large number of parking
facilities in a single market. As a result, the Company has been able to
significantly increase profitability per contract. For example, in 1997,
management estimates that the Company's average profit per contract in
cities in which it operated more than 35 parking locations was nearly
double the Company's profit per contract in cities in which it operated
fewer than 35 locations.
- Strong Operating Performance and Stable Cash Flow. From 1993 to 1997,
the Company's EBITDA increased from $7.2 million to $15.0 million,
representing a compounded annual growth rate ("CAGR") of 20.0%. Over the
same period, the Company's capital expenditures averaged less than $3.0
million per year. In addition, the Company reduced exposure to increasing
cost of parking services by (i) increasing the proportion of its
management contracts, which generally pass cost of parking services onto
the Company's clients, and (ii) maintaining low minimum rental
commitments under its non-cancelable leases. The Company's average
management and lease contract renewal rate over the last three years was
approximately 96%. As a result of the Company's operating performance, as
well as the low capital expenditure requirements and low risk portfolio
of management contracts and leases, the Company has been able to generate
consistent cash flow.
- Strategic Growth Through Acquisitions. The parking industry is highly
fragmented, with over 1,700 industry participants. In addition to
pursuing individual contracts, the Company is seeking to capitalize on
this industry fragmentation by pursuing a focused acquisition strategy
which includes: (i) acquiring parking management companies within core
cities and target cities where the Company believes it can attain a
significant market share, and (ii) acquiring larger, regional parking
management companies. As a part of this strategy, APCOA and Standard,
combined, have successfully acquired and integrated 6 companies with 138
new facilities and 252 net individual contracts over the past five years.
- Leading Client Base. The Company's diversified, long-standing customer
base comprises many of the premier national property management and
ownership organizations in the United States and Canada. The Company is a
market leader in airport parking, operating approximately 100 parking
facilities at airports in the United States and Canada. Management
believes that the Company's focus on select core cities enables the
Company to maintain broader and stronger relationships with the local
client base and improves its client retention rates and its ability to
compete for new contracts.
- Value-Added Services and Award-Winning Information Systems. The Company
believes that it can continue to increase profitability and attract new
clients by providing: (i) Ambiance in Parking(R); (ii) state-of-the-art
information technology, including Client View(C); and (iii) award-winning
training programs for on-site employees. Management believes that these
capabilities facilitate development opportunities that typically lead to
long-term lease and management contracts on new facilities. Also, the
Company has developed state-of-the-art information technology systems
which connect local offices across the country to its corporate office.
These systems, which received the 1994 Esprit Award sponsored by
Booz-Allen & Hamilton and CIO magazine, enable a centralized staff to
eliminate inefficient duplication of administrative and accounting
functions at the field level and also help provide key operational
information to clients. Management believes that these systems will
enable the Company to add many new clients and contracts without
incurring additional administrative staff and expense.
7
<PAGE> 10
- Experienced Management Team. Myron C. Warshauer, the Company's Chief
Executive Officer and the third generation of his family to direct
Standard, has over 35 years of industry experience. G. Walter Stuelpe,
Jr., the Company's President, has been with APCOA for over 25 years,
serving as Chief Executive Officer since 1986. Other members of the
Company's executive team are the most experienced, talented executives
from both companies. Overall, the members of the Company's executive team
have an average of over 15 years of industry experience.
THE TRANSACTIONS
In connection with the Combination, the Company: (i) consummated the
Offering; (ii) entered into the New Credit Facility; and (iii) received the
Preferred Stock Contribution. The Combination, the issuance of the Notes, the
New Credit Facility, the Preferred Stock Contribution, the application of
proceeds therefrom and the payment of related fees and expenses are collectively
referred to herein as the "Transactions."
------------------------
APCOA's principal executive offices are presently located at 800 Superior
Avenue, Cleveland, Ohio 44114-2601, and its telephone number is (216) 522-0700.
The Company expects to move its principal executive offices to Chicago,
Illinois, at a location to be determined.
8
<PAGE> 11
THE OFFERING
The Notes.................. The Notes were sold by the Company on March 25,
1998 and were subsequently resold to qualified
institutional buyers pursuant to Rule 144A under
the Securities Act, to institutional investors that
are accredited investors in a manner exempt from
registration under the Securities Act and to
persons in transactions outside the United States
in reliance on Regulation S under the Securities
Act (the "Offering").
Registration Rights
Agreement.................. In connection with the Offering, the Company
entered into the Registration Rights Agreement,
which grants Holders of the Notes certain exchange
and registration rights, which generally terminate
upon the consummation of the Exchange Offer.
THE EXCHANGE OFFER
Securities Offered......... $140.0 million in aggregate principal amount of the
Company's 9 1/4% New Senior Subordinated Notes due
2008.
The Exchange Offer......... $1,000 principal amount of New Notes in exchange
for each $1,000 principal amount of the Notes. As
of the date hereof, $140.0 million aggregate
principal amount of Notes are outstanding. The
Company will issue the New Notes to Holders on or
promptly after the Expiration Date.
Expiration Date............ 12:00 midnight, New York City time on ,
1998, unless the Exchange Offer is extended, in
which case the term "Expiration Date" means the
latest date and time to which the Exchange Offer is
extended.
Interest on the New Notes
and the Notes.............. The New Notes will bear interest from March 25,
1998, the date of issuance of the Notes that are
tendered in exchange for the New Notes (or the most
recent Interest Payment Date (as defined below in
the Summary of Terms of New Notes) to which
interest on such Notes has been paid). Accordingly,
Holders of Notes that are accepted for exchange
will not receive interest on the Notes that is
accrued but unpaid at the time of tender, but such
interest will be payable on the first Interest
Payment Date after the Expiration Date.
Conditions to the Exchange
Offer.................... The Exchange Offer is subject to certain customary
conditions, which may be waived by the Company. See
"The Exchange Offer -- Conditions."
Procedures for Tendering
Notes.................... Each Holder of Notes wishing to accept the Exchange
Offer must complete, sign and date the relevant
accompanying Letter of Transmittal, or a facsimile
thereof, in accordance with the instructions
contained herein and therein, and mail or otherwise
deliver such Letter of Transmittal, or such
facsimile, together with the Notes and any other
required documentation to the relevant Exchange
Agent at the address set forth in the Letter of
Transmittal. The Letter of Transmittal should be
used to tender Notes. By executing the Letter of
Transmittal, each Holder will represent to the
Company that, among other things, the Holder or the
person receiving such New Notes, whether or not
such person is the Holder, is acquiring the New
Notes in the ordinary course of business
9
<PAGE> 12
and that neither the Holder nor any such other
person has any arrangement or understanding with
any person to participate in the distribution of
such New Notes. In lieu of physical delivery of the
certificates representing Notes, tendering Holders
may transfer Notes pursuant to the procedure for
book-entry transfer as set forth under "The
Exchange Offer -- Procedures for Tendering."
Special Procedures for
Beneficial Owners.......... Any beneficial owner whose Notes are registered in
the name of a broker, dealer, commercial bank,
trust company or other nominee and who wishes to
tender should contact such registered Holder
promptly and instruct such registered Holder to
tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such
beneficial owner's own behalf, such beneficial
owner must, prior to completing and executing the
Letter of Transmittal and delivering its Notes,
either make appropriate arrangements to register
ownership of the Notes in such beneficial owner's
name or obtain a properly completed bond power from
the registered Holder. The transfer of registered
ownership may take considerable time.
Guaranteed Delivery
Procedures............... Holders of Notes who wish to tender their Notes and
whose Notes are not immediately available or who
cannot deliver their Notes, the Letter of
Transmittal or any other documents required by the
Letter of Transmittal to the Exchange Agent (or
comply with the procedures for book-entry transfer)
prior to the Expiration Date must tender their
Notes according to the guaranteed delivery
procedures set forth in "The Exchange
Offer -- Guaranteed Delivery Procedures."
Withdrawal Rights.......... Tenders may be withdrawn at any time prior to 12:00
midnight, New York City time, on the Expiration
Date pursuant to the procedures described under
"The Exchange Offer -- Terms of the Exchange
Offer."
Acceptance of Notes and
Delivery of New Notes.... The Company will accept for exchange any and all
Notes that are properly tendered in the Exchange
Offer prior to 12:00 midnight, New York City time,
on the Expiration Date. The New Notes issued
pursuant to the Exchange Offer will be delivered
promptly following the Expiration Date. See "The
Exchange Offer -- Terms of the Exchange Offer."
Federal Income Tax
Consequences............. The issuance of the New Notes to Holders of the
Notes pursuant to the terms set forth in this
Prospectus will not constitute an exchange for
federal income tax purposes. Consequently, no gain
or loss would be recognized by Holders of the Notes
upon receipt of the New Notes. See "Certain Federal
Income Tax Consequences of the Exchange Offer."
Use of Proceeds............ There will be no proceeds to the Company from the
exchange of Notes pursuant to the Exchange Offer.
Effect on Holders of
Notes...................... As a result of the making of this Exchange Offer,
the Company will have fulfilled certain of its
obligations under the Registration Rights
Agreement, and Holders of Notes who do not tender
their Notes will generally not have any further
registration rights under the Registration Rights
Agreement or otherwise. Such Holders will continue
to hold the un-
10
<PAGE> 13
tendered notes and will be entitled to all the
rights and subject to all the limitations
applicable thereto under the Indentures, except to
the extent such rights or limitations, by their
terms, terminate or cease to have further
effectiveness as a result of the Exchange Offer.
All untendered Notes will continue to be subject to
certain restrictions on transfer. Accordingly, if
any Notes are tendered and accepted in the Exchange
Offer, the trading market for the untendered Notes
could be adversely affected.
Exchange Agent............. State Street Bank and Trust Company is serving as
exchange agent in connection with the Exchange
Offer. See "The Exchange Offer -- Exchange Agent."
SUMMARY OF TERMS OF NEW NOTES
The form and terms of the New Notes are the same as the form and terms of
the Notes (which they will replace) except that (i) the New Notes have been
registered under the Securities Act and, therefore, will not bear legends
restricting the transfer thereof and (ii) the Holders of the New Notes generally
will not be entitled to further registration rights under the Registration
Rights Agreement, which rights generally will be satisfied when the Exchange
Offer is consummated. The New Notes will evidence the same debt as the Notes and
will be entitled to the benefits of the Indenture. See "Description of New
Notes."
Securities Offered......... $140.0 million in aggregate principal amount of
9 1/4% New Senior Subordinated Notes due 2008.
Maturity Date.............. March 15, 2008.
Interest Rate.............. The New Notes will bear interest at the rate of
9 1/4% per annum, payable semi-annually in cash on
March 15 and September 15 of each year, commencing
September 15, 1998.
Optional Redemption........ The New Notes will be redeemable at the option of
the Company, in whole or in part, at any time on or
after March 15, 2003 in cash at the redemption
prices set forth herein, plus accrued and unpaid
interest and Liquidated Damages (as defined), if
any, thereon to the date of redemption. In
addition, at any time prior to March 15, 2001, the
Company may redeem up to 35% of the initially
outstanding aggregate principal amount of New Notes
at a redemption price equal to 109.25% of the
principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to
the redemption date, with the net cash proceeds of
a Public Equity Offering (as defined); provided
that, in each case, at least 65% of the initially
outstanding aggregate principal amount of Notes
remains outstanding immediately after the
occurrence of any such redemption. See "Description
of Notes--Optional Redemption."
Change of Control.......... Upon the occurrence of a Change of Control (as
defined), each holder of New Notes will have the
right to require the Company to repurchase all or
any part of such holder's New Notes at an offer
price in cash equal to 101% of the aggregate
principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to
the date of repurchase. See "Description of
Notes--Repurchase at the Option of Holders--Change
of Control." There can be no assurance that, in the
event of a Change of Control, the Company would
have sufficient funds to purchase all New Notes
tendered. See "Risk Factors--Payment Upon a Change
of Control."
11
<PAGE> 14
Note Guarantees............ The New Notes will be fully and unconditionally
guaranteed on a joint and several basis by all of
the Company's existing and future wholly owned
domestic subsidiaries with material operations (the
"Subsidiary Guarantors").
Ranking.................... The New Notes will be general unsecured obligations
of the Company, will rank subordinate in right of
payment to all Senior Debt of the Company and
senior or pari passu in right of payment to all
existing and future subordinated indebtedness of
the Company. The New Note Guarantees will be
general unsecured obligations of the Subsidiary
Guarantors, will rank subordinate in right of
payment to all Senior Debt of the Subsidiary
Guarantors and senior or pari passu in right of
payment to all existing and future subordinated
indebtedness of the Subsidiary Guarantors. The New
Notes and the New Note Guarantees will be
effectively subordinated to all indebtedness,
including trade payables, of the Company's
subsidiaries that are not Subsidiary Guarantors. As
of December 31, 1997, on a pro forma basis, after
giving effect to the Combination and the related
financings and other transactions described herein,
there would have been no Senior Debt outstanding.
Upon the closing of the Offering, the Company
entered into a $40.0 million revolving credit
facility pursuant to which $4.9 million in letters
of credit were issued as of the closing of the
Offering. See "Risk Factors--Subordination."
Certain Covenants.......... The Indenture contains certain covenants that
limit, among other things, the ability of the
Company and its Restricted Subsidiaries to: (i) pay
dividends, redeem capital stock or make certain
other restricted payments or investments; (ii)
incur additional indebtedness or issue preferred
equity interests; (iii) merge, consolidate or sell
all or substantially all of its assets; (iv) create
liens on assets; and (v) enter into certain
transactions with affiliates or related persons.
See "Description of New Notes--Certain Covenants."
Form and Denomination...... The certificates representing the New Notes will be
issued in fully registered form, deposited with a
custodian for and registered in the name of a
nominee of the Depositary in the form of a Global
New Note certificate. Beneficial interests in the
certificates representing the Global New Note will
be shown on, and transfers thereof will be effected
through, records maintained by the Depositary and
its Participants. See "Book Entry, Delivery and
Form."
Exchange Offer;
Registration Rights........ If any Holder of an aggregate of at least $2.0
million in principal amount of Notes notifies the
Company within 20 business days of the consummation
of the Exchange Offer that (A) such Holder is
prohibited by law or SEC policy from participating
in the Exchange Offer, or (B) such Holder may not
resell the New Notes acquired by it in the Exchange
Offer to the public without delivering a prospectus
and the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or
available for such resales by such Holder, or (C)
such Holder is a broker-dealer and holds Notes
acquired directly from the Company or one of its
respective affiliates, then the Company and the
Subsidiary Guarantors will be required to provide a
shelf registration statement (the "Shelf
Registration Statement") to cover resales of the
Notes by the
12
<PAGE> 15
Holders thereof. Notwithstanding the foregoing, at
any time after consummation of the Exchange Offer,
the Company may allow the Shelf Registration
Statement to cease to be effective and usable if
(i) the Board of Directors of the Company
determines in good faith that it is in the best
interests of the Company not to disclose the
existence of or facts surrounding any proposed or
pending material corporate transaction involving
the Company, and the Company notifies the Holders
within a certain period of time after the Board of
Directors makes such determination, or (ii) the
prospectus contained in the Shelf Registration
Statement contains an untrue statement of a
material fact necessary in order to make the
statements therein, in the light of the
circumstances under which they were made, not
misleading. The Company will pay certain liquidated
damages to Holders of Notes and Holders of New
Notes if the Company is not in compliance with its
obligations under the Registration Rights
Agreement. See "Exchange Offer; Registration
Rights."
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY
PARTICIPANTS IN THE EXCHANGE OFFER, SEE "RISK FACTORS."
13
<PAGE> 16
SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS)
The following table sets forth summary unaudited pro forma consolidated
balance sheet data of the Company at December 31, 1997 and summary unaudited pro
forma consolidated income statement data of the Company for the year ended
December 31, 1997. The pro forma consolidated balance sheet data at December 31,
1997 give effect to the Transactions and the Other Acquisitions as if they had
occurred on December 31, 1997. The pro forma consolidated income statement data
and other data for the year ended December 31, 1997 give effect to the
Transactions and the Other Acquisitions as if they had occurred at the beginning
of the period presented. The following information should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations of APCOA," "Management's Discussion and Analysis of Financial
Condition and Results of Operations of Standard," the historical financial
statements of APCOA, the unaudited pro forma financial statements of the
Company, the historical financial statements of Standard and the related notes
thereto included elsewhere herein.
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
---------------------
<S> <C>
INCOME STATEMENT DATA:
Parking services revenue.................................. $186,078
Cost of parking services.................................. 146,165
General and administrative expenses....................... 20,045
Depreciation and amortization............................. 7,498
--------
Operating income.......................................... 12,370
Interest expense, net..................................... 14,696
Minority interest......................................... 321
Income tax expense........................................ 140
--------
Net income (loss)......................................... $ (2,787)
========
OTHER DATA:
Gross customer collections................................ $948,612
Pro forma EBITDA(1)....................................... 19,868
Capital expenditures...................................... 3,249
Ratio of earnings to fixed charges(2)..................... N/A
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31, 1997
---------------------
<S> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................. $ 61,173
Working capital........................................... 37,531
Total assets.............................................. 216,594
Total debt................................................ 152,339
Redeemable preferred stock................................ 40,683
Common stock subject to put/call rights(3)................ 4,589
Stockholders' equity (deficit)............................ (28,828)
</TABLE>
- ------------------------------
(1) Pro forma EBITDA represents pro forma operating income plus pro forma
depreciation and amortization. EBITDA is presented because management
believes it is a widely accepted financial indicator used by certain
investors and analysts to analyze and compare companies on the basis of
operating performance. The Company understands that EBITDA is not intended
to represent cash flow for the period, nor has it been presented as an
alternative to operating income as an indicator of operating performance and
should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with generally accepted accounting
principles.
(2) For purposes of computing this ratio, earnings consist of income before
income taxes and minority interest plus fixed charges. Fixed charges consist
of interest expense, amortization of deferred financing costs and one-third
of the rent expense from operating leases, which management believes is a
reasonable approximation of the interest factor of the rent. For the year
ended December 31, 1997, on a pro forma basis, earnings were inadequate to
cover fixed charges by $2.3 million.
(3) In accordance with the Stockholders Agreement (as defined below under
"Certain Relationships and Related Party Transactions -- Stockholders
Agreement"), the Company will be obligated under certain circumstances to
repurchase shares of common stock issued in connection with the Combination.
The amount reflected herein has been calculated based on the formula in the
Stockholders Agreement calculated on a pro forma basis giving effect to the
consummation of the Combination as of December 31, 1997. The Company will
not be obligated to repurchase such common stock prior to the third
anniversary of the consummation of the Combination.
14
<PAGE> 17
RISK FACTORS
Holders of Notes should consider carefully the factors set forth below, as
well as the other information set forth elsewhere in this Prospectus, before
tendering Notes in the Exchange Offer. This Prospectus includes forward-looking
statements, including statements concerning the Company's business strategy,
operations, cost savings initiatives, economic performance, financial condition
and liquidity and capital resources. Such statements are subject to various
risks and uncertainties. The Company's actual results may differ materially from
the results discussed in such forward-looking statements because of a number of
factors, including those identified in this "Risk Factors" section and elsewhere
in this Prospectus. See "Prospectus Summary," "Management's Discussion and
Analysis of Financial Condition and Results of Operations of APCOA,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of Standard" and "Business." The forward-looking statements are made
as of the date of this Prospectus, and the Company assumes no obligation to
update the forward-looking statements or to update the reasons why actual
results could differ from those projected in the forward-looking statements.
SUBSTANTIAL LEVERAGE AND DEBT SERVICE REQUIREMENTS
The Company is and will continue to be highly leveraged as a result of
substantial indebtedness it has incurred in connection with the Transactions.
After giving pro forma effect to the Transactions and the Other Acquisitions,
the Company would have had total indebtedness of $152.3 million and a
stockholders' deficit of $28.8 million as of December 31, 1997, and earnings
would have been inadequate to cover fixed charges by $2.3 million for the year
ended December 31, 1997. The Company may incur additional indebtedness in the
future, subject to limitations imposed by the Indenture and the New Credit
Facility. See "Capitalization," "Unaudited Pro Forma Combined Financial
Statements," "The Transactions--The Combination" and "Description of
Indebtedness."
The Company's ability to make scheduled payments of principal of, or to pay
interest on, or to refinance its indebtedness (including the New Notes) depends
on its future performance, which, to a certain extent, is subject to general
economic, financial, competitive, legislative, regulatory and other factors
beyond its control. Based upon the current level of operations and anticipated
growth, management of the Company believes that, together with available
borrowings under the New Credit Facility, its cash flow and available cash will
be adequate to meet the Company's anticipated future requirements for working
capital, capital expenditures, scheduled payments of principal of and interest
on its indebtedness, and interest on the New Notes. However, all or a portion of
the principal payments at maturity on the New Notes may require refinancing.
There can be no assurance that the Company's business will generate sufficient
cash flow from operations or that future borrowings will be available in an
amount sufficient to enable the Company to service its indebtedness, including
the New Notes, or to make necessary capital expenditures, or that any
refinancing would be available on commercially reasonable terms or at all. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of APCOA--Liquidity and Capital Resources."
The degree to which the Company is now leveraged and will continue to be
leveraged following the Offering could have important consequences to holders of
the New Notes, including, but not limited to, the following: (i) a substantial
portion of the Company's cash flow from operations will be required to be
dedicated to debt service and will not be available for other purposes; (ii) the
Company's ability to obtain additional financing in the future could be limited
and (iii) the Indenture and the New Credit Facility contain financial and
restrictive covenants that limit the ability of the Company to, among other
things, borrow additional funds, dispose of assets or pay cash dividends.
Failure by the Company to comply with such covenants could result in an event of
default, which, if not cured or waived, could have a material adverse effect on
the Company.
SUBORDINATION
The New Notes will be subordinated in right of payment to all Senior Debt,
including the principal of or premium, if any, and interest on and all other
amounts due on or payable in connection with Senior Debt. At December 31, 1997,
on a pro forma basis after giving effect to the Transactions, the Company would
have had
15
<PAGE> 18
no Senior Debt. However, the Company entered into a $40.0 million revolving
credit facility pursuant to which $4.9 million in letters of credit were issued
at Closing. The New Notes will rank subordinate in right of payment to
borrowings under the revolving credit facility. By reason of such subordination,
in the event of the insolvency, liquidation, reorganization, dissolution or
other winding-up of the Company or upon a default in payment with respect to, or
the acceleration of, any Senior Debt, the holders of such Senior Debt must be
paid in full before the holders of the New Notes may be paid. If the Company
incurs any additional pari passu debt, the holders of such debt would be
entitled to share ratably with the holders of the New Notes in any proceeds
distributed in connection with any insolvency, liquidation, reorganization,
dissolution or other winding-up of the Company. This may have the effect of
reducing the amount of proceeds paid to holders of the New Notes. In addition,
no payments may be made with respect to the principal of, premium and Liquidated
Damages, if any, or interest on the New Notes if a payment default exists with
respect to Senior Debt and, under certain circumstances, no payments may be made
with respect to the principal of, premium and Liquidated Damages, if any, or
interest on the New Notes for a period of up to 179 days if a non-payment
default exists with respect to Senior Debt. In addition, the Indenture and the
New Credit Facility permit the Company and its subsidiaries to incur additional
debt, including Senior Debt, if certain conditions are met. See "Description of
Notes--Subordination."
All extensions of credit under the New Credit Facility to the Company will
be secured, subject to certain exceptions, by all existing and after-acquired
personal property of the Company and its subsidiaries, including all outstanding
capital stock of the Company's subsidiaries, and any intercompany debt
obligations, and all existing and after-acquired real property fee and leasehold
interests and management contracts, subject to prohibitions in certain of such
arrangements relating to collateral assignments. In the event of a default on
secured indebtedness (whether as a result of the failure to comply with a
payment or other covenant, a cross-default, or otherwise), the lenders under the
New Credit Facility (the "Lenders") will have a prior secured claim on such
assets. If such Lenders should attempt to foreclose on their collateral, the
Company's financial condition and the value of the New Notes could be materially
adversely affected. See "Description of Indebtedness."
The Company has subsidiaries that are not guaranteeing the New Notes.
Accordingly, the New Notes will be effectively subordinated to all existing and
future liabilities, including trade payables, of such non-guaranteeing
subsidiaries.
DEPENDENCE ON MANAGEMENT CONTRACTS AND LEASES
The principal sources of the Company's revenues are management contracts
and leases covering parking facilities. For the years ended December 31, 1996
and December 31, 1997, gross profits from management contracts accounted for
43.8% and 42.5%, respectively, of the Company's total gross profits, and for the
years ended December 31, 1996 and December 31, 1997, gross profits from leased
facilities accounted for 56.2% and 57.5%, respectively, of the Company's total
gross profits. Under a management contract, the Company typically receives a
base monthly fee for managing the property, and may also receive an incentive
fee based on the achievement of facility revenues above a base amount. In some
instances, the Company also receives certain fees for ancillary services.
Typically, all of the underlying revenues and expenses under a management
contract flow through to the property owner, not to the Company. Leases
generally are for three to ten year terms. Certain of Standard's management
contracts and leases contain provisions allowing the property owner to terminate
such management contract or lease in the event of a transaction such as the
Combination. There can be no assurance that property owners will not terminate
such management contracts or leases upon consummation of the Combination, nor
that any such terminations would not have a material adverse effect on the
Company and its business, operations or financial condition. There also can be
no assurance that the Company will be able to maintain or renew its management
contracts and leases on favorable terms. In addition, because certain management
contracts and leases are with state, local and quasi-governmental entities,
changes to certain governmental entities' approaches to contracting regarding
parking facilities could affect such contracts. The loss, or renewal on less
favorable terms, of a substantial number of management contracts or leases could
have a material adverse effect on the Company. In addition, a material reduction
in the profit margins associated with ancillary services provided by the Company
under its management contracts and leases, including increases in costs or
claims associated with, or reductions in the number of clients
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purchasing, insurance provided by the Company, could have a material adverse
effect on the Company. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations of APCOA," "Management's Discussion and
Analysis of Financial Condition and Results of Operations of Standard" and
"Business--Insurance."
DEPENDENCE ON PROPERTY PERFORMANCE
The Company's leases generally require the Company to make a fixed monthly
lease payment regardless of the parking fees collected. Some management
contracts provide for payment to the Company based on a percentage of revenues
generated by the parking facility. Accordingly, the Company's revenues and net
income are dependent on the performance of the parking facilities it leases and
manages. Such performance depends, in part, on the ability to negotiate
favorable contract terms, the ability to control operating expenses, financial
conditions prevailing generally and in areas where parking facilities are
located, the nature and extent of competitive parking facilities in the area,
weather conditions at certain properties (particularly with respect to
airports), government-mandated security measures at airport parking facilities
and the real estate market generally. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations of APCOA" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations of
Standard."
EXPANSION OF BUSINESS; ABILITY TO INTEGRATE ACQUISITIONS
Following the Combination, the Company will have to integrate Standard's
and APCOA's businesses. While the Company believes that such integration
provides significant opportunities to reduce costs, there can be no assurance
that the Company will be able to meet performance expectations or successfully
integrate these businesses on a timely basis without disruption in the quality
and reliability of service to its customers or clients or diversion of
management resources. In addition, while each of APCOA and Standard has made
acquisitions successfully before, the Combination is substantially larger than
any of such prior acquisitions. Further, the Company intends to expand its
business by adding leases and management contracts and by acquiring additional
parking management companies. The Company's growth will be directly affected by
results of operations of added parking facilities, which will depend, in turn,
upon the Company's ability to obtain suitable financing, contract terms,
government licenses and approvals, and the competitive environment for
acquisitions. In that regard, the nature of licenses and approvals, and the
timing and likelihood of obtaining them, vary widely from state to state and
from country to country. Some of the acquired operations may be located in
geographic markets in which the Company has little or no presence. Successful
integration and management of additional facilities will depend on a number of
factors, many of which are beyond the Company's control. There can be no
assurance that suitable acquisition candidates will be identified, that such
acquisitions can be consummated, or that the acquired operations can be
integrated successfully. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations of APCOA--Liquidity and Capital Resources,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of Standard--Liquidity and Capital Resources," "Business--Business
Strategy and Competitive Advantages" and "--Regulation."
ENVIRONMENTAL AND OTHER REGULATIONS
Under various federal, state, and local environmental laws, ordinances, and
regulations, a current or previous owner or operator of real property may be
liable for the costs of removal or remediation of hazardous or toxic substances
on, under, or in such property. Such laws typically impose liability without
regard to whether the owner or operator knew of, or was responsible for, the
presence of such hazardous or toxic substances. In connection with the operation
of parking facilities, the Company may be potentially liable for such costs.
Although the Company is currently not aware of any material environmental claims
pending or threatened against it or any of its operated parking facilities, no
assurances can be given that a material environmental claim will not be asserted
against the Company or against the parking facilities it operates. The cost of
defending against claims of liability, or of remediating a contaminated
property, could have a material adverse effect on the results of operations or
financial condition of the Company.
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Various other governmental regulations affect the Company's operation of
parking facilities, both directly and indirectly, including air quality laws,
licensing laws and the Americans with Disabilities Act of 1990 (the "ADA").
Under the ADA, all public accommodations, including parking facilities, are
required to meet certain federal requirements related to access and use by
disabled persons. Although management believes that the parking facilities it
operates are in substantial compliance with these requirements, a determination
that the Company or the facility owner is not in compliance with the ADA could
result in the imposition of fines or damage awards against the Company. See
"Business--Regulation."
COMPETITION
The parking industry is highly competitive with limited barriers to entry.
The Company's competitors range from small single-lot operators to large
regional and national multi-facility operators, and include municipal and other
governmental entities. Some of the Company's present and potential competitors
have or may obtain greater financial and marketing resources than those of the
Company. Furthermore, the Company competes for qualified management personnel
with other parking facility operators, with property management companies, and
with property owners. The Company competes for acquisitions with other parking
facility operators. There can be no assurance that the Company will not
encounter increased competition for acquisitions in the future and that such
competition will not have an adverse effect on the Company's ability to complete
acquisitions or on prices paid for acquisitions. See "Business--Competition."
DEPENDENCE ON KEY PERSONNEL
The Company's success is, and will continue to be, substantially dependent
upon the continued services of the Company's management team.
The loss of the services of one or more members of senior management could
have a material adverse effect on the Company's financial condition and results
of operations. Although the Company has entered into employment agreements with,
and historically has been successful in retaining the services of, its senior
management, there can be no assurance that the Company will be able to retain
such personnel in the future. In addition, the Company's continued growth
depends on the ability to attract and retain skilled operating managers and
employees and the ability of its key personnel to manage the Company's growth
and consolidate and integrate its operations. See "Management."
CONTROL BY PRINCIPAL STOCKHOLDER
Following the consummation of the Transactions, Holberg Industries, Inc.
("Holberg") indirectly owns a majority of the issued and outstanding capital
stock of the Company. See "Security Ownership of Certain Beneficial Holders and
Management." Holberg has sufficient rights and/or voting power to elect the
majority of the Board of Directors of the Company, and thereby exercise control
over the business, policies and affairs of the Company, and, in general,
determine the outcome of any corporate transaction or other matters submitted to
stockholders for approval, such as any amendment to the certificate of
incorporation of the Company (the "Certificate of Incorporation"), the
authorization of additional shares of capital stock, and any merger,
consolidation or sale of all or substantially all of the assets of the Company,
all of which could adversely affect the Company and holders of the New Notes.
See "Security Ownership of Certain Beneficial Holders and Management."
PAYMENT UPON A CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each holder of New Notes may
require the Company to repurchase all or a portion of such holder's Notes at
101% of the principal amount of the New Notes, together with accrued and unpaid
interest, if any, and Liquidated Damages, if any, to the date of repurchase. The
Indenture requires that prior to such a repurchase, the Company must either
repay all outstanding indebtedness under the New Credit Facility or obtain any
required consent to such repurchase. If a Change of Control were to occur, the
Company may not have the financial resources to repay all of its obligations
under
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<PAGE> 21
the New Credit Facility, the New Notes and the other indebtedness that would
become payable upon such event. See "Description of New Notes--Repurchase at the
Option of Holders--Change of Control."
FRAUDULENT CONVEYANCE RISKS
Management of the Company believes that the indebtedness represented by the
New Notes is being incurred for proper purposes and in good faith, and that,
based on present forecasts, asset valuations and other financial information,
after the consummation of the Transactions, the Company will be solvent, will
have sufficient capital for carrying on its business and will be able to pay its
debts as they mature. See "--Substantial Leverage and Debt Service
Requirements." Notwithstanding management's belief, however, if a court of
competent jurisdiction in a suit by an unpaid creditor or a representative of
creditors (such as a trustee in bankruptcy or a debtor-in-possession) were to
find that, at the time of the incurrence of such indebtedness, the Company was
insolvent, was rendered insolvent by reason of such incurrence, was engaged in a
business or transaction for which its remaining assets constituted unreasonably
small capital, intended to incur, or believed that it would incur, debts beyond
its ability to pay such debts as they matured, or intended to hinder, delay or
defraud its creditors, and that the indebtedness was incurred for less than
reasonably equivalent value, then such court could, among other things, (i) void
all or a portion of the Company's obligations to the holders of the New Notes,
the effect of which would be that the holders of the New Notes may not be repaid
in full and/or (ii) subordinate the Company's obligations to the holders of the
New Notes to other existing and future indebtedness of the Company to a greater
extent than would otherwise be the case, the effect of which would be to entitle
such other creditors to be paid in full before any payment could be made on the
New Notes.
The Company's obligations under the New Notes will be fully and
unconditionally guaranteed, jointly and severally, on a senior subordinated
basis, by each of the Subsidiary Guarantors. Management of the Company believes
that indebtedness represented by the New Note Guarantees is being incurred by
the Subsidiary Guarantors for proper purposes and in good faith, and that, based
on present forecasts, asset valuations and other financial information, after
consummation of the Transactions, each of the Subsidiary Guarantors will be
solvent, will have sufficient capital for carrying on its business, and will be
able to pay its debts as they mature. See "--Substantial Leverage and Debt
Service Requirements." Notwithstanding management's belief, however, if a court
of competent jurisdiction in a suit by an unpaid creditor or a representative of
creditors (such as a trustee in bankruptcy or a debtor-in-possession) were to
find that, at the time of the incurrence of such indebtedness, the Subsidiary
Guarantors were insolvent, were rendered insolvent by reason of such incurrence,
were engaged in a business or transaction for which their remaining assets
constituted unreasonably small capital, intended to incur, or believed that they
would incur, debts beyond their ability to pay such debts as they matured, or
intended to hinder, delay or defraud their creditors, and that the indebtedness
was incurred for less than reasonably equivalent value, then such court could,
among other things, (i) void all or a portion of such Subsidiary Guarantors'
obligations to the holders of the New Notes, the effect of which would be that
the holders of the New Notes may not be repaid in full or at all and/or (ii)
subordinate such Subsidiary Guarantors' obligations to the holders of the New
Notes to other existing and future indebtedness of such Subsidiary Guarantors,
the effect of which would be to entitle such other creditors to be paid in full
before any payment could be made on the New Notes. Among other things, a legal
challenge to a New Note Guarantee on fraudulent conveyance grounds may focus on
the benefits, if any, realized by the Subsidiary Guarantors as a result of the
issuance by the Company of the New Notes.
ABSENCE OF PUBLIC MARKET FOR THE NEW NOTES; RESTRICTIONS ON TRANSFERS
The Notes are currently owned by a relatively small number of beneficial
owners. The Notes have not been registered under the Exchange Act and will be
subject to restrictions on transferability to the extent that they are not
exchanged for the New Notes. The New Notes will constitute a new issue of
securities with no established trading market. Although the New Notes will
generally be permitted to be resold or otherwise transferred by Holders who are
not affiliates of the Company without compliance with the registration
requirements under the Securities Act, the Company does not intend to list the
New Notes on any securities exchange or to seek admission thereof to trading in
the National Association of Securities Dealers Automated
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Quotation System. Although DLJ and First Chicago have advised the Company that
they currently intend to make a market in the New Notes, they are not obligated
to do so and may discontinue such market making at any time without notice. If a
trading market does not develop or is not maintained, holders of the New Notes
may experience difficulty in reselling the New Notes or may be unable to sell
them at all. If a market for the New Notes develops, any such market may be
discontinued at any time. In addition, such market making activity will be
subject to the limits imposed by the Exchange Act. See "Description of New
Notes -- Registration Rights; Liquidated Damages." Accordingly, there can be no
assurance as to the development or liquidity of any market for the New Notes.
COMPLIANCE WITH EXCHANGE OFFER PROCEDURES; RESTRICTIONS ON RESALES
Issuance of the New Notes in exchange for Notes pursuant to the Exchange
Offer will be made only after a timely receipt by the Exchange Agent of such
Notes, a properly completed and duly executed Letter of Transmittal and all
other required documents. Therefore, Holders of the Notes desiring to tender
such Notes in exchange for New Notes should allow sufficient time to ensure
timely delivery. The Company is under no duty to give notification of defects or
irregularities with respect to the tenders of Notes for exchange. Notes that are
not tendered or are tendered but not accepted will, following the consummation
of the Exchange Offer, continue to be subject to the existing restrictions upon
transfer thereof and, upon consummation of the Exchange Offer, the registration
rights under the Registration Rights Agreement generally will terminate. In
addition, any Holder of Notes who tenders in the Exchange Offer for the purpose
of participating in a distribution of the New Notes may be deemed to have
received restricted securities and, if so, will be required to comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale. Each broker-dealer that receives New Notes for its
own account in exchange for Notes, where such Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities must acknowledge that it will deliver a prospectus in connection with
the initial resale of such New Notes. To the extent that Notes are tendered and
accepted in the Exchange Offer, the trading market for untendered and tendered
but unaccepted Notes could be adversely affected. See "The Exchange Offer."
FORWARD-LOOKING STATEMENTS
This Prospectus includes forward-looking statements, including statements
concerning the Company's business strategy, operations, cost savings
initiatives, economic performance, financial condition and liquidity and capital
resources. Such statements are subject to various risks and uncertainties. The
Company's actual results may differ materially from the results discussed in
such forward-looking statements because of a number of factors, including those
identified in the sections of this Prospectus captioned "Prospectus Summary,"
"Risk Factors," "Management's Discussion and Analysis of Financial Condition and
Results of Operations of APCOA," "Management's Discussion and Analysis of
Financial Condition and Results of Operations of Standard" and "Business."
Forward-looking statements are made as of the date of this Prospectus, and the
Company assumes no obligation to update the forward-looking statements, or to
update the reasons why actual results could differ from those projected in the
forward-looking statements.
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<PAGE> 23
THE EXCHANGE OFFER
The following discussion sets forth or summarizes what the Company believes
are the material terms of the Exchange Offer, including those set forth in the
Letter of Transmittal distributed with this Prospectus. This summary is
qualified in its entirety by reference to the full text of the documents
underlying the Exchange Offer, copies of which are filed as exhibits to the
Registration Statement of which this Prospectus is a part, and are incorporated
by reference herein.
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Notes were sold by the Company on March 25, 1998, and were subsequently
resold to qualified institutional buyers pursuant to Rule 144A under the
Securities Act, to institutional investors that are accredited investors in a
manner exempt from registration under the Securities Act and to certain persons
in transactions outside the United States in reliance on Regulation S under the
Securities Act. In connection with the Offering, the Company entered into the
Registration Rights Agreement, which requires, among other things, that promptly
following the completion of the Offering, the Company and the Subsidiary
Guarantors (i) file with the SEC a registration statement under the Securities
Act with respect to an issue of new Notes of the Company identical in all
material respects to the Notes, (ii) use their best efforts to cause such
registration statement to become effective under the Securities Act and (iii)
upon the effectiveness of that registration statement, offer to the Holders of
the Notes the opportunity to exchange their Notes for a like principal amount of
New Notes, which would be issued without a restrictive legend and may be
reoffered and resold by the holder without restrictions or limitations under the
Securities Act (other than any such holder that is an "affiliate" of the Company
within the meaning of Rule 405 under the Securities Act). A copy of the
Registration Rights Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The term "Holder" with respect to
the Exchange Offer means any person in whose name the Notes are registered on
the books of the Company or any other person who has obtained a properly
completed bond power from the registered holder.
Because the Exchange Offer is for any and all Notes, the number of Notes
tendered and exchanged in the Exchange Offer will reduce the principal amount of
Notes outstanding. Following the consummation of the Exchange Offer, Holders of
the Notes who did not tender their Notes generally will not have any further
registration rights under the Registration Rights Agreement, and such Notes will
continue to be subject to certain restrictions on transfer. Accordingly, the
liquidity of the market for such Notes could be adversely affected. The Notes
are currently eligible for sale pursuant to Rule 144A through the PORTAL System
of the National Association of Securities Dealers, Inc. Because the Company
anticipates that most holders of Notes will elect to exchange such Notes for New
Notes due to the absence of restrictions on the resale of New Notes under the
Securities Act, the Company anticipates that the liquidity of the market for any
Notes remaining after the consummation of the Exchange Offer may be
substantially limited.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Notes
validly tendered and not withdrawn prior to 12:00 midnight, New York City time,
on the Expiration Date. The Company will issue $1,000 principal amount of New
Notes in exchange for each $1,000 principal amount of outstanding Notes accepted
in the Exchange Offer. Holders may tender some or all of their Notes pursuant to
the Exchange Offer. However, Notes may be tendered only in integral multiples of
$1,000.
The form and terms of the New Notes are the same as the form and terms of
the Notes except that (i) the New Notes have been registered under the
Securities Act and hence will not bear legends restricting the transfer thereof
and (ii) the holders of the New Notes generally will not be entitled to certain
rights under the Registration Rights Agreement, which rights generally will
terminate upon consummation of the Exchange Offer. The New Notes will evidence
the same debt as the Notes and will be entitled to the benefits of the
Indentures.
Holders of Notes do not have any appraisal or dissenters' rights under the
General Corporation Law of Delaware or the Indenture in connection with the
Exchange Offer. The Company intends to conduct the
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Exchange Offer in accordance with the applicable requirements of the Exchange
Act and the rules and regulations of the SEC thereunder, including Rule 14e-1
thereunder.
The Company shall be deemed to have accepted validly tendered Notes when,
as and if the Company has given oral or written notice thereof to the Exchange
Agents. The Exchange Agent will act as agent for the tendering Holders for the
purpose of receiving the New Notes from the Company.
If any tendered Notes are not accepted for exchange because of an invalid
tender, the occurrence of certain other events set forth herein or otherwise,
the certificates for any such unaccepted Notes will be returned, without
expense, to the tendering Holder thereof as promptly as practicable after the
Expiration Date.
Holders who tender Notes in the Exchange Offer will not be required to pay
brokerage commissions or fees or, subject to the instructions in the Letter of
Transmittal, transfer taxes with respect to the exchange of Notes pursuant to
the Exchange Offer. The Company will pay all charges and expenses, other than
transfer taxes in certain circumstances, in connection with the Exchange Offer.
See "-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 12:00 midnight, New York City time,
on , 1998, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
To extend the Exchange Offer, the Company will notify the Exchange Agent of
any extension by oral or written notice, followed by a public announcement
thereof no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date.
The Company reserves the right, in its reasonable judgment, (i) to delay
accepting any Notes, to extend the Exchange Offer or to terminate the Exchange
Offer if any of the conditions set forth below under "-- Conditions" shall not
have been satisfied, by giving oral or written notice of such delay, extension
or termination to the Exchange Agent or (ii) to amend the terms of the Exchange
Offer in any manner. Any such delay in acceptance, extension, termination or
amendment will be followed as promptly as practicable by a public announcement
thereof. If the Exchange Offer is amended in a manner determined by the Company
to constitute a material change, the Company will promptly disclose such
amendment by means of a prospectus supplement that will be distributed to the
registered Holders, and, depending upon the significance of the amendment and
the manner of disclosure to the registered Holders, the Company will extend the
Exchange Offer for five to ten business days if the Exchange Offer would
otherwise expire during such five to ten business-day period.
If the Company does not consummate the Exchange Offer, or, in lieu thereof,
the Company does not file and cause to become effective a resale shelf
registration for the New Notes within the time periods set forth herein,
liquidated damages will accrue and be payable on the New Notes either
temporarily or permanently. See "Description of New Notes -- Registration
Rights; Liquidated Damages."
INTEREST ON NEW NOTES
The New Notes will bear interest from March 25, 1998, the date of issuance
of the Notes that are tendered in exchange for the New Notes (or the most recent
Interest Payment Date to which interest on such Notes has been paid).
Accordingly, Holders of Notes that are accepted for exchange will not receive
interest that is accrued but unpaid on the Notes at the time of tender, but such
interest will be payable on the first Interest Payment Date after the Expiration
Date. Interest on the New Notes will be payable semiannually on each March 15
and September 15, commencing on September 15, 1998.
PROCEDURES FOR TENDERING
Only a Holder of Notes may tender such Notes in the Exchange Offer. To
tender in the Exchange Offer, a Holder must complete, sign and date the relevant
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal and mail or otherwise
deliver such Letter of Transmittal or such facsimile, together with the Notes
and any other required documents, to the Exchange Agent so as to be received by
the Exchange Agent at the address set forth below prior to 12:00 midnight, New
York City time, on the Expiration Date. The Letter of Transmittal must be used
to tender Notes. Delivery of the Notes may be made by book-entry transfer in
accordance with the procedures described
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below. Confirmation of such book-entry transfer must be received by the Exchange
Agent prior to the Expiration Date.
By executing the Letter of Transmittal, each Holder will make to the
Company the representation set forth below in the second paragraph under the
heading "-- Resale of New Notes."
The tender by a Holder and the acceptance thereof by the Company will
constitute an agreement between such Holder and the Company in accordance with
the terms and subject to the conditions set forth herein and in the Letter of
Transmittal.
THE METHOD OF DELIVERY OF NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE
HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN
OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO
LETTER OF TRANSMITTAL OR NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS MAY
REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR
NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner whose Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to tender
should contact the registered Holder promptly and instruct such registered
Holder to tender on such beneficial owner's behalf.
Signatures on the Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution (as defined below)
unless the Notes tendered pursuant thereto are tendered (i) by a registered
Holder who has not completed the box entitled "Special Registration
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal or
(ii) for the account of an Eligible Institution. In the event that signatures on
a Letter of Transmittal or a notice of withdrawal, as the case may be, are
required to be guaranteed, such guarantee must be by a member firm of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution").
If the Letter of Transmittal is signed by a person other than the
registered Holder of any Notes listed therein, such Notes must be endorsed or
accompanied by a properly completed bond power, signed by such registered Holder
as such registered Holder's name appears on such Notes with the signature
thereon guaranteed by an Eligible Institution.
If the Letter of Transmittal or any Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by the Company,
evidence satisfactory to the Company of their authority to so act must be
submitted with the Letter of Transmittal.
The Company understands that each Exchange Agent will make a request
promptly after the date of this Prospectus to establish accounts with respect to
the Notes at the Depository for the purpose of facilitating the Exchange Offer,
and subject to the establishment thereof, any financial institution that is a
participant in the Depository's system may make book-entry delivery of the Notes
by causing the Depository to transfer such Notes into the Exchange Agent's
account with respect to the Notes in accordance with the Depository's procedures
for such transfer. Although delivery of the Notes may be effected through
book-entry transfer into the Exchange Agent's account at the Depository, an
appropriate Letter of Transmittal properly completed and duly executed with any
required signature guarantee and all other required documents must in each case
be transmitted to and received or confirmed by the Exchange Agent at its address
set forth below on or prior to the Expiration Date, or, if the guaranteed
delivery procedures described below are complied with, within the time period
provided under such procedures. Delivery of documents to the Depository does not
constitute delivery to the Exchange Agent.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Notes and withdrawal of tendered Notes will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and all
Notes
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not properly tendered or any Notes the Company's acceptance of which would, in
the opinion of counsel for the Company, be unlawful. The Company also reserves
the right to waive any defects, irregularities or conditions of tender as to
particular Notes. The Company's interpretation of the terms and conditions of
the Exchange Offer (including the instructions in the Letter of Transmittal)
will be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Notes must be cured within such
time as the Company shall determine. Although the Company intends to notify
Holders of defects or irregularities with respect to tenders of Notes, none of
the Company, the Exchange Agent or any other person shall incur any liability
for failure to give such notification. Tenders of Notes will not be deemed to
have been made until such defects or irregularities have been cured or waived.
Any Notes received by the Exchange Agent that are not properly tendered and as
to which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering Holders, unless otherwise
provided in the Letter of Transmittal, as soon as practicable following the
Expiration Date.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Notes and (i) whose New Notes are not
immediately available, (ii) who cannot deliver their Notes, the Letter of
Transmittal or any other required documents to the relevant Exchange Agent or
(iii) who cannot complete the procedures for book-entry transfer, prior to the
Expiration Date, may effect a tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the relevant Exchange Agent receives
from such Eligible Institution a properly completed and duly executed
Notice of Guaranteed Delivery (by facsimile transmission, mail or hand
delivery) setting forth the name and address of the Holder, the certificate
number(s) of such Notes and the principal amount of Notes tendered, stating
that the tender is being made thereby and guaranteeing that, within three
New York Stock Exchange trading days after the Expiration Date, the Letter
of Transmittal (or facsimile thereof), together with the certificates(s)
representing the Notes (or a confirmation of book-entry transfer of such
Notes into the Exchange Agent's account at the Depository) and any other
documents required by the Letter of Transmittal, will be deposited by the
Eligible Institution with the Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as the certificate(s) representing all tendered
Notes in proper form for transfer (or a confirmation of book-entry transfer
of such Notes into the Exchange Agent's account at the Depository) and all
other documents required by the Letter of Transmittal, are received by the
Exchange Agent within three New York Stock Exchange trading days after the
Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to Holders who wish to tender their Notes according to the guaranteed
delivery procedures set forth above.
WITHDRAWALS OF TENDERS
Except as otherwise provided herein, tenders of Notes may be withdrawn at
any time prior to 12:00 midnight New York City time, on the Expiration Date.
To withdraw a tender of Notes in the Exchange Offer, a written or facsimile
transmission notice of withdrawal must be received by the Exchange Agent at its
address set forth herein prior to 12:00 midnight New York City time, on the
Expiration Date. Any such notice of withdrawal must (i) specify the name of the
person having deposited the Notes to be withdrawn (the "Depositor"), (ii)
identify the Notes to be withdrawn (including the certificate number(s) and
principal amount of such Notes, or, in the case of Notes transferred by
book-entry transfer, the name and number of the account at the Depository to be
credited), (iii) be signed by the Holder in the same manner as the original
signature on the Letter of Transmittal by which such Notes were tendered
(including any required signature guarantees) or be accompanied by documents of
transfer sufficient to have the Trustee with respect to the Notes register the
transfer of such Notes into the name of the person withdrawing the tender, and
(iv) specify the name in which any such Notes are to be registered, if different
from that of the Depositor. All questions as to the validity, form and
eligibility (including time or receipt) of such notices will be determined by
the Company, whose determination shall be final and binding on all parties. Any
Notes so withdrawn will be deemed not to have been validly tendered for purposes
of the
24
<PAGE> 27
Exchange Offer and no New Notes will be issued with respect thereto unless the
Notes so withdrawn are validly retendered. Any Notes which have been tendered
but which are not accepted for exchange will be returned to the Holder thereof
without cost to such Holder as soon as practicable after withdrawal, rejection
of tender or termination of the Exchange Offer. Properly withdrawn Notes may be
retendered by following one of the procedures described above under
"-- Procedures for Tendering" at any time prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company shall not
be required to accept for exchange, or to exchange New Notes for, any Notes, and
may terminate or amend the Exchange Offer as provided herein before the
acceptance of such Notes, if any law, statute, rule, regulation or
interpretation by the staff of the SEC is proposed, adopted or enacted, which,
in the reasonable judgment of the Company, might materially impair the ability
of the Company to proceed with the Exchange Offer or materially impair the
contemplated benefits of the Exchange Offer to the Company.
If the Company determines in its reasonable judgment that any of the
conditions are not satisfied, the Company may (i) refuse to accept any Notes and
return all tendered Notes to the tendering Holders, (ii) extend the Exchange
Offer and retain all Notes tendered prior to the expiration of the Exchange
Offer, subject, however, to the rights of Holders to withdraw such Notes (see
"Withdrawals of Tenders") or (iii) waive such unsatisfied conditions with
respect to the Exchange Offer and accept all properly tendered Notes which have
not been withdrawn. If such waiver constitutes a material change to the Exchange
Offer, the Company will promptly disclose such waiver by means of a prospectus
supplement that will be distributed to the registered Holders, and, depending
upon the significance of the waiver and the manner of disclosure to the
registered Holders, the Company will extend the Exchange Offer for a period of
five to ten business days if the Exchange Offer would otherwise expire during
such five to ten business-day period.
EXCHANGE AGENT
State Street Bank & Trust Company will act as Exchange Agent for the
Exchange Offer with respect to the Notes (the "Exchange Agent").
Questions and requests for assistance, requests for additional copies of
this Prospectus or of the Letter of Transmittal for the Notes and requests for
copies of Notice of Guaranteed Delivery should be directed to the Exchange
Agent, addressed as follows:
<TABLE>
<S> <C> <C>
By Mail By Facsimile Transmission: By Hand or Overnight Courier:
(registered or certified mail (617) 664-5395
recommended):
State Street Bank and
State Street Bank and Confirm by Telephone Trust Company
Trust Company or for Information Call: Corporate Trust Department
Corporate Trust Department (617) 664-5587 4th floor
P.O. Box 778 Attn: Kellie Mullen Two International Place
Boston, MA 02102-0078 Boston, MA 02110
</TABLE>
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telephone, facsimile or in person by officers and
regular employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers or other persons
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for their services and will
reimburse them for their reasonable out-of-pocket expenses in connection
therewith and pay other registration expenses, including fees and expenses of
the Trustees, filing fees, blue sky fees and printing and distribution expenses.
The Company will pay all transfer taxes, if any, applicable to the exchange
of the Notes pursuant to the Exchange Offer. If, however, certificates
representing the New Notes or the Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be issued in the name
of, any person other than the registered Holder of the Notes tendered, or if
tendered Notes are registered in the name of any person
25
<PAGE> 28
other than the person signing the Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of the Notes pursuant to the
Exchange Offer, then the amount of any such transfer taxes (whether imposed on
the registered Holder or any other person) will be payable by the tendering
Holder.
ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Notes,
which is the aggregate principal amount in the case of the Notes, as reflected
in the Company's accounting records on the date of exchange. Accordingly, no
gain or loss for accounting purposes will be recognized in connection with the
Exchange Offer. The expenses of the Exchange Offer will be amortized over the
term of the New Notes.
RESALE OF NEW NOTES
Based on an interpretation by the staff of the SEC set forth in no-action
letters issued to third parties, the Company believes that New Notes issued
pursuant to the Exchange Offer in exchange for Notes may be offered for resale,
resold and otherwise transferred by any Holder of such New Notes (other than any
such Holder which is an "affiliate" of the Company within the meaning of Rule
405 under the Securities Act) without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such Holder's business and such
Holder does not intend to participate, and has no arrangement or understanding
with any person to participate, in the distribution of such New Notes. Any
Holder who tenders in the Exchange Offer with the intention to participate, or
for the purpose of participating, in a distribution of the New Notes may not
rely on the position of the staff of the SEC enunciated in Exxon Capital
Holdings Corporation (available April 13, 1989) and Morgan Stanley & Co.,
Incorporated (available June 5, 1991), or similar no-action letters, but rather
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction. In addition, any such
resale transaction should be covered by an effective registration statement
containing the selling security holder's information required by Item 507 or 508
of Regulation S-K of the Securities Act, as applicable. Each broker-dealer that
receives New Notes for its own account in exchange for Notes, where such Notes
were acquired by such broker-dealer as a result of market-making activities or
other trading activities, may be a statutory underwriter and must acknowledge
that it will deliver a prospectus in connection with any resale of such New
Notes.
By tendering in the Exchange Offer, each Holder will represent to the
Company that, among other things, (i) the New Notes acquired pursuant to the
Exchange Offer are being obtained in the ordinary course of business of the
person receiving such New Notes, whether or not such person is a Holder, (ii)
neither the Holder nor any such other person has an arrangement or understanding
with any person to participate in the distribution of such New Notes and (iii)
the Holder and such other person acknowledge that if they participate in the
Exchange Offer for the purpose of distributing the New Notes (a) they must, in
the absence of an exemption therefrom, comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale of the New Notes and cannot rely on the no-action letters referenced
above and (b) failure to comply with such requirements in such instance could
result in such Holder incurring liability under the Securities Act for which
such Holder is not indemnified by the Company. Further, by tendering in the
Exchange Offer, each Holder that may be deemed an "affiliate" (as defined under
Rule 405 of the Securities Act) of the Company will represent to the Company
that such Holder understands and acknowledges that the New Notes may not be
offered for resale, resold or otherwise transferred by that Holder without
registration under the Securities Act or an exemption therefrom.
As set forth above, affiliates of the Company are not entitled to rely on
the foregoing interpretations of the staff of the SEC with respect to resales of
the New Notes without compliance with the registration and prospectus delivery
requirements of the Securities Act. In connection with the Offering, the Company
entered into the Registration Rights Agreement pursuant to which the Company
agreed to file and maintain, subject to certain limitations, a registration
statement that would allow DLJ and First Chicago to engage in market-making
transactions with respect to the Notes or the New Notes. The Company has agreed
to bear all registration expenses incurred under such agreement, including
printing and distribution expenses, reasonable fees of counsel, blue sky fees
and expenses, reasonable fees of independent accountants in connection with the
preparation of comfort letters, and SEC and the National Association of
Securities Dealers, Inc. filing fees and expenses.
26
<PAGE> 29
CONSEQUENCES OF FAILURE TO EXCHANGE
As a result of the making of this Exchange Offer, the Company will have
fulfilled one of its obligations under the Registration Rights Agreement, and
Holders of Notes who do not tender their Notes generally will not have any
further registration rights under the Registration Rights Agreement or
otherwise. Accordingly, any Holder of Notes that does not exchange that Holder's
Notes for New Notes will continue to hold the untendered Notes and will be
entitled to all the rights and limitations applicable thereto under the
Indentures, except to the extent that such rights or limitations, by their
terms, terminate or cease to have further effectiveness as a result of the
Exchange Offer.
The Notes that are not exchanged for New Notes pursuant to the Exchange
Offer will remain restricted securities. Accordingly, such Notes may be resold
only (i) to the Company (upon redemption thereof or otherwise), (ii) pursuant to
an effective registration statement under the Securities Act, (iii) so long as
the Notes are eligible for resale pursuant to Rule 144A, to a qualified
institutional buyer within the meaning of Rule 144A under the Securities Act in
a transaction meeting the requirements of Rule 144A, (iv) outside the United
States to a foreign person pursuant to the exemption from the registration
requirements of the Securities Act provided by Regulation S thereunder, (v)
pursuant to an exemption from registration under the Securities Act provided by
Rule 144 thereunder (if available), or (vi) to an institutional accredited
investor in a transaction exempt from the registration requirements of the
Securities Act, in each case in accordance with any applicable securities laws
of any state of the United States. See "Risk Factors--Absence of Public Market
for the New Notes; Restrictions on Transfer."
OTHER
Participation in the Exchange Offer is voluntary and holders should
carefully consider whether to accept. Holders of the Notes are urged to consult
their financial and tax advisors in making their own decision on what action to
take.
The Company may in the future seek to acquire untendered Notes in open
market or privately negotiated transactions, through subsequent exchange offers
or otherwise. The Company has no present plans to acquire any Notes that are not
tendered in the Exchange Offer or to file a registration statement to permit
resales of any untendered Notes.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OFFER
The following discussion is based upon current provisions of the Internal
Revenue Code of 1986, as amended, applicable Treasury regulations, judicial
authority and administrative rulings and practice. There can be no assurance
that the Internal Revenue Service (the "IRS") will not take a contrary view, and
no ruling from the IRS has been or will be sought. Legislative, judicial or
administrative changes or interpretations may be forthcoming that could alter or
modify the statements and conditions set forth herein. Any such changes or
interpretations may or may not be retroactive and could affect the tax
consequences to Holders. Certain Holders of the Notes (including insurance
companies, tax-exempt organizations, financial institutions, broker-dealers,
foreign corporations and persons who are not citizens or residents of the United
States) may be subject to special rules not discussed below. Each Holder of a
Note should consult his, her or its own tax advisor as to the particular tax
consequences of exchanging such Holder's Notes for New Notes, including the
applicability and effect of any state, local or foreign tax laws.
The issuance of the New Notes to Holders of the Notes pursuant to the terms
set forth in this Prospectus will not constitute an exchange for federal income
tax purposes. Consequently, no gain or loss would be recognized by Holders of
the Notes upon receipt of the New Notes, and ownership of the New Notes will be
considered a continuation of ownership of the Notes. For purposes of determining
gain or loss upon the subsequent sale or exchange of the New Notes, a Holder's
basis in the New Notes should be the same as such Holder's basis in the Notes
exchanged therefor. A Holder's holding period for the New Notes should include
the Holder's holding period for the Notes exchanged therefor. The issue price
and other tax characteristics of the New Notes should be identical to the issue
price and other tax characteristics of the Notes exchanged therefor.
See also "Description of Certain Federal Income Tax Consequences."
27
<PAGE> 30
THE TRANSACTIONS
In connection with the Combination, the Company: (i) consummated the
Offering, (ii) received the Preferred Stock Contribution, and (iii) entered into
the New Credit Facility. The Offering, the Preferred Stock Contribution and the
New Credit Facility, collectively, will be referred to herein as the
"Financing." The Combination and the Financing will collectively be referred to
as the "Transactions." See "Description of Indebtedness."
THE COMBINATION
Pursuant to the Combination Agreement, dated as of January 15, 1998 (the
"Combination Agreement"), by and among Myron C. Warshauer, Stanley Warshauer,
Steven A. Warshauer, Dosher Partners, L.P., a Delaware limited partnership, SP
Parking Associates, an Illinois general partnership, and SP Associates, an
Illinois general partnership (collectively, "Standard Owners") and APCOA, APCOA
has, subject to the terms and conditions contained in the Combination Agreement,
acquired all of the outstanding capital stock, partnership and other equity
interests of Standard Parking Corporation, an Illinois corporation; Standard
Auto Park, Inc., an Illinois corporation; Standard Parking Corporation MW, an
Illinois corporation; Standard Parking, L.P., a Delaware limited partnership;
Standard Parking Corporation IL, an Illinois corporation; and Standard/Wabash
Parking Corporation, an Illinois corporation (all such interests collectively,
"Standard") for consideration consisting of $65.0 million in cash, 16% of the
common stock of the Company ("Company Common Stock") outstanding as of January
15, 1998 and the assumption of certain liabilities. In addition, following the
Combination, APCOA paid to the Standard Owners $2.8 million, generally
representing Standard's earnings through the date of the Combination and
Standard's cash on hand at such time. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations of APCOA--Pro Forma Liquidity
and Capital Resources."
Pursuant to the Combination Agreement, the Company executed certain
agreements including (a) a stockholders agreement among the stockholders of the
Company, (b) an escrow agreement among the Company and the Standard Owners, (c)
an employment agreement between the Company and Myron C. Warshauer, and (d) a
consulting agreement between the Company and Sidney Warshauer.
The Combination Agreement contains customary representations and warranties
by the parties which generally survive for a period of two years after the
consummation of the Combination. The Standard Owners and APCOA have agreed to
indemnify each other for any loss resulting from such party's breach of a
representation, warranty or covenant made by such party; provided, however, that
such indemnity is limited, in the aggregate, to a basket of $2.0 million and is
limited to a cap of $10.0 million, except for an indemnity by the Standard
Owners related to taxes which shall not be subject to such limitations.
THE FINANCING
In addition to the Offering, the Financing consisted of the following:
The Preferred Stock Contribution. In connection with the Combination, AP
Holdings, Inc. ("AP Holdings"), a Delaware corporation and the parent of APCOA,
contributed $40.7 million of cash to the Company (the "Preferred Stock
Contribution") in exchange for $40.7 million of new preferred stock of the
Company. The Preferred Stock Contribution was financed through AP Holdings' sale
of $40.7 million in gross proceeds of its debt securities, the fees and expenses
of which were borne by APCOA.
The New Credit Facility. Upon the closing of the Offering, the Company
entered into a $40.0 million secured revolving credit facility (the "New Credit
Facility") with The First National Bank of Chicago (the "Agent"). Borrowings
under the New Credit Facility bear interest at variable rates based, at the
Company's option, either on LIBOR, the federal funds rate, or the Agent's base
rate. See "Description of Indebtedness--New Credit Facility."
28
<PAGE> 31
USE OF PROCEEDS
(DOLLARS IN MILLIONS)
The net proceeds from the Offering (after deducting discounts and
commissions and estimated expenses), together with the Preferred Stock
Contribution, were used by the Company: (i) to fund the cash portion of the
consideration payable in connection with the Combination; (ii) to repay certain
indebtedness; (iii) for general corporate purposes, including working capital
needs and future acquisitions; (iv) to redeem preferred stock held by Holberg;
and (v) to pay fees and expenses in connection with the Transactions. The
existing indebtedness repaid in connection with the Offering included
approximately $40.7 million of borrowings under APCOA's then-existing credit
facility and approximately $0.35 million of borrowings under Standard's
then-existing credit facility. See "Certain Relationships and Related Party
Transactions."
29
<PAGE> 32
CAPITALIZATION
(DOLLARS IN THOUSANDS)
The following table sets forth the actual cash and cash equivalents and
capitalization of the Company as of December 31, 1997 and on a pro forma basis,
adjusted to reflect the Transactions and the Other Acquisitions, and in each
case on a consolidated basis. This table should be read in conjunction with the
historical financial statements of APCOA and the related notes thereto, the
historical financial statements of Standard and the related notes thereto and
the unaudited pro forma financial statements of the Company and the related
notes thereto, each included elsewhere herein. See "The Transactions."
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
-----------------------
ACTUAL PRO FORMA
--------- ----------
<S> <C> <C>
Cash and cash equivalents(1)................................ $ 3,322 $ 61,173
======== ========
Long-term debt (including current portion):
Existing bank debt........................................ $ 29,529 $ --
New Credit Facility(2).................................... -- --
9 1/4% Senior Subordinated Notes due 2008................. -- 140,000
Other debt................................................ 8,754 12,339
-------- --------
Total long-term debt................................... 38,283 152,339
Redeemable preferred stock.................................. 8,728 40,683
Common stock subject to put/call rights(3).................. -- 4,589
Stockholders' equity (deficit):
Common stock and additional paid-in capital............... 17,206 13,412
Retained earnings (deficit)............................... (39,465) (42,240)
-------- --------
Total stockholders' equity (deficit)................... (22,259) (28,828)
-------- --------
Total capitalization.............................. $ 24,752 $168,783
======== ========
</TABLE>
- ------------------------------
(1) As a result of anticipated normal fluctuations in working capital, the
Company had approximately $7.5 million less in cash and cash equivalents at
Closing than indicated above.
(2) Following the Closing, $40.0 million is available under the New Credit
Facility for working capital and general corporate purposes, including the
issuance of letters of credit, $4.9 million of which were issued at Closing,
subject to the achievement of certain financial ratios and compliance with
certain conditions. See "Description of Indebtedness--New Credit Facility."
(3) In accordance with the Stockholders Agreement (as defined below under
"Certain Relationships and Related Party Transactions--Stockholders
Agreement"), the Company will be obligated under certain circumstances to
repurchase shares of common stock issued in connection with the Combination.
The amount reflected herein has been calculated based on the formula in the
Stockholders Agreement calculated on a pro forma basis giving effect to the
consummation of the Combination as of December 31, 1997. The Company will
not be obligated to repurchase such common stock prior to the third
anniversary of the consummation of the Combination.
30
<PAGE> 33
SELECTED HISTORICAL FINANCIAL DATA OF APCOA
(DOLLARS IN THOUSANDS)
The following table presents selected historical consolidated financial
data of APCOA at and for the fiscal years 1993, 1994, 1995, 1996 and 1997 which
have been derived from the audited financial statements of APCOA, audited by
Ernst & Young LLP. The selected financial data set forth below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations of APCOA" and the historical consolidated financial
statements of APCOA and the notes thereto included elsewhere herein.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Parking services revenue.................. $150,280 $148,398 $141,540 $135,752 $115,676
Cost of parking services.................. 132,598 129,175 120,215 113,501 92,818
General and administrative expenses....... 10,712 10,879 12,121 13,017 13,528
Depreciation and amortization............. 8,486 8,749 8,772 4,888 3,767
-------- -------- -------- -------- --------
Operating income (loss)................... (1,516) (405) 432 4,346 5,563
Interest expense, net..................... 2,021 2,350 2,705 2,877 3,243
Other expense............................. 500 125 -- -- --
Minority interest......................... 496 850 604 424 321
Income tax expense........................ 126 169 240 106 140
-------- -------- -------- -------- --------
Net income (loss)......................... $ (4,659) $ (3,899) $ (3,117) $ 939 $ 1,859
======== ======== ======== ======== ========
OTHER DATA:
Gross customer collections................ $352,466 $389,556 $408,952 $430,696 $476,183
Capital expenditures...................... 1,577 2,002 2,782 2,552 2,757
Ratio of earnings to fixed charges(1)..... N/A N/A N/A 1.3x 1.5x
Number of managed locations............... 173 197 227 207 318
Number of leased locations................ 232 223 260 243 252
Number of total locations................. 405 420 487 450 570
Number of parking spaces.................. 268,000 235,000 226,000 225,000 273,000
BALANCE SHEET DATA (AT END OF PERIOD):
Cash and cash equivalents................. $ 2,197 $ 2,021 $ 2,551 $ 2,532 $ 3,322
Working capital (deficiency).............. (24,065) (20,795) (20,990) (19,455) (17,059)
Total assets.............................. 52,788 51,544 51,605 52,823 59,095
Total debt................................ 24,829 27,700 30,461 32,795 38,283
Redeemable preferred stock................ 6,000 6,330 7,045 7,841 8,728
Stockholders' equity (deficit)............ (14,137) (19,542) (23,374) (23,231) (22,259)
</TABLE>
(1) For purposes of computing this ratio, earnings consist of income before
income taxes and minority interest plus fixed charges. Fixed charges consist
of interest expense, amortization of deferred financing costs and one-third
of the rent expense from operating leases, which management believes is a
reasonable approximation of the interest factor of the rent. For the years
ended December 31, 1993, 1994 and 1995, earnings were inadequate to cover
fixed charges by $4,037, $2,880 and $2,273, respectively.
31
<PAGE> 34
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF APCOA
The following discussion of APCOA's results of operations should be read in
conjunction with the consolidated financial statements of APCOA and the notes
thereto included elsewhere herein.
OVERVIEW
APCOA operates facilities under two types of arrangements: management
contracts and leases. APCOA does not own any parking facilities and, as a
result, APCOA assumes few of the risks of real estate ownership. Under a
management contract, APCOA typically receives a base monthly fee for managing
the property, and may also receive an incentive fee based on the achievement of
facility revenues above a base amount. In some instances, APCOA also receives
certain fees for ancillary services. Typically, all of the underlying revenues,
expenses and capital expenditures under a management contract flow through to
the property owner, not to APCOA. Under lease arrangements, APCOA generally pays
to the property owner either a fixed annual rental, a percentage of gross
customer collections or a combination thereof. APCOA collects all revenues under
lease arrangements and is responsible for most operating expenses, but it is
typically not responsible for major maintenance or capital expenditures. As of
December 31, 1997, the Company (giving effect to the Combination and the Other
Acquisitions) operated approximately 72% of its approximately 1,100 parking
facilities under management contracts and approximately 28% under leases.
Gross customer collections. Gross customer collections consist of gross
receipts collected at all leased and managed properties, including
unconsolidated affiliates.
Parking services revenue--leases. Lease parking services revenues consist
of all revenues received at a leased facility.
Parking services revenue--management contracts. Management contract
revenues consist of management fees, including both fixed and revenue-based, and
fees for ancillary services such as accounting, equipment leasing, consulting,
and other value-added services with respect to managed locations, but exclude
gross customer collections at such locations. Management contracts generally
provide APCOA a management fee regardless of the operating performance of the
underlying facility.
Cost of parking services--leases. Cost of parking services under lease
arrangements consist of (i) contractual rental fees paid to the facility owner
and (ii) all operating expenses incurred in connection with operating the leased
facility. Contractual fees paid to the facility owner are based on either a
fixed contractual amount or a percentage of gross revenue, or a combination
thereof. Generally under a lease arrangement, APCOA is not responsible for major
capital expenditures or property taxes.
Cost of parking services--management contracts. Cost of parking services
under management contracts are generally passed through to the facility owner.
Most management contracts have no cost of parking services related to them as
all costs are reimbursable to APCOA by the client. Several APCOA contracts,
however, require APCOA to pay for certain costs which are offset by larger
management fees. These contracts tend to be large airport properties with high
cost structures.
General and administrative expenses. General and administrative expenses
include primarily salaries, wages, travel and office related expenses for the
headquarters and field employees.
SUMMARY OF OPERATING FACILITIES
Pursuant to the terms of the Combination Agreement, APCOA paid to the
Standard Owners $65.0 million in cash and 16.0% of the Company Common Stock
outstanding as of January 15, 1998. In addition to the Combination, APCOA
completed four acquisitions since January 1, 1997, as follows: (i) Colonial
Richmond (March 1, 1997); (ii) Metropolitan Parking (June 1, 1997); (iii) the
remaining 50% interest in APCOA Limited (November 1, 1997); and (iv) Dixie
Parking (January 22, 1998). In addition, APCOA has entered into a binding letter
of intent with respect to the acquisition of the remaining 76% interest in
Executive Parking Industries LLC ("EPI") not currently owned by APCOA (such
proposed acquisition, together with
32
<PAGE> 35
the four completed acquisitions described above, the "Other Acquisitions"). The
Other Acquisitions will contribute 233 additional parking locations.
The following table reflects the Company's facilities at the end of the
periods indicated taking into consideration the Combination and the Other
Acquisitions, on a pro forma basis:
<TABLE>
<CAPTION>
FISCAL YEAR
---------------------
1995 1996 1997
<S> <C> <C> <C>
Managed facilities:
APCOA..................................................... 227 207 263
Standard.................................................. 233 295 344
Other Acquisitions........................................ N/A N/A 187
--- --- -----
Combined............................................... 460 502 794
Leased facilities:
APCOA..................................................... 260 243 227
Standard.................................................. 32 32 35
Other Acquisitions........................................ N/A N/A 46
--- --- -----
Combined............................................... 292 275 308
--- --- -----
Total facilities............................................ 752 777 1,102
=== === =====
Contract retention rate..................................... 96% 96% 96%
</TABLE>
RESULTS OF OPERATIONS
APCOA has made a strategic decision to pursue management contracts
primarily because its target client base generally prefers such arrangements
and, therefore, management believes that there are greater growth opportunities
in this area.
APCOA does not believe that an analysis of margins is a meaningful
indicator of operating performance with respect to management contracts because
the cost of parking services in connection with the provision of management
services is generally paid by the clients. Similarly, APCOA does not believe
that an analysis of margins is a meaningful indicator of operating performance
with respect to lease arrangements because margins are significantly impacted by
variables other than operating performance, such as the ability to charge higher
parking rates in different cities and widely varying space utilization by
parking facility type.
The following table sets forth, for the periods indicated, APCOA's results
of operations expressed in thousands of dollars:
<TABLE>
<CAPTION>
FISCAL YEAR
--------------------------------
1995 1996 1997
<S> <C> <C> <C>
Gross customer collections......................... $408,952 $430,696 $476,183
======== ======== ========
Parking services revenue:
Lease contracts.................................. $128,745 $120,286 $ 99,594
Management contracts............................. 12,795 15,466 16,082
-------- -------- --------
141,540 135,752 115,676
Cost of parking services:
Lease contracts.................................. 113,337 104,718 83,327
Management contracts............................. 6,878 8,783 9,491
-------- -------- --------
120,215 113,501 92,818
General and administrative expenses................ 12,121 13,017 13,528
Depreciation and amortization...................... 8,772 4,888 3,767
-------- -------- --------
Operating income................................... $ 432 $ 4,346 $ 5,563
======== ======== ========
</TABLE>
33
<PAGE> 36
FISCAL 1997 COMPARED TO FISCAL 1996
Gross customer collections. Gross customer collections increased $45.5
million, or 10.6%, to $476.2 million in fiscal 1997 from $430.7 million in
fiscal 1996. This increase resulted primarily from the net addition of 120
leased and managed locations, as well as a combination of rate increases and
higher utilization of parking spaces at existing facilities.
Parking services revenue--leases. Lease revenue decreased $20.7 million,
or 17.2%, to $99.6 million in fiscal 1997 from $120.3 million in fiscal 1996.
This decrease resulted from the loss of an airport lease ($31.7 million)
partially offset by improvements at other lease facilities ($6.9 million) and
new leases acquired in connection with the Other Acquisitions ($4.1 million).
Parking services revenue--management contracts. Management contract
revenue increased $0.6 million, or 4.0%, to $16.1 million in fiscal 1997 from
$15.5 million in fiscal 1996. This increase resulted primarily from increased
revenues at existing facilities ($0.4 million) and new contracts acquired in
connection with the Other Acquisitions ($1.1 million), offset by APCOA's Los
Angeles facilities that were contributed to EPI ($0.9 million).
Cost of parking services--leases. Cost of parking for leases decreased
$21.4 million, or 20.4%, to $83.3 million in fiscal 1997 from $104.7 million in
fiscal 1996. The reduction in cost of parking services leases was due to the
loss of a large airport lease ($31.2 million) partially offset by increases in
costs at existing lease locations ($6.6 million) and new leases acquired in
connection with the Other Acquisitions ($3.8 million).
Cost of parking services--management contracts. Cost of parking for
management contracts increased $0.7 million, or 8.1%, to $9.5 million in fiscal
1997 from $8.8 million in fiscal 1996. Most management contracts have no cost of
parking services related to them as all costs are reimbursable to APCOA.
However, several contracts (primarily large airport properties), require APCOA
to pay for certain costs which are offset by larger management fees. The
increase in cost of parking for management contracts was related to growth at
two airport facilities ($0.8 million), costs related to new management contracts
and the acquisition of Metropolitan in June 1997 ($0.4 million), offset by
APCOA's Los Angeles facilities that were contributed to EPI ($0.5 million).
General and administrative expenses. General and administrative expenses
increased $0.5 million, or 3.9%, to $13.5 million in fiscal 1997 from $13.0
million in fiscal 1996. This increase was primarily a result of inflation.
Depreciation and amortization expense. Depreciation and amortization
expense decreased $1.1 million, or 22.9%, to $3.8 million in fiscal 1997 from
$4.9 million in fiscal 1996. This decrease resulted primarily from the declining
balance of the leasehold contracts which were amortized over seven years. The
leasehold contracts were recorded in 1989 at their fair value in connection with
the acquisition of APCOA by Holberg.
FISCAL 1996 COMPARED TO FISCAL 1995
Gross customer collections. Gross customer collections increased $21.7
million, or 5.3%, to $430.7 million in fiscal 1996 from $409.0 million in fiscal
1995. This increase resulted primarily from a combination of rate increases and
higher utilization of parking spaces at existing facilities.
Parking services revenue--leases. Lease revenue decreased $8.4 million, or
6.6%, to $120.3 million in fiscal 1996 from $128.7 million in fiscal 1995. This
decrease resulted from a strategic shift from leases to management contracts,
particularly the conversion of one large airport lease ($10.7 million). This
decrease was partially offset by growth in existing revenues at other locations
($2.3 million).
Parking services revenue--management contracts. Management contract
revenue increased $2.7 million, or 20.9%, to $15.5 million in fiscal 1996 from
$12.8 million in fiscal 1995. This increase resulted from the conversion of one
large lease to a management contract ($0.2 million), significant growth at two
large airports ($1.4 million) and the increased revenues at existing facilities
primarily as a result of rate increases ($1.1 million).
34
<PAGE> 37
Cost of parking services--leases. Cost of parking for leases decreased
$8.6 million, or 7.6%, to $104.7 million in fiscal 1996 from $113.3 million in
fiscal 1995. The reduction in cost of parking services for leases is primarily
related to the conversion of one airport lease to a management contract ($10.4
million).
Cost of parking services--management contracts. Cost of parking for
management contracts increased $1.9 million, or 27.7%, to $8.8 million in fiscal
1996 from $6.9 million in fiscal 1995. The increase in cost of parking services
for management contracts reflects the significant growth at two airport
facilities ($0.9 million), and additional costs at other management accounts
($1.0 million).
General and administrative expenses. General and administrative expenses
increased $0.9 million, or 7.4%, to $13.0 million in fiscal 1996 from $12.1
million in fiscal 1995. This increase was primarily a result of additions to the
airport administrative staff designed to stimulate growth in that segment.
Depreciation and amortization. Depreciation and amortization expenses
decreased $3.9 million, or 44.3%, to $4.9 million in fiscal 1996 from $8.8
million in fiscal 1995. This decrease resulted primarily from the declining
balance of the leasehold contracts which were amortized over seven years. The
leasehold contracts were recorded in 1989 at their fair value in connection with
the acquisition of APCOA by Holberg.
HISTORICAL LIQUIDITY AND CAPITAL RESOURCES
As a result of day-to-day activity at the parking locations, APCOA collects
significant amounts of cash. Under lease contracts, this revenue is deposited
into APCOA's bank account, with a portion remitted to the clients in the form of
rental payments according to the terms of the leases. Under management
contracts, some clients require APCOA to deposit the daily receipts into an
APCOA bank account while others require the deposit into a client account. The
locations with revenues deposited into the APCOA banks result in the Company
operating with a negative working capital. This negative working capital arises
from the liability that is created for the amount of revenue that will be
remitted to the clients in the form of rents or net profit distributions
subsequent to month end, after the books are closed and reconciled. Since the
Company operates with a revolving working capital facility, all funds held for
future remittance to the clients are used to reduce the line until the payments
are made to the clients.
APCOA had $17.1 million of negative working capital at December 31, 1997 as
compared to $19.5 million at December 31, 1996. The reduction in negative
working capital in fiscal 1997 resulted primarily from an increase in cash and
accounts receivable attributable to the addition of management contracts during
the year. This is partially offset by the increase in current portion of
long-term debt which totaled $4.1 million at December 31, 1997 and $0.7 million
at December 31, 1996.
Net cash provided by operating activities totaled $0.9 million for fiscal
1997 and $2.0 million for fiscal 1996. The reduction of $1.1 million resulted
from working capital uses primarily related to adding new management contracts
and reductions in accrued rent and insurance reserves. The new management
contracts were concentrated in the type that require the Company to deposit the
receipts into the client's account. The reductions in accrued rent were
primarily a result of a location that was lost in a competitive bid. Insurance
reserves declined due to a concerted effort to close out old claims.
Cash used in investing activities totaled $3.6 million in 1997 and $3.3
million in 1996. The primary use is for capital expenditures which are used to
extend lease contracts, obtain new contracts and for management information
system equipment and upgrades. The Company has historically expended about $2.0
million annually on capital expenditures at parking properties. These
expenditures are generally used to acquire parking equipment, booths, or install
paving or fencing. The average expenditure is $50,000 to $60,000 per project. In
addition, the Company spends approximately $250,000 to $500,000 per year on
management information system upgrades.
Cash from financing activities totaled $3.5 million in 1997 up from $1.3
million in 1996. The primary reason for the increase was the acquisition of
three small parking companies in 1997 that were funded partially with promissory
notes issued by APCOA to the sellers in these transactions.
35
<PAGE> 38
PRO FORMA LIQUIDITY AND CAPITAL RESOURCES
In connection with the Offering, the Company has $55.8 million of
additional cash on its balance sheet as of December 31, 1997. The Company
anticipates using this cash to finance working capital needs, as well as for
future acquisitions.
The Company has lease commitments of $51.4 million for fiscal 1998. The
leased properties generate sufficient cash flow to meet the base rent payments.
In addition, following the Combination, APCOA paid to the Standard Owners $2.8
million, generally representing Standard's earnings through the date of the
Combination and Standard's cash on hand at such time. See "The Transactions--The
Combination."
Also, the Company anticipates taking a one-time charge of $8.5 million in
connection with the Transactions and Other Acquisitions, of which an estimated
$6.6 million will be paid in cash. See Note 2 to the Unaudited Pro Forma
Consolidated Statement of Operations.
The Company entered into the New Credit Facility for $40.0 million of
secured revolving credit. Borrowings under the New Credit Facility will bear
interest at variable rates based, at the Company's option, either on LIBOR,
overnight federal funds rate, or the bank's base rate. The New Credit Facility
contains certain covenants with which the Company must comply, including
restrictions on debt limits relative to EBITDA, capital expenditures, and other
customary requirements.
After the Transactions, the Company's primary capital requirements, on a
pro forma basis, are for working capital, capital expenditures and debt service.
The Company believes that cash flow from operating activities, cash and cash
equivalents and borrowings under the New Credit Facility will be adequate to
meet the Company's short-term and long-term liquidity requirements prior to the
maturity of its long-term indebtedness, although no assurance can be provided in
this regard. If the Company identifies investment opportunities requiring cash
in excess of the Company's cash flows and the net proceeds from the Offering,
the Company may borrow under the New Credit Facility, or may seek additional
sources of capital including the sale or issuance of Company Common Stock. The
Company has in the past and expects in the future to pursue a strategy of growth
through acquisition. The Company is currently in negotiations with respect to
several possible acquisitions. No binding agreements with respect to
acquisitions are pending, other than with respect to the proposed acquisition of
the interest in EPI not currently owned by the Company. There can be no
assurance as to the Company's ability to effect future acquisitions, nor as to
the effect of any such acquisition on the Company's operations, financial
condition and profitability.
IMPACT OF INFLATION AND CHANGING PRICES
The primary sources of revenues to APCOA are parking revenues from leased
locations and management contract revenue on managed parking facilities. APCOA
believes that inflation has had a limited impact on its overall operations for
fiscal years 1995, 1996 and 1997.
YEAR 2000
APCOA has tested its computer systems and applications for compliance with
Year 2000 issues and believes that its computer systems and applications are
Year 2000 compliant and that Year 2000 issues will not have a significant impact
on its operations or liquidity.
36
<PAGE> 39
SELECTED HISTORICAL FINANCIAL DATA OF STANDARD
(DOLLARS IN THOUSANDS)
The following table presents selected historical financial data of Standard
at and for the fiscal years 1993, 1994, 1995, 1996 and 1997. The selected
historical financial data of Standard at and for the fiscal years 1994, 1995,
1996 and 1997 have been derived from the audited financial statements of
Standard, audited by Altschuler, Melvoin and Glasser LLP. The selected
historical financial data of Standard at and for the fiscal year 1993 have been
derived from the unaudited financial statements of Standard. The selected
financial data set forth below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations of
Standard" and the historical consolidated financial statements of Standard and
the notes thereto included elsewhere herein.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Parking services revenue.......... $ 21,537 $ 35,787 $ 45,201 $ 50,275 $ 63,652
Cost of parking services.......... 12,213 25,901 35,168 37,838 50,142
General and administrative
expenses....................... 9,074 6,095 6,798 7,547 7,857
Depreciation and amortization..... 119 184 316 376 464
-------- -------- -------- -------- --------
Operating income.................. 131 3,607 2,919 4,514 5,189
Interest income, net.............. 16 9 59 56 85
-------- -------- -------- -------- --------
Net income........................ $ 147 $ 3,616 $ 2,978 $ 4,570 $ 5,274
======== ======== ======== ======== ========
OTHER DATA:
Gross customer collections........ $217,734 $250,081 $339,234 $412,114 $462,261
Capital expenditures.............. 196 306 547 336 492
Ratio of earnings to fixed
charges(1)..................... 2.9x 41.6x 26.9x 35.9x 41.6x
Number of managed locations....... 177 186 233 295 344
Number of leased locations........ 18 23 32 32 35
Number of total locations......... 195 209 265 327 379
Number of parking spaces.......... 155,000 174,000 192,000 235,000 249,000
BALANCE SHEET DATA (AT END OF
PERIOD):
Cash and cash equivalents......... $ 838 $ 2,774 $ 1,248 $ 2,968 $ 2,478
Working capital................... 2,305 2,615 1,697 3,453 3,449
Total assets...................... 5,642 6,672 6,956 9,130 10,176
Total debt........................ -- 248 529 470 590
Equity............................ 2,516 3,894 3,400 4,912 5,016
</TABLE>
- ------------------------------
(1) For purposes of computing this ratio, earnings consist of net income plus
fixed charges. Fixed charges consist of interest expense, amortization of
deferred financing costs and one-third of the rent expense from operating
leases, which management believes is a reasonable approximation of the
interest factor of the rent.
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<PAGE> 40
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF STANDARD
The following discussion of Standard's results of operations should be read
in conjunction with the Standard Consolidated Financial Statements and Notes
thereto.
OVERVIEW
For a general discussion of parking revenues, costs and expenses, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of APCOA--Overview."
As of December 31, 1997, Standard operated 344 facilities under management
contracts and 35 facilities pursuant to leases. A summary of Standard's
facilities is as follows:
<TABLE>
<CAPTION>
FISCAL YEAR
--------------------------------
1995 1996 1997
<S> <C> <C> <C>
Managed facilities......................................... 233 295 344
Leased facilities.......................................... 32 32 35
--- --- ---
Total facilities (end of period)........................... 265 327 379
Contract retention rate.................................... 97% 97% 96%
</TABLE>
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, Standard's
results of operations expressed in thousands of dollars:
<TABLE>
<CAPTION>
FISCAL YEAR
--------------------------------
1995 1996 1997
<S> <C> <C> <C>
Gross customer collections................................. $339,234 $412,114 $462,261
======== ======== ========
Parking services revenue:
Leases................................................... $ 38,418 $ 41,770 $ 54,801
Management contracts..................................... 6,783 8,505 8,851
-------- -------- --------
45,201 50,275 63,652
Cost of parking services:
Leases................................................... 35,168 37,838 50,142
Management contracts..................................... -- -- --
-------- -------- --------
35,168 37,838 50,142
General and administrative expenses........................ 6,798 7,547 7,857
Depreciation and amortization.............................. 316 376 464
-------- -------- --------
Operating income........................................... $ 2,919 $ 4,514 $ 5,189
======== ======== ========
</TABLE>
FISCAL 1997 COMPARED TO FISCAL 1996
Gross customer collections. Gross customer collections increased $50.2
million, or 12.2%, to $462.3 million in fiscal 1997 from $412.1 million in
fiscal 1996. This increase resulted primarily from the net addition of 52 leased
and managed locations as well as from a combination of rate increases and higher
utilization of parking spaces at existing facilities.
Parking services revenue--leases. Lease revenue increased $13.0 million,
or 31.1%, to $54.8 million in fiscal 1997 compared to $41.8 million in fiscal
1996. This increase resulted from the net addition of two large leased
properties.
Parking services revenue--management contracts. Revenue at managed
locations increased $0.4 million, or 4.1%, to $8.9 million in fiscal 1997 from
$8.5 million in fiscal 1996. This increase resulted from the net addition of 49
managed locations.
Cost of parking services. Cost of parking services increased $12.3
million, or 32.5%, to $50.1 million in fiscal 1997 from $37.8 million in fiscal
1996. This increase resulted from a net addition of two large leased
38
<PAGE> 41
properties. There are no cost of parking services for management contracts
because all such costs are reimbursed by the parking facility owner.
General and administrative expenses. General and administrative expenses
increased $0.4 million, or 4.1%, to $7.9 million in fiscal 1997 from $7.5
million in fiscal 1996. This modest increase was primarily due to an increase in
employee compensation.
Depreciation and amortization expenses. Depreciation and amortization
expenses were $0.5 million in fiscal 1997 and $0.4 in fiscal 1996.
FISCAL 1996 COMPARED TO FISCAL 1995
Gross customer collections. Gross customer collections increased $72.9
million, or 21.5%, to $412.1 million in fiscal 1996 from $339.2 million in
fiscal 1995. This increase resulted primarily from the net addition of 62 leased
and managed locations as well as from a combination of rate increases and higher
utilization of parking spaces at existing facilities.
Parking services revenue--leases. Lease revenue increased $3.4 million, or
8.7%, to $41.8 million in fiscal 1996 from $38.4 in fiscal 1995. This increase
resulted from rate increases and increased volume.
Parking services revenue--management contracts. Management contract
revenue increased $1.7 million, or 25.4%, to $8.5 million in fiscal 1996 from
$6.8 million in fiscal 1995. This increase resulted from the net addition of 62
managed locations.
Cost of parking services. Cost of parking services increased $2.6 million,
or 7.6%, to $37.8 million in fiscal 1996 from $35.2 million in fiscal 1995. This
increase was due to increased volume.
General and administrative expenses. General and administrative expenses
increased $0.7 million, or 11.0%, to $7.5 million in fiscal 1996 from $6.8
million in fiscal 1995. This increase was primarily a result of increased
compensation of key employees.
Depreciation and amortization expenses. Depreciation and amortization
expenses increased $0.1 million, or 19.0%, to $0.4 million in fiscal 1996 from
$0.3 million in fiscal 1995. This increase resulted primarily from the
headquarters office relocation late in 1995.
LIQUIDITY AND CAPITAL RESOURCES
During fiscal 1997, Standard generated cash flows from operating activities
of $5.1 million compared to $5.3 million in fiscal 1996. This decrease in cash
flow from operating activities resulted primarily from net changes in the
components of working capital.
Net cash used in investing activities was $0.5 million for the years ended
December 31, 1997 and December 31, 1996. The primary use of these funds was the
acquisition of capital assets.
Net cash used by financing activities was $5.0 million for the year ended
December 31, 1997 and $3.1 million for the year ended December 31, 1996. The
primary use of these funds was distributions to partners.
Standard has lease commitments of $23.3 million for fiscal 1998. The lease
commitments are in the form of a fixed base rent with the majority of leases on
a year-to-year renewal. The leased properties generate sufficient cash flow in
order to meet the base rent payments.
YEAR 2000
Standard has considered the impact of Year 2000 issues on its computer
systems and applications and believes the impact of the Year 2000 will not have
a significant impact on its operations or liquidity. As part of the Combination,
Standard will convert to the APCOA computer system which has been tested to
comply with Year 2000 issues.
39
<PAGE> 42
BUSINESS
GENERAL
The Company is a leading national provider of parking facility management
services. The Company provides on-site management services at multi-level and
surface parking facilities in the two major markets of the parking industry:
urban parking and airport parking. Following consummation of the Combination,
the Company manages approximately 1,100 parking facilities, containing
approximately 580,000 parking spaces in over 45 cities across the United States
and Canada. The Company's pro forma gross customer collections, pro forma
parking services revenue, pro forma EBITDA and pro forma net loss for the year
ended December 31, 1997 were $948.6 million, $186.1 million, $19.9 million and
$2.8 million, respectively.
The Company believes that its superior management services coupled with its
focus on increasing market share in select core cities leads to higher
profitability per parking facility than its competitors. The Company believes
that it enhances its leading position by providing: (i) Ambiance in Parking(C),
an approach to parking that includes a number of premium, on-site, value-added
services and amenities; (ii) state-of-the-art information technology, including
Client View(C), a proprietary client reporting system which allows the Company
to provide clients with real-time access to site-level financial and operating
information; and (iii) award-winning training programs for on-site employees
that promote customer service and client retention. In addition, the Company
believes that it distinguishes itself from its competitors because of its
ability to leverage its long-standing experience in securing contracts,
particularly with regard to the airport parking market.
The Company's diversified client base includes some of the nation's largest
owners and developers of major office building complexes, shopping centers,
sports complexes, hotels and hospitals. In addition, the Company manages parking
operations at many of the major airports in North America. In the urban parking
market, the Company's clients include CB Commercial Real Estate Group, Equity
Office Properties, the Taubman Company, Harvard Medical School, Northwestern
University, Children's Memorial Medical Center in Chicago and Cedars Sinai
Medical Center in Los Angeles. Parking facilities managed by the Company include
the CNN Center in Atlanta, the Kennedy Center for the Performing Arts in
Washington, D.C. and the Gateway Sports Complex in Cleveland. In the airport
parking market, the Company's clients include Chicago O'Hare International and
Chicago Midway, Cleveland-Hopkins International, Minneapolis-St. Paul
International and Detroit Metropolitan airports.
The Company operates its clients' parking properties through two types of
arrangements: management contracts and leases. The Company does not own any
parking facilities and, as a result, the Company assumes fewer of the risks of
real estate ownership. Under a management contract, the Company typically
receives a base monthly fee for managing the property, and may also receive an
incentive fee based on the achievement of facility revenues above a base amount.
In some instances, the Company also receives certain fees for ancillary
services. Typically, all of the underlying revenues and expenses under a
management contract flow through to the property owner, not to the Company.
Under lease arrangements, the Company generally pays either a fixed annual
rental, a percentage of gross customer collections, or a combination thereof to
the property owner. The Company collects all revenues under lease arrangements
and is responsible for most operating expenses, but it is typically not
responsible for major maintenance or capital expenditures. As of December 31,
1997, the Company operated approximately 72% of its approximately 1,100 parking
facilities under management contracts and approximately 28% under leases.
Renewal rates for the Company's management contracts and leases were
approximately 96% for each of the last three years.
INDUSTRY OVERVIEW
General. The International Parking Institute, a trade organization of
parking professionals, estimates that there are 35,000 parking facilities in the
United States generating over $26.0 billion in gross customer collections. The
parking industry is highly fragmented, with over 1,700 commercial parking
operators in the United States, as estimated by the Parking Market Research
Company, an independent research company. Industry participants, the vast
majority of which are privately-held companies, consist of a relatively few
40
<PAGE> 43
nationwide companies and a large number of small regional or local operators,
including a substantial number of companies providing parking as an ancillary
service in connection with property management or ownership. Clients of parking
facility managers include the owners of office buildings, major airports,
shopping centers, sports complexes, hotels and hospitals, which provide parking
to customers.
Operating Arrangements. Parking facilities operate under three general
types of arrangements: management contracts, leases and fee ownership. The
general terms and benefits of these three types of arrangements are as follows:
Management Contracts. Under a management contract, the facility
manager generally receives a base monthly fee for managing the facilities
and often receives an incentive fee based on the achievement of facility
revenues above a base amount. Facility managers generally charge fees for
various ancillary services such as accounting, equipment leasing and
consulting. Responsibilities under a management contract include hiring,
training and staffing parking personnel, and providing collections,
accounting, record-keeping, insurance and facility marketing services. In
general, the facility manager is not responsible for structural or
mechanical repairs, and typically is not responsible for providing security
or guard services. Under typical management contracts, the facility owner
is responsible for operating expenses such as taxes, license and permit
fees, insurance premiums, payroll and accounts receivable processing and
wages of personnel assigned to the facility. In addition, the facility
owner is responsible for non-routine maintenance, repair costs and capital
improvements. The typical management contract is for a term of one to three
years (though the owner often reserves the right to terminate, without
cause, on 30 days' notice) and may contain a renewal clause.
Leases. Under a lease arrangement, the parking facility operator
generally pays either a fixed annual rent, a percentage of gross customer
collections, or a combination thereof to the property owner. The parking
facility operator collects all revenues and is responsible for most
operating expenses, but is typically not responsible for major maintenance.
In contrast to management contracts, lease arrangements are typically for
terms of three to ten years and typically contain a renewal term, and
provide for a fixed payment to the facility owner regardless of the
operating earnings of the parking facility. As a result, the leased
facilities generally require a longer commitment and a larger capital
investment by the parking facility operator than do managed facilities.
Fee Ownership. Under fee ownership arrangements, the parking facility
operator owns the property and fixtures. Ownership of parking facilities,
either independently or through joint ventures, typically requires a larger
capital investment than managed or leased facilities but provides maximum
control over the operation of the parking facility, and all increases in
revenue flow directly to the owner. Ownership provides the potential for
realizing capital gains from the appreciation in the value of the
underlying real estate, but it also subjects the property owner to risks
including reduction in value of the property and additional potential
liabilities, as well as additional costs such as real estate taxes and
structural, mechanical or electrical maintenance or repairs.
Parking Industry Markets. The parking industry is comprised of two major
markets: urban parking and airport parking. The urban parking market consists of
many sub-markets with differing clients including commercial, office,
residential, event, entertainment, retail, shopping centers, hospitals and
hotels. In contrast, the airport parking market consists of a relatively small
number of clients with large revenue-generating parking operations and similar
needs that are unique to airport parking facilities.
Industry Growth Dynamics. A number of opportunities for growth exist for
parking facility operators:
Industry Consolidation. There are many opportunities for industry
consolidation, both domestically and abroad. Consolidation is essential to
growth in the parking industry because of the limitations on growth in
revenues of existing operations. While some growth in revenues from
existing operations is possible through redesign, increased operational
efficiency or increased facility use and prices, such growth is ultimately
limited by the size of a facility and market conditions. The net effect of
the consolidation in the urban parking market is that the typical buyer in
this market is becoming larger and increasingly sophisticated. This
increase in sophistication has placed greater demands on parking
41
<PAGE> 44
management firms and has driven the trend toward management contracts where
clients require high-level management and reporting systems, site-specific
services and quality control.
Privatization of Government-Owned and Operated Facilities. Additional
growth in the industry has been a function of the trend for parking owners
to move from owner-operation to outsourcing the management of operations to
private operators. This is particularly true in the case of privatization
of government operations and facilities, which is resulting in new
opportunities for the parking industry. The Company believes that cities
and municipal authorities are increasingly retaining private firms to
operate facilities and parking-related services in an effort to reduce
operating budgets and increase efficiency.
Expanding Relationships with Large Property Managers, Owners and
Developers. Generally, the overall parking industry expansion is created
by new construction of parking facilities by property managers, owners and
developers. While new construction in the United States slowed in the late
1980s and has only gradually begun to increase in recent years, growth for
parking facility operators during such period generally resulted from more
established parking facility operators leveraging their relationships with
property managers and owners to take market share from smaller companies.
As new construction of parking facilities increases, the Company believes
that facility operators with established relationships with such parking
facility developers can leverage such relationships to capture incremental
market share.
BUSINESS STRATEGY AND COMPETITIVE ADVANTAGES
The Company believes its innovative parking facility amenities, services
and management, coupled with its state-of-the-art information technology and
reporting systems, position the Company to enhance its standing as a leading
provider of parking services. Specific elements of the Company's business
strategy and competitive advantages include:
Focus on Core Cities. Part of the Company's business strategy is to
focus on increasing system-wide profitability by maximizing operating
leverage. As part of this strategy, the Company operates in certain core
cities and realizes certain economies of scale, including the ability to
spread administrative overhead costs across a large number of parking
facilities in a single market. As a result, the Company has been able to
increase significantly profitability per contract. For example, management
estimates that in 1997 the Company's average profit per contract in cities
in which it operated more than 35 parking locations was nearly double the
Company's profit per contract in cities in which it operated fewer than 35
locations.
Strong Operating Performance and Stable Cash Flow. From 1993 to 1997,
the Company's EBITDA increased from $7.2 million to $15.0 million,
representing a CAGR of 20.0%. Over the same period, the Company's capital
expenditures averaged less than $3.0 million per year. In addition, the
Company reduced exposure to increasing cost of parking services by (i)
increasing the proportion of its management contracts, which generally pass
cost of parking services onto the Company's clients, and (ii) maintaining
low minimum rental commitments under its non-cancelable leases. The
Company's average management and lease contract renewal rate over the last
three years was approximately 96%. As a result of the Company's operating
performance, as well as the low capital expenditure requirements and low
risk portfolio of management contracts and leases, the Company has been
able to generate consistent cash flow.
Strategic Growth Through Acquisitions. The parking industry is highly
fragmented, with over 1,700 industry participants. In addition to pursuing
individual contracts, the Company is seeking to capitalize on this industry
fragmentation by pursuing a focused acquisition strategy which includes:
(i) acquiring parking management companies within core cities and target
cities where the Company believes it can attain a significant market share,
and (ii) acquiring larger, regional parking management companies. As a part
of this strategy, APCOA and Standard, combined, have successfully acquired
and integrated 6 companies with 138 new facilities and also added 252 net
individual contracts over the past five years.
Leading Client Base. The Company's diversified, long-standing
customer base comprises many of the premier national property management
and ownership organizations in the United States and
42
<PAGE> 45
Canada. The Company is a market leader in airport parking, operating
approximately 100 parking facilities at airports in the United States and
Canada. The Company's focus on select core cities enables the Company to
maintain broader and stronger relationships with the local client base,
which the Company believes improves its client retention rates and its
ability to compete for new contracts.
Value-Added Services and Award-Winning Information Systems. The
Company believes that it can continue to increase profitability and attract
new clients by providing: (i) Ambiance in Parking(R); (ii) state-of-the-art
information technology, including Client View(C); and (iii) award-winning
training programs for on-site employees. In addition, these capabilities
facilitate development opportunities that typically lead to long-term lease
and management contracts on new facilities. Also, the Company has developed
state-of-the-art information technology systems which connect local offices
across the country to its corporate office. These systems, which received
the 1994 Esprit Award sponsored by Booz-Allen & Hamilton and CIO magazine,
enable a centralized staff to eliminate inefficient duplication of
administrative and accounting functions at the field level and also help
provide key operational information to clients. Management believes that
these systems will enable the Company to add many new clients without
incurring additional administrative staff and expense.
Experienced Management Team. Myron C. Warshauer, the Company's Chief
Executive Officer and the third generation of his family to direct
Standard, has over 35 years of industry experience. G. Walter Stuelpe, Jr.,
the Company's President, has been with APCOA for over 25 years, serving as
Chief Executive Officer since 1986. The Company's other executive team
members are comprised of the most experienced, talented executives from
both companies. Overall, the members of the Company's executive team have
an average of over 15 years of industry experience.
AMBIANCE IN PARKING(R)
The Company offers a comprehensive package of value-added, on-site parking
services and amenities which the Company characterizes as Ambiance in Parking(R)
which includes:
Patented Musical Theme Floor Reminder System. The Company's patented
musical theme floor reminder system is designed to help customers remember
the garage level on which they had parked. A different song is played on
each floor of the parking garage which also displays distinctive signs and
graphics which correspond with the floor's theme. For example, in one
garage with U.S. cities as a theme, songs played include "I Left My Heart
in San Francisco" on one floor and "New York, New York" on a different
floor. Other garages have themes such as college fight songs, broadway
shows, classic movies and professional sports teams.
Books-To-Go(R). Books-To-Go(R) is an audiotape library which is
provided free-of-charge for monthly parkers.
ParkNet(R). The ParkNet(R) traffic information system allows parking
customers to obtain continuous, site-specific traffic reports relating to
current traffic conditions on area expressways as well as the routes
utilized to get from the specific parking facility to the expressways.
CarCare(R). The CarCare(R) service program is provided in conjunction
with Midas(R). Parking customers can have their cars picked up from the
parking facility, serviced and returned before the end of the business day.
Standard Parking Exchange(TM). The Standard Parking Exchange(TM)
program entitles monthly parkers at participating locations to free parking
for one hour per day at all other participating locations.
Complimentary Windshield and Headlight Cleaning. During off-peak
hours, the Company's parking attendants clean windshields and headlights of
cars and place a card on the windshield informing the parking customer that
this service has been provided.
Emergency Car Services. The Company offers complimentary services
such as battery starts, lost car assistance, tire inflation, tire change,
escort service and key retrieval.
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<PAGE> 46
STATE-OF-THE-ART INFORMATION TECHNOLOGY
The Company's information technology provides valuable benefits to the
Company's clients. Client View(C), a proprietary Windows(R)-based client
reporting system, allows the Company's clients to access, on a real-time basis,
site-level financial and operating information.
The Company has created advanced information systems that connect local
offices across the country to its corporate office. A centralized staff provides
accounting and administrative expertise and controls that eliminate duplication
of administrative and accounting functions at the field level. ParkStat(C), one
of the Company's proprietary software tools, enhances the performance of parking
facilities managed by the Company. By automatically polling information from
on-site collection devices, ParkStat(C) uses location-specific information to
calculate the impact of pricing alternatives, optimize staffing levels, improve
forecasting and assist in long-range planning.
Technological innovations such as an automated credit card lane and a
radio-activated hands-free parking access system allow fast and hassle-free
service for parking customers.
AWARDS
In 1994, the Company received the prestigious Esprit Award sponsored by CIO
magazine and Booz-Allen & Hamilton for its proprietary state-of-the-art
information technology systems which connect local offices across the country to
the Company's corporate office. These systems enable a centralized staff to
eliminate inefficient duplication of administrative and accounting functions at
the field level and also help provide key operational, financial and demographic
information to clients. No other parking facility manager has ever received this
award.
Over the past five years various elements of the Company's training program
have received industry awards for outstanding content and production, including:
- National Association of Industrial and Office Properties' Outstanding
Literature and Video Award;
- two Telly Awards, a prestigious national award in the field of
advertising, film and video productions;
- BPAA Bronze Tower Award which recognizes business-to-business
communications in Business/Professional Advertising; and
- Great-Lakes Sho-Me Award which recognizes outstanding business
communication in Greater Cleveland.
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<PAGE> 47
PARKING FACILITIES
The Company operates parking facilities in 35 states, Washington D.C. and
two provinces of Canada pursuant to management contracts or leases. The Company
does not currently own any parking facilities. The following table summarizes
certain information regarding the Company's facilities as of December 31, 1997,
giving effect to the Combination and the Other Acquisitions:
<TABLE>
<CAPTION>
NUMBER OF LOCATIONS NUMBER OF SPACES
------------------------- -----------------------------
STATES/PROVINCES AIRPORTS AND URBAN CITIES AIRPORT URBAN TOTAL AIRPORT URBAN TOTAL
<S> <C> <C> <C> <C> <C> <C> <C>
Alabama Airports 3 3 1,430 1,430
Arizona Phoenix 3 3 4,225 4,225
California Los Angeles, San Diego, San 6 177 183 23,779 51,866 75,645
Francisco, San Jose, Santa
Barbara and Airports
Colorado Denver and Airports 5 12 17 713 5,688 6,401
Connecticut Stamford and Airport 2 6 8 4,351 4,332 8,683
Delaware Wilmington 1 1 500 500
District of Columbia Washington D.C. 11 11 7,577 7,577
Florida Miami, Orlando and Airports 4 13 17 4,340 6,085 10,425
Georgia Atlanta and Airports 2 36 38 2,142 9,677 11,819
Hawaii Honolulu 53 53 21,735 21,735
Idaho Airport 1 1 376 376
Illinois Chicago and Airport 2 150 152 26,800 87,246 114,046
Indiana Indianapolis and Airport 1 19 20 619 4,420 5,039
Kentucky Louisville and Airport 2 1 3 3,071 395 3,466
Louisiana New Orleans and Airport 1 45 46 909 8,125 9,034
Maine Airport 2 2 1,299 1,299
Maryland Baltimore, Bethesda 19 19 4,167 4,167
Massachusetts Boston and Airports 2 95 97 645 61,557 62,202
Michigan Detroit and Airports 6 1 7 1,412 132 1,544
Minnesota Minneapolis and Airports 8 38 46 13,495 12,938 26,433
Missouri Kansas City and Airports 2 77 79 9,848 14,206 24,054
Montana Great Falls and Airports 5 4 9 2,432 1,966 4,398
Nebraska Airport 1 1 1,361 1,361
Nevada Las Vegas 1 1 286 286
New York Buffalo, Hamburg, Hawthorne and 10 3 13 8,678 16,060 24,738
Airports
North Dakota Airports 2 2 1,415 1,415
Ohio Cleveland, Columbus and Airports 9 94 103 7,492 38,474 45,966
Ontario East York, North York, Oshawa, 1 34 35 3,171 23,912 27,083
Scarsborough, Toronto and Airport
Oregon Airport 1 1 433 433
Pennsylvania Philadelphia, Pittsburgh and 2 3 5 1,331 2,182 3,513
Airports
Quebec Airports 3 3 8,591 8,591
South Carolina Airport 1 1 4,987 4,987
South Dakota Airport 1 1 1,024 1,024
Tennessee Memphis and Airports 2 11 13 3,077 5,176 8,253
Texas Houston, Dallas, Fort Worth and 4 57 61 2,862 29,176 32,038
Airports
Virginia Richmond and Airport 4 32 36 3,468 6,109 9,577
Washington Seattle and Airports 2 3 5 822 1,195 2,017
Wisconsin Milwaukee and Airports 3 3 6 1,512 1,948 3,460
--- ----- ----- ------- ------- -------
TOTALS 100 1,002 1,102 147,885 431,355 579,240
=== ===== ===== ======= ======= =======
</TABLE>
The Company has interests in 18 joint ventures that each operate a single
parking facility. The Company is the general partner of three limited
partnerships which operate a single parking facility and one limited partnership
which operates five parking facilities. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations of APCOA--Summary of
Operating Facilities."
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<PAGE> 48
COMPETITION
The parking industry is fragmented and highly competitive, with limited
barriers to entry. The Company faces direct competition for additional
facilities to manage or lease and the facilities currently operated by the
Company face competition for employees and customers. The Company competes with
a variety of other companies to add new operations. Although there are
relatively few large, national parking companies that compete with the Company,
developers, hotel companies, and national financial services companies also have
the potential to compete with parking companies. Municipalities and other
governmental entities also operate parking facilities that compete with the
Company. The Company also faces competition from local owner-operators of
facilities who are potential clients for the Company's management services.
Construction of new parking facilities near the Company's existing facilities
could adversely affect the Company's business. See "Risk Factors--Competition."
REGULATION
The Company's business is not substantially affected by direct governmental
regulation, although parking facilities are sometimes directly regulated by both
municipal and state authorities. The Company is affected by laws and regulations
(such as zoning ordinances) that are common to any business that deals with real
estate and by regulations (such as labor and tax laws) that affect companies
with a large number of employees. In addition, several state and local laws have
been passed in recent years that encourage car pooling and the use of mass
transit, including, for example, a Los Angeles, California law prohibiting
employers from reimbursing employee parking expenses. Laws and regulations that
reduce the number of cars and vehicles being driven could adversely impact the
Company's business.
Under various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real property may be
liable for the costs of removal or remediation of hazardous or toxic substances
on, under or in such property. Such laws typically impose liability without
regard to whether the owner or operator knew of, or was responsible for, the
presence of such hazardous or toxic substances. In connection with the operation
of parking facilities, the Company may be potentially liable for any such costs.
Although the Company is currently not aware of any material environmental claims
pending or threatened against it or any of the parking facilities which it
operates, there can be no assurance that a material environmental claim will not
be asserted against the Company or against the parking facilities which it
operates. The cost of defending against claims of liability, or of remediating a
contaminated property, could have a material adverse effect on the Company's
financial condition or result of operations.
Various other governmental regulations affect the Company's operation of
parking facilities, both directly and indirectly, including the ADA. Under the
ADA, all public accommodations, including parking facilities, are required to
meet certain federal requirements related to access and use by disabled persons.
For example, the ADA requires parking facilities to include handicapped spaces,
headroom for wheelchair vans, attendants' booths that accommodate wheelchairs,
and elevators that are operable by disabled persons. When negotiating management
contracts and leases with clients, the Company generally has the property owner
contractually assume responsibility for any ADA liability in connection with the
property; however, there can be no assurance that the property owner has assumed
such liability for any given property and there can be no assurance that the
Company would not be held liable despite assumption of responsibility for such
liability by the property owner. Management believes that the parking facilities
the Company operates are in substantial compliance with ADA requirements.
EMPLOYEES
As of December 31, 1997, the Company employed approximately 8,000
individuals, including approximately 4,200 full-time and 3,800 part-time
employees. The Company believes that its employee relations are good.
Approximately 2,600 employees are represented by unions. Most union employees
are represented by the Teamsters Union. The largest union facilities are in the
Chicago metropolitan area and in airport parking facilities located in Detroit,
Michigan, San Jose, California, Minneapolis, Minnesota, Cleveland, Ohio and
Hartford, Connecticut.
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<PAGE> 49
INTELLECTUAL PROPERTY
The APCOA name and logo and the Standard name and logo are registered with
the United States Patent and Trademark Office. In addition, the Company has
registered the names and, as applicable, the logos of all material subsidiaries
and divisions of the Company in the United States Patent and Trademark Office or
the equivalent State registry, including the right to the exclusive use of the
name Central Park in the Chicago metropolitan area. The Company has also
obtained a United States patent for its Multi-Level Vehicle Parking Facility
(the Musical Theme Floor Reminder System) and trademark protection for its
proprietary parker programs, such as Books-To-Go(C) and Ambiance in Parking(C).
Proprietary software developed by the Company, such as Client View(C), Hand Held
Program(C), License Plate Inventory Program(C) and Parkstat(C) are registered in
the United States Copyright Office.
LITIGATION
The provision of services to the public entails an inherent risk of
liability. The Company is engaged in routine litigation incidental to its
business. There is no legal proceeding to which the Company is a party which, if
decided adversely, would be material to the Company's financial condition,
liquidity, or results of operations. The Company attempts to disclaim liability
for personal injury and property damage claims by printing disclaimers on its
ticket stubs and by placing warning signs in the facilities it operates. The
Company also carries liability insurance that management believes meets or
exceeds industry standards; however, there can be no assurance that any future
legal proceedings (including any related judgments, settlements or costs) will
not have a material adverse effect on the financial condition, liquidity, or
results of operations of the Company.
INSURANCE
The Company purchases comprehensive liability insurance covering the
parking facilities that it leases and manages. The Company also purchases
workers' compensation insurance with respect to all its employees, whether such
persons are employed at leased or managed facilities. The Company's insurance
program insulates its clients against any additional annual premium charges in
the event of adverse claims experience. Due to the magnitude of the Company's
parking operations, the Company's management believes that the rates at which it
purchases such insurance represent a discount to the rates that would be charged
to parking facility owners on a stand-alone basis. Recognizing the benefits and
protection afforded by the Company's insurance program, a significant majority
of the Company's clients historically have purchased liability insurance through
the Company. However, the clients of the Company have the option of purchasing
their own policies, provided that the Company is adequately protected. A
significant reduction in the number of clients that purchase insurance through
the Company could have a material adverse effect on operating earnings. In
addition, although the cost of insurance has not fluctuated significantly in
recent years for the Company, a material increase either in the Company's
insurance costs or in the magnitude of its claims could have a material adverse
effect on the Company's operating earnings.
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<PAGE> 50
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth certain information with respect to each
person who is an executive officer or director of the Company following
consummation of the Combination, as indicated below:
<TABLE>
<CAPTION>
NAME AGE TITLE
- ---- --- -----
<S> <C> <C>
John V. Holten................. 41 Director and Chairman
Myron C. Warshauer............. 58 Director and Chief Executive Officer
G. Walter Stuelpe, Jr.......... 53 Director and President
Michael J. Celebrezze.......... 41 Executive Vice President -- Chief Financial Officer
Douglas R. Warshauer........... 30 Executive Vice President -- Marketing/Business Development
Steven A. Warshauer............ 43 Executive Vice President -- Operations
Michael K. Wolf................ 48 Executive Vice President -- Chief Administrative Officer
and Associate General Counsel
James A. Wilhelm............... 44 Executive Vice President -- Operations
Herbert W. Anderson, Jr. ...... 39 Executive Vice President -- Operations
Robert N. Sacks................ 45 Executive Vice President -- General Counsel and Secretary
James V. LaRocco, Jr........... 53 Executive Vice President -- Corporate Development
Patrick J. Meara............... 35 Director
Gunnar E. Klintberg............ 49 Director, Vice President
A. Petter Ostberg.............. 36 Vice President
</TABLE>
John V. Holten. Mr. Holten has served as Chairman and Chief Executive
Officer of Holberg since its inception in 1986, and as a Director and Chairman
of APCOA since 1989. Mr. Holten was Managing Director of DnC Capital
Corporation, a merchant banking firm in New York City, from 1984 to 1986. Mr.
Holten received his M.B.A. from Harvard University in 1982 and he graduated from
the Norwegian School of Economics and Business Administration in 1980.
Myron C. Warshauer. Mr. Warshauer has served as President and Chief
Executive Officer of Standard since 1973, and has been associated with Standard
since 1963. Mr. Warshauer received his B.S. Degree in Finance from the
University of Illinois in 1962, and received a Masters Degree in Business
Administration from Northwestern University in 1963.
G. Walter Stuelpe, Jr. Mr. Stuelpe has been associated with APCOA for over
25 years, serving as the Company's President since 1986. His prior executive
positions have included sales and marketing, corporate development and strategic
planning, as well as having headed up different operational divisions in a
variety of cities in the United States and Europe. Mr. Stuelpe is an alumnus of
Indiana University, class of 1967. Mr. Stuelpe has since participated in
numerous executive programs specifically designed to address managing business
change and growth. He has also had an active leadership role in industry-related
associations, having served as president, chairman and now as a member of the
Board of the National Parking Association as well as the International Parking
Institute, and is a full member of the Urban Land Institute.
Michael J. Celebrezze. Mr. Celebrezze joined APCOA in 1984 as Manager,
Treasury and Financial Planning. Since then he has held the positions of Vice
President, Controller and, since 1995, Senior Vice President, Chief Financial
Officer and Treasurer. His responsibilities included the operations of
accounting, tax, management information systems, corporate security, financial
planning, insurance and risk management, real estate finance and banking. Mr.
Celebrezze graduated cum laude from Kent State University with a Degree in
Business Administration, majoring in Accounting and he subsequently earned a
Masters in Business Administration from John Carroll University. He is a
Certified Public Accountant in the State of Ohio.
Douglas R. Warshauer. Mr. Warshauer joined Standard in 1994, initially
serving as Vice President. Upon receiving his Masters of Management Degree with
distinction from the J.L. Kellogg School of Management at Northwestern
University, Mr. Warshauer became Standard's Executive Vice President for
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<PAGE> 51
Finance. Mr. Warshauer also holds a Bachelors Degree with highest honors in
Social Science from the University of California at Berkeley.
Steven A. Warshauer. Mr. Warshauer joined Standard in 1982, initially
serving as Vice President, then becoming Senior Vice President and, since
January 1, 1998, serving as Executive Vice President. Mr. Warshauer is a
Certified Public Accountant and a member of both the American Institute of
Certified Public Accountants and the Illinois Society of Certified Public
Accountants. Mr. Warshauer received his Bachelor of Science Degree from the
University of Northern Colorado in 1976 with dual majors in Accounting and
Finance. Prior to joining Standard, he practiced with a national accounting
firm.
Michael K. Wolf. Mr. Wolf joined Standard as Senior Vice President and
General Counsel in 1990, after sixteen years in the private practice of law. Mr.
Wolf was subsequently appointed Executive Vice President of Standard. Prior to
joining Standard, Mr. Wolf was a partner of the international law firm of Jones,
Day, Reavis & Pogue, resident in the Chicago office, where his primary
concentration was in the field of real estate. Mr. Wolf received his B.A. Degree
in 1971 from the University of Pennsylvania, and in 1974 received his J.D.
Degree from Washington University, where he served as Notes and Comments editor
of the Washington University Law Quarterly. Upon graduation from law school, Mr.
Wolf was elected to the Order of the Coif.
James A. Wilhelm. Mr. Wilhelm joined Standard in 1985, serving as
Executive Vice President since January 1, 1998. Mr. Wilhelm is currently
responsible for managing Standard's Midwest and Western Regions, which include
parking facilities in Chicago and sixteen other cities throughout the United
States and Canada. Mr. Wilhelm received his B.A. Degree from Northeastern
Illinois University in 1976. Mr. Wilhelm is a member of the National Parking
Association and the International Parking Institute.
Herbert W. Anderson, Jr. Mr. Anderson joined APCOA in 1994, and has served
as Corporate Vice President--Urban Properties since 1995. Mr. Anderson graduated
from LaSalle University and began his career in the parking industry in 1984.
Mr. Anderson is a member of the Board of the National Parking Association.
Robert N. Sacks. Mr. Sacks joined APCOA in 1988, serving as General
Counsel and Secretary since 1988, serving as Vice President, Secretary, and
General Counsel since 1989 and serving as Senior Vice President, Secretary and
General Counsel since 1997. Mr. Sacks has overall responsibility for the Legal
Department, which includes negotiation, documentation and approval of parking
and corporate contracts, financing documentation and coordination of outside
counsel. In his position, Mr. Sacks is also responsible for maintaining field
compliance with corporate legal and financial policies. Mr. Sacks received his
B.A. Degree, cum laude, from Northwestern University in 1976 and, in 1979,
received his J.D. Degree from Suffolk University. Mr. Sacks has spoken on legal
issues concerning the parking industry at the National Parking Association
National Convention and the Institutional and Municipal Parking Congress.
James V. LaRocco, Jr. Mr. LaRocco has been associated with APCOA since
1962, starting in an operations position at the Los Angeles International
Airport, and has served as Executive Vice President since 1995. His prior
positions have included Division Manager, Regional Manager and Vice President.
Patrick J. Meara. Mr. Meara became a director of the Company upon
consummation of the Combination. Mr. Meara is a Senior Vice President of JMB
Realty Corporation, which held an interest in Standard prior to the Combination,
and acquired an interest in the Company as a result of the Combination.
Gunnar E. Klintberg. Mr. Klintberg has served as Vice Chairman of Holberg
since its inception in 1986, and as a Director of APCOA since 1989. Mr.
Klintberg was a Managing Partner of DnC Capital Corporation, a merchant banking
firm in New York City, from 1983 to 1986. From 1975 to 1983, Mr. Klintberg held
various management positions with the Axel Johnson Group, headquartered in
Stockholm, Sweden. Mr. Klintberg headed up the Axel Johnson Group's headquarters
in Moscow from 1976 to 1979 and served as assistant to the President of Axel
Johnson Group's $1 billion operation in the U.S., headquartered in New York
City, from 1979 to 1983. Mr. Klintberg received his undergraduate degree from
Dartmouth College in 1972 and a degree in Business Administration and Economics
from the University of Uppsala, Sweden in 1974.
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<PAGE> 52
A. Petter Ostberg. Mr. Ostberg joined Holberg in 1994 and was appointed
Chief Financial Officer of Holberg in 1997. Mr. Ostberg is currently a Vice
President of APCOA. Prior to joining Holberg, Mr. Ostberg held various finance
positions from 1990 to 1994 with New York Cruise Lines, Inc., including Group
Vice President, Treasurer and Secretary. Prior to joining New York Cruise Lines,
Inc., Mr. Ostberg was General Manager of Planter Technology Ltd. in Mountain
View, California, and from 1985 to 1987, Mr. Ostberg was a Financial Analyst
with Prudential Securities, Inc. in New York. Mr. Ostberg received a B.A. in
International Relations and Economics from Tufts University in 1985, and an
M.B.A. from Stanford University Graduate School of Business in 1989.
EXECUTIVE COMPENSATION
The following table sets forth information for 1995, 1996 and 1997 with
regard to compensation for services rendered in all capacities to (a) APCOA by
the Chief Executive Officer and the other four most highly compensated executive
officers of APCOA and (b) to Standard by two executive officers of Standard for
each of whom disclosure would have been provided but for the fact that he was
not serving as an executive officer of APCOA at the end of the last completed
fiscal year (collectively, the "Named Executive Officers"). Except as otherwise
noted, information set forth in the table reflects compensation earned by such
individuals for services with APCOA or its respective subsidiaries.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
OTHER
ANNUAL ALL OTHER
COMPEN- COMPEN-
FISCAL SALARY BONUS SATION SATION
NAME AND PRINCIPAL POSITION YEAR ($) $ $ ($)
--------------------------- ------ ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
G. Walter Stuelpe, Jr..................... 1997 420,942(1) 183,500(4) -- 21,000(2)
Chief Executive Officer and 1996 405,129(1) 216,600 -- 17,000(2)
President 1995 393,834(1) 222,100 -- 17,000(2)
James V. LaRocco, Jr...................... 1997 189,396(1) 72,895(4) -- 22,000(2)
Executive Vice President, 1996 172,006(1) 64,539 -- 19,300(2)
Corporate Development 1995 164,063(1) 61,710 -- 19,300(2)
Trevor R. Van Horn(5)..................... 1997 140,399(1) 56,646(4) -- --
Corporate Vice President, 1996 98,654(1) 29,798 17,033(3) --
Airport Properties 1995 -- -- -- --
Herbert W. Anderson, Jr................... 1997 130,250(1) 53,146(4) 21,241(3) 7,900(2)
Corporate Vice President, 1996 121,944(1) 49,050 17,695(3) --
Urban Properties 1995 101,334(1) 26,972 -- --
Michael J. Celebrezze..................... 1997 128,477(1) 43,750(4) -- 8,500(2)
Senior Vice President, Chief 1996 116,386(1) 45,911 -- 7,900(2)
Financial Officer and 1995 108,227(1) 38,304 -- 2,400(2)
Treasurer
Myron C. Warshauer(6)..................... 1997 98,265 -- 41,229(7) 42,102(8)
Chief Executive Officer and 1996 53,290 -- 28,795(7) 41,630(8)
President of Standard 1995 37,950 -- 18,740(7) 46,169(8)
Michael K. Wolf(6)........................ 1997 376,400 -- -- --
Executive Vice President and 1996 313,800 -- -- --
General Counsel of Standard 1995 254,800 -- -- --
</TABLE>
- ---------------
(1) The amount shown includes amounts contributed by APCOA to its 401(k) plan
under a contribution matching program.
(2) The amount shown reflects deposits made by APCOA on behalf of Named
Executive Officers into a supplemental pension plan pursuant to which the
Named Executive Officers will be entitled to monthly cash retirement and
death benefit payments.
(3) The amount shown includes car allowances, club dues and moving expenses paid
by APCOA.
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<PAGE> 53
(4) The amount shown is a target only, bonuses for 1997 have not yet been paid,
and the actual bonus may be different from the amount shown in the table
above.
(5) As of April 1, 1998, Mr. Van Horn is no longer an employee of the Company.
(6) All compensation information set forth in the table for this individual
reflects compensation earned for services with Standard or its respective
subsidiaries.
(7) The amount shown includes car allowances, club dues, health insurance
premiums and legal fees related to estate planning paid by Standard.
(8) The amount shown reflects premiums paid by Standard on behalf of Myron C.
Warshauer for life insurance policies to which Mr. Warshauer is entitled to
the cash surrender value.
DIRECTOR COMPENSATION
Directors of the Company do not receive compensation for serving on the
Company's Board of Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company did not have a Compensation Committee in the year ended
December 31, 1997. The Company intends to form a Compensation Committee in 1998.
The members of such committee have not yet been determined. During 1997, no
executive officer of the Company served as a member of the Compensation
Committee of another entity.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
Mr. Stuelpe's current employment agreement with the Company provides for an
initial four year term with default annual renewals, and is scheduled to lapse
on December 31, 2000. The agreement also provides for an annual base salary of
$423,306 in 1998, plus an annual bonus equal to eight percent of an amount
substantially based on the amount by which the Company's EBITDA, subject to
certain adjustments, exceeds a certain floor amount, as well as certain other
benefits. Mr. Stuelpe agrees not to disclose confidential information if such
disclosure would have a material adverse effect on the Company. During the term
of the employment agreement, and for two years after its termination, or, under
certain circumstances, until receipt of the final salary payment due under the
terms of the agreement, Mr. Stuelpe agrees not to render services to, or have
any ownership interest in, any business which is competitive with the Company.
If Mr. Stuelpe's employment is terminated by reason of his death or
Disability (as defined in the agreement), the Company is obligated to pay Mr.
Stuelpe's designated beneficiary, in the case of termination by reason of death,
and Mr. Stuelpe, in the case of termination by reason of Disability, (i) an
amount equal to Mr. Stuelpe's annual base salary at the time of his death; (ii)
the annual bonus for the year in which the termination of employment occurred,
prorated for the numbers of days Mr. Stuelpe was employed during that year; and
(iii) certain other benefits.
If Mr. Stuelpe's employment is terminated other than for death or
Disability, and without Cause (as defined in the agreement) or within six months
following a Change of Control (as defined in the agreement), the Company is
required to pay Mr. Stuelpe (a) his salary (i) through the date that the
agreement was scheduled to terminate as if Mr. Stuelpe had continued to be
employed by the Company, in the case of a termination without Cause and (ii) for
a minimum period of twenty-four months after the termination of employment, in
the case of a Change of Control; (b) the annual bonus for the year in which the
termination of employment occurred, prorated for the number of days Mr. Stuelpe
was employed during that year; and (c) certain other benefits.
Mr. LaRocco's current employment agreement with the Company provides for a
three-year term, scheduled to lapse on June 30, 1998, default annual renewals,
and an annual base salary of not less than $165,000, subject to annual review
and increases at the discretion of the Company's Chief Executive Officer, plus
an annual bonus of up to forty percent of annual base salary, as well as certain
other benefits. Mr. LaRocco agrees not to disclose confidential information for
any reason whatsoever. During the term of the employment agreement, and for one
year after its termination if Mr. LaRocco is terminated other than
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<PAGE> 54
without Cause (as defined in the agreement), Mr. LaRocco agrees not to render
services to, or have any ownership interest in, any business which is
competitive with the Company. Mr. LaRocco's employment agreement does not
contain change of control provisions.
If Mr. LaRocco's employment is terminated by reason of his death or
Disability (as defined in the agreement), the Company is obligated to pay Mr.
LaRocco's designated beneficiary, in the case of termination by reason of death,
and Mr. LaRocco, in the case of termination by reason of Disability, (i) an
amount equal to Mr. LaRocco's annual base salary at the time of his death plus
$9,600, which represents the estimated annual value of the right to use a
company automobile and (ii) certain other benefits.
If Mr. LaRocco's employment is terminated other than for death or
Disability and without Cause, the Company is required to pay Mr. LaRocco (i) the
greater of his annual base salary at the time of termination or the aggregate
amount payable to Mr. LaRocco under the company's severance benefit policy; (ii)
a termination bonus in an amount equal to the annual bonus for the year in which
the termination of employment occurred, multiplied by the number of days
remaining after the date of termination in that year plus 365, and then divided
by 365; and (iii) certain other benefits.
Mr. Van Horn's employment agreement with the Company terminated as of April
1, 1998. In connection with such termination, the Company paid Mr. Van Horn (i)
thirty weeks' severance pay; (ii) a thirty-five percent Severance Retention
Bonus and (iii) $25,000 in relocation and related expenses. In addition, the
Company transferred to Mr. Van Horn the title to Mr. Van Horn's company
automobile and company computer, and will continue providing insurance benefits
to Mr. Van Horn for a certain time after such termination.
Mr. Anderson's current employment agreement with the Company provides for a
two and one-half year term, scheduled to lapse on June 30, 1998, default annual
renewals, and an annual base salary of not less than $125,000, subject to annual
review and increases at the discretion of the Company's Chief Executive Officer,
plus an annual bonus of up to forty percent of the annual base salary, as well
as certain other benefits. Mr. Anderson agrees not to disclose confidential
information for any reason whatsoever. During the term of the employment
agreement, and for one year after its termination if Mr. Anderson is terminated
other than without Cause (as defined in the agreement), Mr. Anderson agrees not
to render services to, or have any ownership interest in, any business which is
competitive with the Company. Mr. Anderson's employment agreement does not
contain change of control provisions.
If Mr. Anderson's employment is terminated by reason of his death or
Disability (as defined in the agreement), the Company is obligated to pay Mr.
Anderson's designated beneficiary, in the case of termination by reason of
death, and Mr. Anderson, in the case of termination by reason of Disability, (i)
an amount equal to Mr. Anderson's annual base salary at the time of his death
plus $9,600, which represents the estimated annual value of the right to use a
company automobile and (ii) certain other benefits.
If Mr. Anderson's employment is terminated other than for death or
Disability and without Cause, the Company is required to pay Mr. Anderson (i)
the greater of his annual base salary at the time of termination and the
aggregate amount payable to Mr. Anderson under the company's severance benefit
policy; (ii) a termination bonus in an amount equal to the annual bonus for the
year in which the termination of employment occurred, multiplied by the number
of days remaining after the date of termination in that year plus 365, and then
divided by 365; and (iii) certain other benefits.
Mr. Celebrezze's current employment agreement with the Company provides for
a three-year term, scheduled to lapse on March 30, 2001, default renewals for
additional two year periods, an annual base salary of not less than $180,000,
subject to annual review, plus an annual bonus of at least 35% of Mr.
Celebrezze's annual base salary and a $250,000 housing differential loan with a
term of three years, of which one-third of the principal balance and the accrued
interest due thereon shall be forgiven by the Company, and treated as additional
compensation to Mr. Celebrezze in the year of such forgiveness, for each year
Mr. Celebrezze remains in the continual employ of the Company (and the Company
shall make Mr. Celebrezze whole with respect to the tax consequences of any such
forgiveness), as well as certain other benefits.
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<PAGE> 55
Mr. Celebrezze agrees not to communicate, divulge or disseminate
confidential information at any time during or after his employment with the
Company, except with the prior written consent of the Company or as required by
law or legal process. During the term of the employment agreement and for two
years after its termination, Mr. Celebrezze agrees not to render services to, or
have any ownership interest in, any business which is competitive with the
Company in geographic areas in which the Company, or its affiliates, is then
conducting, or is in the process of developing prospects to conduct, business.
Mr. Celebrezze's employment agreement does not contain change of control
provisions.
If Mr. Celebrezze's employment is terminated by reason of his death, the
Company is obligated to pay Mr. Celebrezze's estate an amount equal to the sum
of (i) Mr. Celebrezze's annual base salary through the end of the calendar month
in which death occurs and (ii) any earned and unpaid annual bonus, vacation pay
and other vested benefits. If Mr. Celebrezze's employment is terminated by
reason of his Disability (as defined in the agreement), the Company is obligated
to pay Mr. Celebrezze or his legal representative (a) Mr. Celebrezze's annual
base salary for the duration of the employment period in effect on the date of
termination, reduced by amounts received under any disability benefit program
and (b) any earned and unpaid annual bonus and other vested benefits.
If Mr. Celebrezze's employment is terminated by the Company other than for
death, Disability or Cause (as defined in the agreement) or if Mr. Celebrezze
terminates his employment for Good Reason (as defined in the agreement), the
Company is required to continue (A) to pay Mr. Celebrezze for the remainder of
the employment period in effect immediately before the date of termination his
annual base salary and annual bonus(es) through the end of the then-current
employment period and (B) to provide Mr. Celebrezze and/or his family with
certain other benefits, provided that in the event of a termination of
employment by Mr. Celebrezze for Good Reason, the annual base salary, annual
bonus and benefit continuation period shall be two years from the date of such
termination. In addition, under the foregoing circumstances, any remaining
principal balance and any accrued and unpaid interest on the housing
differential loan shall be forgiven by the Company, and the Company shall make
Mr. Celebrezze whole for any tax consequences of such forgiveness.
If Mr. Celebrezze's employment is terminated by the Company any time before
the third anniversary of the employment agreement for any reason other than for
Cause, or if the Company gives notice of its intention not to renew the
agreement for an additional two-year term beginning on the third anniversary of
the agreement, the Company is obligated to (x) pay Mr. Celebrezze his annual
base salary and annual bonus for the remaining balance of the initial three-year
term, if any, and for an additional two years and (y) to continue to provide Mr.
Celebrezze with certain other benefits for the same period.
Mr. Wolf's current employment agreement with the Company provides for a
three-year term, scheduled to lapse on March 26, 2001, default annual renewals,
and an annual base salary of not less than $376,400, subject to annual review,
plus an annual bonus based on a percentage of the annual base salary to be
mutually agreed upon by the Company and Mr. Wolf, as well as certain other
benefits. Mr. Wolf agrees to hold all confidential information in strict
confidence and not publish or otherwise disclose any portion thereof to any
person whatsoever except with the prior written consent of the Company. During
the term of the employment agreement and for two years after its termination (or
eighteen months if such termination follows a Change in Control (as defined in
the agreement)), Mr. Wolf agrees not to render services to, or have any
ownership interest in, any business which is competitive with the Company in
certain geographic areas.
If Mr. Wolf's employment is terminated by reason of his death, the Company
is obligated to pay Mr. Wolf's estate an amount equal to the sum of (i) Mr.
Wolf's annual base salary through the end of the calendar month in which death
occurs and (ii) any earned and unpaid annual bonus, vacation pay and other
vested benefits.
If Mr. Wolf's employment is terminated by reason of his Disability (as
defined in the agreement), the Company is obligated to pay Mr. Wolf or his legal
representative (a) an amount equal to Mr. Wolf's annual base salary for the
duration of the employment period in effect on the date of termination, reduced
by amounts received under any disability benefit program and (b) any earned and
unpaid annual bonus and other vested benefits.
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<PAGE> 56
If Mr. Wolf's employment is terminated by the Company other than for death
or Disability and without Cause (as defined in the agreement), the Company is
required to continue (A) to pay Mr. Wolf for the remainder of the employment
period in effect immediately before the date of termination his annual base
salary and annual bonus(es) through the end of the then-current employment
period and (B) to provide Mr. Wolf and/or his family with certain other
benefits.
If Mr. Wolf's employment is terminated by the Company for any reason other
than Cause during the three-year period following a Change in Control (as
defined in the agreement), the Company is obligated to (x) pay Mr. Wolf an
amount ("Severance Pay") equal to the greater of (1) one and one-half times the
sum of (I) Mr. Wolf's current annual base salary plus (II) the amount of any
bonus paid to Mr. Wolf in the preceding twelve months and (2) the annual base
salary and annual bonuses through the end of the then-current employment period
and (y) continue to provide Mr. Wolf with certain other benefits for a certain
period of time. If Mr. Wolf terminates his employment voluntarily following a
Change in Control, he shall not be entitled to Severance Pay, provided, however,
that any such termination by Mr. Wolf for Good Reason (as defined in the
agreement) shall not be considered a voluntary termination and Mr. Wolf will be
treated as if he had been terminated by the Company other than for Cause.
Consummation of the Combination was conditioned, among other things, upon
the execution of an employment agreement between the Company and Myron C.
Warshauer.
Employment Agreement with Myron C. Warshauer. The Employment Agreement
between the Company and Myron C. Warshauer (the "Warshauer Employment
Agreement") provides that Myron C. Warshauer serve as Chief Executive Officer of
the Company, and be appointed as a member of the Board of Directors of the
Company (the "Board") and each committee of the Board, for a period beginning on
the date of the consummation of the Combination and ending on Myron C.
Warshauer's 65th birthday (the "Employment Period"). Myron C. Warshauer will
receive during the Employment Period an annual base salary of $600,000 ("Annual
Base Salary"). The Warshauer Employment Agreement also provides for certain
perquisites.
Under the Warshauer Employment Agreement, if Myron C. Warshauer's
employment were to be terminated by Myron C. Warshauer for Good Reason (as
defined below), or by the Company other than for Cause (as defined below), death
or Disability (as defined below), the Company would be obligated to (i) pay
Myron C. Warshauer a lump sum cash payment in an amount equal to the aggregate
Annual Base Salary that he would have received for the remainder of the
Employment Period, reduced to present value using as a discount rate the
"applicable federal rate," as defined in Section 1274(d) of the Internal Revenue
Code of 1986, as amended, and (ii) continue to provide for the same period
welfare benefits to Myron C. Warshauer and/or his family, at least as favorable
as those that would have been provided to them under the Warshauer Employment
Agreement if Myron C. Warshauer's employment had continued until the end of the
Employment Period, provided, however, that during any period when Myron C.
Warshauer is eligible to receive such benefits under another employer-provided
plan, such benefits provided by the Company may be made secondary to those
provided under such other plan. If Myron C. Warshauer's employment were to be
terminated by reason of his Disability during the Employment Period, the Company
would be obligated to pay Myron C. Warshauer, or his legal representative, as
applicable, the Annual Base Salary for the duration of the Employment Period in
effect at the time of the termination of employment.
In addition to the above compensation and benefits, if Myron C. Warshauer's
employment were to be terminated for any reason other than by the Company for
Cause, the Company would be obligated, beginning on the date of such termination
in the case of a voluntary termination by Myron C. Warshauer, and beginning on
Myron C. Warshauer's 65th birthday in all other cases, and ending on the first
to occur of Myron C. Warshauer's 75th birthday and Myron C. Warshauer's death
(such ending date, the "Cutoff Date"), to (i) pay Myron C. Warshauer $200,000
annually, adjusted for inflation and (ii) provide Myron C. Warshauer with an
executive office and secretarial services. In consideration for such benefits,
Myron C. Warshauer is obligated to provide reasonable consulting services to the
Company from the date of termination of his employment through the Cutoff Date.
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<PAGE> 57
As used in the Warshauer Employment Agreement: (i) "Cause" means (a)
illegal conduct, or gross misconduct, that results in material damage to the
business or reputation of the Company; or (b) any willful and continued failure
by Myron C. Warshauer to perform his duties under the Warshauer Employment
Agreement, (ii) "Disability" means that Myron C. Warshauer has been unable, for
a period of 180 consecutive days, or for periods aggregating 180 business days
in any period of twelve months, to perform a material portion of his duties
under the Warshauer Employment Agreement, as a result of physical or mental
illness or injury, and a physician selected by the Company has determined that
Myron C. Warshauer's incapacity is total and permanent, and (iii) "Good Reason"
means (a) the relocation of Myron C. Warshauer's principal place of business
outside of the central business district and northern suburbs of Chicago; (b) a
material reduction in Myron C. Warshauer's responsibilities; (c) the assignment
to Myron C. Warshauer of duties inconsistent with his position as set forth in
the Warshauer Employment Agreement; (d) a change in Myron C. Warshauer's title
from that required under the Warshauer Employment Agreement; (e) a removal of
Myron C. Warshauer from the Board or any committee thereof; (f) a requirement
that Myron C. Warshauer report to anyone other than the Chairman of the Board;
or (g) any material breach by the Company of any other term of the Warshauer
Employment Agreement.
The Warshauer Employment Agreement also provides that during the period
beginning on the date of the consummation of the Combination and ending on Myron
C. Warshauer's 75th birthday (the "Noncompetition Period"), Myron C. Warshauer
shall not, without written consent of the Board, engage in or become associated
with any business or other endeavor that engages in construction, ownership,
leasing, design and/or management of parking lots, parking garages, or other
parking facilities or consulting with respect thereto, provided, however, that
Myron C. Warshauer may own or sell investments in certain parking facilities
("Permitted Investments") during the Noncompetition Period, and may own or sell
any interest in any other real estate ("Other Real Estate") at any time after
the Employment Period for the remainder of the Noncompetition Period. The
Warshauer Employment Agreement provides that, if such Permitted Investment or
Other Real Estate includes a parking facility, Myron C. Warshauer shall initiate
negotiations, or, under certain circumstances, use reasonable and good-faith
efforts to cause such negotiations, with the Company in an attempt to determine
mutually agreeable terms pursuant to which the Company will manage or lease the
parking facility and, if such negotiations fail, that, under certain
circumstances, the Company shall have a right of first refusal with respect to
any management agreement or lease that may be negotiated with any independent
third party.
Pursuant to the Warshauer Employment Agreement, within 120 days after the
Closing Date, the Company shall establish a stock option or phantom stock option
plan (the "Option Plan") providing for grants of actual or phantom options with
respect to the common stock of the Company ("Company Common Stock"), under which
Myron C. Warshauer will be granted options to purchase a number of shares of
Company Common Stock equal to 1.0% of the total number of shares of Company
Common Stock. All such options will have a term of 10 years from the date of the
grant.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Company Common Stock by (i) each person known to the Company to own
beneficially more than 5% of Company Common Stock, (ii) each director of the
Company, (iii) each Named Executive Officer and (iv) all executive officers and
directors of the Company, as a group. All information with respect to beneficial
ownership has been furnished to the Company by the respective stockholders of
the Company. Except as otherwise indicated in the footnotes, each beneficial
owner has the sole power to vote and to dispose of all shares held by such
holder.
<TABLE>
<CAPTION>
PERCENT
AMOUNT AND NATURE OF SHARES
NAME AND ADDRESS OF BENEFICIAL OWNERSHIP OUTSTANDING
---------------- ----------------------- -----------
<S> <C> <C>
AP Holdings, Inc. ("AP Holdings")......... 26.3 shares of Common Stock 84.0%
John V. Holten............................ (1)
Orkla ASA ("Orkla")....................... (2)
Delaware North Companies, Inc. ("Delaware
North")................................. (3)
Dosher Partners, L.P...................... 2.5 shares of Common Stock(4) 8.0
Myron C. Warshauer........................ (4)
SP Associates............................. 2.5 shares of Common Stock(5) 8.0
G. Walter Stuelpe, Jr. ................... (6)
Michael J. Celebrezze..................... (7)
Robert N. Sacks........................... (8)
James V. LaRocco, Jr...................... (9)
Directors and Executive Officers as a
Group................................... (1)(4)(6)(7)(8)(9)
</TABLE>
- ------------------------------
(1) Mr. Holten owns all of the outstanding common stock of the corporate parent
of Holberg, which parent entity owns approximately 70.0% of the outstanding
common stock of Holberg, which in turn owns 82.5% of the outstanding common
stock of AP Holdings. The corporate parent of Holberg has an additional
interest in the common stock of Holberg of approximately 25% through
certain preferred stock convertible into common stock. The convertible
interests described in this note have been computed based upon the
outstanding common shares of Holberg, without taking into account any
convertible interests of Holberg.
(2) Orkla owns approximately 30.0% of the outstanding common stock of Holberg.
Orkla has an additional interest in the common stock of Holberg of
approximately 17% through certain preferred stock convertible into common
stock. The convertible interests described in this note have been computed
based upon the outstanding common shares of Holberg, without taking into
account any convertible interests of Holberg.
(3) Delaware North owns 10.0% of the outstanding common stock of AP Holdings.
In accordance with an agreement (the "Put/Call Agreement"), between AP
Holdings and Delaware North, AP Holdings has the right under certain
circumstances to, and has the obligation under certain circumstances to,
repurchase the shares of its common stock held by Delaware North. AP
Holdings has exercised the right to repurchase the common stock held by
Delaware North pursuant to the terms of the Put/Call Agreement, and the
price of such repurchase will be determined in accordance with the terms of
the Put/Call Agreement by a nationally recognized investment bank.
(4) All of the interests in Dosher Partners, L.P. are beneficially owned by
Myron C. Warshauer and trusts for the benefit of certain members of his
family. Mr. Warshauer disclaims beneficial ownership of the assets of
Dosher Partners, L.P., including the shares of Common Stock held by it, to
the extent those interests are held for the benefit of such trusts.
(5) SP Associates is a general partnership controlled by affiliates of JMB
Realty Corp.
(6) Mr. Stuelpe owns approximately 3.1% of the common stock of AP Holdings.
(7) Mr. Celebrezze owns less than 1.0% of the common stock of AP Holdings.
(8) Mr. Sacks owns less than 1.0% of the common stock of AP Holdings.
(9) Mr. LaRocco owns approximately 1.6% of the common stock of AP Holdings.
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
COMPANY STOCKHOLDERS AGREEMENT
Upon consummation of the Combination, the Company entered into a
Stockholders Agreement (the "Stockholders Agreement") with Dosher Partners, L.P.
("Dosher"), and SP Associates (collectively, the "Standard Parties") and Holberg
and AP Holdings (collectively with the Standard Parties, the "Stockholders").
The Stockholders Agreement provides, among other things, for (i) prior to the
earliest of (a) the seventh anniversary of the consummation of the Combination,
(b) the termination of Myron C. Warshauer's employment with the Company under
certain circumstances and (c) the consummation of an initial public offering of
Company Common Stock (as such offering will be defined in the Stockholders
Agreement), certain obligations of Holberg to allow Dosher the opportunity to
acquire all, but not less than all, of the Company Common Stock held by Holberg
and/or its affiliates before Holberg may directly or indirectly sell an amount
of Company Common Stock which would constitute a Control Transaction (as will be
defined in the Stockholders Agreement); provided that, under certain
circumstances, Holberg may sell such shares to a party other than Dosher if the
terms of such other party's offer are more favorable to Holberg, (ii) until the
consummation of an initial public offering of Company Common Stock, certain
rights of each Standard Party to purchase shares of Company Common Stock to the
extent necessary to maintain such Standard Party's percentage ownership of the
Company, (iii) the right of the Standard Parties to participate in, and the
right of Holberg to require the Standard Parties to participate in, certain
sales of Company Common Stock, (iv) following the third anniversary of the
consummation of the Combination and prior to an initial public offering of
Company Common Stock, certain rights of the Company to purchase, and certain
rights of the Standard Parties to require the Company to purchase, shares of
Company Common Stock at prices determined in accordance with the Stockholders
Agreement and (v) certain additional restrictions on the rights of the Standard
Parties to transfer shares of Company Common Stock. The Stockholders Agreement
also contains certain provisions granting the Stockholders certain rights in
connection with registrations of Company Common Stock in certain offerings and
provides for indemnification and certain other rights, restrictions and
obligations in connection with such registrations.
AP HOLDINGS STOCKHOLDERS AGREEMENT
AP Holdings is party to a Stockholders Agreement with Holberg, Delaware
North, and each of the members of APCOA management who is a stockholder of AP
Holdings, and an ancillary Put/Call Option Agreement between Holberg and
Delaware North, which provide for, among other things, (i) a board of directors
consisting of three or more Holberg nominees, one Delaware North nominee, and
one management nominee, (ii) certain restrictions on the sale, assignment,
transfer, encumbrance or other disposition of the common stock of AP Holdings,
(iii) certain first offer, repurchase and put/call rights with respect to the AP
Holdings common stock held by the management investors, (iv) certain pre-emptive
rights in favor of the management investors with respect to the issuance of AP
Holdings common stock, and (v) certain put/call rights with respect to the AP
Holdings common stock held by Delaware North.
TAX SHARING AGREEMENT
The Company is a party to the Tax Sharing Agreement, dated April 28, 1989,
by and among Holberg, AP Holdings and the Company (the "Tax Sharing Agreement"),
which applies to each of Holberg's consolidated return years beginning with
1989. The Tax Sharing Agreement provides that each member of Holberg's
affiliated group, including the Company, will pay to Holberg the amount of
federal income tax that such member would be required to pay on a separate
return basis for the year in question, except that the amount that the Company
is required to pay to Holberg will not exceed the tax liabilities of the Company
on a separate return basis for all taxable years to which the Tax Sharing
Agreement applies and for which the Company joined in the Holberg consolidated
return, computed as if the Company had actually filed separate returns for all
such years and taking into account any net operating loss carryforward the
Company would have had if it had filed a separate return for all such years.
Holberg is not required to make a payment to the Company by virtue of the
utilization by the Holberg affiliated group of any net operating loss generated
by the
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<PAGE> 60
Company. In the event that the consolidated federal income tax liability of the
Holberg affiliated group is adjusted for any taxable period, whether by means of
an amended return, claim for refund, or tax audit by the Internal Revenue
Service, the liability of the Company under the Tax Sharing Agreement will be
recomputed to give effect to such adjustments.
PREFERRED STOCK
Prior to the consummation of the Combination, Holberg held $8.7 million of
preferred stock of APCOA. A portion of the proceeds of the Offering was used to
redeem $8.0 million of the preferred stock. The remaining $0.7 million was
contributed to the capital of the Company. See "Use of Proceeds" and Notes 6 and
7 to the Unaudited Pro Forma Consolidated Balance Sheet of APCOA included
herein.
The preferred stock issued by the Company to AP Holdings in respect of the
Preferred Stock Contribution has the same maturity as the debt securities of AP
Holdings issued to finance the Preferred Stock Contribution, has an initial
liquidation preference equal to the issue price of such debt securities,
increases in liquidation preference at the same rate as such debt securities
accrue interest, such that the liquidation preference of the preferred stock
will at all times be equal to the then principal amount of such debt securities,
and accrues cash dividends commencing at such times as such debt securities
commence to accrue cash interest, at the same rate as such debt securities.
MANAGEMENT CONTRACTS AND RELATED ARRANGEMENTS WITH AFFILIATES
The Company has a management contract to operate one parking facility in
Chicago with an Illinois land trust which is beneficially owned by a partnership
in which Myron C. Warshauer, Steven A. Warshauer and Stanley Warshauer have an
equity interest. All expenses that are typically borne by a facility owner under
a management contract, such as salaries, wages and benefits associated with
employees at the parking facility and an allocable portion of such costs for
supervisory management personnel, the cost of uniforms, supplies, insurance,
utilities and other direct operating costs ("property-level expenses") are paid
by the facility owner. Pursuant to the management contract, the Company is
entitled to an annual management fee of approximately $40,700 in 1998. However,
certain subordination provisions in the loan agreement between the facility
owner and its lender have resulted in the non-payment of all or a portion of the
management fee for the past four years. The Company estimates that the
management fee to which it is entitled pursuant to this management contract is
no less than would normally be obtained through arms-length negotiations.
The Company has a management contract with the Buckingham Plaza Limited
Partnership ("BPLP") to operate the parking facility at a condominium complex in
Chicago of which BPLP was the developer. Myron C. Warshauer and SP Associates
own an equity interest in one of BPLP's limited partners. The Company received
an annual management fee of $20,200 pursuant to such management contract. The
Company estimates that such management fee is no less than would normally be
obtained through arms-length negotiations.
The Company has management contracts to operate two surface parking lots in
Chicago. Myron C. Warshauer, Steven A. Warshauer, Stanley Warshauer, Michael K.
Wolf and SP Associates own membership interests in a limited liability company
that is a member of the limited liability companies that own such surface
parking lots. The Company receives a total of $39,300 in management fees
annually under such management contracts. The Company estimates that such
management fees are no less than would normally be obtained through arms-length
negotiations.
The Company operates the Clark Fullerton Self Park, a parking facility in
which Myron C. Warshauer has a 50% equity interest. The facility owner pays all
of the property-level expenses. The Company does not receive a management fee.
The Company estimates that in today's market, it reasonably could expect to
receive an annual management fee ranging from $15,000 to $20,000 for providing
such services.
The Company provides office and related support services to Auditorium
Garage, Inc. ("Auditorium"), an Illinois corporation owned by Stanley Warshauer
and his wife, in conjunction with Auditorium's
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management of a parking facility. Auditorium reimburses the Company for the
general and administrative costs associated with providing these services, which
reimbursement totaled $32,200 in 1997.
Myron C., Stanley and Steven A. Warshauer own an equity interest in two
parking facilities in Chicago. One of those facilities is leased to the Company
on terms that the Company believes are no less favorable to the Company than
would normally be obtained through arms-length negotiations. The Company earned
net lease income of $342,000 in 1997 at such facility. The other parking
facility (the "Tremont Facility") is leased to Standard/Tremont Parking
Corporation ("Standard Tremont"), an Illinois corporation that is owned by
Stanley Warshauer, Steven A. Warshauer and Myron C. Warshauer. The Company
provides office and related support services to Standard Tremont, in conjunction
with Standard Tremont's management of the Tremont Facility. Standard Tremont
reimburses the Company for the general and administrative costs associated with
providing these services, which reimbursement totaled $13,900 in 1997.
The Company pays 12.5% of the lease net operating income derived from one
parking facility to Warshauer Management Corporation for services rendered in
obtaining the right to operate the facility.
LIABILITY INSURANCE
The Company currently purchases a portion of its casualty insurance from an
affiliate of Holberg. The Company estimates that the premiums paid for such
insurance are comparable to premiums it would pay for comparable coverage from
an unrelated third party. See Note H to the Historical Consolidated Financial
Statements of APCOA included herein.
The Company purchases liability insurance covering certain parking
facilities from JMB Insurance Agency, Inc., an affiliate of JMB Realty Corp. The
Company estimates that the premiums paid for such insurance are comparable to
premiums it would pay for comparable coverage from an unrelated third party.
CONSULTING AGREEMENT WITH SIDNEY WARSHAUER
Consummation of the Combination was conditioned, among other things, upon
the execution of a consulting agreement between the Company and Sidney
Warshauer, the father of Myron C. Warshauer. Sidney Warshauer is 83 years old.
The Consulting Agreement between the Company and Sidney Warshauer (the
"Consulting Agreement") provides that Sidney Warshauer render such services as
may be requested, from time to time, by the Board of Directors of the Company
(the "Board") and/or the Chief Executive Officer of the Company, consistent with
Mr. Warshauer's past practices and experience, for a period beginning on the
date of the consummation of the Combination and ending on Sidney Warshauer's
death (the "Consulting Period"). Sidney Warshauer will receive, during the
Consulting Period, an annual consulting fee of $552,000. The Consulting
Agreement also provides that Sidney Warshauer will receive certain other
benefits during the Consulting Period.
The Consulting Agreement is not terminable by the Company for any reason
other than the death of Sidney Warshauer, or a breach by Sidney Warshauer of his
obligations under the Consulting Agreement with respect to non-disclosure of
Company confidential information, or his obligation under the Consulting
Agreement to refrain from engaging in competition with the Company, as described
below.
The Consulting Agreement provides that, during the Consulting Period,
Sidney Warshauer will not, without written consent of the Board, engage in, or
become associated with, any business or other endeavor that engages in
construction, ownership, leasing, design and/or management of parking lots,
parking garages, or other parking facilities or consulting with respect thereto.
CERTAIN OTHER MATTERS RELATING TO HOLBERG
Holberg has received customary investment banking and advisory fees from
APCOA in connection with certain prior transactions, and received a $1.0 million
advisory fee (and reimbursement of expenses) upon consummation of the
Combination. The Company also may pay an annual management fee to Holberg and
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otherwise reimburse Holberg for certain expenses incurred by Holberg on behalf
of the Company. In addition, the Company currently leases a plane on behalf of
Holberg. Holberg pays all costs under the lease other than amounts that may be
charged to the Company in connection with use of the plane and indemnifies the
Company for all obligations under the lease. All of these fees and other amounts
paid to Holberg are subject to the limits and restrictions imposed by the
Indenture. See "Description of New Notes--Affiliate Transactions."
APCOA and Holberg and its affiliates have periodically engaged in
bi-lateral loans and advances. In connection with the Combination, APCOA made a
$4.5 million non-cash distribution to Holberg of the receivable in such amount
due from Holberg to APCOA, thereby eliminating all amounts due from Holberg to
APCOA. The Company may from time to time enter into such bi-lateral loans and
advances in the future as permitted under the Indenture. See Note 5 to the
Unaudited Pro Forma Consolidated Balance Sheet and "Description of New
Notes--Permitted Investments."
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DESCRIPTION OF INDEBTEDNESS
The following sets forth information concerning the Company's indebtedness
available immediately following the consummation of the Transactions.
NEW CREDIT FACILITY
The Company has entered into the New Credit Facility, pursuant to which the
Company has available a new $40 million revolving credit facility with a
six-year term. The New Credit Facility is available for working capital and
general corporate purposes, including the issuance of letters of credit. At the
Closing, the Company issued approximately $4.9 million of letters of credit
under the New Credit Facility.
The initial interest rate for borrowings under the New Credit Facility is,
at the option of the Company, LIBOR plus 2.50% or the Alternate Base Rate (as
defined below) plus 1.25%. The initial rates may be reduced or increased
according to a pricing grid. The Company may elect interest periods of one, two,
three or six months for LIBOR borrowings. The "Alternate Base Rate" is the
higher of (i) the Agent's corporate base rate and (ii) the federal funds rate
plus 1%. LIBOR will at all times include maximum statutory reserves.
Indebtedness under the New Credit Facility may be prepaid in whole or in part
without premium or penalty (subject in some cases to related breakage) and the
Company may reduce or terminate the Lenders' commitments upon such notice and in
such amounts as may be agreed upon.
All of the Company's existing and future wholly-owned domestic subsidiaries
guarantee indebtedness under the New Credit Facility. All extensions of credit
under the New Credit Facility to the Company and the guarantees of subsidiaries
of the Company's indebtedness under the New Credit Facility are secured, subject
to certain exceptions, by all existing and after-acquired personal property of
the Company and its subsidiaries, including all outstanding capital stock of the
Company's subsidiaries, and any intercompany debt obligations, and all existing
and after-acquired real property fee and leasehold interests and management
contracts, subject to prohibitions in certain of such arrangements relating to
collateral assignment. With certain exceptions, the Company and its subsidiaries
are prohibited from pledging any of their assets other than under the New Credit
Facility. Additionally, AP Holdings guarantees the Company's obligations under
the New Credit Facility and such guarantee is secured by a first priority pledge
of all the capital stock of the Company owned by AP Holdings.
Under the New Credit Facility, the initial letter of credit fee is 2.50%
per annum based upon the amount available for drawing under outstanding standby
letters of credit plus customary and reasonable issuing fees. The issuing bank
will retain 0.25% per annum from the fee for issuing the standby letters of
credit. There may be adjustments in the letter of credit fees described above
according to a pricing grid.
The New Credit Facility contains customary and appropriate representations
and warranties, including, without limitation, those relating to due
organization and authorization, no conflicts, financial condition, no material
adverse changes, title to properties, liens, litigation, payment of taxes,
compliance with laws, and full disclosure.
The New Credit Facility also contains customary and appropriate conditions
including requirements relating to prior written notice of borrowing.
The New Credit Facility also contains customary affirmative and negative
covenants (including, where appropriate, certain exceptions and baskets),
including but not limited to furnishing information and limitations on asset
sales, other indebtedness, liens, investments, guarantees, restricted payments,
mergers and acquisitions, capital expenditures, and affiliate transactions. The
New Credit Facility also contains financial covenants including, without
limitation, those relating to: minimum interest coverage; minimum fixed charge
coverage; and maximum leverage.
Events of default under the New Credit Facility include those relating to:
(a) non-payment of interest, principal or fees payable under the New Credit
Facility; (b) non-performance of certain covenants; (c) cross default to other
material debt of the Company and its subsidiaries; (d) bankruptcy or insolvency;
(e) judgments in excess of specified amounts; (f) materially inaccurate or false
representations or warranties; and (g) change of control.
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DESCRIPTION OF NEW NOTES
GENERAL
The New Notes will be issued pursuant to the same indenture (the
"Indenture") among the Company, the direct or indirect domestic Restricted
Subsidiaries of the Company (together, the "Subsidiary Guarantors"), and State
Street Bank and Trust Company, as trustee (the "Trustee"), under which the Notes
were issued. The terms of the New Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). The New Notes are subject to all
such terms, and Holders of New Notes are referred to the Indenture and the Trust
Indenture Act for a statement thereof. The following summary of the material
provisions of the Indenture does not purport to be complete and is qualified in
its entirety by reference to the Indenture, including the definitions therein of
certain terms used below. Copies of the proposed form of Indenture and
Registration Rights Agreement are available as set forth below under "--
Additional Information." The definitions of certain terms used in the following
summary are set forth below under "-- Certain Definitions."
The New Notes will be general unsecured obligations of the Company, will
rank subordinated in right of payment to all Senior Debt of the Company and
senior or pari passu in right of payment to all existing and future subordinated
indebtedness of the Company. The New Notes will be fully and unconditionally
guaranteed (the "New Note Guarantees") on a joint and several basis by each of
the Subsidiary Guarantors. The New Note Guarantees will be general unsecured
obligations of the Subsidiary Guarantors, will rank subordinate in right of
payment to all Senior Debt of the Subsidiary Guarantors and senior or pari passu
in right of payment to all existing and future subordinated indebtedness of the
Subsidiary Guarantors. The New Notes and the New Note Guarantees will be
effectively subordinated to all indebtedness, including trade payables, of the
Company's subsidiaries that are not Subsidiary Guarantors. As of December 31,
1997, on a pro forma basis giving effect to the Combination, and the related
financings and other transactions described herein, there was no Senior Debt
outstanding. Upon the Closing, the Company entered into a $40.0 million
revolving credit facility pursuant to which $4.9 million in letters of credit
were issued as of the closing of the Offering. All borrowings and other
obligations under the revolving credit facility constitute Senior Debt.
The operations of the Company are conducted in part through its
Subsidiaries, and the Company may, therefore, be dependent upon the cash flow of
its Subsidiaries to meet its debt obligations, including its obligations under
the New Notes. All of the existing and future wholly owned domestic Restricted
Subsidiaries with material assets are expected to be Subsidiary Guarantors.
However, under certain circumstances, the Company is able to designate current
or future Subsidiaries as Unrestricted Subsidiaries. Unrestricted Subsidiaries
will not be subject to many of the restrictive covenants set forth in the
Indenture.
PRINCIPAL, MATURITY AND INTEREST
The New Notes will be limited in aggregate principal amount to $200.0
million, of which $140.0 million were issued in the Offering and will mature on
March 15, 2008. Interest on the New Notes will accrue at the rate of 9 1/4% per
annum and will be payable semi-annually in arrears on March 15 and September 15
of each year, commencing on September 15, 1998, to Holders of record on the
immediately preceding March 1 and September 1. Additional New Notes may be
issued from time to time, subject to the provisions of the Indenture described
below under the caption "-- Certain Covenants -- Incurrence of Indebtedness and
Issuance of Preferred Stock." Interest on the New Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of original issuance. Interest will be computed on the basis
of a 360-day year comprised of twelve 30-day months. Principal, premium and
Liquidated Damages, if any, and interest on the New Notes will be payable at the
office or agency of the Company maintained for such purpose within the City and
State of New York or, at the option of the Company, payment of interest and
Liquidated Damages, if any, may be made by check mailed to the Holders of the
New Notes at their respective addresses set forth in the register of Holders of
New Notes; provided that all payments of principal, premium and Liquidated
Damages, if any, and interest with respect to New Notes the Holders of which
have given wire transfer instructions to the Company will be required to be made
by wire transfer of immediately available funds to the accounts specified by the
Holders thereof. Until otherwise
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designated by the Company, the Company's office or agency in New York will be
the office of the Trustee maintained for such purpose. The Notes will be issued
in denominations of $1,000 and integral multiples thereof.
SUBORDINATION
The payment of principal of, premium and Liquidated Damages, if any, and
interest on the New Notes will be subordinated in right of payment, as set forth
in the Indenture, to the prior payment in full in cash or cash equivalents of
all Senior Debt and all other Obligations with respect thereto, whether
outstanding on the date of the Indenture or thereafter created, incurred or
assumed and all permissible renewals, extensions, refundings or refinancings
thereof.
The Indenture provides that, upon any payment or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
to creditors in any Insolvency or Liquidation Proceeding with respect to the
Company all amounts due or to become due under or with respect to all Senior
Debt will first be paid in full in cash or cash equivalents before any payment
is made on account of the New Notes and all other Obligations with respect
thereto, except that the Holders of New Notes may receive Reorganization
Securities. Upon any such Insolvency or Liquidation Proceeding, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (other than Reorganization Securities), to which the
Holders of the New Notes or the Trustee would be entitled will be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other person making such payment or distribution, or by the Holders of the New
Notes or by the Trustee if received by them, directly to the holders of Senior
Debt (pro rata to such holders on the basis of the amounts of Senior Debt held
by such holders) or their Representative or Representatives, as their interests
may appear, for application to the payment of the Senior Debt remaining unpaid
until all such Senior Debt has been paid in full in cash, after giving effect to
any concurrent payment, distribution or provision therefor to or for the holders
of Senior Debt.
The Indenture provides that (a) in the event of and during the continuation
of any default in the payment of principal of, interest or premium, if any, on
any Senior Debt, or any Obligation owing from time to time under or in respect
of Senior Debt, or in the event that any event of default (other than a payment
default) with respect to any Senior Debt will have occurred and be continuing
and will have resulted in such Senior Debt becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable, or (b) if any event of default other than as described in clause (a)
above with respect to any Designated Senior Debt will have occurred and be
continuing permitting the holders of such Designated Senior Debt (or their
Representative or Representatives) to declare such Designated Senior Debt due
and payable prior to the date on which it would otherwise have become due and
payable, then no payment will be made, or redemption or acquisition will be
effected, by or on behalf of the Company on account of the New Notes and all
other Obligations with respect thereto (other than payments in the form of
Reorganization Securities) (x) in case of any payment or nonpayment default
specified in (a), unless and until such default will have been cured or waived
in writing in accordance with the instruments governing such Senior Debt or such
acceleration will have been rescinded or annulled, or (y) in case of any
nonpayment event of default specified in (b), during the period (a "Payment
Blockage Period") commencing on the date the Company or the Trustee receive
written notice (a "Payment Notice") of such event of default (which notice will
be binding on the Trustee and the Holders of New Notes as to the occurrence of
such a payment default or nonpayment event of default) from the Credit Agent (or
other holders of Designated Senior Debt or their Representative or
Representatives) and ending on the earliest of (A) 179 days after such date, (B)
the date, if any, on which such Designated Senior Debt to which such default
relates is paid in full in cash or such default is cured or waived in writing in
accordance with the instruments governing such Designated Senior Debt by the
holders of such Designated Senior Debt and (C) the date on which the Trustee
receives written notice from the Credit Agent (or other holders of Designated
Senior Debt or their Representative or Representatives), as the case may be,
terminating the Payment Blockage Period. During any consecutive 360-day period,
the aggregate of all Payment Blockage Periods shall not exceed 179 days and
there shall be a period of at least 181 consecutive days in each consecutive
360-day period when no Payment Blockage Period is in effect. No event of default
which existed or was continuing with respect to the Senior Debt for which notice
commencing
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a Payment Blockage Period was given on the date such Payment Blockage Period
commenced shall be or be made the basis for the commencement of any subsequent
Payment Blockage Period unless such event of default is cured or waived for a
period of not less than 90 consecutive days.
As a result of the subordination provisions described above, in the event
of the Company's liquidation, dissolution, bankruptcy, reorganization,
insolvency, receivership or similar proceeding or in an assignment for the
benefit of the creditors or a marshalling of the assets and liabilities of the
Company, Holders of New Notes may recover less ratably than creditors of the
Company who are holders of Senior Debt. See "Risk Factors -- Subordination." The
Indenture limits, subject to certain financial tests, the amount of additional
Indebtedness, including Senior Debt, that the Company and its Restricted
Subsidiaries can incur. See "-- Certain Covenants -- Incurrence of Indebtedness
and Issuance of Preferred Stock."
NEW NOTE GUARANTEES
The Company's payment obligations under the New Notes will be jointly and
severally guaranteed by the Subsidiary Guarantors. The New Note Guarantees will
be subordinated to the prior payment in full of all Senior Debt of each
Subsidiary Guarantor (including such Subsidiary Guarantor's guarantee of the New
Credit Facility, if any) to the same extent that the New Notes are subordinated
to Senior Debt of the Company. The obligations of any Subsidiary Guarantor under
its New Note Guarantee will be limited so as not to constitute a fraudulent
conveyance under applicable law.
The Indenture provides that no Subsidiary Guarantor may consolidate with or
merge with or into (whether or not such Subsidiary Guarantor is the surviving
Person), another corporation, Person or entity whether or not affiliated with
such Subsidiary Guarantor unless, subject to the provisions of the following
paragraph, (i) the Person formed by or surviving any such consolidation or
merger (if other than such Subsidiary Guarantor) assumes all the obligations of
such Subsidiary Guarantor pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the New Senior
Subordinated Notes and the Indenture; (ii) immediately after giving effect to
such transaction, no Default or Event of Default exists; and (iii) the Company
would be permitted by virtue of its pro forma Fixed Charge Coverage Ratio,
immediately after giving effect to such transaction, to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the covenant described below under the caption "Incurrence of
Indebtedness and Issuance of Preferred Stock." The requirements of clause (iii)
of this paragraph will not apply in the case of a consolidation with or merger
with or into (a) the Company or another Subsidiary Guarantor or (b) any other
Person if the acquisition of all of the Equity Interests in such Person would
have complied with the provisions of the covenants described below under the
captions "-- Restricted Payments" and "-- Incurrence of Indebtedness and
Issuance of Preferred Stock."
The Indenture provides that (a) in the event of a sale or other disposition
of all of the assets of any Subsidiary Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the capital
stock of any Subsidiary Guarantor, or (b) in the event that the Company
designates a Subsidiary Guarantor to be an Unrestricted Subsidiary, or such
Subsidiary Guarantor ceases to be a Subsidiary of the Company, then such
Subsidiary Guarantor (in the event of a sale or other disposition, by way of
such a merger, consolidation or otherwise, of all of the capital stock of such
Subsidiary Guarantor or any such designation) or the entity acquiring the
property (in the event of a sale or other disposition of all of the assets of
such Subsidiary Guarantor) will be released and relieved of any obligations
under its New Note Guarantee; provided that the Net Proceeds of such sale or
other disposition are applied in accordance with the applicable provisions of
the Indenture. See "Repurchase at the Option of Holders." In the case of a sale,
assignment, lease, transfer, conveyance or other disposition of all or
substantially all of the assets of a Subsidiary Guarantor, upon the assumption
provided for in clause (ii) of the covenant described under the caption "Merger,
Consolidation, or Sale of Assets," such Subsidiary Guarantor shall be discharged
from all further liability and obligations under the Indenture.
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OPTIONAL REDEMPTION
The New Notes will not be redeemable at the Company's option prior to March
15, 2003. Thereafter, the New Notes will be subject to redemption at any time at
the option of the Company, in whole or in part, upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the applicable redemption date, if
redeemed during the twelve-month period beginning on March 15 of the years
indicated below:
<TABLE>
<CAPTION>
PERCENTAGE
----------
<S> <C>
2003.................................................... 104.625%
2004.................................................... 103.083%
2005.................................................... 101.542%
2006 and thereafter..................................... 100.000%
</TABLE>
Notwithstanding the foregoing, at any time prior to March 15, 2001, the
Company may redeem up to 35% of the original aggregate principal amount of New
Notes at a redemption price of 109.25% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the
redemption date, with the net cash proceeds of a Public Equity Offering;
provided that at least 65% of the original aggregate principal amount of New
Notes remains outstanding immediately after the occurrence of such redemption
(excluding New Notes held by the Company and its Subsidiaries); and provided,
further, that such redemption shall occur within 45 days of the date of the
closing of such Public Equity Offering.
SELECTION AND NOTICE
If less than all of the New Notes are to be redeemed at any time, selection
of New Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
New Notes are listed, or, if the New Notes are not so listed, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate;
provided that no New Notes of $1,000 or less shall be redeemed in part. Notices
of redemption shall be mailed by first class mail at least 30 but not more than
60 days before the redemption date to each Holder of New Notes to be redeemed at
its registered address. Notices of redemption may not be conditional. If any New
Note is to be redeemed in part only, the notice of redemption that relates to
such Note shall state the portion of the principal amount thereof to be
redeemed. A new New Note in principal amount equal to the unredeemed portion
thereof will be issued in the name of the Holder thereof upon cancellation of
the original New Note. New Notes called for redemption become due on the date
fixed for redemption. On and after the redemption date, interest ceases to
accrue on New Notes or portions of them called for redemption.
MANDATORY REDEMPTION
Except as set forth below under "Repurchase at the Option of Holders," the
Company is not required to make mandatory redemption or sinking fund payments
with respect to the New Notes.
REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder of New Notes will
have the right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's New Notes pursuant to
the offer described below (the "Change of Control Offer") at an offer price in
cash equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase New Notes on the date specified in such notice, which date shall
be no earlier than 30 days and no later than 60 days from the date such notice
is mailed (the "Change of Control Payment Date"), pursuant to the procedures
required by the Indenture and described in such notice. The Company will comply
with the requirements of Rule 14e-1 under the Exchange
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Act and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with the repurchase of the New
Notes as a result of a Change of Control.
On the Change of Control Payment Date, the Company will, to the extent
lawful, (1) accept for payment all New Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all New
Notes or portions thereof so tendered and (3) deliver or cause to be delivered
to the Trustee the New Notes so accepted together with an Officers' Certificate
stating the aggregate principal amount of New Notes or portions thereof being
purchased by the Company. The Paying Agent will promptly mail to each Holder of
New Notes so tendered the Change of Control Payment for such New Notes, and the
Trustee will promptly authenticate and mail (or cause to be transferred by book
entry) to each Holder a new New Note equal in principal amount to any
unpurchased portion of the New Notes surrendered, if any; provided that each
such new New Note will be in a principal amount of $1,000 or an integral
multiple thereof. The Indenture provides that, prior to complying with the
provisions of this covenant, but in any event within 90 days following a Change
of Control, the Company will either repay all outstanding Senior Debt or obtain
the requisite consents, if any, under all agreements governing outstanding
Senior Debt to permit the repurchase of New Notes required by this covenant. The
Company will publicly announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Payment Date.
The Change of Control provisions described above will be applicable whether
or not any other provisions of the Indenture are applicable. Except as described
above with respect to a Change of Control, the Indenture does not contain
provisions that permit the Holders of the New Notes to require that the Company
repurchase or redeem the New Notes in the event of a takeover, recapitalization
or similar transaction.
The New Credit Facility provides that certain change of control events with
respect to the Company would constitute a default thereunder. Any future credit
agreements or other agreements relating to Senior Debt to which the Company
becomes a party may contain similar restrictions and provisions. In the event a
Change of Control occurs at a time when the Company is prohibited from
purchasing New Notes, the Company could seek the consent of its lenders to
purchase the New Notes or could attempt to refinance the borrowings that contain
such prohibition. If the Company does not obtain such consent or repay such
borrowings, the Company will remain prohibited from purchasing New Notes. In
such case, the Company's failure to purchase tendered New Notes would constitute
an Event of Default under the Indenture which would, in turn, constitute a
default under the New Credit Facility. In such circumstances, the subordination
provisions in the Indenture would likely restrict payments to the Holders of New
Notes.
The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Indenture applicable to a Change of Control Offer made by the Company and
purchases all New Notes validly tendered and not withdrawn under such Change of
Control Offer.
The definition of Change of Control includes a phrase relating to the sale,
lease, transfer, conveyance or other disposition of "all or substantially all"
of the assets of the Company and its Subsidiaries taken as a whole. Although
there is a developing body of case law interpreting the phrase "substantially
all," there is no precise established definition of the phrase under applicable
law. Accordingly, the ability of a Holder of New Notes to require the Company to
repurchase such New Notes as a result of a sale, lease, transfer, conveyance or
other disposition of less than all of the assets of the Company and its
Subsidiaries taken as a whole to another Person or group may be uncertain.
ASSET SALES
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the
Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value (evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee) of the assets or Equity
Interests issued or sold or otherwise disposed of and (ii) at least 80% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of cash; provided that the amount of
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(x) any liabilities (as shown on the Company's or such Restricted Subsidiary's
most recent balance sheet), of the Company or any Restricted Subsidiary (other
than contingent liabilities and liabilities that are by their terms subordinated
to the New Notes or any guarantee thereof) that are assumed by the transferee of
any such assets pursuant to a customary novation agreement that releases the
Company or such Restricted Subsidiary from further liability and (y) any
securities, notes or other obligations received by the Company or any such
Restricted Subsidiary from such transferee that are converted by the Company or
such Restricted Subsidiary into cash within 180 days (to the extent of the cash
received), shall be deemed to be cash for purposes of this provision.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds, at its option, (a) to permanently repay
Senior Debt (and to correspondingly reduce commitments with respect thereto in
the case of revolving borrowings), or (b) to the acquisition of a controlling
interest in another business, the making of a capital expenditure or the
acquisition of other long-term assets and parking facility agreements, in each
case, in a Permitted Business. Pending the final application of any such Net
Proceeds, the Company may temporarily reduce the revolving Indebtedness under
the New Credit Facility or otherwise invest such Net Proceeds in any manner that
is not prohibited by the Indenture. Any Net Proceeds from Asset Sales that are
not applied or invested as provided in the first sentence of this paragraph will
be deemed to constitute "Excess Proceeds." When the aggregate amount of Excess
Proceeds exceeds $10.0 million, the Company will be required to make an offer to
all Holders of New Notes (an "Asset Sale Offer") to purchase the maximum
principal amount of New Notes that may be purchased out of the Excess Proceeds,
at an offer price in cash in an amount equal to 100% of the principal amount
thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any,
to the date of purchase, in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of New Notes tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
may use any remaining Excess Proceeds for general corporate purposes. If the
aggregate principal amount of New Notes surrendered by Holders thereof exceeds
the amount of Excess Proceeds, the Trustee shall select the New Notes to be
purchased on a pro rata basis. Upon completion of such offer to purchase, the
amount of Excess Proceeds shall be reset at zero.
CERTAIN COVENANTS
RESTRICTED PAYMENTS
The Indenture provides that from and after the date of the Indenture the
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly: (i) declare or pay any dividend or make any other
payment or distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation involving the Company) or to the
direct or indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other than dividends
or distributions payable in Equity Interests (other than Disqualified Stock) of
the Company); (ii) purchase, redeem or otherwise acquire or retire for value
(including without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any direct or
indirect parent of the Company; (iii) make any payment on or with respect to, or
purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is pari passu with or subordinated to the New Notes (other
than New Notes), except a payment of interest or principal at Stated Maturity;
or (iv) make any Restricted Investment (all such payments and other actions set
forth in clauses (i) through (iv) above being collectively referred to as
"Restricted Payments"), unless, at the time of and after giving effect to such
Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed
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Charge Coverage Ratio test set forth in the first paragraph of the covenant
described below under the caption "-- Incurrence of Indebtedness and
Issuance of Preferred Stock"; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Subsidiaries after
the date of the Indenture (excluding Restricted Payments permitted by
clause (ii) and (iii) of the next succeeding paragraph), is less than the
sum of (i) 50% of the Consolidated Net Income of the Company for the period
(taken as one accounting period) from the beginning of the first fiscal
quarter commencing after the date of the Indenture to the end of the
Company's most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment (or, if
such Consolidated Net Income for such period is a deficit, less 100% of
such deficit), plus (ii) 100% of the aggregate net cash proceeds received
by the Company from the issue or sale since the date of the Indenture of
Equity Interests of the Company (other than Disqualified Stock) or of
Disqualified Stock or debt securities of the Company that have been
converted into such Equity Interests (other than Equity Interests (or
Disqualified Stock or convertible debt securities) sold to a Subsidiary of
the Company and other than Disqualified Stock or convertible debt
securities that have been converted into Disqualified Stock), plus (iii) to
the extent that any Restricted Investment that was made after the date of
the Indenture is sold for cash or otherwise liquidated or repaid for cash,
the lesser of (A) the cash return of capital with respect to such
Restricted Investment (less the cost of disposition, if any) and (B) the
initial amount of such Restricted Investment plus (iv) if any Unrestricted
Subsidiary (A) is redesignated as a Restricted Subsidiary, the fair market
value of such redesignated Subsidiary (as determined in good faith by the
Board of Directors) as of the date of its redesignation or (B) pays any
cash dividends or cash distributions to the Company or any of its
Restricted Subsidiaries, 50% of any such cash dividends or cash
distributions made after the date of the Indenture.
The foregoing provisions will not prohibit (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at said date of
declaration such payment would have complied with the provisions of the
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any pari passu or subordinated Indebtedness or Equity Interests
of the Company in exchange for, or out of the net cash proceeds of the
substantially concurrent sale or issuance (other than to a Restricted Subsidiary
of the Company) of, other Equity Interests of the Company (other than any
Disqualified Stock); (iii) the defeasance, redemption, repurchase or other
acquisition of pari passu or subordinated Indebtedness with the net cash
proceeds from an incurrence of Permitted Refinancing Indebtedness; (iv) the
payment of any dividend by a Restricted Subsidiary of the Company to the holders
of its Equity Interests on a pro rata basis; (v) Investments in any Person
(other than the Company or a Wholly-Owned Restricted Subsidiary) engaged in a
Permitted Business in an amount taken together with all other Investments made
pursuant to this clause (v) that are at that time outstanding not to exceed $5.0
million; (vi) other Investments in Unrestricted Subsidiaries having an aggregate
fair market value, taken together with all other Investments made pursuant to
this clause (vi) that are at that time outstanding, not to exceed $2.0 million;
(vii) payments to Holdings or Holberg pursuant to the tax sharing agreement
among Holberg and other members of the affiliated corporations of which Holberg
is the common parent; (viii) the designation of certain of the Company's
Subsidiaries as Unrestricted Subsidiaries immediately prior to the date of the
Indenture; (ix) the payment of a one-time dividend or distribution by the
Company to pay fees, expenses, commissions and discounts in connection with the
offering by Holdings of debt securities used to finance the Preferred Stock
Contribution; (x) the redemption in connection with the Transactions of the
preferred stock of the Company held by Holberg; (xi) the repurchase, redemption
or other acquisition or retirement for value of any Equity Interests of Holdings
or the Company held by any member of Holdings' or the Company's (or any of their
Restricted Subsidiaries) management pursuant to any management equity
subscription agreement or stock option agreement or in connection with the
termination of employment of any employees or management of Holdings or the
Company or their Subsidiaries; provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity Interests shall not
exceed $2.0 million in the aggregate plus the aggregate cash proceeds received
by Holdings or the Company after the date of the Indenture from any reissuance
of Equity Interests by Holdings or the Company to members of management of
Holdings or the Company and their Restricted Subsidiaries; and (xii) other
Restricted Payments in an aggregate amount not to exceed $10.0 million.
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From and after the date of the Indenture, the Board of Directors may
designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such
designation would not cause a Default; provided that in no event shall the
business currently operated by any Subsidiary Guarantor be transferred to or
held by an Unrestricted Subsidiary. For purposes of making such determination,
all outstanding Investments by the Company and its Restricted Subsidiaries
(except to the extent repaid in cash) in the Subsidiary so designated will be
deemed to be Restricted Payments at the time of such designation and will reduce
the amount available for Restricted Payments under the first paragraph of this
covenant. All such outstanding Investments will be deemed to constitute
Investments in an amount equal to the fair market value of such Investments at
the time of such designation (as determined in good faith by the Board of
Directors). Such designation will only be permitted if such Restricted Payment
would be permitted at such time and if such Restricted Subsidiary otherwise
meets the definition of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Subsidiary, as the
case may be, pursuant to the Restricted Payment. The fair market value of any
non-cash Restricted Payment shall be determined in good faith by the Board of
Directors whose resolution with respect thereto shall be delivered to the
Trustee such determination to be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if such
fair market value exceeds $10.0 million. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by the covenant "Restricted
Payments" were computed, together with a copy of any fairness opinion or
appraisal required by the Indenture.
INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
The Indenture provides that the Company will not, and will not permit any
of its Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness (including
Acquired Debt) and that the Company will not issue any Disqualified Stock and
will not permit any of its Subsidiaries to issue any shares of preferred stock;
provided, however, that the Company may incur Indebtedness (including Acquired
Debt) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio
for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred or such Disqualified Stock is
issued would have been at least 2.0 to 1, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred, or the Disqualified Stock had been
issued, as the case may be, at the beginning of such four-quarter period.
The provisions of the first paragraph of this covenant will not apply to
the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(i) the incurrence by the Company of revolving credit Indebtedness and
letters of credit pursuant to New Credit Facility; provided that the aggregate
principal amount of all revolving credit Indebtedness (with letters of credit
being deemed to have a principal amount equal to the maximum potential liability
of the Company and its Subsidiaries thereunder) outstanding under the New Credit
Facility after giving effect to such incurrence does not exceed $40.0 million
less the aggregate amount of all Net Proceeds of Asset Sales applied to repay
revolving credit Indebtedness under the New Credit Facility pursuant to the
covenant described above under "-- Repurchase at the Option of Holders -- Asset
Sales";
(ii) the incurrence by the Company and its Restricted Subsidiaries of the
Existing Indebtedness;
(iii) the incurrence by the Company and the Subsidiary Guarantors of
Indebtedness represented by the New Notes and the New Note Guarantees thereof,
respectively;
(iv) the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case incurred for the purpose of financing
all or any part of the purchase price or cost of construction or improvement of
property,
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plant or equipment used in the business of the Company or such Restricted
Subsidiary (whether through the direct purchase of assets or the Capital Stock
of any Person owning such Assets), in an aggregate principal amount not to
exceed $7.5 million;
(v) the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness in connection with the acquisition of assets or a new Restricted
Subsidiary; provided that such Indebtedness was incurred by the prior owner of
such assets or such Restricted Subsidiary prior to such acquisition by the
Company or one of its Subsidiaries and was not incurred in connection with, or
in contemplation of, such acquisition by the Company or one of its Subsidiaries;
provided further that the principal amount (or accreted value, as applicable) of
such Indebtedness, together with any other outstanding Indebtedness incurred
pursuant to this clause (v), does not exceed $5.0 million;
(vi) the incurrence by the Company or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which
are used to refund, refinance or replace Indebtedness that was permitted by the
Indenture to be incurred under the first paragraph hereof or clauses (i), (ii),
(iii), (iv), (v) or (xv) of this paragraph;
(vii) the incurrence by the Company or any of its Restricted Subsidiaries
of intercompany Indebtedness between or among the Company and any of its Wholly
Owned Restricted Subsidiaries; provided, however, that (i) if the Company is the
obligor on such Indebtedness and the payee is not a Subsidiary Guarantor, such
Indebtedness is expressly subordinated to the prior payment in full in cash of
all Obligations with respect to the Notes and (ii)(A) any subsequent issuance or
transfer of Equity Interests that results in any such Indebtedness being held by
a Person other than the Company or a Wholly Owned Restricted Subsidiary and (B)
any sale or other transfer of any such Indebtedness to a Person that is not
either the Company or a Wholly Owned Restricted Subsidiary shall be deemed, in
each case, to constitute an incurrence of such Indebtedness by the Company or
such Restricted Subsidiary, as the case may be;
(viii) the incurrence by the Company or any of its Restricted Subsidiaries
of Hedging Obligations that are incurred for the purpose of fixing or hedging
currency risk or interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(ix) the guarantee by the Company or any of its Restricted Subsidiaries of
Indebtedness of the Company or a Restricted Subsidiary of the Company that was
permitted to be incurred by another provision of this covenant;
(x) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be
Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to
constitute an incurrence of Indebtedness by a Restricted Subsidiary of the
Company that was not permitted by this clause (x);
(xi) Indebtedness incurred by the Company or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to letters of
credit issued in the ordinary course of business, including without limitation
to letters of credit in respect to workers' compensation claims or
self-insurance, surety bonds or other Indebtedness with respect to reimbursement
type obligations regarding workers' compensation claims, provided, however, that
upon the drawing of such letters of credit or the incurrence of such
Indebtedness, such obligations are reimbursed within 30 days following such
drawing or incurrence;
(xii) Indebtedness arising from agreements of the Company or a Restricted
Subsidiary providing for indemnification, adjustment of purchase price or
similar obligations, in each case, incurred or assumed in connection with the
disposition of any business, asset or Subsidiary, other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Subsidiary for the purpose of financing such acquisition;
provided that the maximum aggregate liability of all such Indebtedness shall at
no time exceed 50% of the gross proceeds actually received by the Company;
(xiii) obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary in
the ordinary course of business;
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(xiv) guarantees incurred in the ordinary course of business in an
aggregate principal amount not to exceed $5.0 million; and
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of
additional Indebtedness, including Attributable Debt incurred after the date of
the Indenture, in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any other Indebtedness
incurred pursuant to this clause (xv), not to exceed $25.0 million.
For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xv) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this covenant and such item of Indebtedness will be
treated as having been incurred pursuant to only one of such clauses or pursuant
to the first paragraph hereof. The incurrence of Indebtedness pursuant to the
first paragraph of the covenant described above shall not be classified as any
of the Items in clauses (i) through (xv) above. Accrual of interest and the
accretion of accreted value will not be deemed to be an incurrence of
Indebtedness for purposes of this covenant.
LIENS
The Indenture provides that the Company will not and will not permit any of
its Restricted Subsidiaries to, create, incur, assume or otherwise cause or
suffer to exist or become effective any Lien of any kind securing Indebtedness
or trade payables that do not constitute Senior Debt (other than Permitted
Liens) upon any of their property or assets, now owned or hereafter acquired.
DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary to (i)(a) pay dividends or make any
other distributions to the Company or any of its Restricted Subsidiaries (1) on
its Capital Stock or (2) with respect to any other interest or participation in,
or measured by, its profits, or (b) pay any indebtedness owed to the Company or
any of its Restricted Subsidiaries, (ii) make loans or advances to the Company
or any of its Restricted Subsidiaries or (iii) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (a) Existing
Indebtedness as in effect on the date of the Indenture, (b) the New Credit
Facility as in effect as of the date of the Indenture, and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof; provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive in the aggregate (as
determined by the Credit Agent in good faith) with respect to such dividend and
other payment restrictions than those contained in the New Credit Facility as in
effect on the date of the Indenture, (c) the Indenture and the New Notes, (d)
any applicable law, rule, regulation or order, (e) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company or any of its
Restricted Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness was incurred in connection with or in contemplation
of such acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of the Indenture to
be incurred, (f) by reason of customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with past
practices, (g) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(iii) above on the property so acquired, (h) Permitted Refinancing Indebtedness;
provided that the material restrictions contained in the agreements governing
such Permitted Refinancing Indebtedness are no more restrictive than those
contained in the agreements governing the Indebtedness being refinanced, (i)
contracts for the sale of assets, including without limitation customary
restrictions with respect to a Subsidiary pursuant
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to an agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Subsidiary, and (j)
restrictions on cash or other deposits or net worth imposed by customers under
contracts entered into in the ordinary course of business.
MERGER, CONSOLIDATION, OR SALE OF ASSETS
The Indenture provides that the Company may not consolidate or merge with
or into (whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets in one or more related transactions, to another
corporation, Person or entity unless (i) the Company is the surviving
corporation or the entity or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia; (ii) the entity or Person formed
by or surviving any such consolidation or merger (if other than the Company) or
the entity or Person to which such sale, assignment, transfer, lease, conveyance
or other disposition shall have been made assumes all the obligations of the
Company under the New Notes and the Indenture pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee; (iii) immediately
after such transaction no Default or Event of Default exists; and (iv) except in
the case of a merger of the Company with or into a Wholly Owned Restricted
Subsidiary of the Company, the Company or the entity or Person formed by or
surviving any such consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made will, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the first paragraph of the covenant described above under the caption
"-- Incurrence of Indebtedness and Issuance of Preferred Stock."
TRANSACTIONS WITH AFFILIATES
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer
or otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction")
unless (i) such Affiliate Transaction is on terms that are no less favorable to
the Company or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5.0 million, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, an opinion as to the
fairness to the Holders of such Affiliate Transaction from a financial point of
view issued by an accounting, appraisal or investment banking firm of national
standing; provided that the following shall not be deemed Affiliate
Transactions: (q) any employment agreement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business and consistent
with the past practice of the Company or such Restricted Subsidiary, (r)
transactions between or among the Company and/or its Restricted Subsidiaries,
(s) Permitted Investments and Restricted Payments that are permitted by the
provisions of the Indenture described above under the caption "-- Restricted
Payments," (t) customary loans, advances, fees and compensation paid to, and
indemnity provided on behalf of, officers, directors, employees or consultants
of the Company or any of its Restricted Subsidiaries, (u) annual management fees
paid to Holberg Industries, Inc. not to exceed $5.0 million in any one year, (v)
transactions pursuant to any contract or agreement in effect on the date of the
Indenture as the same may be amended, modified or replaced from time to time so
long as any such amendment, modification or replacement is no less favorable to
the Company and its Restricted Subsidiaries than the contract or agreement as in
effect on the date of the Indenture or is approved by a majority of the
disinterested directors of
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the Company, (w) transactions between the Company or its Restricted Subsidiaries
on the one hand, and Holberg on the other hand, involving the provision of
financial or advisory services by Holberg; provided that fees payable to Holberg
do not exceed the usual and customary fees for similar services, (x)
transactions between the Company or its Restricted Subsidiaries on the one hand,
and Donaldson, Lufkin & Jenrette Securities Corporation or its Affiliates
("DLJ") on the other hand, involving the provision of financial, advisory,
placement or underwriting services by DLJ; provided that fees payable to DLJ do
not exceed the usual and customary fees of DLJ for similar services, (y) the
insurance arrangements between the Company and its Subsidiaries and an Affiliate
of Holberg that are not less favorable to the Company or any of its Subsidiaries
than those that are in effect on the date hereof provided such arrangements are
conducted in the ordinary course of business consistent with past practices and
(z) payments under the tax sharing agreement among Holberg and other members of
the affiliated group of corporations of which it is the common parent.
ANTI-LAYERING
The Indenture provides that (i) the Company will not incur, create, issue,
assume, guarantee or otherwise become liable for any Indebtedness that is both
(a) subordinate or junior in right of payment to any Senior Debt and (b) senior
in any respect in right of payment to the Notes and (ii) no Subsidiary Guarantor
will incur, create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is both (a) subordinate or junior in right of payment to its
Senior Debt and (b) senior in right of payment to its New Note Guarantee.
SALE AND LEASEBACK TRANSACTIONS
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, enter into any sale and leaseback
transaction; provided that the Company may enter into a sale and leaseback
transaction if (i) the Company could have (a) incurred Indebtedness in an amount
equal to the Attributable Debt relating to such sale and leaseback transaction
pursuant to the covenant described above under the caption "-- Incurrence of
Additional Indebtedness and Issuance of Preferred Stock" and (b) incurred a Lien
to secure such Indebtedness pursuant to the covenant described above under the
caption "-- Liens," (ii) the gross cash proceeds of such sale and leaseback
transaction are at least equal to the fair market value (as determined in good
faith by the Board of Directors and set forth in an Officers' Certificate
delivered to the Trustee) of the property that is the subject of such sale and
leaseback transaction and (iii) the transfer of assets in such sale and
leaseback transaction is permitted by, and the Company applies the proceeds of
such transaction in compliance with, the covenant described above under the
caption "-- Asset Sales."
LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED RESTRICTED
SUBSIDIARIES
The Indenture provides that the Company (i) will not, and will not permit
any Wholly Owned Restricted Subsidiary of the Company to, transfer, convey,
sell, lease or otherwise dispose of any Capital Stock of any Wholly Owned
Subsidiary of the Company to any Person (other than the Company or a Wholly
Owned Restricted Subsidiary of the Company), unless (a) such transfer,
conveyance, sale, lease or other disposition is of all the Capital Stock of such
Wholly Owned Restricted Subsidiary and (b) the cash Net Proceeds from such
transfer, conveyance, sale, lease or other disposition are applied in accordance
with the covenant described above under the caption "-- Asset Sales," and (ii)
will not permit any Wholly Owned Restricted Subsidiary of the Company to issue
any of its Equity Interests (other than, if necessary, shares of its Capital
Stock constituting directors' qualifying shares) to any Person other than to the
Company or a Wholly Owned Restricted Subsidiary of the Company.
LIMITATIONS ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS
The Indenture provides that the Company will not permit any Restricted
Subsidiary, directly or indirectly, to Guarantee or pledge any assets to secure
the payment of any other Indebtedness of the Company unless either such
Restricted Subsidiary (x) is a Subsidiary Guarantor or (y) simultaneously
executes and delivers a supplemental indenture to the Indenture providing for
the Guarantee of the payment of the New Notes by such Restricted Subsidiary,
which Guarantee shall be senior to or pari passu with such Restricted
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Subsidiary's Guarantee of or pledge to secure such other Indebtedness.
Notwithstanding the foregoing, any such Guarantee by a Restricted Subsidiary of
the New Notes shall provide by its terms that it shall be automatically and
unconditionally released and discharged upon any sale, exchange or transfer, to
any Person not an Affiliate of the Company, of all of the Company's stock in, or
all or substantially all the assets of, such Restricted Subsidiary, which sale,
exchange or transfer is made in compliance with the applicable provisions of the
Indenture. The form of such Guarantee will be attached as an exhibit to the
Indenture.
BUSINESS ACTIVITIES
The Company will not, and will not permit any Restricted Subsidiary to,
engage in any business other than Permitted Businesses, except to such extent as
would not be material to the Company and its Restricted Subsidiaries taken as a
whole.
ADDITIONAL GUARANTEES
The Indenture provides that (i) if the Company or any of its Restricted
Subsidiaries shall, after the date of the Indenture, transfer or cause to be
transferred, including by way of any Investment, in one or a series of
transactions (whether or not related), any assets, businesses, divisions, real
property or equipment having an aggregate fair market value (as determined in
good faith by the Board of Directors) in excess of $1.0 million to any
Restricted Subsidiary that is not a Subsidiary Guarantor or a Foreign
Subsidiary, (ii) if the Company or any of its Restricted Subsidiaries shall
acquire another Restricted Subsidiary other than a Foreign Subsidiary having
total assets with a fair market value (as determined in good faith by the Board
of Directors) in excess of $1.0 million, or (iii) if any Restricted Subsidiary
other than a Foreign Subsidiary shall incur Acquired Debt in excess of $1.0
million, then the Company shall, at the time of such transfer, acquisition or
incurrence, (i) cause such transferee, acquired Restricted Subsidiary or
Restricted Subsidiary incurring Acquired Debt (if not then a Subsidiary
Guarantor) to execute a New Note Guarantee of the Obligations of the Company
under the New Notes in the form set forth in the Indenture and (ii) deliver to
the Trustee an Opinion of Counsel, in form reasonably satisfactory to the
Trustee, that such New Note Guarantee is a valid, binding and enforceable
obligation of such transferee, acquired Restricted Subsidiary or Restricted
Subsidiary incurring Acquired Debt, subject to customary exceptions for
bankruptcy, fraudulent conveyance and equitable principles. Notwithstanding the
foregoing, the Company or any of its Restricted Subsidiaries may make a
Restricted Investment in any Wholly Owned Restricted Subsidiary of the Company
without compliance with this covenant provided that such Restricted Investment
is permitted by the covenant described under the caption "Restricted Payments."
REPORTS
The Indenture provides that, whether or not required by the rules and
regulations of the Commission, so long as any New Notes are outstanding, the
Company will furnish to the Holders of New Notes (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants and (ii) all
current reports that would be required to be filed with the Commission on Form
8-K if the Company were required to file such reports. In addition, whether or
not required by the rules and regulations of the Commission, the Company will
file a copy of all such information and reports with the Commission for public
availability (unless the Commission will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. In addition, the Company has agreed that, for so long as any New Notes
remain outstanding, it will furnish to the Holders and to securities analysts
and prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
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EVENTS OF DEFAULT AND REMEDIES
The Indenture provides that each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the New Notes (whether or not prohibited by
the subordination provisions of the Indenture); (ii) default in payment when due
of the principal of or premium, if any, on the New Notes (whether or not
prohibited by the subordination provisions of the Indenture); (iii) failure by
the Company to comply with the provisions described under the captions
"-- Change of Control," "-- Asset Sales," or "-- Merger, Consolidation, or Sale
of Assets;" (iv) failure by the Company for 30 days after notice from the
Trustee or at least 30% in principal amount of the New Notes then outstanding to
comply with the provisions described under the captions "-- Restricted Payments"
or "-- Incurrence of Indebtedness and Issuance of Preferred Stock;" (v) failure
by the Company for 60 days after notice from the Trustee or at least 25% in
principal amount of the New Notes then outstanding to comply with any of its
other agreements in the Indenture or the New Notes; (vi) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Subsidiaries) whether such Indebtedness or Guarantee now
exists, or is created after the date of the Indenture, which default (a) is
caused by a failure to pay principal of or premium, if any, or interest on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (b) results in
the acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated, aggregates $15.0
million or more; (vii) failure by the Company or any of its Subsidiaries to pay
final judgments aggregating in excess of $5.0 million, which judgments are not
paid, discharged or stayed for a period of 60 days; and (viii) certain events of
bankruptcy or insolvency with respect to the Company or any of its Subsidiaries.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding New Notes
may declare all the New Notes to be due and payable immediately; provided,
however, that if any Indebtedness or Obligation is outstanding pursuant to the
New Credit Facility, upon a declaration of acceleration by the holders of the
New Notes or the Trustee, all principal and interest under the Indenture shall
be due and payable upon the earlier of (x) the day which five Business Days
after the provision to the Company, the Credit Agent and the Trustee of such
written notice of acceleration or (y) the date of acceleration of any
Indebtedness under the New Credit Facility; and provided, further, that in the
event of an acceleration based upon an Event of Default set forth in clause (vi)
above, such declaration of acceleration shall be automatically annulled if the
holders of Indebtedness which is the subject of such failure to pay at maturity
or acceleration have rescinded their declaration of acceleration in respect of
such Indebtedness or such failure to pay at maturity shall have been cured or
waived within 30 days thereof and no other Event of Default has occurred during
such 30-day period which has not been cured, paid or waived. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company or any of its Subsidiaries
all outstanding New Notes will become due and payable without further action or
notice. Holders of the New Notes may not enforce the Indenture or the New Notes
except as provided in the Indenture. Subject to certain limitations, Holders of
a majority in principal amount of the then outstanding New Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the New Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the New Notes pursuant to the
optional redemption provisions of the Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the New Notes. If an Event of Default occurs prior to
March 15, 2003 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the New Notes prior
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to March 15, 2003, then the premium specified in the Indenture shall also become
immediately due and payable to the extent permitted by law upon the acceleration
of the New Notes.
The Holders of a majority in aggregate principal amount of the New Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the New Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of Default
in the payment of interest on, or the principal of, the New Notes.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the Company
or the Subsidiary Guarantors, as such, shall have any liability for any
obligations of the Company or any Subsidiary Guarantor under the New Notes, the
Indenture, the New Note Guarantees or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder of New Notes by
accepting a New Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the New Notes. Such waiver
may not be effective to waive liabilities under the federal securities laws and
it is the view of the Commission that such a waiver is against public policy.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding New Notes and all
obligations of the Subsidiary Guarantors under the New Note Guarantees ("Legal
Defeasance") except for (i) the rights of Holders of outstanding New Notes to
receive payments in respect of the principal of, premium and Liquidated Damages,
if any, and interest on such New Notes when such payments are due from the trust
referred to below, (ii) the Company's obligations with respect to the New Notes
concerning issuing temporary New Notes, registration of New Notes, mutilated,
destroyed, lost or stolen New Notes and the maintenance of an office or agency
for payment and money for security payments held in trust, (iii) the rights,
powers, trusts, duties and immunities of the Trustee, and the Company's
obligations in connection therewith and (iv) the Legal Defeasance provisions of
the Indenture. In addition, the Company may, at its option and at any time,
elect to have the obligations of the Company and the Subsidiary Guarantors
released with respect to certain covenants that are described in the Indenture
("Covenant Defeasance") and thereafter any omission to comply with such
obligations shall not constitute a Default or Event of Default with respect to
the New Notes. In the event Covenant Defeasance occurs, certain events (not
including non-payment, bankruptcy, receivership, rehabilitation and insolvency
events) described under "Events of Default" will no longer constitute an Event
of Default with respect to the New Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance: (i)
the Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the Holders of the New Notes, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, premium and Liquidated Damages, if any, and interest on
the outstanding New Notes on the stated maturity or on the applicable redemption
date, as the case may be, and the Company must specify whether the New Notes are
being defeased to maturity or to a particular redemption date; (ii) in the case
of Legal Defeasance, the Company shall have delivered to the Trustee an opinion
of counsel in the United States reasonably acceptable to the Trustee confirming
that (A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of the Indenture, there
has been a change in the applicable federal income tax law, in either case to
the effect that, and based thereon such opinion of counsel shall confirm that,
the Holders of the outstanding New Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had not
occurred; (iii) in the case of Covenant Defeasance, the Company shall have
delivered to
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the Trustee an opinion of counsel in the United States reasonably acceptable to
the Trustee confirming that the Holders of the outstanding New Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred; (iv) no Default or Event of Default
shall have occurred and be continuing on the date of such deposit (other than a
Default or Event of Default resulting from the borrowing of funds to be applied
to such deposit) or insofar as Events of Default from bankruptcy or insolvency
events are concerned, at any time in the period ending on the 91st day after the
date of deposit; (v) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under any material
agreement or instrument (other than the Indenture) to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound; (vi) the Company must have delivered to the Trustee an
opinion of counsel to the effect that after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally; (vii) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of New Notes over the other creditors of the Company
with the intent of defeating, hindering, delaying or defrauding creditors of the
Company or others; and (viii) the Company must deliver to the Trustee an
Officers' Certificate and an opinion of counsel, each stating that all
conditions precedent provided for relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
TRANSFER AND EXCHANGE
A Holder may transfer or exchange New Notes in accordance with the
Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company is not required to transfer or exchange
any New Note selected for redemption. Also, the Company is not required to
transfer or exchange any Note for a period of 15 days before a selection of
Notes to be redeemed.
The registered Holder of a New Note will be treated as the owner of it for
all purposes.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next two succeeding paragraphs, the Indenture or
the New Notes may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, New Notes), and any existing default
or compliance with any provision of the Indenture or the New Notes may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding New Notes (including consents obtained in connection with a tender
offer or exchange offer for New Notes).
Without the consent of each Holder affected, an amendment or waiver may not
(with respect to any New Notes held by a non-consenting Holder): (i) reduce the
principal amount of New Notes whose Holders must consent to an amendment,
supplement or waiver, (ii) reduce the principal of or change the fixed maturity
of any New Note or alter the provisions with respect to the redemption of the
New Notes (other than provisions relating to the covenants described above under
the caption "-- Repurchase at the Option of Holders"), (iii) reduce the rate of
or change the time for payment of interest on any New Note, (iv) waive a Default
or Event of Default in the payment of principal of or premium, if any, or
interest on the New Notes (except a rescission of acceleration of the New Notes
by the Holders of at least a majority in aggregate principal amount of the New
Notes and a waiver of the payment default that resulted from such acceleration),
(v) make any New Note payable in money other than that stated in the New Notes,
(vi) make any change in the provisions of the Indenture relating to waivers of
past Defaults or the rights of Holders of New Notes to receive payments of
principal of or premium, if any, or interest on the New Notes, (vii) waive a
redemption payment with respect to any New Note (other than a payment required
by one of the covenants described above under the caption "-- Repurchase at the
Option of Holders") or (viii) make any change in the foregoing amendment
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and waiver provisions. In addition, any amendment to the provisions of Article
10 of the Indenture (which relate to subordination) will require the consent of
the Holders of at least 75% in aggregate principal amount of the New Notes then
outstanding if such amendment would adversely affect the rights of Holders of
New Notes.
Notwithstanding the foregoing, without the consent of any Holder of New
Notes, the Company, the Subsidiary Guarantors and the Trustee may amend or
supplement the Indenture or the New Notes to cure any ambiguity, defect or
inconsistency, to provide for uncertificated New Notes in addition to or in
place of certificated New Notes, to provide for the assumption of the Company's
and the Subsidiary Guarantors' obligations to Holders of New Notes in the case
of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of New Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the Commission for permission to continue
or resign.
The Holders of a majority in principal amount of the then outstanding New
Notes will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur (which shall not be cured), the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent man in the conduct
of his own affairs. Subject to such provisions, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request of any Holder of New Notes, unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability or
expense.
ADDITIONAL INFORMATION
Anyone who receives this Prospectus may obtain a copy of the Indenture and
Registration Rights Agreement without charge by writing to APCOA, Inc., 800
Superior Avenue, Cleveland, Ohio 44114; Attention: Corporate Secretary.
BOOK-ENTRY, DELIVERY AND FORM
The New Notes initially being issued in exchange for the Notes generally
will be represented by one or more fully-registered global notes without
interest coupons (collectively the "Global New Notes"). Notwithstanding the
foregoing, Notes held in certificated form will be exchanged solely for New
Notes in certificated form as discussed below. The Global New Notes will be
deposited upon issuance with the Depository Trust Company (the "DTC") and
registered in the name of DTC or its nominee (the "Global New Note Registered
Owner"), in each case for credit to an account of a direct or indirect
participant as described below. Except as set forth below, the Global New Notes
may be transferred, in whole and not in part, only to another nominee of the DTC
or to a successor of the DTC or its nominee. See "-- Exchange of Book-Entry New
Notes for Certificated New Notes."
The New Notes may be presented for registration of transfer and exchange at
the offices of the Registrar.
DEPOSITORY PROCEDURES
DTC has advised the Company that DTC is a limited-purpose trust company
created to hold securities for its participating organizations (collectively,
the "Participants") and to facilitate the clearance and settlement of
transactions in those securities between Participants through electronic
book-entry changes in
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accounts of Participants. The Participants include securities brokers and
dealers (including the Initial Purchaser), banks, trust companies, clearing
corporations and certain other organizations. Access to DTC's system is also
available to other entities such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly (collectively, the "Indirect Participants").
Persons who are not Participants may beneficially own securities held by or on
behalf of DTC only through the Participants or Indirect Participants. The
ownership interest and transfer of ownership interest of each actual purchaser
of each security held by or on behalf of DTC are recorded on the records of the
Participants and Indirect Participants.
DTC has also advised the Company that pursuant to procedures established by
it, (i) upon deposit of the Global New Notes, DTC will credit the accounts of
Participants designated by the Initial Purchaser with portions of the principal
amount of Global New Notes and (ii) ownership of such interests in the Global
New Notes will be shown on, and the transfer ownership thereof will be effected
only through, records maintained by DTC (with respect to Participants) or by
Participants and the Indirect Participants (with respect to other owners of
beneficial interests in the Global New Notes).
EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE GLOBAL NEW NOTES WILL
NOT HAVE NEW NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY
OF NEW NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED
OWNERS OR HOLDERS THEREOF UNDER THE INDENTURE FOR ANY PURPOSE.
Payments in respect of the principal and premium and Liquidated Damages, if
any, and interest on a Global New Note registered in the name of DTC or its
nominee will be payable by the Trustee to DTC or its nominee in its capacity as
the registered holder under the Indenture. Under the terms of the Indenture, the
Company and the Trustee will treat the persons in whose names the New Notes,
including the Global New Notes, are registered as the owners thereof for the
purpose of receiving such payments and for any and all other purposes
whatsoever. Consequently, none of the Company, the Trustee nor any agent of the
Company or the Trustee has or will have any responsibility or liability for (i)
any aspect of DTC's records or any Participant's or Indirect Participant's
records relating to or payments made on account of beneficial ownership
interests in the Global New Notes, or for maintaining, supervising or reviewing
any of DTC's records or any Participant's or Indirect Participant's records
relating to the beneficial ownership interests in the Global New Notes or (ii)
any other matter relating to the actions and practices of DTC or any of its
Participants or Indirect Participants.
DTC has advised the Company that its current practice, upon receipt of any
payment in respect of securities such as the New Notes (including principal and
interest), is to credit the accounts of the relevant Participants with the
payment on the payment date, in amounts proportionate to their respective
holdings in principal amount of beneficial interests in the relevant security
such as the Global New Notes as shown on the records of DTC. Payments by
Participants and the Indirect Participants to the beneficial owners of New Notes
will be governed by standing instructions and customary practices and will not
be the responsibility of DTC, the Trustee or the Company. Neither the Company
nor the Trustee will be liable for any delay by DTC or its Participants in
identifying the beneficial owners of the New Notes, and the Company and the
Trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee as the registered owner of the New Notes
for all purposes.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of New Notes only at the direction of one or more Participants
to whose account DTC interests in the Global New Notes are credited and only in
respect of such portion of the aggregate principal amount of the New Notes as to
which such Participant or Participants have given direction. However, if there
is an Event of Default under the New Notes, DTC reserves the right to exchange
Global New Notes for legended New Notes in certificated form, and to distribute
such New Notes to its Participants.
The information in this section concerning DTC and its book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
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Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in the Global New Notes among Participants in DTC, it is under no
obligation to perform or to continue to perform such procedures, and such
procedures may be discontinued at any time. None of the Company, the Initial
Purchasers or the Trustee will have any responsibility for the performance by
DTC, or its Participants or indirect Participants of its obligations under the
rules and procedures governing their operations.
EXCHANGE OF BOOK-ENTRY NEW NOTES FOR CERTIFICATED NEW NOTES
A Global New Note is exchangeable for definitive New Notes in registered
certificated form if (i) DTC (x) notifies the Company that it is unwilling or
unable to continue as depositary for the Global New Note and the Company
thereupon fails to appoint a successor depositary or (y) has ceased to be a
clearing agency registered under the Exchange Act, (ii) the Company, at its
option, notifies the Trustee in writing that it elects to cause the issuance of
the New Notes in certificated form or (iii) there shall have occurred and be
continuing to occur a Default or an Event of Default with respect to the New
Notes. In addition, beneficial interests in a Global New Note may be exchanged
for certificated New Notes upon request but only upon at least 20 days' prior
written notice given to the Trustee by or on behalf of DTC in accordance with
customary procedures. In all cases, certificated New Notes delivered in exchange
for any Global New Note or beneficial interest therein will be registered in the
names, and issued in any approved denominations, requested by or on behalf of
the depositary (in accordance with its customary procedures).
Subject to the restrictions on the transferability of the New Notes
described in "Risk Factors -- Restrictions on Transfer," a New Note in
definitive form will be issued (i) in the Exchange Offer solely in exchange for
certificated Notes or (ii) following the Exchange Offer, upon the resale, pledge
or other transfer of any New Note or interest therein to any person or entity
that does not participate in the Depository. The exchange of certificated Notes
in the Exchange Offer may be made only by presentation of the Notes, duly
endorsed, together with a duly completed Letter of Transmittal and other
required documentation as described under "The Exchange Offer -- Procedures for
Tendering" and "-- Guaranteed Delivery Procedures." Transfers of certificated
New Notes may be made only by presentation of New Notes, duly endorsed, to the
Trustees for registration of transfer on the Note Register maintained by the
Trustees for such purposes.
The information in this section concerning the Depository and the
Depository's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
CERTIFICATED NEW NOTES
Subject to certain conditions, any person having a beneficial interest in
the Global New Notes may, upon request to the Trustee, exchange such beneficial
interest for New Notes in the form of Certificated New Notes. Upon any such
issuance, the Trustee is required to register such Certificated New Notes in the
name of, and cause the same to be delivered to, such person or persons (or the
nominee of any thereof). In addition, if (i) the Company notifies the Trustee in
writing that the DTC is no longer willing or able to act as a depositary and the
Company is unable to locate a qualified successor within 90 days or (ii) the
Company, at its option, notifies the Trustee in writing that it elects to cause
the issuance of New Notes in the form of Certificated New Notes under the
Indenture, then, upon surrender by the Global New Note Holder of its Global New
Note, New Notes in such form will be issued to each person that the Global New
Note Holder and the DTC identify as being the beneficial owner of the related
New Notes.
Neither the Company nor the Trustee will be liable for any delay by the
Global New Note Holder or the DTC in identifying the beneficial owners of New
Notes and the Company and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from the Global New Note Holder or the DTC
for all purposes.
SAME DAY SETTLEMENT AND PAYMENT
The Indenture requires that payments in respect of the New Notes
represented by the Global New Notes (including principal, premium, if any,
interest and Liquidated Damages, if any) be made by wire transfer of
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immediately available next day funds to the accounts specified by the Global New
Note Holder. With respect to Certificated New Notes, the Company will make all
payments of principal, premium, if any, interest and Liquidated Damages, if any,
by wire transfer of immediately available funds to the accounts specified by the
Holders thereof or, if no such account is specified, by mailing a check to each
such Holder's registered address. The Company expects that secondary trading in
the Certificated New Notes will also be settled in immediately available funds.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
The Company, the Subsidiary Guarantors and the Initial Purchasers entered
into the Registration Rights Agreement on the Closing date. Pursuant to the
Registration Rights Agreement, the Company and the Subsidiary Guarantors agreed
to file with the Commission the Exchange Offer Registration Statement of which
this Prospectus is a part on the appropriate form under the Securities Act with
respect to the New Notes. Pursuant to the Exchange Offer, the Company is
offering to the Holders of Transfer Restricted Securities who are able to make
certain representations the opportunity to exchange their Transfer Restricted
Securities for New Notes. If any Holder of Transfer Restricted Securities
notifies the Company prior to the 20th day following consummation of the
Exchange Offer that (i) it is prohibited by law or Commission policy from
participating in the Exchange Offer or (ii) that it may not resell the New Notes
acquired by it in the Exchange Offer to the public without delivering a
prospectus and the prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales or (iii) that it is a
broker-dealer and owns Notes acquired directly from the Company or an affiliate
of the Company, the Company and the Subsidiary Guarantors will file with the
Commission a Shelf Registration Statement to cover resales of the Notes by the
Holders thereof who satisfy certain conditions relating to the provision of
information in connection with the Shelf Registration Statement. The Company and
the Subsidiary Guarantors will use their best efforts to cause the applicable
registration statement to be declared effective as promptly as possible by the
Commission. For purposes of the foregoing, "Transfer Restricted Securities"
means each Note until (i) the date on which such Note has been exchanged by a
person other than a broker-dealer for a New Note in the Exchange Offer, (ii)
following the exchange by a broker-dealer in the Exchange Offer of a Note for a
New Note, the date on which such New Note is sold to a purchaser who receives
from such broker-dealer on or prior to the date of such sale a copy of the
prospectus contained in the Exchange Offer Registration Statement, (iii) the
date on which such Note has been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement or (iv) the
date on which such Note is distributed to the public pursuant to Rule 144 under
the Act.
The Registration Rights Agreement provides, among other things, that (i)
unless the Exchange Offer would not be permitted by applicable law or Commission
policy, the Company and the Subsidiary Guarantors will have commenced the
Exchange Offer and used their best efforts to issue on or prior to 30 business
days after the date on which the Exchange Offer Registration Statement was
declared effective by the Commission, New Notes in exchange for all Notes
tendered prior thereto in the Exchange Offer and (ii) if obligated to file the
Shelf Registration Statement, the Company and the Subsidiary Guarantors will use
their best efforts to file the Shelf Registration Statement with the Commission
on or prior to 45 days after such filing obligation arises and to cause the
Shelf Registration to be declared effective by the Commission on or prior to 120
days after such obligation arises. If (a) the Company and the Subsidiary
Guarantors fail to file any of the Registration Statements required by the
Registration Rights Agreement on or before the date specified for such filing,
(b) any of such Registration Statements is not declared effective by the
Commission on or prior to the date specified for such effectiveness (the
"Effectiveness Target Date"), (c) the Company and the Subsidiary Guarantors fail
to consummate the Exchange Offer within 30 business days of the Effectiveness
Target Date with respect to the Exchange Offer Registration Statement, or (d)
the Shelf Registration Statement or the Exchange Offer Registration Statement is
declared effective but thereafter ceases to be effective or usable in connection
with resales of Transfer Restricted Securities during the periods specified in
the Registration Rights Agreement (each such event referred to in clauses (a)
through (d) above a "Registration Default"), then the Company will pay
Liquidated Damages to each Holder of Notes, with respect to the first 90-day
period immediately following the occurrence of the first Registration Default in
an amount equal to $.05 per week per $1,000 principal amount of Notes held by
such Holder. The amount of the Liquidated Damages will
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increase by an additional $.05 per week per $1,000 principal amount of Notes
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of Liquidated Damages of $.50 per week
per $1,000 principal amount of Notes. All accrued Liquidated Damages will be
paid by the Company on each Damages Payment Date to the Global Note Holder by
wire transfer of immediately available funds or by federal funds check and to
Holders of Certificated Notes by wire transfer to the accounts specified by them
or by mailing checks to their registered addresses if no such accounts have been
specified. Following the cure of all Registration Defaults, the accrual of
Liquidated Damages will cease.
Holders of Notes will be required to make certain representations to the
Company (as described in the Registration Rights Agreement) in order to
participate in the Exchange Offer and will be required to deliver information to
be used in connection with the Shelf Registration Statement and to provide
comments on the Shelf Registration Statement within the time periods set forth
in the Registration Rights Agreement in order to have their Notes included in
the Shelf Registration Statement and benefit from the provisions regarding
Liquidated Damages set forth above.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback) other than sales of inventory in the ordinary course of business
consistent with past practices (provided that the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company and
its Restricted Subsidiaries taken as a whole will be governed by the provisions
of the Indenture described above under the caption "-- Change of Control" and/or
the provisions described above under the caption "-- Merger, Consolidation or
Sale of Assets" and not by the provisions of the Asset Sale covenant), and (ii)
the issue or sale by the Company or any of its Restricted Subsidiaries of Equity
Interests of any of the Company's Restricted Subsidiaries, in the case of either
clause (i) or (ii), whether in a single transaction or a series of related
transactions (a) that have a fair market value in excess of $3.0 million or (b)
for net proceeds in excess of $3.0 million. Notwithstanding the foregoing: (i) a
transfer of assets by the Company to a Wholly Owned Restricted Subsidiary or by
a Wholly Owned Restricted Subsidiary to the Company or to another Wholly Owned
Restricted Subsidiary, (ii) an issuance of Equity Interests by a Wholly Owned
Restricted Subsidiary to the Company or to another Wholly Owned Restricted
Subsidiary, and (iii) a Restricted Payment that is permitted by the covenant
described above under the caption "-- Restricted Payments" will not be deemed to
be Asset Sales.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
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"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than six
months from the date of acquisition, (iii) certificates of deposit and
eurodollar time deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case with any lender party to the New Credit
Facility or with any domestic commercial bank having capital and surplus in
excess of $500 million and a Thompson Bank Watch Rating of "B" or better, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above, and (v) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Corporation and in each
case maturing within six months after the date of acquisition.
"Change of Control" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of Holdings and its Subsidiaries or of the
Company and its Subsidiaries, in each case, taken as a whole to any "person" (as
such term is used in Section 13(d)(3) of the Exchange Act) other than the
Principals or their Related Parties (as defined below), (ii) the adoption of a
plan relating to the liquidation or dissolution of Holdings or the Company,
(iii) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as defined
above), other than the Principals and their Related Parties, becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire, whether
such right is currently exercisable or is exercisable only upon the occurrence
of a subsequent condition), directly or indirectly, of more than 50% of the
Voting Stock of Holdings or the Company (measured by voting power rather than
number of shares), (iv) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors or (v) Holdings
or the Company consolidates with, or merges with or into, any Person or sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates with,
or merges with or into, Holdings or the Company, in any such event pursuant to a
transaction in which any of the outstanding Voting Stock of Holdings or the
Company is converted into or exchanged for cash, securities or other property,
other than any such transaction where the Voting Stock of Holdings or the
Company outstanding immediately prior to such transaction is converted into or
exchanged for Voting Stock (other than Disqualified Stock) of the surviving or
transferee Person constituting a majority of the outstanding shares of such
Voting Stock of such surviving or transferee Person (immediately after giving
effect to such issuance).
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount
equal to any extraordinary loss plus any net loss realized in connection with an
Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Subsidiaries for such period, to the extent that
such provision for taxes was included in computing such Consolidated Net Income,
plus (iii) consolidated interest expense of such Person and its Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and
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charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments (if any) pursuant to Hedging Obligations), to the
extent that any such expense was deducted in computing such Consolidated Net
Income, plus (iv) depreciation, amortization (including amortization of goodwill
and other intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period) and other non-cash expenses (excluding any such
non-cash expense to the extent that it represents an accrual of or reserve for
cash expenses in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of such Person and its Subsidiaries for such
period to the extent that such depreciation, amortization and other non-cash
expenses were deducted in computing such Consolidated Net Income, plus (v)
one-time charges related to the Combination, to the extent that such charges
were deducted in computing Consolidated Net Income, plus (vi) in connection with
any acquisition by the Company or a Restricted Subsidiary, projected
quantifiable improvements in operating results (on an annualized basis) due to
cost reductions calculated in good faith by the Company or one of its Restricted
Subsidiaries, as evidenced by (A) in the case of cost reductions of less than
$10.0 million, an Officers' Certificate delivered to the Trustee and (B) in the
case of cost reductions of $10.0 million or more, a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the Trustee, minus
(vii) non-cash items increasing such Consolidated Net Income for such period.
Notwithstanding the foregoing, the provision for taxes on the income or profits
of, and the depreciation and amortization and other non-cash charges of, a
Subsidiary of the referent Person shall be added to Consolidated Net Income to
compute Consolidated Cash Flow only to the extent that a corresponding amount
would be permitted at the date of determination to be dividended to the Company
by such Subsidiary without prior governmental approval (that has not been
obtained), and without direct or indirect restriction pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Subsidiary or
its stockholders.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Subsidiary or its stockholders,
(iii) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded, (iv) the cumulative effect of a change in accounting principles shall
be excluded and (v) the Net Income of any Unrestricted Subsidiary shall be
excluded, whether or not distributed to the Company or one of its Restricted
Subsidiaries for purposes of the covenant described under the covenant
"Incurrence of Indebtedness and Issuance of Preferred Stock."
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of the Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"Credit Agent" means The First National Bank of Chicago, in its capacity as
Administrative Agent for the lenders party to the New Credit Facility or any
successor thereto or any person otherwise appointed.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Designated Senior Debt" means (i) any Indebtedness outstanding under the
New Credit Facility and (ii) any other Senior Debt permitted under the Indenture
the principal amount of which is $25.0 million or more and that has been
designated by the Company as Designated Senior Debt.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is
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mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the Holder thereof, in whole or in part, on or prior
to the date that is 91 days after the date on which the Notes mature; provided,
however, that any Capital Stock that would not qualify as Disqualified Stock but
for change of control provisions shall not constitute Disqualified Stock if the
provisions are not more favorable to the holders of such Capital Stock than the
provisions described under "-- Change of Control" applicable to the Holders of
the Notes.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the New Credit Facility) in
existence on the date of the Indenture, until such amounts are repaid.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of (i) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued (including,
without limitation, original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations) and (ii) the consolidated
interest expense of such Person and its Restricted Subsidiaries that was
capitalized during such period, and (iii) to the extent paid by such Person, any
interest expense on Indebtedness of another Person that is Guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or one of its Restricted Subsidiaries (whether or not such Guarantee
or Lien is called upon) and (iv) the product of (a) all dividend payments,
whether or not in cash, on any series of preferred stock of such Person or any
of its Restricted Subsidiaries, other than dividend payments on Equity Interests
payable solely in Equity Interests of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the Company or
any of its Restricted Subsidiaries incurs, assumes, Guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, Guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period. In addition, for
purposes of making the computation referred to above, (i) acquisitions that have
been made by the Company or any of its Restricted Subsidiaries, including
through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be deemed to have
occurred on the first day of the four-quarter reference period and Consolidated
Cash Flow for such reference period shall be calculated without giving effect to
clause (iii) of the proviso set forth in the definition of Consolidated Net
Income, and (ii) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, and (iii) the
Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the referent Person
or any of its Restricted Subsidiaries following the Calculation Date.
"Foreign Subsidiary" means any Subsidiary organized and existing under the
laws of a jurisdiction other than those of any state or commonwealth in the
United States of America.
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"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of the Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency rates.
"Holdings" means AP Holdings, Inc., a Delaware corporation and the parent
(but not 100% owner) of APCOA, Inc.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, as well as all indebtedness of others
secured by a Lien on any asset of such Person (whether or not such indebtedness
is assumed by such Person) and, to the extent not otherwise included, the
Guarantee by such Person of any indebtedness of any other Person. The amount of
any Indebtedness outstanding as of any date shall be (i) the accreted value
thereof, in the case of any Indebtedness that does not require current payments
of interest, and (ii) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Insolvency or Liquidation Proceedings" means (i) any insolvency or
bankruptcy case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding, relative to the Company or to the creditors
of the Company, as such, or to the assets of the Company, or (ii) any
liquidation, dissolution, reorganization or winding up of the Company, whether
voluntary or involuntary and involving insolvency or bankruptcy, or (iii) any
assignment for the benefit of creditors or any other marshalling of assets and
liabilities of the Company.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Restricted Subsidiary of the Company, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Equity Interests of such
Restricted Subsidiary not sold or disposed of in an amount determined as
provided in the final paragraph of the covenant described above under the
caption " -- Restricted Payments."
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"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"New Credit Facility" means that certain Credit Agreement, dated as of the
date of the Indenture, by and among the Company, the lenders and other parties
thereto from time to time and The First National Bank of Chicago, as agent,
together with all related documents executed or delivered pursuant thereto at
any time (including, without limitation, all mortgages, guarantees, security
agreements and all other collateral and security documents), in each case as
such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of available borrowings
thereunder provided that such increase in borrowings is within the definition of
Permitted Indebtedness or is otherwise permitted under the covenant described
"Incurrence of Indebtedness and Issuance of Preferred Stock") or adding
Subsidiaries as additional borrowers or guarantors thereunder) all or any
portion of the Indebtedness and other Obligations under such agreement or
agreements or any successor or replacement agreement or agreements, and whether
by the same or any other agent, lender or group of lenders.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the Company
nor any of its Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise), or (c) constitutes the lender; (ii) no default with respect to which
(including any rights that the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness (other than the Notes being
offered hereby) of the Company or any of its Restricted Subsidiaries to declare
a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and (iii) as to which the
lenders have been notified in writing that they will not have any recourse to
the stock or assets of the Company or any of its Restricted Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness, and in all cases whether now
outstanding or hereafter created, assumed or incurred and including, without
limitation, interest accruing subsequent to the filing of a petition in
bankruptcy at the rate provided in the relevant document, whether or not an
allowed claim, and any obligation to redeem or defease any of the foregoing.
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"Permitted Business" means any of the businesses and any other businesses
related to the businesses engaged in by the Company and its respective
Restricted Subsidiaries on the date of the Indenture.
"Permitted Investments" means (a) any Investment in the Company or in a
Wholly Owned Restricted Subsidiary of the Company that is engaged in a Permitted
Business; (b) any Investment in Cash Equivalents; (c) any Investment by the
Company or any Restricted Subsidiary of the Company in a Person, if as a result
of such Investment (i) such Person becomes a Wholly Owned Restricted Subsidiary
of the Company that is engaged in a Permitted Business or (ii) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Wholly Owned Restricted Subsidiary of the Company that is engaged in a Permitted
Business; (d) any Restricted Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under the caption " -- Repurchase
at the Option of Holders -- Asset Sales"; (e) any acquisition of assets solely
in exchange for the issuance of Equity Interests (other than Disqualified Stock)
of the Company; (f) loans and advances made after the date of the Indenture to
Holberg Industries, Inc. not to exceed $10.0 million at any time outstanding;
(g) make and permit to remain outstanding travel and other like advances in the
ordinary course of business consistent with past practices to officers and
employees of the Company or a Subsidiary of the Company; (h) other Investments
made after the date of the Indenture in any Person having an aggregate fair
market value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (h) that are at the time
outstanding, not to exceed $10 million; and (i) loans and advances made after
the date of the Indenture to Holdings, not to exceed $9.0 million at any time
outstanding.
"Permitted Liens" means (i) Liens securing Senior Debt under the New Credit
Facility that were permitted by the terms of the Indenture to be incurred; (ii)
Liens in favor of the Company; (iii) Liens on property of a Person existing at
the time such Person is merged into or consolidated with the Company or any
Restricted Subsidiary of the Company; provided that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with the
Company; (iv) Liens on property existing at the time of acquisition thereof by
the Company or any Restricted Subsidiary of the Company, provided that such
Liens were in existence prior to the contemplation of such acquisition; (v)
Liens to secure the performance of bids, tenders, contracts, statutory
obligations, surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business; (vi) Liens existing on
the date of the Indenture; (vii) Liens for taxes, assessments or governmental
charges or claims that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and diligently
concluded, provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor; (viii) Liens
incurred in the ordinary course of business of the Company or any Restricted
Subsidiary of the Company with respect to obligations that do not exceed $5.0
million at any one time outstanding and that (a) are not incurred in connection
with the borrowing of money or the obtaining of advances or credit (other than
trade credit in the ordinary course of business) and (b) do not in the aggregate
materially detract from the value of the property or materially impair the use
thereof in the operation of business by the Company or such Restricted
Subsidiary; (ix) Liens on assets of Unrestricted Subsidiaries that secure
Non-Recourse Debt of Unrestricted Subsidiaries; (x) Liens on the daily revenues
in favor of Persons other than the Company and its Restricted Subsidiaries who
are parties to parking facility agreements for the amounts due to them pursuant
thereto; (xi) Liens arising by applicable law in respect of employees' wages,
salaries or commissions not overdue; and (xii) Liens arising out of judgments or
awards not in excess of $5.0 million with respect to which the Company or its
Subsidiary with respect to which the Company or such Subsidiaries are
prosecuting an appeal or a proceeding or review and the enforcement of such lien
is stayed pending such appeal or review.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that: (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount of
(or accreted value, if applicable), plus accrued interest on, the
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Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded
(plus the amount of reasonable expenses incurred in connection therewith); (ii)
such Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Notes on terms at least as
favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (iv) such Indebtedness is incurred either by the
Company or by the Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.
"Principals" means Holberg Industries, Inc., John V. Holten or, in the case
of the Company, Holdings.
"Public Equity Offering" means a public offering of Equity Interests (other
than Disqualified Stock) of (i) the Company or (ii) Holdings, to the extent that
the net proceeds thereof are contributed to the Company as a capital
contribution, that, in each case, results in net proceeds to the Company of at
least $25.0 million.
"Receivables" means, with respect to any Person or entity, all of the
following property and interests in property of such Person or entity, whether
now existing or existing in the future or hereafter acquired or arising: (i)
accounts, (ii) accounts receivable incurred in the ordinary course of business,
including without limitation, all rights to payment created by or arising from
sales of goods, leases of goods or the rendition of services no matter how
evidenced, whether or not earned by performance, (iii) all rights to any goods
or merchandise represented by any of the foregoing after creation of the
foregoing, including, without limitation, returned or repossessed goods, (iv)
all reserves and credit balances with respect to any such accounts receivable or
account debtors, (v) all letters of credit, security, or guarantees for any of
the foregoing, (vi) all insurance policies or reports relating to any of the
foregoing, (vii) all collection or deposit accounts relating to any of the
foregoing, (viii) all proceeds of the foregoing and (ix) all books and records
relating to any of the foregoing.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Notes" means the Regulation S Temporary Global Notes
or the Regulation S Permanent Global Notes as applicable.
"Regulation S Permanent Global Notes" means the permanent global notes that
are deposited with and registered in the name of the Depositary or its nominee,
representing a series of Notes sold in reliance on Regulation S.
"Regulation S Temporary Global Notes" means the temporary global notes that
are deposited with and registered in the name of the Depositary or its nominee,
representing a series of Notes sold in reliance on Regulation S.
"Related Party" with respect to any Principal means (A) any controlling
stockholder, 80% (or more) owned Subsidiary, or spouse or immediate family
member (in the case of an individual) of such Principal or (B) or trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more controlling
interest of which consist of such Principal and/or such other Persons referred
to in the immediately preceding clause (A).
"Reorganization Securities" means securities distributed to the Holders of
the Notes in an Insolvency or Liquidation Proceeding pursuant to a plan of
reorganization consented to by each class of the Senior Debt, but only if all of
the terms and conditions of such securities (including, without limitation,
term, tenor, interest, amortization, subordination, standstills, covenants and
defaults), are at least as favorable (and provide the same relative benefits) to
the holders of Senior Debt and to the holders of any security distributed in
such Insolvency or Liquidation Proceeding on account of any such Senior Debt as
the terms and conditions of the Notes and the Indenture are, and provide to the
holders of Senior Debt.
"Representative" means the Trustee, agent or representative for any Senior
Debt.
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"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Note" means a permanent global note that is deposited
with and registered in the name of the Depositary or its nominee, representing a
series of Notes sold in reliance on Rule 144A.
"Senior Debt" means (i) all Indebtedness outstanding under the New Credit
Facility, including any Guarantees thereof and all Hedging Obligations with
respect thereto, (ii) any other Indebtedness permitted to be incurred by the
Company or its Restricted Subsidiaries under the terms of the Indenture, unless
the instrument under which such Indebtedness is incurred expressly provides that
it is on a parity with or subordinated in right of payment to the Notes and
(iii) all Obligations with respect to the foregoing. Notwithstanding anything to
the contrary in the foregoing, Senior Debt will not include (w) any liability
for federal, state, local or other taxes owed or owing by the Company, (x) any
Indebtedness of the Company to any of its Subsidiaries or other Affiliates, (y)
any trade payables or (z) any Indebtedness that is incurred in violation of the
Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantors" means all direct and indirect Restricted
Subsidiaries of the Company.
"Unrestricted Subsidiary" means (i) any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution; but only to the extent that such Subsidiary: (a) has no Indebtedness
other than Non-Recourse Debt; (b) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of the Company; (c) is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (x) to subscribe for additional Equity Interests or (y) to maintain
or preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; and (d) has not guaranteed or
otherwise directly or indirectly provided credit support for any Indebtedness of
the Company or any of its Restricted Subsidiaries. Any such designation by the
Board of Directors shall be evidenced to the Trustee by filing with the Trustee
a certified copy of the Board Resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by the covenant described above under the
caption "Certain Covenants -- Restricted Payments." If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary
shall be deemed to be incurred by a Restricted Subsidiary of the Company as of
such date (and, if such Indebtedness is not permitted to be incurred as of such
date under the covenant described under the caption "Incurrence of Indebtedness
and Issuance of Preferred Stock," the Company shall be in default of such
covenant). The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the
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Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (i) such Indebtedness is permitted under
the covenant described under the caption "Certain Covenants -- Incurrence of
Indebtedness and Issuance of Preferred Stock," and (ii) no Default or Event of
Default would be in existence following such designation.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person and one or
more Wholly Owned Subsidiaries of such Person.
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DESCRIPTION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of certain U.S. federal income tax
considerations relevant to the purchase, ownership and disposition of the New
Notes by the holders thereof. This summary does not purport to be a complete
analysis of all the potential federal income tax effects relating to the
purchase, ownership and disposition of the New Notes. There can be no assurance
that the U.S. Internal Revenue Service will take a similar view of such
consequences. Further, the discussion does not address all aspects of taxation
that may be relevant to particular purchasers in light of their individual
circumstances (including the effect of any foreign, state or local laws) or to
certain types of purchasers (including dealers in securities, insurance
companies, financial institutions, persons that hold New Notes that are a hedge
or that are hedged against currency risks or that are part of a straddle or
conversion transaction, persons whose functional currency is not the U.S. dollar
and tax-exempt entities) subject to special treatment under U.S. federal income
tax laws. The discussion below assumes that the New Notes are held as capital
assets.
The discussion of the U.S. federal income tax consequences set forth below
is based upon currently existing provisions of the Internal Revenue Code of
1986, as amended (the "Code"), judicial decisions, and administrative
interpretations. Because individual circumstances may differ, each prospective
purchaser of the New Notes is strongly urged to consult its own tax advisor with
respect to its particular tax situation and the particular tax effects of any
state, local, non-U.S. or other tax laws and possible changes in the tax laws.
As used herein, the term "U.S. Holder" means a beneficial owner of a New
Note who or which is for U.S. federal income tax purposes either (i) a citizen
or resident of the U.S., (ii) a corporation, partnership or other entity created
or organized in or under the laws of the U.S. or of any political subdivision
thereof, (iii) an estate or trust the income of which is subject to U.S. federal
income taxation regardless of its source or (iv) a trust if a court within the
U.S. is able to exercise primary supervision over the administration of the
trust and one or more U.S. persons have the authority to control all substantial
decisions of the trust. The term also includes certain former citizens of the
U.S. whose income and gain on the New Notes will be subject to U.S. taxation. As
used herein, the term "U.S. Alien Holder" means a beneficial owner of a New Note
that is not a U.S. Holder.
PAYMENTS OF INTEREST
Interest paid on a New Note will generally be taxable to a U.S. Holder as
ordinary interest income at the time it accrues or is received, in accordance
with the U.S. Holder's method of accounting for federal income tax purposes.
MARKET DISCOUNT AND PREMIUM
If a U.S. Holder that acquires a New Note has a tax basis in the New Note
that is less than its "stated redemption price at maturity," the amount of the
difference will be treated as "market discount" for U.S. federal income tax
purposes, unless such difference is less than a specified de minimis amount.
Under the market discount rules of the Code, a U.S. Holder will be required to
treat any principal payment on, or any gain on the sale, exchange, retirement or
other disposition of, a New Note as ordinary income to the extent of any accrued
market discount that has not previously been included in income. Market discount
generally accrues on a straight-line basis over the remaining term of a New
Note. A U.S. Holder may not be allowed to deduct immediately all or a portion of
the interest expense on any indebtedness incurred or continued to purchase or to
carry such New Note. A U.S. Holder may elect to include market discount in
income currently as it accrues (either on a straight-line basis or, if the
United States Holder so elects, on a constant yield basis), in which case the
interest deferral rule set forth in the preceding sentence will not apply. Such
an election will apply to all bonds acquired by the U.S. Holder on or after the
first day of the first taxable year to which such election applies and may be
revoked only with the consent of the Internal Revenue Service.
If a U.S. Holder purchases a New Note for an amount that is greater than
the sum on all amounts payable on the New Note after the purchase date, other
than stated interest, such holder will be considered to have purchased such New
Note with "amortizable bond premium" equal in amount to such excess, and may
elect (in accordance with applicable Code provisions) to amortize such premium,
using a constant yield
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method over the remaining term of the New Note. The amount amortized in any year
will be treated as a reduction of the U.S. Holder's interest income from the New
Note in such year. A U.S. Holder that elects to amortize bond premium must
reduce its tax basis in the New Note by the amount of the premium amortized in
any year. An election to amortize bond premium applies to all taxable debt
obligations then owned and thereafter acquired by the U.S. Holder and may be
revoked only with the consent of the Internal Revenue Service.
SALE, EXCHANGE OR RETIREMENT OF NEW NOTES
Upon the sale, exchange or retirement of a New Note, a U.S. Holder will
recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or retirement (not including any amount
attributable to accrued but unpaid interest) and such holder's adjusted tax
basis in the New Note. A U.S. Holder's adjusted tax basis in a New Note will
equal the cost of the New Note to such holder, increased by the amount of any
market discount previously included in income by such holder with respect to
such New Note and reduced by any amortized bond premium and any principal
payment received by such holder.
Subject to the discussion of market discount above, gain or loss realized
on the sale, exchange or retirement of a New Note by a U.S. Holder will be
capital gain or loss, and will be long-term capital gain or loss if at the time
of the sale, exchange or retirement the New Note has been held for more than one
year. In the case of a U.S. Holder who is an individual, net capital gain will
be taxed at a maximum rate of 28% if such U.S. Holder's holding period is more
than one year but not more than 18 months and at a maximum rate of 20% if such
U.S. Holder's holding period is more than 18 months. The distinction between
capital gain or loss and ordinary income or loss is also relevant for purposes
of, among other things, limitations on the deductibility of capital losses.
If Liquidated Damages are paid, although not free from doubt, such payment
should be taxable to a U.S. Holder as ordinary income at the time it accrues or
is received in accordance with such holder's regular method of accounting. It is
possible, however, that the Internal Revenue Service may take a different
position, in which case the timing and amount of income inclusion may be
different. A U.S. Holder will recognize no gain or loss on the exchange of a
Note for a New Note pursuant to the Exchange Offer.
TAX CONSEQUENCES TO U.S. ALIEN HOLDERS
Under present U.S. federal income and estate tax law, and subject to the
discussion below concerning backup withholding:
(a) payments of principal or interest on the New Notes by the Company
or any paying agent to a beneficial owner of a New Note that is a U.S.
Alien Holder will not be subject to U.S. federal withholding tax, provided
that, in the case of interest, (i) such Holder does not own, actually or
constructively, 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote, (ii) such Holder is not,
for U.S. federal income tax purposes, a controlled foreign corporation
related, directly or indirectly, to the Company through stock ownership,
(iii) such Holder is not a bank receiving interest described in Section
881(c)(3)(A) of the Code, and (iv) the certification requirements under
Section 871(h) or Section 881(c) of the Code and Treasury Regulations
thereunder (summarized below) are met;
(b) a U.S. Alien Holder of a New Note will not be subject to U.S.
federal income tax on gains realized on the sale, exchange or other
disposition of such New Note, unless (i) such Holder is an individual who
is present in the U.S. for 183 days or more in the taxable year of sale,
exchange or other disposition, and certain conditions are met; (ii) such
gain is effectively connected with the conduct by such Holder of a trade or
business in the U.S. and, if certain tax treaties apply, is attributable to
a U.S. permanent establishment maintained by the U.S. Alien Holder or (iii)
the U.S. Alien Holder is subject to tax pursuant to the Code provisions
applicable to certain U.S. expatriates; and
(c) a New Note held by an individual who is not a citizen or resident
of the U.S. at the time of his death will not be subject to U.S. federal
estate tax as a result of such individual's death, provided that, at
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the time of such individual's death, the individual does not own, actually
or constructively, 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote and payments with respect
to such New Note would not have been effectively connected with the conduct
by such individual of a trade or business in the U.S.
Sections 871(h) and 881(c) of the Code and currently effective Treasury
Regulations thereunder require that, in order to obtain the exemption from
withholding tax described in paragraph (a) above, either (i) the beneficial
owner of a New Note must certify, under penalties of perjury, to the Company or
paying agent, as the case may be, that such owner is a U.S. Alien Holder and
must provide such owner's name and address, and U.S. taxpayer identification
number ("TIN"), if any, or (ii) a securities clearing organization, bank or
other financial institution that holds customers securities in the ordinary
course of its trade or business (a "Financial Institution") and holds the New
Note on behalf of the beneficial owner thereof must certify, under penalties of
perjury, to the Company or paying agent, as the case may be, that such
certificate has been received from the beneficial owner by it or by a Financial
Institution between it and the beneficial owner and must furnish the payor with
a copy thereof. A certificate described in this paragraph is effective only with
respect to payments of interest made to the certifying U.S. Alien Holder after
delivery of the certificate in the calendar year of its delivery and the two
immediately succeeding calendar years. Under currently effective U.S. Treasury
Regulations, such requirement will be fulfilled if the beneficial owner of a New
Note certifies on Internal Revenue Service Form W-8, under penalties of perjury,
that it is a U.S. Alien Holder and provides its name and address, and any
Financial Institution holding the New Note on behalf of the beneficial owner
files a statement with the withholding agent to the effect that it has received
such a statement from the beneficial owner (and furnishes the withholding agent
with a copy thereof).
Treasury Regulations released on October 6, 1997 (the "New Regulations")
and effective for payments made after December 31, 1998, will provide
alternative methods for satisfying the certification requirement described
herein. The New Regulations also will require, in the case of Notes held by a
foreign partnership, that (x) the certification be provided by the partners
rather than by the foreign partnership and (y) the partnership provide certain
information, including a United States taxpayer identification number. A look
through rule will apply in the case of tiered partnerships.
If a U.S. Alien Holder of a New Note is engaged in a trade or business in
the U.S., and if interest on the New Note, or gain realized on the sale,
exchange or other disposition of the New Note, is effectively connected with the
conduct of such trade or business and, if certain tax treaties apply, is
attributable to a U.S. permanent establishment maintained by the U.S. Alien
Holder, the U.S. Alien Holder, although exempt from U.S. withholding tax, will
generally be subject to regular U.S. income tax on such interest or gain in the
same manner as if it were a U.S. Holder. In lieu of the certificate described in
the preceding paragraph, such a Holder will be required to provide the Company a
properly executed Internal Revenue Service Form 4224 in order to claim an
exemption from withholding tax. In addition, if such U.S. Alien Holder is a
foreign corporation, it may be subject to a branch profits tax equal to 30% (or
such lower rate provided by an applicable treaty) of its effectively connected
earnings and profits for the taxable year, subject to certain adjustments. For
purposes of the branch profits tax, interest on and any gain recognized on the
sale, exchange or other disposition of a New Note will be included in the
earnings and profits of such U.S. Alien Holder if such interest or gain is
effectively connected with the conduct by the U.S. Alien Holder of a trade or
business in the U.S. The New Regulations will change some of the withholding
reporting requirements described above, effective for payments made after
December 31, 1998, subject to certain grandfathering provisions.
BACKUP WITHHOLDING
Under current U.S. federal income tax law, a 31% backup withholding tax
requirement applies to certain payments of interest on, and the proceeds of a
sale, exchange or redemption of, the New Notes.
Backup withholding will generally not apply with respect to payments made
to certain exempt recipients, such as corporations or other tax-exempt entities.
In the case of a non-corporate U.S. Holder, backup withholding will apply only
if such Holder (i) fails to furnish its TIN, which, for an individual, would be
his Social Security number, (ii) furnishes an incorrect TIN, (iii) is notified
by the Internal Revenue Service that
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it has failed to properly report payments of interest and dividends or (iv)
under certain circumstances, fails to certify, under penalties of perjury, that
it has furnished a correct TIN and has not been notified by the Internal Revenue
Service that it is subject to backup withholding for failure to report interest
and dividend payments.
In the case of a U.S. Alien Holder, under currently effective Treasury
Regulations, backup withholding will not apply to payments made by the Company
or any paying agent thereof on a New Note if such holder has provided the
required certification under penalties of perjury that it is not a U.S. Holder
(as defined above) or has otherwise established an exemption, provided in each
case that the Company or such paying agent, as the case may be, does not have
actual knowledge that the payee is a U.S. Holder.
Under currently effective Treasury Regulations, if payments on a New Note
are made to or through a foreign office of a custodian, nominee or other agent
acting on behalf of a beneficial owner of a New Note, such custodian, nominee or
other agent acting will not be required to apply backup withholding to such
payments made to such beneficial owner. However, under the New Regulations,
backup withholding may apply to payments made after December 31, 1998 if such
custodian, nominee or other agent has actual knowledge that the payee is a U.S.
Holder.
Under currently effective Treasury Regulations, payments on the sale,
exchange or other disposition of a New Note made to or through a foreign office
of a broker generally will not be subject to backup withholding. However, under
the New Regulations, backup withholding may apply to payments made after
December 31, 1998 if such broker has actual knowledge that the payee is a U.S.
Holder. In the case of proceeds from a sale of a New Note by a U.S. Alien Holder
paid to or through the foreign office of a U.S. broker or a foreign office of a
foreign broker that is (i) a controlled foreign corporation for U.S. tax
purposes or (ii) a person 50% or more of whose gross income for the three-year
period ending with the close of the taxable year preceding the year of payment
(or for the part of that period that the broker has been in existence) is
effectively connected with the conduct of a trade or business within the U.S.,
information reporting is required unless the broker has documentary evidence in
its files that the payee is not a U.S. person and certain other conditions are
met, or the payee otherwise establishes an exemption. Payments to or through the
U.S. office of a broker will be subject to backup withholding and information
reporting unless the holder certifies, under penalties of perjury, that it is
not a U.S. Holder and that certain other conditions are met or otherwise
establishes an exemption.
Holders of New Notes should consult their tax advisors regarding the
application of backup withholding in their particular situations, the
availability of an exemption therefrom, and the procedure for obtaining such an
exemption, if available. Any amounts withheld from payment under the backup
withholding rules will be allowed as a credit against a Holder's U.S. federal
income tax liability and may entitle such holder to a refund, provided that the
required information is furnished to the Internal Revenue Service.
THE FOREGOING DISCUSSION IS FOR GENERAL INFORMATION AND IS NOT TAX ADVICE.
ACCORDINGLY, EACH PROSPECTIVE HOLDER OF NEW NOTES SHOULD CONSULT ITS OWN TAX
ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO THE PROSPECTIVE HOLDER OF THE
NEW NOTES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, OR
NON-U.S. INCOME TAX LAWS AND ANY RECENT OR PROSPECTIVE CHANGES IN APPLICABLE TAX
LAWS AND THE EFFECT OF THE NEW REGULATIONS WITH RESPECT TO PAYMENTS MADE AFTER
DECEMBER 31, 1998.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account
("Participating Broker-Dealer") pursuant to the Exchange Offer must acknowledge
that it will deliver a Prospectus in connection with the initial sales of such
New Notes. This Prospectus, as it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer in connection with the sales
of New Notes received in exchange for Notes where such Notes were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that it will make this Prospectus, as amended or supplemented, available
to any Participating Broker-Dealer for use in connection with any such resale
and Participating Broker-Dealers shall be authorized to deliver this prospectus
for a period not exceeding 120 days after the Expiration Date. In
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addition, until , 1998 (90 days after the date of this Prospectus),
all dealers effecting transactions in the New Notes may be required to deliver a
prospectus.
The Company will not receive any proceeds from any sales of the New Notes
by participating Broker-Dealers. New Notes received by Participating
Broker-Dealers for their own account pursuant to the Exchange Offer may be sold
from time to time, in one or more transactions in the over-the-counter market,
in negotiated transactions, through the writing of options on the New Notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or at negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such Participating Broker-Dealer that resells the New Notes
that were received by it for its own account pursuant to the Exchange Offer. Any
broker or dealer that participates in a distribution of such New Notes may be
deemed to be an "underwriter" within the meaning of the Securities Act and may
profit on any such resale of New Notes and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation under
the Securities Act. The Letter of Transmittal states that by acknowledging that
it will deliver and by delivering a prospectus, a Participating Broker-Dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
The Company will promptly send additional copies of this Prospectus and any
amendment or supplement to this prospectus to any Participating Broker-Dealer
that requests such documents in the Letter of Transmittal. See "The Exchange
Offer."
DLJ has, from time to time, including in connection with the Combination,
provided investment banking and other financial advisory services to APCOA and
affiliates of APCOA for which it has received customary compensation. The First
National Bank of Chicago, an affiliate of First Chicago, is the agent under the
New Credit Facility and First Chicago is the arranger under the New Credit
Facility. See "Description of Indebtedness."
LEGAL MATTERS
Certain legal matters in connection with the New Notes offered hereby will
be passed upon for the Company by Wachtell, Lipton, Rosen & Katz, New York, New
York.
EXPERTS
The consolidated financial statements of APCOA at December 31, 1996 and
1997 and for each of the three years in the period ended December 31, 1997,
appearing in this Prospectus and in the Registration Statement, and the
financial statement schedule for each of the three years in the period ended
December 31, 1997 included in the Registration Statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their reports thereon
appearing elsewhere herein and in the Registration Statement, and are included
herein in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
The financial statements of Standard at December 31, 1996 and 1997 and for
each of the three years in the period ended December 31, 1997, appearing in this
Prospectus and in the Registration Statement have been audited by Altschuler,
Melvoin and Glasser LLP, independent auditors, as set forth in their report
thereon appearing elsewhere herein, and are included herein in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
96
<PAGE> 99
INDEX OF CERTAIN DEFINED TERMS
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
ADA............................... 18
Affiliate Transaction............. 72
Agent............................. 28
Annual Base Salary................ 54
APCOA............................. 1
AP Holdings....................... 20
Board............................. 54
CAGR.............................. 9
Certificate of Incorporation...... 17
Change of Control Offer........... 65
Closing........................... 12
Code.............................. 92
Combination....................... 1
Combination Agreement............. 28
Commission........................ 3
Company........................... 1
Company Common Stock.............. 28
Delaware North.................... 49
Depositary........................ 3
DLJ............................... 73
DTC............................... 78
EPI............................... 26
ERISA............................. 94
Exchange Act...................... 4
Exchange Offer.................... 1
Exchange Offer Registration
Statement....................... 12
Financing......................... 28
First Chicago..................... 3
Guarantors........................ 54
Holberg........................... 18
Indenture......................... 1
Initial Purchasers................ 3
Lenders........................... 16
Liquidated Damages................ 78
Named Executive Officers.......... 50
New Credit Facility............... 28
New Global Notes.................. 72
</TABLE>
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
New Notes......................... 1
New Note Guarantees............... 1
New Regulations................... 94
Offering.......................... 9
Option Plan....................... 55
Other Acquisitions................ 6
PORTAL............................ 1
Preferred Stock Contribution...... 28
property-level expenses........... 58
Purchase Agreement................ 95
Registration Default.............. 81
Registration Rights Agreement..... 1
Regulation S Certificate.......... 76
Regulation S Global Notes......... 72
Regulation S Notes................ 72
Regulation S Permanent Global
Notes........................... 72
Regulation S Temporary Global
Notes........................... 72
Restricted Payments............... 69
Restricted Period................. 72
Securities Act.................... 1
Shelf Registration Statement...... 12
Standard.......................... 1
Standard Owners................... 28
Standard Parties.................. 57
Stockholders...................... 57
Stockholders Agreement............ 57
Subsidiary Guarantors............. 12
Tax Sharing Agreement............. 57
TIN............................... 94
Transactions...................... 28
Trustee........................... 1
Trust Indenture Act............... 62
U.S. Alien Holder................. 92
U.S. Holder....................... 92
U.S. Person....................... 76
Warshauer Employment Agreement.... 54
</TABLE>
97
<PAGE> 100
APCOA, INC.
INDEX TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Description of Unaudited Pro Forma Consolidated Financial
Statements................................................ P-2
Unaudited Pro Forma Consolidated Balance Sheet as of
December 31, 1997......................................... P-3
Notes to Unaudited Pro Forma Consolidated Balance Sheet as
of December 31, 1997...................................... P-4
Unaudited Pro Forma Consolidated Statement of Operations for
the Year Ended December 31, 1997.......................... P-6
Notes to Unaudited Pro Forma Consolidated Statement of
Operations for the Year Ended December 31, 1997........... P-7
</TABLE>
P-1
<PAGE> 101
APCOA, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Consolidated Balance Sheet as of December
31, 1997 and Unaudited Pro Forma Consolidated Statement of Operations for the
year then ended are based on the historical consolidated financial statements of
APCOA. The Unaudited Pro Forma Consolidated Balance Sheet is adjusted to give
effect to (1) the acquisition of Standard, (2) the Other Acquisitions, including
the probable acquisition of EPI, (3) the Preferred Stock Contribution, (4) the
sale of the Notes and (5) the application of the estimated net proceeds
therefrom as described under "Use of Proceeds," as if these events had occurred
on December 31, 1997. The Unaudited Pro Forma Consolidated Statement of
Operations is adjusted to give effect to (1) the acquisition of Standard, (2)
the Other Acquisitions, including the probable acquisition of EPI, (3) the
Preferred Stock Contribution, (4) the sale of the Notes and (5) the application
of the net proceeds therefrom, as if these events had occurred as of January 1,
1997. The Unaudited Pro Forma Consolidated Statement of Operations combines the
historical operations of APCOA with the historical operations of the acquired
businesses prior to the date APCOA made such acquisitions, using the purchase
method of accounting. The actual allocation of purchase price for each
acquisition will be based on management's final determination of the fair value
of assets acquired or to be acquired and liabilities assumed or to be assumed.
The pro forma operating results are not necessarily indicative of the operating
results that would have been achieved had the acquisitions actually occurred at
January 1, 1997, nor do they purport to indicate the results of future
operations.
The Unaudited Pro Forma Consolidated Financial Statements are based on the
assumptions set forth in the notes to such statements and should be read in
conjunction with the related consolidated financial statements and notes thereto
of APCOA and Standard included elsewhere in this Prospectus.
P-2
<PAGE> 102
APCOA, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS COMBINED
---------------------------------- FOR STANDARD PRO FORMA
OTHER AND OTHER COMBINED ADJUSTMENTS ADJUSTED
APCOA STANDARD ACQUISITIONS ACQUISITIONS PRO FORMA FOR OFFERING(7) FOR OFFERING
-------- -------- ------------ ------------ --------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash......................... $ 3,322 $ 2,478 $ 824 $ (1,200)(1) $ 5,424 $ 55,749 $ 61,173
Notes and accounts
receivable, net............ 13,806 4,919 338 (2,800)(1) 16,263 -- 16,263
Prepaid expenses............. 1,126 150 73 -- 1,349 -- 1,349
-------- ------- ------ -------- -------- -------- --------
Total current assets... 18,254 7,547 1,235 (4,000) 23,036 55,749 78,785
Property and equipment, net... 8,248 1,170 222 -- 9,640 -- 9,640
Cost of parking contracts,
net.......................... 4,092 328 -- 6,473(2) 12,725 -- 12,725
935(3)
897(4)
Cost in excess of net assets
acquired, net................ 18,457 -- -- 74,475(2) 102,649 -- 102,649
6,364(3)
3,353(4)
Other intangible assets,
net.......................... 4,013 -- -- (283)(3) 3,730 7,200 10,155
(775)
Due from affiliate............ 4,522 -- -- (4,522)(5) -- -- --
Other assets.................. 1,509 1,131 -- -- 2,640 -- 2,640
-------- ------- ------ -------- -------- -------- --------
$ 59,095 $10,176 $1,457 $ 83,692 $154,420 $ 62,174 $216,594
======== ======= ====== ======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable............. $ 16,401 $ 650 $ 848 $ -- $ 17,899 $ -- $ 17,899
Accrued expenses............. 14,810 2,910 625 4,875(2) 25,720 (4,875) 20,845
2,500(2)
Line of credit............... -- 330 -- -- 330 (330) --
Current portion of long-term
debt....................... 4,102 208 -- -- 4,310 (1,800) 2,510
-------- ------- ------ -------- -------- -------- --------
Total current
liabilities........... 35,313 4,098 1,473 7,375 48,259 (7,005) 41,254
Long-term liabilities:
Existing credit facilities... 27,729 -- -- 1,000(4) 28,729.. (28,729) --
New credit facility.......... -- -- -- -- -- -- --
9 1/4% Senior Subordinated
Notes due 2008............. -- -- -- -- -- 140,000 140,000
Other debt................... 6,452 127 -- -- 6,579 -- 6,579
Due to Standard.............. -- -- -- 65,000(2) 65,000 (65,000) --
Due to EPI................... -- -- -- 7,000(3) 7,000 (7,000) --
Seller notes................. -- -- -- 3,250(4) 3,250 -- 3,250
Other liabilities............ 3,132 935 -- 5,000(2) 9,067 -- 9,067
-------- ------- ------ -------- -------- -------- --------
Total long-term
liabilities........... 37,313 1,062 -- 81,250 119,625 39,271 158,896
Redeemable preferred stock.... 8,728 -- -- (728)(6) 8,000 40,683 40,683
(8,000)
Common stock subject to
put/call rights.............. -- -- -- 4,589(2) 4,589 -- 4,589
Stockholders' equity
(deficit):
Common stock................. 1 -- -- -- 1 -- 1
Additional paid in capital... 17,205 -- -- (4,522)(5) 13,411 -- 13,411
728(6)
Retained earnings
(deficit).................. (39,465) -- -- -- (39,465) (2,000) (42,240)
(775)
Owners' equity (deficit)..... -- 5,016 (16) (4,000)(2) -- -- --
(1,016)(2)
16(3)
-------- ------- ------ -------- -------- -------- --------
Total stockholders'
equity (deficit)...... (22,259) 5,016 (16) (8,794) (26,053) (2,775) (28,828)
-------- ------- ------ -------- -------- -------- --------
$ 59,095 $10,176 $1,457 $ 83,692 $154,420 $ 62,174 $216,594
======== ======= ====== ======== ======== ======== ========
</TABLE>
See accompanying notes to unaudited pro forma consolidated balance sheet.
P-3
<PAGE> 103
APCOA, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1997
(IN THOUSANDS)
(1) Represents the reduction in cash and notes and accounts receivable for the
closing distribution to the Standard Owners pursuant to the Combination
Agreement.
(2) Represents the following adjustments to reflect the Combination (the final
purchase price allocation will be based upon a final determination of fair
values of the net assets acquired):
<TABLE>
<S> <C>
Cash consideration payable from proceeds of the Offering.... $65,000
APCOA common stock to be issued, at calculated put/call
value per the Stockholders' Agreement..................... 4,589
-------
Total consideration............................... $69,589
=======
The total consideration is allocated as follows:
Historical net assets of Standard......................... $ 5,016
Closing distribution to the Standard Owners............... (4,000)
-------
Net assets acquired.................................... 1,016
Cost of parking contracts................................. 6,473
Cost in excess of net assets acquired..................... 74,475
Accrued transaction costs................................. (4,875)
Restructuring reserves.................................... (2,500)
Long-term severance liabilities........................... (5,000)
-------
$69,589
=======
</TABLE>
(3) Represents the following adjustments to reflect the probable acquisition of
EPI (the final purchase price allocation will be based upon a final
determination of fair values of the net assets acquired):
<TABLE>
<S> <C>
Historical net assets (deficit) of EPI...................... $ (16)
Less: Current APCOA investment in EPI....................... (283)
-------
Net deficit acquired................................... (299)
Cost of parking contracts................................... 935
Cost in excess of net assets acquired....................... 6,364
-------
Cash consideration payable from proceeds of the Offering.... $ 7,000
=======
</TABLE>
(4) Represents the acquisition by the Company of Dixie Parking on January 22,
1998, but which was managed by the Company in 1997. The purchase price
consisted of cash of $1,000, which was borrowed under the existing credit
facility, and seller notes of $3,250. The purchase price allocation
consisted of $897 to parking contracts acquired and $3,353 to cost in excess
of net assets acquired.
(5) Represents the closing distribution to Holberg Industries, Inc., pursuant to
the Combination Agreement, of the receivable, "Due from affiliate."
(6) Represents $728 of preferred stock eliminated pursuant to the Combination
Agreement.
P-4
<PAGE> 104
APCOA, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET--(CONTINUED)
(7) Reflects the issuance of $140,000 of Senior Subordinated Notes due 2008 in
the Offering and $40,683 of redeemable preferred stock issued to AP
Holdings, Inc. The application of the proceeds therefrom are as follows:
<TABLE>
<S> <C>
Reduction of existing indebtedness:
Amounts due the Standard Owners........................... $ 65,000
Existing credit facilities................................ 28,729
Amounts due EPI owners.................................... 7,000
Current portion of long-term debt......................... 1,800
Line of credit for Standard............................... 330
Redemption of preferred stock held by Holberg Industries,
Inc....................................................... 8,000
Deferred financing fees..................................... 7,200
Prepayment penalty on existing credit facilities, charged to
stockholders' equity (deficit)............................ 2,000
Payment of accrued transaction costs at closing............. 4,875
Excess proceeds from the Offering........................... 55,749
--------
$180,683
========
</TABLE>
In connection with the reduction of existing indebtedness, $775 of deferred
financing costs will be written off.
P-5
<PAGE> 105
APCOA, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
HISTORICAL FOR COMBINED
------------------------------------- STANDARD ADJUSTMENTS PRO FORMA
OTHER AND OTHER COMBINED FOR ADJUSTED
APCOA STANDARD ACQUISITIONS(1) ACQUISITIONS PRO FORMA OFFERING FOR OFFERING
-------- -------- --------------- ------------ --------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Parking service revenue...... $115,676 $63,652 $6,750 $ -- $186,078 $ -- $186,078
Cost and expenses:
Cost of parking services... 92,818 50,142 3,205 -- 146,165 -- 146,165
General and
administrative.......... 13,528 7,857 3,566 (2,987)(2) 20,045 -- 20,045
(1,919)(3)
Depreciation and
amortization............ 3,767 464 -- 1,298(4) 7,678 (180)(8) 7,498
2,149(5)
-------- ------- ------ ------- -------- ------- --------
Total costs and
expenses......... 110,113 58,463 6,771 (1,459) 173,888 (180) 173,708
-------- ------- ------ ------- -------- ------- --------
Operating income............. 5,563 5,189 (21) 1,459 12,190 180 12,370
Other expense (income):
Interest expense........... 3,713 45 -- 7,124(6) 10,882 4,063(9) 14,945
Interest income............ (470) (130) -- 351(7) (249) -- (249)
-------- ------- ------ ------- -------- ------- --------
Income (loss) before income
taxes and minority
interest................... 2,320 5,274 (21) (6,016) 1,557 (3,883) (2,326)
Minority interest............ 321 -- -- -- 321 -- 321
Income tax expense........... 140 -- -- -- 140 -- 140
-------- ------- ------ ------- -------- ------- --------
Net income (loss)............ $ 1,859 $ 5,274 $ (21) $(6,016) $ 1,096 $(3,883) $ (2,787)
======== ======= ====== ======= ======== ======= ========
Other data:
EBITDA(10)................... $ 19,868
========
Deficiency of earnings to
fixed charges(11).......... $ 2,326
========
</TABLE>
See accompanying notes to unaudited pro forma consolidated statement of
operations.
P-6
<PAGE> 106
APCOA, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS)
(1) The historical consolidated statement of operations data for the Other
Acquisitions for the year ended December 31, 1997 represents the results of
operations of such companies from January 1, 1997 to the earlier of their
respective dates of acquisition or December 31, 1997. The Other
Acquisitions and their respective acquisition dates include: (i) Colonial
Richmond (March 1, 1997); (ii) Metropolitan Parking (June 1, 1997); (iii)
the remaining 50% interest in APCOA Parking Management & Development, Ltd.
(November 1, 1997); (iv) Dixie Parking (January 22, 1998); and (v) the
remaining 76% interest in EPI, a probable acquisition. Each of the Other
Acquisitions has been or is proposed to be accounted for as a purchase.
Accordingly, the results of the operations of each such acquired company
are or will be included in APCOA's results of operations from the date of
acquisition.
(2) Represents the net reduction in costs in accordance with the Company's
business plan to integrate Standard:
<TABLE>
<S> <C>
Payroll reductions for the elimination of duplicative
administrative and operations personnel................... $1,461
Reduction in salaries of certain Standard executives
pursuant to post-acquisition employment agreements........ 1,139
Reductions in management information systems costs.......... 387
------
$2,987
======
</TABLE>
In addition, there are $3,289 of anticipated cost savings ($1,883
represents personnel reduction savings at APCOA and $1,406 represents
purchasing efficiencies) that have not been reflected in the pro forma
statement of operations because they are not directly attributable to the
acquisition of Standard. APCOA intends to record a $8,500 charge in fiscal
1998 related to its planned restructuring of existing operations. This
charge is composed of $5,700 in employee displacement costs, $1,900 in
writedowns of long-term assets to current fair value, and $900 in other
restructuring costs.
(3) Represents the net reduction in costs in accordance with APCOA's business
plans to integrate the Other Acquisitions:
<TABLE>
<S> <C>
Payroll reductions for the elimination of duplicative
administrative and operations personnel:
EPI.................................................. $ 331
Other................................................ 428
Reduction in salaries of certain EPI executives pursuant to
proposed post-acquisition employment agreements........... 577
Reduction in management fees paid to third parties which
will be eliminated upon acquisition....................... 583
------
$1,919
======
</TABLE>
(4) Represents the incremental depreciation and amortization due to the
application of purchase accounting. Property, leaseholds and equipment are
being amortized over 3 to 7 years. Depreciation and amortization has been
increased to reflect each acquisition as if it had occurred on January 1,
1997 as follows:
<TABLE>
<S> <C>
Amortization of cost of parking contracts acquired from
Standard.................................................. $1,034
Amortization of cost of parking contracts acquired from the
Other Acquisitions........................................ 347
Net reduction in depreciation of property and equipment
acquired from Standard.................................... (83)
------
$1,298
======
</TABLE>
P-7
<PAGE> 107
APCOA, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS--(CONTINUED)
(5) Represents the incremental amortization, due to the application of purchase
accounting, for amortization of the excess cost over the fair value of net
assets acquired over 40 years. Amortization has been increased to reflect
each acquisition as if it had occurred on January 1, 1997 as follows:
<TABLE>
<S> <C>
Amortization of excess cost over fair value of net assets
acquired
for Standard.............................................. $1,862
Amortization of excess cost over fair value of net assets
acquired for the
Other Acquisitions........................................ 287
------
$2,149
======
</TABLE>
(6) Represents the incremental interest expense for the additional financing
required for the acquisitions. Interest expense has been increased to
reflect each acquisition as if it had occurred on January 1, 1997. The
interest rate used for the additional financing for the Standard
acquisition and the proposed EPI acquisition was 9 1/4%, the actual rate of
the Senior Subordinated Notes, the proceeds from which will be partially
used to finance such acquisitions. The interest expense is as follows:
<TABLE>
<CAPTION>
INCREMENTAL
PRINCIPAL INTEREST
AMOUNT RATE EXPENSE
--------- ----------- -----------
<S> <C> <C> <C>
Standard................................. $65,000 9 1/4% $6,013
EPI...................................... 7,000 9 1/4% 648
Seller notes for Dixie acquisition....... 3,250 8 1/4% 268
Other borrowings (pro-rated)............. 3,128 8.0% - 9.0% 195
------
$7,124
======
</TABLE>
(7) Represents the elimination of interest income from Holberg Industries, Inc.
on the outstanding amount due from Holberg Industries, Inc.
(8) Represents the elimination of historical amortization expense related to
the deferred financing costs on the existing credit facilities.
(9) Represents the change in interest expense related to the Offering:
<TABLE>
<CAPTION>
PRINCIPAL YEAR ENDED
AMOUNT DECEMBER 31,
OF DEBT 1997
--------- ------------
<S> <C> <C>
Recording of pro forma interest expense:
9 1/4% Senior Subordinated Notes due 2008................. $140,000 $12,950
Nonrecourse third party debt at 11.0% to 15.0%............ 5,523 660
Seller notes for Dixie acquisition at 8.25%............... 3,250 268
Letters of credit......................................... 4,905 123
Capital leases............................................ 168
Other debt................................................ 56
-------
Cash interest expense..................................... 14,225
Amortization of deferred financing costs.................. 720
-------
Total interest expense............................ 14,945
Less: Combined pro forma interest expense................... 10,882
-------
Pro forma interest adjustment after the Offering............ $ 4,063
=======
</TABLE>
(10) EBITDA represents operating income plus depreciation and amortization.
EBITDA is presented because management believes it is a widely accepted
financial indicator used by certain investors and analysts to analyze and
compare companies on the basis of operating performance. EBITDA is not
P-8
<PAGE> 108
APCOA, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS--(CONTINUED)
intended to represent cash flows for the period, nor has it been presented
as an alternative to operating income as an indicator of operating
performance and should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with generally accepted
accounting principles. The Company understands that, while EBITDA is
frequently used by securities analysts in the evaluation of companies,
EBITDA, as used herein, is not necessarily comparable to other similarly
titled captions of other companies due to potential inconsistencies in the
method of calculation.
(11) For purposes of computing the deficiency of earnings to fixed charges,
earnings consist of income (loss) before income taxes and minority interest
plus fixed charges. Fixed charges consist of interest expense, amortization
of deferred financing costs and one-third of the rent expense from
operating leases, which management believes is a reasonable approximation
of the interest factor of the rent.
P-9
<PAGE> 109
INDEX TO HISTORICAL FINANCIAL STATEMENTS
<TABLE>
<S> <C>
APCOA, INC.
Report of Ernst & Young LLP, Independent Auditors........... F-2
Consolidated Balance Sheets as of December 31, 1996 and
1997...................................................... F-3
Consolidated Statements of Operations for each of the three
years in the period ended December 31, 1997............... F-4
Consolidated Statements of Stockholders' Equity (Deficit)
for each of the three years in the period ended December
31, 1997.................................................. F-5
Consolidated Statements of Cash Flows for each of the three
years in the period ended December 31, 1997............... F-6
Notes to Consolidated Financial Statements.................. F-7
STANDARD PARKING
Report of Altschuler, Melvoin and Glasser LLP, Independent
Auditors.................................................. F-13
Balance Sheets as of December 31, 1996 and 1997............. F-14
Statements of Income for each of the three years in the
period ended December 31, 1997............................ F-15
Statements of Changes in Equity for each of the three years
in the period ended December 31, 1997..................... F-16
Statements of Cash Flows for each of the three years in the
period ended December 31, 1997............................ F-17
Notes to Financial Statements............................... F-18
</TABLE>
F-1
<PAGE> 110
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
Board of Directors
APCOA, Inc.
Cleveland, Ohio
We have audited the accompanying consolidated balance sheets of APCOA,
Inc., as of December 31, 1996 and 1997, and the related consolidated statements
of operations, stockholders' equity (deficit) and cash flows for each of the
three years in the period ended December 31, 1997. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
APCOA, Inc. at December 31, 1996 and 1997, and the consolidated results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1997, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Cleveland, Ohio
February 3, 1998
F-2
<PAGE> 111
APCOA, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31
------------------
1996 1997
<S> <C> <C>
ASSETS
Current assets:
Cash...................................................... $ 2,532 $ 3,322
Notes and accounts receivable, less allowances of $315 in
1996 and $443 in 1997.................................. 10,241 13,806
Prepaid expenses and supplies............................. 1,343 1,126
------- -------
Total current assets........................................ 14,116 18,254
Property, leaseholds and equipment:
Buildings and equipment................................... 9,296 10,024
Land and leasehold improvements........................... 15,804 13,981
Leaseholds................................................ 31,446 31,293
Construction in progress.................................. 36 417
------- -------
56,582 55,715
Less accumulated depreciation and amortization............ 44,906 43,375
------- -------
11,676 12,340
Other assets:
Advances and deposits
Cost in excess of net assets acquired, less accumulated... 1,011 1,509
amortization of $2,979 and $3,412 in 1996 and 1997,
respectively.......................................... 17,118 18,457
Other intangible assets, less accumulated amortization of
$3,081 and $3,433 in 1996 and 1997, respectively....... 3,381 4,013
Due from affiliate........................................ 5,521 4,522
------- -------
27,031 28,501
------- -------
Total assets...................................... $52,823 $59,095
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable.......................................... $15,742 $16,401
Accrued rent.............................................. 6,023 5,649
Compensation and payroll withholdings..................... 2,057 1,924
Property, payroll and other taxes......................... 3,004 3,111
Accrued insurance and expenses............................ 6,079 4,126
Current portion of long-term borrowings................... 666 4,102
------- -------
Total current liabilities................................... 33,571 35,313
Long-term borrowings, excluding current portion:
Obligation under credit agreements........................ 25,261 27,729
Other..................................................... 6,868 6,452
------- -------
32,129 34,181
Other long-term liabilities................................. 2,513 3,132
Redeemable preferred stock.................................. 7,841 8,728
Stockholders' equity (deficit):
Common stock, par value $1.00 per share, 1,000 shares
authorized; 26.3 shares issued and outstanding......... 1 1
Additional paid-in capital................................ 17,205 17,205
Accumulated deficit....................................... (40,437) (39,465)
------- -------
Total stockholders' equity (deficit)........................ (23,231) (22,259)
------- -------
Total liabilities and stockholders' equity
(deficit)........................................ $52,823 $59,095
======= =======
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE> 112
APCOA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
1995 1996 1997
<S> <C> <C> <C>
Parking revenue............................................ $141,540 $135,752 $115,676
Costs and expenses:
Cost of parking services................................. 120,215 113,501 92,818
General and administrative............................... 12,121 13,017 13,528
Depreciation and amortization............................ 8,772 4,888 3,767
-------- -------- --------
Total costs and expenses................................... 141,108 131,406 110,113
-------- -------- --------
Operating income........................................... 432 4,346 5,563
Other expenses (income):
Interest expense......................................... 3,101 3,409 3,713
Interest income.......................................... (396) (532) (470)
-------- -------- --------
2,705 2,877 3,243
-------- -------- --------
Income (loss) before minority interest and income taxes.... (2,273) 1,469 2,320
Minority interest.......................................... 604 424 321
Income tax expense......................................... 240 106 140
-------- -------- --------
Net income (loss).......................................... $ (3,117) $ 939 $ 1,859
======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
F-4
<PAGE> 113
APCOA, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
<TABLE>
<CAPTION>
COMMON STOCK
------------------ ADDITIONAL
NUMBER PAR PAID-IN ACCUMULATED
OF SHARES VALUE CAPITAL DEFICIT TOTAL
<S> <C> <C> <C> <C> <C>
Balance (deficit) at January 1, 1995.... 26.3 $1 $17,205 $(36,748) $(19,542)
Net loss................................ (3,117) (3,117)
Preferred stock dividend................ (715) (715)
----- -- ------- -------- --------
Balance (deficit) at December 31,
1995.................................. 26.3 1 17,205 (40,580) (23,374)
Net income.............................. 939 939
Preferred stock dividend................ (796) (796)
----- -- ------- -------- --------
Balance (deficit) at December 31,
1996.................................. 26.3 1 17,205 (40,437) (23,231)
Net income.............................. 1,859 1,859
Preferred stock dividend................ (887) (887)
----- -- ------- -------- --------
Balance (deficit) at December 31,
1997.................................. 26.3 $1 $17,205 $(39,465) $(22,259)
===== == ======= ======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
F-5
<PAGE> 114
APCOA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
------------------------------
1995 1996 1997
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss)........................................... $(3,117) $ 939 $ 1,859
Adjustment to reconcile net income (loss) to net cash
provided by operations:
Depreciation and amortization............................. 8,772 4,888 3,767
Changes in operating assets and liabilities:
(Increase) decrease in notes and accounts receivable... (686) 1,041 (3,495)
(Increase) decrease in prepaid assets.................. (2) 163 273
(Increase) decrease in other assets.................... (452) (1,071) 216
Increase (decrease) in accounts payable................ 2,067 (845) 294
Decrease in accrued liabilities........................ (1,340) (1,209) (2,982)
(Increase) decrease in due from affiliate.............. (902) (1,864) 999
------- -------- -------
Net cash provided by operating activities................... 4,340 2,042 931
INVESTING ACTIVITIES
Purchase of property, leaseholds and equipment.............. (2,782) (2,552) (2,357)
Purchase of property, leaseholds and equipment by joint
ventures.................................................. (1,930) (1,181) (480)
Increase in other assets.................................... (100) (906)
Businesses acquired, net of cash............................ (227) 151
Proceeds from disposition of property, leaseholds and
equipment................................................. 122 384
------- -------- -------
Net cash used in investing activities....................... (4,917) (3,349) (3,592)
FINANCING ACTIVITIES
Proceeds from refinancing................................... 11,217
Payments due to refinancing................................. (11,071)
Proceeds from long-term borrowings.......................... 1,027 4,269
Payments on long-term borrowings............................ (1,183) (412) (829)
Proceeds from joint venture borrowings...................... 2,430 2,665 400
Payments on joint venture borrowing......................... (140) (1,414) (389)
Payments of debt issuance costs............................. (724)
------- -------- -------
Net cash provided by financing activities................... 1,107 1,288 3,451
------- -------- -------
Increase (decrease) in cash................................. 530 (19) 790
Cash at beginning of year................................... 2,021 2,551 2,532
------- -------- -------
CASH AT END OF YEAR......................................... $ 2,551 $ 2,532 $ 3,322
======= ======== =======
</TABLE>
See Notes to Consolidated Financial Statements.
F-6
<PAGE> 115
APCOA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(IN THOUSANDS)
NOTE A. ORGANIZATION
APCOA, Inc. (the Company), its subsidiaries and affiliates manage, operate
and develop parking properties throughout the United States and Canada. The
Company is a wholly owned subsidiary of AP Holdings, Inc.
NOTE B. SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION--The consolidated financial statements include
the accounts of the Company, its wholly owned subsidiaries, and joint ventures
in which the Company has more than 50% ownership interest. Minority interest
recorded in the consolidated statement of operations is the Company's
noncontrolling interest in consolidated joint ventures. Minority interest
included in the consolidated balance sheet was $49 and $276 at December 31, 1996
and 1997, respectively. Investments in joint ventures of 50% or less ownership
interest are reported on the equity method. Investments in joint ventures
accounted for using the equity method in the consolidated balance sheet was $217
and $273 at December 31, 1996 and 1997, respectively. All significant
intercompany profits, transactions and balances have been eliminated in
consolidation.
GROSS CUSTOMER COLLECTIONS--Gross customer collections represent gross
receipts collected at all leased and managed properties, including
unconsolidated affiliates. Gross customer collections were $408,952, $430,696
and $476,183 in 1995, 1996 and 1997.
PARKING REVENUE--The Company recognizes gross receipts from leased
locations and management fees earned from management contract properties as
parking revenue as the related services are provided. Also included in parking
revenue is $850 in 1995, $147 in 1996 and $1,207 in 1997 from gains on sales of
property and leaseholds.
COST OF PARKING SERVICES--The Company recognizes costs for leases and
nonreimbursed costs from managed facilities as cost of parking services. Cost of
parking services consists primarily of rent and payroll related costs.
PROPERTIES, LEASEHOLDS AND EQUIPMENT--Leaseholds and property and equipment
are stated at cost. Leaseholds are amortized on a straight-line basis over the
average contract life of 7 years. Equipment is depreciated on the straight-line
basis over the estimated useful lives of approximately 5 years on average.
Leasehold improvements are amortized on the straight-line basis over the terms
of the respective leases or the service lives of the improvements, whichever is
shorter (average of approximately 7 years). Depreciation and amortization
includes losses on abandonments of property and leaseholds.
ADVERTISING COSTS--Advertising costs are expensed as incurred and are
included in general and administrative expenses. Advertising expenses were $246,
$414 and $440 for 1995, 1996 and 1997, respectively.
COST IN EXCESS OF NET ASSETS ACQUIRED (GOODWILL)--Cost in excess of net
assets acquired arising from acquisitions is amortized using the straight-line
method over 40 years. The carrying value of goodwill is evaluated if
circumstances indicate a possible impairment in value. If undiscounted cash
flows over the remaining amortization period indicate that goodwill may not be
recoverable, the carrying value of goodwill will be reduced by the estimated
shortfall of cash flows on a discounted basis.
INTANGIBLE ASSETS--Organization and start-up costs of $633 and $1,296 at
December 31, 1996 and 1997, respectively, are amortized over 7 years using the
straight-line method. Debt issuance costs of $900 and $775 at December 31, 1996
and 1997, respectively, are amortized over the terms of the credit agreements
using the straight-line method.
F-7
<PAGE> 116
APCOA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
FINANCIAL INSTRUMENTS--The carrying values of cash, accounts receivable and
accounts payable are reasonable estimates of their fair value due to the
short-term nature of these financial instruments. Other long-term assets and
debt have a carrying value that approximates fair value.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
NEW ACCOUNTING PRONOUNCEMENT--In June 1997, the Financial Accounting
Standards Board issued Statement No. 131, Disclosures about Segments of an
Enterprise and Related Information. Statement No. 131, which becomes effective
in 1998, establishes standards for reporting segment information in annual and
interim financial statements including disclosures about services, geographic
areas and major customers. The Company has not yet determined the impact of
adopting Statement No. 131 on its financial statement disclosures.
NOTE C. BORROWING ARRANGEMENTS
Long-term borrowings consist of:
<TABLE>
<CAPTION>
AMOUNT OUTSTANDING
DECEMBER 31
INTEREST DUE ------------------
RATE(S) DATE 1996 1997
<S> <C> <C> <C> <C>
Prudential term note.................. 9.18% April, 2003 $18,000 $18,000
Prudential term note.................. 8.92% March, 2005 5,000 5,000
Key Bank revolver..................... 7.82--8.75% April, 2000 2,261 6,529
Joint venture debentures.............. 11.00--15.00% December, 2006 5,512 5,523
Capital leases and other.............. Various Various 2,022 3,231
------- -------
32,795 38,283
Less current portion.................. 666 4,102
------- -------
$32,129 $34,181
======= =======
</TABLE>
The Company has a term facility with the Prudential Insurance Company of
America in the amount of $23 million. The facility, with semi-annual principal
payments beginning in 1998 contains two term notes. In March 1996, the Company
refinanced its revolving credit facility with KeyBank, as agent, which provides
for borrowings and letters of credit of up to $20 million and bears interest at
LIBOR plus 2% or prime plus .25% as selected by the Company. These facilities
are secured by substantially all of the assets of the Company. The terms of the
credit agreements call for, among other things, meeting defined net worth,
income and debt coverage ratios as well as restrictions on the payment of
dividends on common stock and capital expenditures.
Consolidated joint ventures have entered into four agreements for
stand-alone development projects providing nonrecourse funding. These joint
venture debentures are collateralized by the specific contracts that were funded
and approximate the net book value of the related assets.
The Company has entered into capital leases and various financing
agreements, which were used for the purchase of equipment and on November 1,
1997, the Company signed interest free promissory notes in the amount of $1,123
to purchase the remaining interest of an unconsolidated subsidiary. The notes
were paid in January, 1998.
The Company paid interest of $3,174, $3,230 and $3,878 in 1995, 1996, and
1997, respectively.
F-8
<PAGE> 117
APCOA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
The aggregate maturities of borrowings outstanding at December 31, 1997 are
as follows:
<TABLE>
<S> <C>
1998............................................... $ 4,102
1999............................................... 4,849
2000............................................... 11,162
2001............................................... 4,466
2002............................................... 4,587
2003 and thereafter................................ 9,117
-------
$38,283
=======
</TABLE>
NOTE D. INCOME TAXES
The Company is included in the consolidated federal income tax return filed
with its affiliates and has a tax sharing agreement with the affiliates. The
Company's income tax provision is determined on a separate return basis. Income
tax expense consists of state and local taxes.
At December 31, 1997, the Company has net operating loss carryforwards of
$23.2 million for income tax purposes that expire in years 2004 through 2012.
Net operating loss carryforwards have been utilized to eliminate federal income
tax expense in 1996.
Deferred income taxes reflect the net effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities as of December 31, 1996 and
1997 are as follows:
<TABLE>
<CAPTION>
1996 1997
<S> <C> <C>
Net operating loss carryforwards......................... $ 7,736 $ 8,111
Book over tax depreciation and amortization.............. 2,042 1,234
Casualty/liability insurance............................. 674 699
Accrued compensation..................................... 433 (55)
Other, net............................................... 280 361
------- -------
11,165 10,350
Less: valuation allowance for deferred tax assets........ 11,165 10,350
------- -------
Net deferred tax assets.................................. $ 0 $ 0
======= =======
</TABLE>
For financial reporting purposes, a valuation allowance for deferred tax
assets will continue to be recorded until realization is certain.
NOTE E. BENEFIT PLANS
The Company sponsors deferred compensation plan for certain key executives
as well as an employees' savings and retirement plan in which certain employees
are eligible to participate. Subject to their continued employment by the
Company, employees eligible for participation in the deferred compensation plan
will receive a defined monthly benefit upon attaining age 65. Participants in
the savings and retirement plan may elect to contribute a portion of their
compensation to the plan. The Company, in turn, contributes an amount in cash or
other property as required by the plan. Expenses related to these plans amounted
to $441, $473 and $461 in 1995, 1996 and 1997, respectively.
The Company also contributes to two multi-employer defined contribution and
nine multi-employer defined benefit plans which cover certain union employees.
Expenses related to these plans were $562, $561 and $418 in 1995, 1996 and 1997,
respectively.
F-9
<PAGE> 118
APCOA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
NOTE F. LEASES
The Company operates parking facilities under operating leases expiring on
various dates, generally prior to the year 2012. Certain of the leases contain
options to renew at the Company's discretion.
At December 31, 1997, the Company was committed to install in future years,
at an estimated cost of $1,063, certain capital improvements at leased
facilities.
Future annual rent expense is not determinable due to the application of
percentage factors based on revenues. At December 31, 1997, the Company's
minimum rental commitments, under all non-cancelable leases with remaining terms
of more than one year, are as follows:
<TABLE>
<S> <C>
1998............................................... $28,036
1999............................................... 16,117
2000............................................... 12,301
2001............................................... 7,925
2002............................................... 6,443
2003 and thereafter................................ 25,216
-------
$96,038
=======
</TABLE>
Rent expense for office space and equipment was $1,623, $1,873 and $2,155
in 1995, 1996 and 1997, respectively.
NOTE G. REDEEMABLE PREFERRED STOCK
The Company has 400 shares of preferred stock authorized, of which 78 and
87 shares are outstanding at December 31, 1996 and 1997, respectively. The
preferred shareholder, an affiliate, is entitled to 11% annual dividends payable
semiannually in cash or additional preferred shares. The preferred stock is
recorded at its $100,000 per share liquidation value plus unpaid dividends.
Subject to the approval of the Board of Directors, the Company has the right to
redeem for cash all or any part of the preferred shares then outstanding at a
redemption price equal to the per share liquidation value. All of the then
outstanding preferred shares will be mandatorily redeemed for cash on February
25, 2004 at a redemption price equal to the per share liquidation value.
NOTE H. RELATED PARTIES TRANSACTIONS
Due from affiliate represents amounts due from Holberg Industries, Inc.
(Holberg) as the result of various transactions between the Company and Holberg
including net cash transferred, investment income and insurance premiums.
Interest is recorded on amounts due based on current investment rates of return.
The Company participates in a master insurance program with affiliates
which serves to reduce the insurance costs of the combined group. The program
provides the Company with a stop loss for each insurance policy year. Insurance
premium for the coverage is included in the cost of parking services and
reflects the Company's estimated cost indicative of the ongoing entity on a
stand alone basis through the purchase of insurance and related costs for
self-insured retention amounts consistent with the limits used in the 1997
policy year and expected to be followed in the future.
NOTE I. ACQUISITIONS
During the year ended December 31, 1997, the Company completed three
acquisitions. In January 1998, the Company acquired Dixie Parking Services, Inc.
located in New Orleans, Louisiana. The aggregate purchase price of the four
acquisitions was $2.0 million in cash and $4.4 million in notes payable.
Additional consideration of up to $875 for one acquisition is contingent upon
the operating results of the acquired
F-10
<PAGE> 119
APCOA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
company. The excess purchase price over the fair value of the net assets
acquired, primarily cost of contracts, was recorded as goodwill for all
acquisitions.
All acquisitions have been accounted for under the purchase method of
accounting, and the consolidated results of operations include the results of
each business from the date of acquisition. Unaudited pro forma data for the
year ended December 31, 1996 and 1997 as though the Company had purchased all of
the above businesses at the beginning of 1996 and 1997 are set forth below. The
pro forma operating results are not necessarily indicative of what would have
occurred had the transactions taken place on January 1, 1996.
<TABLE>
<CAPTION>
1996 1997
<S> <C> <C>
Parking revenue........................................ $142,091 $116,935
Net income............................................. 1,454 2,025
</TABLE>
NOTE J. COMMITMENTS AND CONTINGENCIES
As a result of its day-to-day operations, the Company is involved in
several disputes, generally regarding the terms of lease agreements. In the
opinion of management, the outcome of these disputes and litigation will not
have a material adverse effect on the consolidated financial position or
operating results of the Company.
NOTE K. SUBSEQUENT EVENTS AND SUBSIDIARY GUARANTORS
In January 1998, the Company entered into a definitive Combination
Agreement to acquire all of the outstanding capital stock, partnership and other
equity interests of Standard Parking Corporation and certain affiliates
(Standard). On March 30, 1998, the Company acquired Standard for consideration
consisting of $65 million in cash, common stock of the Company equal to 16.0% of
the common stock of the Company outstanding as of January 15, 1998, and the
assumption of certain liabilities. Standard currently manages approximately 380
properties in 29 cities.
In connection with the Standard acquisition, on March 30, 1998, the Company
(i) issued $140 million principal amount of 9 1/4% Senior Subordinated Notes due
2008 in a Rule 144A private placement, (ii) received a contribution of $40.7
million from AP Holdings, Inc., in exchange for redeemable preferred stock and
(iii) entered into a $40 million senior credit facility. The net proceeds from
the offering and the preferred stock contribution were used by the Company to
fund the cash portion of the consideration for the acquisition of Standard, to
repay certain existing debt of the Company and Standard, for general corporate
purposes and to redeem preferred stock held by an affiliate.
F-11
<PAGE> 120
APCOA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
The majority of the Company's operating subsidiaries, as well as Standard,
will fully, unconditionally, jointly and severally guarantee the Senior
Subordinated Notes. Separate financial statements of the guarantor subsidiaries
are not separately presented because, in the opinion of management, such
financial statements are not material to investors. The following is summarized
combining financial information for APCOA, Inc., the guarantor subsidiaries of
the Company and the non-guarantor subsidiaries of the Company:
<TABLE>
<CAPTION>
APCOA, GUARANTOR NON-GUARANTOR
INC. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL
------ ------------ ------------- ------------ -----
<S> <C> <C> <C> <C> <C>
1995
Income Statement Data:
Parking revenue............................. $73,720 $1,901 $65,919 $ -- $141,540
Gross profit................................ 17,588 360 3,377 -- 21,325
Depreciation and amortization............... 7,996 51 725 -- 8,772
Operating income (loss)..................... (1,828) 182 2,078 -- 432
Interest expense (income), net.............. 2,289 (34) 450 -- 2,705
Net income (loss)........................... (4,357) 216 1,024 -- (3,117)
Statement of Cash Flows Data:
Net cash provided by (used in) operating
activities................................ 4,515 10 (185) -- 4,340
Investing activities:
Purchase of property, leaseholds and
equipment............................... (2,769) (13) (1,930) -- (4,712)
Other..................................... (205) -- -- -- (205)
-------- ------ ------- -------- --------
Net cash used in investing activities....... (2,974) (13) (1,930) -- (4,917)
Financing activities:
Proceeds from long-term borrowings........ -- -- 2,430 -- 2,430
Payments on long-term borrowings.......... (1,183) -- (140) -- (1,323)
-------- ------ ------- -------- --------
Net cash provided by (used in) financing
activities................................ (1,183) -- 2,290 -- 1,107
1996
Balance Sheet Data:
Notes and accounts receivable............... 7,489 (146) 2,898 -- 10,241
Current assets.............................. 10,327 93 3,696 -- 14,116
Property, leaseholds and equipment, net..... 5,925 146 5,605 -- 11,676
Cost in excess of net assets acquired,
net....................................... 16,479 639 -- -- 17,118
Total assets................................ 42,283 977 11,017 (1,454) 52,823
Accounts payable............................ 13,603 241 1,898 -- 15,742
Current liabilities......................... 26,303 377 6,891 -- 33,571
Long-term borrowings, excluding current
portion................................... 27,006 -- 5,123 -- 32,129
Redeemable preferred stock.................. 7,841 -- -- -- 7,841
Total stockholders' equity (deficit)........ (20,956) 600 (1,421) (1,454) (23,231)
Total liabilities and stockholders'
equity.................................... 42,283 977 11,017 (1,454) 52,823
Income Statement Data:
Parking revenue............................. 73,140 2,914 59,698 -- 135,752
Gross profit................................ 18,412 669 3,170 -- 22,251
Depreciation and amortization............... 3,745 166 977 -- 4,888
Operating income............................ 2,722 198 1,426 -- 4,346
Interest expense (income), net.............. 2,340 (18) 555 -- 2,877
Net income (loss)........................... 276 216 447 -- 939
Statement of Cash Flows Data:
Net cash provided by (used in) operating
activities................................ 2,012 286 (256) -- 2,042
Investing activities:
Purchase of property, leaseholds and
equipment............................... (2,481) (71) (1,181) -- (3,733)
Other..................................... 384 -- -- -- 384
-------- ------ ------- -------- --------
Net cash used in investing activities....... (2,097) (71) (1,181) -- (3,349)
</TABLE>
F-12
<PAGE> 121
APCOA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
<TABLE>
<CAPTION>
APCOA, GUARANTOR NON-GUARANTOR
INC. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL
------ ------------ ------------- ------------ -----
<S> <C> <C> <C> <C> <C>
</TABLE>
F-13
APCOA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
<TABLE>
<CAPTION>
APCOA, GUARANTOR NON-GUARANTOR
INC. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL
------ ------------ ------------- ------------ -----
<S> <C> <C> <C> <C> <C>
Financing activities:
Proceeds from refinancing................. $11,217 $ -- $ -- $ -- $11,217
Payments due to refinancing............... (11,071) -- -- -- (11,071)
Proceeds from long-term borrowings........ 1,027 -- 2,665 -- 3,692
Payments on long-term borrowings.......... (412) -- (1,414) -- (1,826)
Payments of debt issuance costs........... (724) -- -- -- (724)
-------- ------ ------- -------- --------
Net cash provided by financing activities... 37 -- 1,251 -- 1,288
1997
Balance Sheet Data:
Notes and accounts receivable............... 10,587 1,113 2,106 -- 13,806
Current assets.............................. 12,801 2,610 2,843 -- 18,254
Property, leaseholds and equipment, net..... 6,246 501 5,593 -- 12,340
Cost in excess of net assets acquired,
net....................................... 16,190 2,267 -- -- 18,457
Total assets................................ 43,895 6,541 10,206 (1,547) 59,095
Accounts payable............................ 13,574 1,756 1,071 -- 16,401
Current liabilities......................... 26,593 4,006 4,714 -- 35,313
Long-term borrowings, excluding current
portion................................... 28,747 407 5,027 -- 34,181
Redeemable preferred stock.................. 8,728 -- -- -- 8,728
Total stockholders' equity (deficit)........ (22,334) 1,981 (359) (1,547) (22,259)
Total liabilities and stockholders'
equity.................................... 43,895 6,541 10,206 (1,547) 59,095
Income Statement Data:
Parking revenue............................. 78,051 3,510 34,115 -- 115,676
Gross profit................................ 18,400 1,033 3,425 -- 22,858
Depreciation and amortization............... 2,836 65 866 -- 3,767
Operating income............................ 4,451 512 600 -- 5,563
Interest expense (income), net.............. 2,654 -- 589 -- 3,243
Net income (loss)........................... 1,657 512 (310) -- 1,859
Statement of Cash Flows Data:
Net cash provided by (used in) operating
activities................................ (173) 739 365 -- 931
Investing activities:
Purchase of property, leaseholds and
equipment............................... (2,357) -- (480) -- (2,837)
Other..................................... (1,467) 712 -- -- (755)
-------- ------ ------- -------- --------
Net cash provided by (used in) investing
activities................................ (3,824) 712 (480) -- (3,592)
Financing activities:
Proceeds from long-term borrowings........ 4,269 -- 400 -- 4,669
Payments on long-term borrowings.......... (685) (144) (389) -- (1,218)
-------- ------ ------- -------- --------
Net cash provided by (used in) financing
activities................................ 3,584 (144) 11 -- 3,451
</TABLE>
F-14
<PAGE> 122
REPORT OF ALTSCHULER, MELVOIN AND GLASSER LLP,
INDEPENDENT AUDITORS
To the Owners of Standard Parking
We have audited the accompanying balance sheets of STANDARD PARKING as of
December 31, 1996 and 1997 and the related statements of income, changes in
equity and cash flows for each of the three years in the period ended December
31, 1997. These financial statements are the responsibility of the management of
Standard Parking. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Standard Parking as of
December 31, 1996 and 1997, and the combined results of its operations, changes
in equity and cash flows for each of the three years in the period ended
December 31, 1997 in conformity with generally accepted accounting principles.
Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
February 3, 1998
F-14
<PAGE> 123
STANDARD PARKING
BALANCE SHEETS
DECEMBER 31, 1996 AND 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1997
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................................. $2,968 $ 2,478
Management fees receivable and due from managed
facilities............................................. 1,357 1,843
Accounts receivable--other................................ 1,143 2,041
Current maturities of notes receivable.................... 60 116
Due from related parties.................................. 879 919
Prepaid expenses.......................................... 168 150
------ -------
Total current assets.............................. 6,575 7,547
------ -------
Property and Equipment (at cost, net of accumulated
depreciation)............................................. 1,014 1,170
------ -------
Other Assets:
Management contracts (net of accumulated amortization of
$58 and $85)........................................... 456 328
Due from related parties.................................. 168 218
Notes receivable--long term............................... 296 184
Cash value of life insurance.............................. 621 729
------ -------
Total other assets................................ 1,541 1,459
------ -------
Total Assets................................. $9,130 $10,176
====== =======
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable and accrued expenses..................... $1,608 $ 2,413
Due to related parties.................................... 70 75
Key card security and lease deposits...................... 167 198
Accrued basic and percentage rents........................ 755 792
Deferred rent............................................. 136 28
Line of credit borrowings................................. 0 330
Current maturities of long-term debt...................... 185 133
Funds held on behalf of managed facilities................ 201 129
------ -------
Total current liabilities......................... 3,122 4,098
------ -------
Long-term Liabilities:
Deferred rent............................................. 265 395
Deferred compensation..................................... 423 417
Long-term debt............................................ 203 70
Long-term related party debt.............................. 82 57
Other..................................................... 123 123
------ -------
Total long-term liabilities....................... 1,096 1,062
------ -------
Total Liabilities........................................... 4,218 5,160
------ -------
Equity...................................................... 4,912 5,016
------ -------
Total Liabilities and Equity................. $9,130 $10,176
====== =======
</TABLE>
The accompanying notes are an integral part of this statement.
F-15
<PAGE> 124
STANDARD PARKING
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
1995 1996 1997
<S> <C> <C> <C>
Revenue:
Leased facilities......................................... $38,418 $41,770 $54,801
Management and consulting fees and other parking services
revenue................................................ 6,783 8,505 8,851
------- ------- -------
Total revenue............................................... 45,201 50,275 63,652
Cost and expenses:
Cost of parking services.................................. 35,168 37,838 50,142
General and administrative expenses....................... 6,390 7,547 7,857
Depreciation and amortization............................. 316 376 464
Loss on office relocation................................. 408
------- ------- -------
Total costs and expenses.................................... 42,282 45,761 58,463
------- ------- -------
Operating income............................................ 2,919 4,514 5,189
Other expense (income):
Interest income........................................... (96) (110) (130)
Interest expense.......................................... 37 54 45
------- ------- -------
(59) (56) (85)
------- ------- -------
Net income.................................................. $ 2,978 $ 4,570 $ 5,274
======= ======= =======
</TABLE>
The accompanying notes are an integral part of this statement.
F-16
<PAGE> 125
STANDARD PARKING
STATEMENTS OF CHANGES IN EQUITY
YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(IN THOUSANDS)
<TABLE>
<S> <C>
Equity, January 1, 1995..................................... $ 3,894
Capital Contribution........................................ 10
Net Income for Year......................................... 2,978
Distributions............................................... (3,482)
-------
Equity, December 31, 1995................................... 3,400
Net Income for Year......................................... 4,570
Distributions............................................... (3,058)
-------
Equity, December 31, 1996................................... 4,912
Net Income for Year......................................... 5,274
Distributions............................................... (5,170)
-------
Equity, December 31, 1997................................... $ 5,016
=======
</TABLE>
The accompanying notes are an integral part of this statement.
F-17
<PAGE> 126
STANDARD PARKING
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
1995 1996 1997
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income................................................ $ 2,978 $ 4,570 $ 5,274
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization.......................... 316 376 464
Increase (decrease) in cash arising from changes in:
Management fees receivable and amounts due from
managed facilities................................ 275 (166) (486)
Accounts receivable and prepaid expenses............. 292 (407) (881)
Related party receivables/payables................... (1,375) 287 (103)
Accrued basic and percentage rents................... (441) 236 37
Deferred compensation................................ 141 149 (6)
Deferred rent........................................ 377 24 22
Other current liabilities............................ 280 262 765
------- ------- -------
Net cash provided by operating activities................... 2,843 5,331 5,086
------- ------- -------
INVESTING ACTIVITIES
Increase in cash value of life insurance.................. (120) (31) (108)
Management contracts acquired............................. (561) 0 0
Capital expenditures...................................... (547) (336) (492)
Proceeds from sale of fixed assets........................ 0 100 0
Increase in notes receivable.............................. (50) (305) 0
Other, net................................................ (25) 76 71
------- ------- -------
Net cash used in investing activities....................... (1,303) (496) (529)
------- ------- -------
FINANCING ACTIVITIES
Principal payments on debt................................ (70) (187) (207)
Proceeds from bank loans.................................. 476 130 330
Distributions............................................. (3,472) (3,058) (5,170)
------- ------- -------
Net cash used in financing activities....................... (3,066) (3,115) (5,047)
------- ------- -------
Net increase (decrease) in cash and cash equivalents........ (1,526) 1,720 (490)
Cash at beginning of year................................... 2,774 1,248 2,968
------- ------- -------
Cash at end of year......................................... $ 1,248 $ 2,968 $ 2,478
======= ======= =======
</TABLE>
The accompanying notes are an integral part of this statement.
F-18
<PAGE> 127
STANDARD PARKING
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(IN THOUSANDS)
NOTE 1--NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation--The financial statements of Standard Parking have
been prepared in connection with the Combination Agreement dated January 15,
1998 between the owners of Standard Parking and APCOA, Inc. The financial
statements include the accounts and activities of the following entities,
exclusive of certain assets not included in the acquisition, as specified and
defined in the Combination Agreement:
Standard Parking, L.P. and consolidated entities:
Central Parking Entities:
Standard Parking I, L.L.C.
Standard Parking II, L.L.C.
Standard Parking/Marina, L.L.C. (ceased operations during 1997)
Standard Parking of Canada, L.P.
Standard Parking Corporation
Standard Auto Park, Inc.
Standard Parking Corporation, MW
Standard Parking Corporation, IL
Standard/Wabash Parking Corporation
Certain business interests, defined as excluded assets in the Combination
Agreement, have not been included in these financial statements as follows:
Standard Parking, L.P.:
Interests in Buckingham Investors Partnership (a partnership) and
Standard Parking/Courthouse, L.L.C. (a limited liability company),
including associated debt of $142.
Standard Parking Corporation:
All assets and liabilities, except for investments in Standard Parking
L.P., Standard Parking I, L.L.C., Standard Parking II, L.L.C., Standard
Parking/Marina L.L.C. and Standard Parking of Canada, L.P.
Because all of the above entities are under the common control and
management of Standard Parking, the financial statements have been combined
based on the historical costs of the underlying entities. All significant
intercompany balances and transactions have been eliminated in the combined
presentation.
In addition, certain other entities under common control are not subject to
the Combination Agreement and have not been included in these financial
statements.
The Combination Agreement states that APCOA, Inc. will acquire the defined
business for $65 million plus 16% of APCOA, Inc.'s common stock.
Standard Parking leases and manages parking facilities located throughout
North America from regional offices in Chicago, Houston, Boston, Los Angeles and
Canada. Standard Parking, L.P. (the "Partnership") was formed pursuant to an
Agreement of Limited Partnership dated January 1, 1994 between Standard Parking
Corporation, as general (and a limited) partner, and SP Associates, as a limited
partner. On formation, the partners contributed to the Partnership cash and
certain assets, net of assumed liabilities, including the rights to management
contracts and parking facility leases previously owned by the general partner.
At December 31, 1997, Standard Parking leased and managed 379 parking
facilities.
Revenue consists primarily of gross receipts from facilities leased by
Standard Parking with terms varying from one to several years and basic and
incentive management fees received from managing parking facilities owned by
related and third parties.
F-19
<PAGE> 128
STANDARD PARKING
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
In preparing financial statements in conformity with generally accepted
accounting principles, management makes estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements, as well as the
reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
A summary of other significant accounting policies is as follows:
Depreciation--For both financial and tax reporting purposes,
depreciation is computed using both the straight-line and accelerated
methods over the estimated useful lives of the assets.
Amortization of Management Contracts--Management contracts acquired
valued at acquisition cost of $561 in accordance with the purchase
agreement are being amortized on the straight-line basis over the average
15 years of expected economic lives of the contracts. The management
contracts are reviewed for impairment based on an assessment of future
operations.
Statement of Cash Flows--For purposes of the statement of cash flows,
all highly liquid debt instruments purchased with a maturity of three
months or less are reflected as cash equivalents.
Deferred Compensation--Standard Parking is contractually committed to
pay additional compensation to certain key employees for a defined period
of time after retirement. The liability for deferred compensation
represents the present value of the payments required to meet the
contractual requirements earned by the employees.
Funds Held on Behalf of Managed Facilities--Standard Parking holds
funds as a deposit for certain managed facilities which usually represents
one month's payroll to be incurred by Standard Parking on behalf of the
facility.
Financial Instruments--Standard Parking believes the book value of its
cash equivalents, current receivables, accounts payable and accrued
expenses and other current liabilities approximates fair value due to their
short-term nature. The book value of its long-term receivables and
obligations approximates their fair value as the current interest rates
approximate rates at which similar types of borrowing arrangements could be
currently obtained.
NOTE 2--PROPERTY AND EQUIPMENT:
Office and parking facility equipment and leasehold improvements consisted
of the following:
<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIFE 1996 1997
<S> <C> <C> <C>
Furniture, fixtures and vehicles.................... 1 to 7 years $ 570 $ 577
Machinery and equipment............................. 1 to 5 years 359 395
Computer equipment and software..................... 1 to 5 years 500 878
Improvements........................................ 1 to 13 years 281 268
------ ------
1,710 2,118
Accumulated depreciation............................ 696 948
------ ------
$1,014 $1,170
====== ======
</TABLE>
Depreciation expense was $273 in 1995, $314 in 1996 and $336 in 1997.
Depreciation expense includes loss on sale/abandonment of fixed assets of $40 in
1995, $15 in 1996 and $53 in 1997.
F-20
<PAGE> 129
STANDARD PARKING
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
NOTE 3--NOTES RECEIVABLE:
Notes receivable at December 31, 1996 and 1997 were as follows:
<TABLE>
<CAPTION>
1996 1997
<S> <C> <C>
(a) Relating to the financing of parking facility
maintenance equipment utilized at facilities managed by
Standard Parking. The notes, secured by the equipment,
call for monthly payments of principal and interest (at
rates ranging from 7.5% to 10.5%) with final payments
being due in 2001....................................... $306 $250
(b) Unsecured note from a third party calling for monthly
payments of interest (at 7%) with entire balance being
due in 1998............................................. 50 50
---- ----
356 300
Less current portion........................................ 60 116
---- ----
$296 $184
==== ====
</TABLE>
Future scheduled receipts are $76 in 1999, $78 in 2000 and $30 in 2001.
NOTE 4--ACCOUNTS RECEIVABLE--OTHER:
Accounts receivable--other at December 31, 1996 and 1997 were as follows:
<TABLE>
<CAPTION>
1996 1997
<S> <C> <C>
Customer receivables........................................ $ 165 $ 588
Insurance receivables....................................... 715 885
Other accounts receivable................................... 263 568
------ ------
$1,143 $2,041
====== ======
</TABLE>
NOTE 5--ACCOUNTS PAYABLE AND ACCRUED EXPENSES:
Accounts payable and accrued expenses at December 31, 1996 and 1997 were as
follows:
<TABLE>
<CAPTION>
1996 1997
<S> <C> <C>
Accrued payroll............................................. $ 412 $ 673
Accrued payroll--managed facilities......................... 0 633
Parking tax withheld........................................ 288 387
Accrued real estate tax..................................... 277 199
Other accounts payable and accrued expenses................. 631 521
------ ------
$1,608 $2,413
====== ======
</TABLE>
Accrued payroll for managed facilities represents funds held by Standard
Parking as of December 31, 1997 which were expended in January 1998 on behalf of
its managed facilities.
NOTE 6--DEBT ARRANGEMENTS:
During 1995, Standard Parking borrowed $476 from LaSalle National Bank to
finance the acquisition of management contracts. The note is payable in monthly
installments of $13, plus interest at the prime rate over three years, with the
final payment being due in 1998.
Additionally, Standard Parking borrowed $130 from Amalgamated Bank of
Chicago during 1996. The proceeds were loaned to one of Standard Parking's
managed facilities to finance the purchase of equipment (see Note 3). The
unsecured note is payable in monthly installments of $2 plus interest at the
prime rate over five years, with the final payment being due in 2001.
F-21
<PAGE> 130
STANDARD PARKING
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
During 1997, Standard Parking borrowed $330 from LaSalle National Bank
under a $500 line of credit. The line is due on July 8, 1998 with payments of
interest at the prime rate, which was 8.5% during 1997, being due monthly.
The prime rates of interest in effect pertaining to the above bank debt at
December 31, 1996 and 1997 were 8.25% and 8.5%, respectively.
Future payments on the installment loans are $26 in 1999 and 2000 and $18
in 2001.
NOTE 7--RELATED-PARTY TRANSACTIONS:
Amounts due from related parties were as follows:
<TABLE>
<CAPTION>
1996 1997
<S> <C> <C>
Relating to the financing of parking facility maintenance
equipment utilized at a facility managed by Standard
Parking and owned by a related party. The note, secured by
the equipment, calls for monthly payments of principal and
interest at 9.25%, with a final payment being due in
1999...................................................... $ 30 $ 15
Advances to affiliates and employees, no stated repayment
terms..................................................... 153 211
Management fees and other amounts due from related party
managed and leased facilities, due currently.............. 864 911
------ ------
1,047 1,137
Less current maturities..................................... 879 919
------ ------
$ 168 $ 218
====== ======
</TABLE>
Amounts due to related parties were as follows:
<TABLE>
<CAPTION>
1996 1997
<S> <C> <C>
Short term operating advances payable....................... $ 48 $ 50
Unsecured loan payable. The loan terms call for monthly
repayment of principal and interest at 12% per year with
final payment being due in 2000........................... 104 82
---- ----
152 132
Less current maturities..................................... 70 75
---- ----
$ 82 $ 57
==== ====
</TABLE>
Future payments pertaining to the unsecured loan payable are $27 in 1999
and $30 in 2000.
Management and consulting fee income relating to management of facilities
controlled by related parties amounted to $1,801, $1,332 and $1,329 during 1995,
1996 and 1997, respectively. These amounts are included with "management and
consulting fees and other parking services revenue" on the statement of income.
Rent expense incurred relating to parking facilities leased from related
parties under short term leases renewable annually amounted to $5,464, $7,628
and $13,403 during 1995, 1996 and 1997, respectively. These expenses are
included with cost of parking services on the statement of income. Minimum lease
payments relating to these leases will approximate $15,808 during 1998.
F-22
<PAGE> 131
STANDARD PARKING
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
NOTE 8--LEASE COMMITMENTS:
Standard Parking leases several parking and office facilities throughout
North America from both related and third parties under leases expiring over
various dates through 2010. Future minimum lease payments are approximately as
follows:
<TABLE>
<S> <C>
1998............................................... $23,326
1999............................................... 5,555
2000............................................... 997
2001............................................... 413
2002............................................... 333
Thereafter......................................... 1,887
-------
$32,511
=======
</TABLE>
In addition to the minimum rental payments, Standard Parking, as designated
in certain of the leases, is responsible for the payment of percentage rent,
real estate taxes, maintenance and operating costs. Total rent expense for 1995,
1996 and 1997 was $20,969, $24,428, and $34,589, respectively, of which $5,173,
$6,753 and $7,634, respectively, related to percentage rent.
Standard Parking relocated its Chicago administrative headquarters to new
leased offices in November 1995. The loss on vacating the old leased space of
approximately $408, which includes rent due until the scheduled lease expiration
date, net of sublease income, was charged to operations during 1995. The new
headquarters office lease requires minimum annual rentals (exclusive of
escalation charges) on an increasing scale. Such total minimum rentals payable
for the lease period from October 1, 1995 through September 30, 2010 are being
amortized to expense in approximately equal installments each month.
A summary of deferred rent as of December 31, 1996 and 1997 relating to the
old and new facilities is as follows:
<TABLE>
<CAPTION>
1996 1997
<S> <C> <C>
Rent accrued on the vacated leased space net of sublease
income.................................................... $205 $ 69
Deferred rent on new leased space........................... 196 354
---- ----
401 423
Less amount due currently................................. 136 28
---- ----
Deferred rent--long-term portion............................ $265 $395
==== ====
</TABLE>
NOTE 9--EMPLOYEE BENEFIT PLAN:
Standard Parking maintains a qualified Section 401(k) Plan which benefits
all eligible employees. Under the plan, Standard Parking partially matches
employee contributions. For 1995, 1996 and 1997, management authorized an
employer match of employee contributions at the rate of 50% of the first 4% of
eligible wages. Standard Parking contributions to the plan were $41, $42 and $53
for 1995, 1996 and 1997, respectively.
NOTE 10--INCOME TAXES:
Under the provisions of the Internal Revenue Code, the affiliated companies
combined herein, which are all partnerships or Subchapter S corporations, pay no
federal income taxes and their net income and losses (including the distributive
shares resulting from its ownership as a member in the subsidiary limited
liability companies, which file partnership income tax returns) are reportable
in the tax returns of the respective partners and shareholders. However, the
partnerships and the affiliated companies are subject to state income taxes.
F-23
<PAGE> 132
=========================================================
NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE INITIAL PURCHASERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
SECURITIES TO WHICH IT RELATES, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO ITS DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.................... 4
Prospectus Summary....................... 5
Risk Factors............................. 15
The Exchange Offer....................... 21
Certain Federal Income Tax Consequences
of the Exchange Offer.................. 27
The Transactions......................... 28
Use of Proceeds.......................... 29
Capitalization........................... 30
Selected Historical Financial Data of
APCOA.................................. 31
Management's Discussion and Analysis of
Financial Condition and Results of
Operations of APCOA.................... 32
Selected Historical Financial Data of
Standard............................... 37
Management's Discussion and Analysis of
Financial Condition and Results of
Operations of Standard................. 38
Business................................. 40
Management............................... 48
Security Ownership of Certain Beneficial
Holders and Management................. 56
Certain Relationships and Related Party
Transactions........................... 57
Description of Indebtedness.............. 61
Description of New Notes................. 62
Description of Certain Federal Income Tax
Consequences........................... 92
Plan of Distribution..................... 95
Legal Matters............................ 96
Experts.................................. 96
Index of Certain Defined Terms........... 97
Index to Unaudited Pro Forma Consolidated
Financial Statements................... P-1
Index to Historical Financial
Statements............................. F-1
</TABLE>
=========================================================
=========================================================
$140,000,000
APCOA, INC.
---------------------------------------------
OFFER TO EXCHANGE
---------------------------------------------
9 1/4% NEW SENIOR SUBORDINATED
NOTES DUE 2008
, 1998
=========================================================
<PAGE> 133
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
(the "DGCL"), provides that a corporation (in its original certificate of
incorporation or an amendment thereto) may eliminate or limit the personal
liability of a director (or certain persons who, pursuant to the provisions of
the certificate of incorporation, exercise or perform duties conferred or
imposed upon directors by the DGCL) to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided that such
provisions shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its stockbrokers,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL
(providing for liability of directors for unlawful payment of dividends or
unlawful stock purchases or redemptions) or (iv) for any transaction from which
the director derived an improper personal benefit. Article VIII, Section 1 of
the Company's Certificate of Incorporation limits the liability of directors
thereof to the extent permitted by Section 102(b)(7) of the DGCL.
Under Section 145 of the DGCL, in general, a corporation may indemnify its
directors, officers, employees or agents against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties to which they may be made parties by reason of their being or
having been directors, officers, employees or agents and shall so indemnify such
persons if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interest of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful. Article VIII, Section 2(a) of the Certificate of
Incorporation of the Company provides that the Company shall indemnify its
officers, directors, employees and agents to the full extent permitted by
Delaware law.
Article VIII, Section 2(a) of the Company's Certificate of Incorporation
also provides that the Company shall indemnify any such person seeking
indemnification in connection with a proceeding initiated by such person only if
such proceeding was authorized by the Board. Any rights to indemnification
conferred in Section 2 are contract rights, and include the right to be paid by
the Company the expenses incurred in defending any such proceeding in advance of
its final disposition, except that, if the DGCL requires, the payment of such
expenses incurred by a director or officer in such capacity in advance of final
disposition shall be made only upon delivery to the Company of an undertaking by
or on behalf of such director or officer, to repay all amounts so advanced if it
is ultimately determined that such director or officer is not entitled to be
indemnified under Section 2 or otherwise. By action of the board of directors,
the Company may extend such indemnification to employees and agents of the
Company.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
<TABLE>
<C> <S>
1.1 Purchase Agreement, by and among the Company, the Subsidiary
Guarantors, Donaldson, Lufkin & Jenrette Securities
Corporation and First Chicago Capital Markets, Inc., dated
as of March 25, 1998.
2.1 Combination Agreement, dated as of January 15, 1998, by and
between APCOA, Inc. and the Standard Owners.
3.1 Amended and Restated Certificate of Incorporation of the
Company.
3.2 By-Laws of the Company.
3.3 Articles of Incorporation of Tower Parking, Inc.
3.4 Code of Regulations of Tower Parking, Inc.
3.5 Articles of Incorporation of Graelic, Inc.
</TABLE>
II-1
<PAGE> 134
<TABLE>
<C> <S>
3.6 Code of Regulations of Graelic, Inc.
3.7 Certificate of Incorporation of APCOA Capital Corporation.
3.8 By-Laws of APCOA Capital Corporation.
3.9 Articles of Incorporation of A-1 Auto Park, Inc.
3.10 Amended and Restated By-Laws of A-1 Auto Park, Inc.
3.11 Articles of Organization of Metropolitan Parking System, Inc.
3.12 By-Laws of Metropolitan Parking System, Inc.
3.13 Articles of Organization of Events Parking Company, Inc.
3.14 By-Laws of Events Parking Company, Inc.
3.15 Agreement of Limited Partnership of Standard Parking, L.P.
3.16 Articles of Incorporation of Standard Parking Corporation.
3.17 Amended and Restated By-laws of Standard Parking Corporation.
3.18 Articles of Incorporation of Standard Parking Corporation MW.
3.19 By-laws of Standard Parking Corporation MW.
3.20 Articles of Incorporation of Standard Parking Corporation IL.
3.21 By-laws of Standard Parking Corporation IL.
3.22 Articles of Incorporation of Standard Auto Park, Inc.
3.23 Amended and Restated By-laws of Standard Auto Park, Inc.
3.24 Articles of Incorporation of Standard/Wabash Parking Corporation.
3.25 By-laws of Standard/Wabash Parking Corporation.
3.26 Agreement of Limited Partnership of Standard Parking of Canada, L.P.
3.27 Operating Agreement of Standard Parking I, L.L.C.
3.28 Operating Agreement of Standard Parking II, L.L.C.
4.1 Indenture, dated as of March 30, 1998, by and among the Company, the Subsidiary Guarantors and State
Street Bank and Trust Company, with respect to the New Notes.
4.2 Form of New Note (included as Exhibit A to Exhibit 4.1).
4.3 Form of New Note Guarantee (included as Exhibit D to Exhibit 4.1).
5.1 Opinion of Wachtell, Lipton, Rosen & Katz.*
10.1 Registration Rights Agreement, dated as of March 30, 1998, by and among the Company, the Subsidiary
Guarantors, Donaldson, Lufkin & Jenrette Securities Corporation and First Chicago Capital Markets, Inc.
10.2 Credit Agreement, dated as of March 30, 1998, by and among the Company, The First National Bank of
Chicago, as Agent and Lender, and the Other Institutions party thereto.
10.3 Stockholders Agreement, dated as of March 30, 1998, by and among Dosher Partners, L.P. and SP Associates
and Holberg, Holdings and the Company.
10.4 Stockholders Agreement, dated as of April 14, 1989, by and among Holdings, Holberg, Delaware North and
each member of the management of the Company who is a stockholder of Holdings.
10.5 Tax Sharing Agreement, dated as of April 28, 1989, as amended as of March 30, 1998, by and among Holberg,
Holdings and the Company.
10.6 Employment Agreement between the Company and Myron C. Warshauer.
10.7 Employment Agreement between the Company and G. Walter Stuelpe, Jr.
10.8 Employment Agreement between the Company and James V. LaRocco, Jr.
10.9 Employment Agreement between the Company and Trevor R. Van Horn.
10.10 Employment Agreement between the Company and Herbert W. Anderson, Jr.
</TABLE>
II-2
<PAGE> 135
<TABLE>
<C> <S>
10.11 Employment Agreement between the Company and Michael J. Celebrezze.
10.12 Employment Agreement between the Company and Michael K. Wolf.
10.13 Deferred Compensation Agreement between the Company and Michael K. Wolf.
10.14 Company Retirement Plan For Key Executive Officers.
10.15 Consulting Agreement between the Company and Sidney Warshauer.
12.1 Statements re computation of ratios.
21.1 Subsidiaries of the Company.*
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Altschuler, Melvoin and Glasser LLP.
23.3 Consent of Wachtell, Lipton, Rosen & Katz (contained in Exhibit 5.1).
24.1 Power of Attorney (see signature pages).
25.1 Statement of Eligibility and Qualification of Trustee on Form T-1 of State Street Bank and Trust Company
under the Trust Indenture Act of 1939.
27.1 Financial Data Schedule.
99.1 Form of Letter of Transmittal for the 9 1/4% New Senior Subordinated Notes due 2008.
99.2 Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
99.3 Form of Notice of Guaranteed Delivery.
</TABLE>
- ---------------
* To be filed by amendment.
(b) Financial Statement Schedule.
ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-3
<PAGE> 136
(b) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
(c) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore unenforceable. In the
event that a claim for indemnification against such liabilities (other than
payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE> 137
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio,
on April 17, 1998.
APCOA, INC.
By /s/ MYRON C. WARSHAUER
------------------------------------
Myron C. Warshauer
Chief Executive Officer and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his
attorney-in-fact with power of substitution for him in any and all capacities,
to sign any amendments, supplements, subsequent registration statements relating
to the offering to which this Registration Statement relates, or other
instruments he deems necessary or appropriate, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on April 17, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ MYRON C. WARSHAUER Chief Executive Officer and Director
- ----------------------------------------------------- (Principal Executive Officer)
Myron C. Warshauer
/s/ G. WALTER STUELPE, JR. President and Director
- -----------------------------------------------------
G. Walter Stuelpe, Jr.
/s/ MICHAEL J. CELEBREZZE Chief Financial Officer and Executive Vice
- ----------------------------------------------------- President (Principal Financial and Accounting
Michael J. Celebrezze Officer)
/s/ JOHN V. HOLTEN Chairman and Director
- -----------------------------------------------------
John V. Holten
/s/ GUNNAR E. KLINTBERG Vice President and Director
- -----------------------------------------------------
Gunnar E. Klintberg
/s/ PATRICK J. MEARA Director
- -----------------------------------------------------
Patrick J. Meara
</TABLE>
II-5
<PAGE> 138
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio,
on April 17, 1998.
TOWER PARKING, INC.
By /s/ G. WALTER STUELPE, JR.
------------------------------------
G. Walter Stuelpe, Jr.
President and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his
attorney-in-fact with power of substitution for him in any and all capacities,
to sign any amendments, supplements, subsequent registration statements relating
to the offering to which this Registration Statement relates, or other
instruments he deems necessary or appropriate, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on April 17, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ G. WALTER STUELPE, JR. President and Director
- ----------------------------------------------------- (Principal Executive Officer)
G. Walter Stuelpe, Jr.
/s/ MICHAEL J. CELEBREZZE Vice President and Treasurer
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
/s/ JOHN V. HOLTEN Director
- -----------------------------------------------------
John V. Holten
/s/ GUNNAR E. KLINTBERG Director
- -----------------------------------------------------
Gunnar E. Klintberg
</TABLE>
II-6
<PAGE> 139
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio,
on April 17, 1998.
APCOA CAPITAL CORPORATION
By /s/ G. WALTER STUELPE, JR.
------------------------------------
G. Walter Stuelpe, Jr.
President and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his
attorney-in-fact with power of substitution for him in any and all capacities,
to sign any amendments, supplements, subsequent registration statements relating
to the offering to which this Registration Statement relates, or other
instruments he deems necessary or appropriate, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on April 17, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ G. WALTER STUELPE, JR. President and Director (Principal Executive
- ----------------------------------------------------- Officer)
G. Walter Stuelpe, Jr.
/s/ MICHAEL J. CELEBREZZE Vice President and Treasurer (Principal
- ----------------------------------------------------- Financial and Accounting Officer)
Michael J. Celebrezze
/s/ JOHN V. HOLTEN Director
- -----------------------------------------------------
John V. Holten
/s/ GUNNAR E. KLINTBERG Director
- -----------------------------------------------------
Gunnar E. Klintberg
</TABLE>
II-7
<PAGE> 140
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio,
on April 17, 1998.
GRAELIC, INC.
By /s/ JAMES V. LAROCCO, JR.
------------------------------------
James V. LaRocco, Jr.
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his
attorney-in-fact with power of substitution for him in any and all capacities,
to sign any amendments, supplements, subsequent registration statements relating
to the offering to which this Registration Statement relates, or other
instruments he deems necessary or appropriate, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following person in the capacities
indicated and on April 17, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ JAMES V. LAROCCO, JR. President
- ----------------------------------------------------- (Principal Executive Officer)
James V. LaRocco, Jr.
/s/ G. WALTER STUELPE, JR. Vice President and Director
- -----------------------------------------------------
G. Walter Stuelpe, Jr.
/s/ MICHAEL J. CELEBREZZE Vice President, Treasurer and Director
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
/s/ ROBERT N. SACKS Secretary and Director
- -----------------------------------------------------
Robert N. Sacks
</TABLE>
II-8
<PAGE> 141
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio,
on April 17, 1998.
A-I AUTO PARK, INC.
By /s/ G. WALTER STUELPE, JR.
------------------------------------
G. Walter Stuelpe, Jr.
President and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his
attorney-in-fact with power of substitution for him in any and all capacities,
to sign any amendments, supplements, subsequent registration statements relating
to the offering to which this Registration Statement relates, or other
instruments he deems necessary or appropriate, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following person in the capacities
indicated and on April 17, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ G. WALTER STUELPE, JR. President and Director
- ----------------------------------------------------- (Principal Executive Officer)
G. Walter Stuelpe, Jr.
/s/ MICHAEL J. CELEBREZZE Vice President, Treasurer and Director
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
/s/ ROBERT N. SACKS Secretary and Director
- -----------------------------------------------------
Robert N. Sacks
</TABLE>
II-9
<PAGE> 142
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio,
on April 17, 1998.
EVENTS PARKING COMPANY, INC.
By /s/ EDWARD P. SETTINO, JR.
------------------------------------------
Edward P. Settino, Jr.
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his
attorney-in-fact with power of substitution for him in any and all capacities,
to sign any amendments, supplements, subsequent registration statements relating
to the offering to which this Registration Statement relates, or other
instruments he deems necessary or appropriate, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on April 17, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ EDWARD P. SETTINO, JR. President
- ----------------------------------------------------- (Principal Executive Officer)
Edward P. Settino, Jr.
/s/ G. WALTER STUELPE, JR. Vice President and Director
- -----------------------------------------------------
G. Walter Stuelpe, Jr.
/s/ MICHAEL J. CELEBREZZE Treasurer and Director
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
/s/ ROBERT N. SACKS Director
- -----------------------------------------------------
Robert N. Sacks
</TABLE>
II-10
<PAGE> 143
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio,
on April 17, 1998.
METROPOLITAN PARKING SYSTEM, INC.
By /s/ EDWARD P. SETTINO, JR.
------------------------------------------
Edward P. Settino, Jr.
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his
attorney-in-fact with power of substitution for him in any and all capacities,
to sign any amendments, supplements, subsequent registration statements relating
to the offering to which this Registration Statement relates, or other
instruments he deems necessary or appropriate, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on April 17, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ EDWARD P. SETTINO, JR. President
- ----------------------------------------------------- (Principal Executive Officer)
Edward P. Settino, Jr.
/s/ G. WALTER STUELPE, JR. Vice President and Director
- -----------------------------------------------------
G. Walter Stuelpe, Jr.
/s/ MICHAEL J. CELEBREZZE Treasurer and Director
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
/s/ ROBERT N. SACKS Director
- -----------------------------------------------------
Robert N. Sacks
</TABLE>
II-11
<PAGE> 144
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on April 17, 1998.
STANDARD PARKING, L.P.
By /s/ MYRON C. WARSHAUER
------------------------------------
Myron C. Warshauer
President and Director of
Standard Parking Corporation,
General Partner of Standard
Parking, L.P.
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his
attorney-in-fact with power of substitution for him in any and all capacities,
to sign any amendments, supplements, subsequent registration statements relating
to the offering to which this Registration Statement relates, or other
instruments he deems necessary or appropriate, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and April 17, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ MYRON C. WARSHAUER President and Director of Standard Parking
- ----------------------------------------------------- Corporation, General Partner of Standard
Myron C. Warshauer Parking, L.P. (Principal Executive Officer)
/s/ MICHAEL J. CELEBREZZE Assistant Treasurer
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
</TABLE>
II-12
<PAGE> 145
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on April 17, 1998.
STANDARD PARKING CORPORATION
By /s/ MYRON C. WARSHAUER
------------------------------------
Myron C. Warshauer
President and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his
attorney-in-fact with power of substitution for him in any and all capacities,
to sign any amendments, supplements, subsequent registration statements relating
to the offering to which this Registration Statement relates, or other
instruments he deems necessary or appropriate, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following person in the capacities
indicated and on April 17, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ MYRON C. WARSHAUER President and Director
- ----------------------------------------------------- (Principal Executive Officer)
Myron C. Warshauer
/s/ MICHAEL J. CELEBREZZE Assistant Treasurer
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
</TABLE>
II-13
<PAGE> 146
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on April 17, 1998.
STANDARD PARKING CORPORATION MW
By /s/ MYRON C. WARSHAUER
------------------------------------
Myron C. Warshauer
President and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his
attorney-in-fact with power of substitution for him in any and all capacities,
to sign any amendments, supplements, subsequent registration statements relating
to the offering to which this Registration Statement relates, or other
instruments he deems necessary or appropriate, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on April 17, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ MYRON C. WARSHAUER President and Director
- --------------------------------------------------- (Principal Executive Officer)
Myron C. Warshauer
/s/ MICHAEL J. CELEBREZZE Assistant Treasurer
- --------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
</TABLE>
II-14
<PAGE> 147
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on April 17, 1998.
STANDARD AUTO PARK, INC.
By /s/ MYRON C. WARSHAUER
----------------------------------------
Myron C. Warshauer
President and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his
attorney-in-fact with power of substitution for him in any and all capacities,
to sign any amendments, supplements, subsequent registration statements relating
to the offering to which this Registration Statement relates, or other
instruments he deems necessary or appropriate, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on April 17, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ MYRON C. WARSHAUER President and Director
- ----------------------------------------------------- (Principal Executive Officer)
Myron C. Warshauer
/s/ MICHAEL J. CELEBREZZE Assistant Treasurer
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
</TABLE>
II-15
<PAGE> 148
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on April 17, 1998.
STANDARD/WABASH PARKING CORPORATION
By /s/ MYRON C. WARSHAUER
----------------------------------------
Myron C. Warshauer
President and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his
attorney-in-fact with power of substitution for him in any and all capacities,
to sign any amendments, supplements, subsequent registration statements relating
to the offering to which this Registration Statement relates, or other
instruments he deems necessary or appropriate, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on April 17, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ MYRON C. WARSHAUER President and Director
- ----------------------------------------------------- (Principal Executive Officer)
Myron C. Warshauer
/s/ MICHAEL J. CELEBREZZE Assistant Treasurer
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
</TABLE>
II-16
<PAGE> 149
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on April 17, 1998.
STANDARD PARKING OF CANADA, L.P.
By /s/ MYRON C. WARSHAUER
------------------------------------
Myron C. Warshauer
President and Director of
Standard Parking Corporation,
General Partner of Standard
Parking of Canada, L.P.
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his
attorney-in-fact with power of substitution for him in any and all capacities,
to sign any amendments, supplements, subsequent registration statements relating
to the offering to which this Registration Statement relates, or other
instruments he deems necessary or appropriate, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on April 17, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ MYRON C. WARSHAUER President and Director of Standard Parking
- --------------------------------------------- Corporation,
Myron C. Warshauer General Partner of Standard Parking of Canada, L.P.
(Principal Executive, Financial and Accounting
Officer)
</TABLE>
II-17
<PAGE> 150
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on April 17, 1998.
STANDARD PARKING I, L.L.C.
By /s/ MYRON C. WARSHAUER
------------------------------------
Myron C. Warshauer
President and Director of
Standard Parking Corporation,
Managing Member of Standard
Parking I, L.L.C.
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his
attorney-in-fact with power of substitution for him in any and all capacities,
to sign any amendments, supplements, subsequent registration statements relating
to the offering to which this Registration Statement relates, or other
instruments he deems necessary or appropriate, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on April 17, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<S> <C>
/s/ MYRON C. WARSHAUER President and Director of Standard Parking
- --------------------------------------------------- Corporation, Managing Member of Standard Parking
Myron C. Warshauer I, L.L.C. (Principal Executive, Financial and
Accounting Officer)
</TABLE>
II-18
<PAGE> 151
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on April 17, 1998.
STANDARD PARKING II, L.L.C.
By /s/ MYRON C. WARSHAUER
------------------------------------
Myron C. Warshauer
President and Director of
Standard Parking Corporation,
Managing Member of Standard
Parking II, L.L.C.
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his
attorney-in-fact with power of substitution for him in any and all capacities,
to sign any amendments, supplements, subsequent registration statements relating
to the offering to which this Registration Statement relates, or other
instruments he deems necessary or appropriate, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on April 17, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<S> <C>
/s/ MYRON C. WARSHAUER President and Director of Standard Parking
- --------------------------------------------------- Corporation, Managing Member of Standard Parking
Myron C. Warshauer II, L.L.C.
(Principal Executive, Financial and Accounting
Officer)
</TABLE>
II-19
<PAGE> 152
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We have audited the consolidated financial statements of APCOA, Inc. (the
Company) as of December 31, 1996 and 1997, and for each of the three years in
the period ended December 31, 1997, and have issued our report thereon dated
February 3, 1998 (included elsewhere in this Registration Statement). Our audit
also included the financial statement schedule for each of the three years in
the period ended December 31, 1997, listed in Item 21(b) of this Registration
Statement. This schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
Cleveland, Ohio ERNST & YOUNG LLP
February 3, 1998
II-20
<PAGE> 153
SCHEDULE II
APCOA, INC.
VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
ADDITIONS
-----------------------
BALANCE AT CHARGED TO CHARGED TO BALANCE
BEGINNING COSTS AND OTHER AT END
DESCRIPTION OF YEAR EXPENSES ACCOUNTS DEDUCTIONS(1) OF YEAR
----------- ---------- ---------- ---------- ------------- -------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1995:
Deducted from asset accounts
Allowance for doubtful accounts............. $369 $101 $ -- $(68) $402
==== ==== ==== ==== ====
Year ended December 31, 1996:
Deducted from asset accounts
Allowance for doubtful accounts............. $402 $ 7 $ -- $(94) $315
==== ==== ==== ==== ====
Year ended December 31, 1997:
Deducted from asset accounts
Allowance for doubtful accounts............. $315 $139 $ -- $(11) $443
==== ==== ==== ==== ====
</TABLE>
- ---------------
(1) Represents uncollectible accounts written off, net of recoveries.
II-21
<PAGE> 154
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
<C> <S> <C>
1.1 Purchase Agreement, by and among the Company, the Subsidiary
Guarantors, Donaldson, Lufkin & Jenrette Securities
Corporation and First Chicago Capital Markets, Inc., dated
as of March 25, 1998.
2.1 Combination Agreement, dated as of January 15, 1998, by and
between APCOA, Inc. and the Standard Owners.
3.1 Amended and Restated Certificate of Incorporation of the
Company.
3.2 By-Laws of the Company.
3.3 Articles of Incorporation of Tower Parking, Inc.
3.4 Code of Regulations of Tower Parking, Inc.
3.5 Articles of Incorporation of Graelic, Inc.
3.6 Code of Regulations of Graelic, Inc.
3.7 Certificate of Incorporation of APCOA Capital Corporation.
3.8 By-Laws of APCOA Capital Corporation.
3.9 Articles of Incorporation of A-1 Auto Park, Inc.
3.10 Amended and Restated By-Laws of A-1 Auto Park, Inc.
3.11 Articles of Organization of Metropolitan Parking System,
Inc.
3.12 By-Laws of Metropolitan Parking System, Inc.
3.13 Articles of Organization of Events Parking Company, Inc.
3.14 By-Laws of Events Parking Company, Inc.
3.15 Agreement of Limited Partnership of Standard Parking, L.P.
3.16 Articles of Incorporation of Standard Parking Corporation.
3.17 Amended and Restated By-Laws of Standard Parking
Corporation.
3.18 Articles of Incorporation of Standard Parking Corporation
MW.
3.19 By-laws of Standard Parking Corporation MW.
3.20 Articles of Incorporation of Standard Parking Corporation
IL.
3.21 By-laws of Standard Parking Corporation IL.
3.22 Articles of Incorporation of Standard Auto Park, Inc.
3.23 Amended and Restated By-Laws of Standard Auto Park, Inc.
3.24 Articles of Incorporation of Standard/Wabash Parking
Corporation.
3.25 By-laws of Standard/Wabash Parking Corporation.
3.26 Agreement of Limited Partnership of Standard Parking of
Canada, L.P.
3.27 Operating Agreement of Standard Parking I, L.L.C.
3.28 Operating Agreement of Standard Parking II, L.L.C.
4.1 Indenture, dated as of March 30, 1998, by and among the
Company, the Subsidiary Guarantors and State Street Bank and
Trust Company, with respect to the New Notes.
4.2 Form of New Note (included as Exhibit A to Exhibit 4.1).
4.3 Form of New Note Guarantee (included as Exhibit D to Exhibit
4.1).
5.1 Opinion of Wachtell, Lipton, Rosen & Katz.*
</TABLE>
<PAGE> 155
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
<C> <S> <C>
10.1 Registration Rights Agreement, dated as of March 30, 1998,
by and among the Company, the Subsidiary Guarantors,
Donaldson, Lufkin & Jenrette Securities Corporation and
First Chicago Capital Markets, Inc.
10.2 Credit Agreement, dated as of March 30, 1998, by and among
the Company, The First National Bank of Chicago, as Agent
and Lender, and the Other Institutions party thereto.
10.3 Stockholders Agreement, dated as of March 30, 1998, by and
among Dosher Partners, L.P. and SP Associates and Holberg,
Holdings and the Company.
10.4 Stockholders Agreement, dated as of April 14, 1989, by and
among Holdings, Holberg, Delaware North and each member of
the management of the Company who is a stockholder of
Holdings.
10.5 Tax Sharing Agreement, dated as of April 28, 1989, as
amended as of March 30, 1998, by and among Holberg, Holdings
and the Company.
10.6 Employment Agreement between the Company and Myron C.
Warshauer.
10.7 Employment Agreement between the Company and G. Walter
Stuelpe, Jr.
10.8 Employment Agreement between the Company and James V.
LaRocco, Jr.
10.9 Employment Agreement between the Company and Trevor R. Van
Horn.
10.10 Employment Agreement between the Company and Herbert W.
Anderson, Jr.
10.11 Employment Agreement between the Company and Michael J.
Celebrezze.
10.12 Employment Agreement between the Company and Michael K.
Wolf.
10.13 Deferred Compensation Agreement between the Company and
Michael K. Wolf.
10.14 Company Retirement Plan For Key Executive Officers.
10.15 Consulting Agreement between the Company and Sidney
Warshauer.
12.1 Statements re computation of ratios.
21.1 Subsidiaries of the Company.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Altschuler, Melvoin and Glasser LLP.
23.3 Consent of Wachtell, Lipton, Rosen & Katz (contained in
Exhibit 5.1).
24.1 Power of Attorney (see signature pages).
25.1 Statement of Eligibility and Qualification of Trustee on
Form T-1 of State Street Bank and Trust Company under the
Trust Indenture Act of 1939.
27.1 Financial Data Schedule.
99.1 Form of Letter of Transmittal for the 9 1/4% New Senior
Subordinated Notes due 2008.
99.2 Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
99.3 Form of Notice of Guaranteed Delivery.
</TABLE>
- ---------------
* To be filed by amendment.
(b) Financial Statement Schedule.
<PAGE> 1
EXECUTION COPY
================================================================================
APCOA, INC.
-----------------
$140,000,000
9 1/4% Senior Subordinated Notes due 2008
-----------------
----------
PURCHASE AGREEMENT
DATED AS OF MARCH 25, 1998
----------
Donaldson, Lufkin & Jenrette
Securities Corporation
First Chicago Capital Markets, Inc.
================================================================================
<PAGE> 2
APCOA, Inc.
$140,000,000 Principal Amount of
9 1/4% Senior Subordinated Notes Due 2008
PURCHASE AGREEMENT
March 25, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
FIRST CHICAGO CAPITAL MARKETS, INC.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
APCOA, Inc., a Delaware corporation (the "Company"), proposes to issue and
sell an aggregate of $140,000,000 in principal amount of 9 1/4% Senior
Subordinated Notes due 2008 (the "Senior Subordinated Notes") of the Company, to
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") and First Chicago
Capital Markets, Inc. ("First Chicago", and together with DLJ, the "Initial
Purchasers") to be issued pursuant to an indenture (the "Indenture") between the
Company, each of the subsidiaries of the Company noted on Schedule I hereto (the
"Subsidiary Guarantors") and State Street Bank and Trust Company, as trustee
(the "Trustee"). The Senior Subordinated Notes and the New Senior Subordinated
Notes (as defined below) issuable in exchange therefor are collectively referred
to herein as the "Notes." The Notes will be guaranteed on a senior subordinated
basis by the Subsidiary Guarantors pursuant to their guarantee (the "Note
Guarantees"). The Notes and the Note Guarantees are hereinafter collectively
referred to as the "Securities." Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Indenture.
The Senior Subordinated Notes are being issued and sold in connection with
a combination (the "Combination") pursuant to the terms and conditions contained
in a combination agreement (the "Combination Agreement"), pursuant to which the
Company will acquire all of the outstanding capital stock, partnership and other
equity interests of Standard Parking Corporation, an Illinois corporation;
Standard Auto Park, Inc., an Illinois corporation; Standard Parking Corporation,
MW, an Illinois corporation; Standard Parking L.P., a Delaware limited
partnership; Standard Parking Corporation, IL, an Illinois corporation; and
Standard/Wabash Parking Corporation, an Illinois corporation (all such interests
collectively, "Standard").
The net proceeds to the Company from the sale to the Initial Purchasers of
the Senior Subordinated Notes (the "Proceeds") will be used by the Company: (i)
to fund the cash purchase portion of the consideration payable in connection
with the Combination; (ii) to repay certain indebtedness; (iii) for general
corporate purposes, including working capital needs and
<PAGE> 3
future acquisitions; (iv) to redeem preferred stock held by Holberg; and (v) no
pay fees and expenses in connection with the Transactions.
1. ISSUANCE OF SECURITIES. The Senior Subordinated Notes will be offered
and sold to the Initial Purchasers pursuant to an exemption from the
registration requirements under the Securities Act of 1933, as amended (the
"Act"). The Company has prepared a preliminary offering memorandum, dated March
13, 1998 (the "Preliminary Offering Memorandum") and a final offering
memorandum, dated March 25, 1998 (the "Offering Memorandum" and, together with
the Preliminary Offering Memorandum, the "Offering Documents"), relating to the
Senior Subordinated Notes.
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Act, the Senior
Subordinated Notes (and all securities issued in exchange therefor, in
substitution thereof or upon conversion thereof) shall bear the following
legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1) (a) INSIDE THE UNITED STATES TO A PERSON
WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 904 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF THE SECURITIES
ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR") THAT, PRIOR
-2-
<PAGE> 4
TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (e) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND IN THE CASE OF CLAUSE (b), (c), (d), or (e), BASED
UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY
OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM
IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH
IN (A) ABOVE."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the representations,
warranties and covenants contained in this Agreement, and subject to the terms
and conditions contained herein, the Company agrees to issue and sell to the
Initial Purchasers, and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Company, the principal amounts of Senior
Subordinated Notes set forth opposite the name of Such Initial Purchasers on
Schedule II hereto at a purchase price equal to 100% of the principal amount
thereof (the "Purchase Price").
3. TERMS OF OFFERING. The Initial Purchasers will make offers (the "Exempt
Resales") of the Senior Subordinated Notes purchased hereunder on the terms set
forth in the Offering Memorandum, as amended or supplemented, solely to persons
(each, a "144A Purchaser") whom the Initial Purchasers reasonably believe to be
"qualified institutional buyers" as defined in Rule 144A under the Act ("QIBs")
or persons otherwise exempt under Regulation S of the Securities Act (together
with QIBs, "Eligible Purchasers"). The Initial Purchasers will offer the Senior
Subordinated Notes to Eligible Purchasers initially at a price equal to 100% of
the principal amount thereof. Such price may be changed at any time without
notice.
Holders (including subsequent transferees) of the Senior Subordinated
Notes will have the registration rights set forth in the registration rights
agreement (the "Registration Rights Agreement"), to be dated the Closing Date
(as defined below), in substantially the form of Exhibit A hereto, for so long
as such Senior Subordinated Notes constitute "Transfer Restricted Securities"
(as defined in the Registration Rights Agreement). Pursuant to the Registration
Rights Agreement, the Company will agree to file with the Securities and
Exchange Commission (the
-3-
<PAGE> 5
"Commission") under the circumstances set forth therein, (i) a registration
statement under the Act (the "Exchange Offer Registration Statement") relating
to the Company's 9 1/4% new Senior Subordinated Notes due 2008 (the "New Senior
Subordinated Notes") to be offered in exchange for the Senior Subordinated
Notes, (such offer to exchange being referred to as the "Registered Exchange
Offer") and (ii) a shelf registration statement pursuant to Rule 415 under the
Act (the "Shelf Registration Statement" and, together with the Exchange Offer
Registration Statement, the "Registration Statements") relating to the resale by
certain holders of the Senior Subordinated Notes, and to use their best efforts
to cause such Registration Statements to be declared effective and consummate
the Registered Exchange Offer. This Agreement, the Indenture, the Notes, the
Note Guarantees and the Registration Rights Agreement are hereinafter referred
to collectively as the "Operative Documents."
4. DELIVERY AND PAYMENT. (a) Delivery of, and payment of the Purchase
Price for, the Senior Subordinated Notes shall be made at the offices of
Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New York or at
such other location as may be mutually acceptable. Such delivery and payment
shall be made at 9:00 a.m. New York City time, on March 30, 1998 or at such
other time as shall be agreed upon by the Company and the Initial Purchasers.
The time and date of such delivery and the payment are herein called the
"Closing Date."
(b) One or more Senior Subordinated Notes in definitive form,
registered in the name of Cede & Co., as nominee of the Depository Trust Company
("DTC"), or such other names as the Initial Purchasers may request upon at least
one business day's notice to the Company, having an aggregate principal amount
corresponding to the aggregate principal amount of Senior Subordinated Notes
sold pursuant to Exempt Resales to Eligible Purchasers (collectively, the
"Master Notes"), shall be delivered by the Company to the Initial Purchasers (or
as the Initial Purchasers direct) in each case with any taxes thereon duly paid
by the Company, against payment by the Initial Purchasers of the Purchase Price
thereof by wire transfer in same day funds to the order of the Company or as the
Company may direct. The Master Notes shall be made available to the Initial
Purchasers for inspection not later than 9:30 a.m., New York City time, on the
business day immediately preceding the Closing Date.
5. AGREEMENTS OF THE COMPANY AND THE SUBSIDIARY GUARANTORS. The Company
and the Subsidiary Guarantors, jointly and severally, covenant and agree with
the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested by
the Initial Purchasers, to confirm such advice in writing, (i) of the
issuance by any state securities commission of any stop order suspending
the qualification or exemption from qualification of any of the Senior
Subordinated Notes for offering or sale in any jurisdiction designated by
the Initial Purchasers pursuant to Section 5(e) hereof, or the initiation
of any proceeding for such purpose by any state securities commission or
other regulatory authority and (ii) of the happening of any event that
makes any statement of a material fact made in the Offering Documents (or
any amendment or supplement thereto) untrue or that requires the making of
-4-
<PAGE> 6
any additions to or changes in the Offering Documents (or any amendment or
supplement thereto) in order to make the statements therein, in the light
of the circumstances under which they are made, not misleading. The
Company shall use its best efforts to prevent the issuance of any stop
order or order suspending the qualification or exemption from
qualification of the Senior Subordinated Notes under any state securities
or Blue Sky laws, and, if at any time any state securities commission or
other regulatory authority shall issue any stop order or order suspending
the qualification or exemption from qualification of any of the Senior
Subordinated Notes under any state securities or Blue Sky laws, the
Company shall use its best efforts to obtain the withdrawal or lifting of
such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons identified
by the Initial Purchasers to the Company, without charge, as many copies
of the Offering Documents, and any amendments or supplements thereto, as
the Initial Purchasers may reasonably request. The Company consents to the
use of the Offering Documents, and any amendments or supplements thereto
required pursuant hereto, by the Initial Purchasers in connection with
Exempt Resales.
(c) During such period as in the written opinion of counsel for the
Initial Purchasers an Offering Memorandum is required by law to be
delivered in connection with the Exempt Resales by the Initial Purchasers
and in connection with market-making activities of the Initial Purchasers
for so long as the Senior Subordinated Notes are outstanding (i) not to
amend or supplement the Offering Documents, whether before or after the
Closing Date, unless the Initial Purchasers shall previously have been
advised thereof, and shall not have objected thereto within a reasonable
time after being furnished a copy thereof, and (ii) to promptly prepare,
upon the Initial Purchasers's reasonable request, any amendment or
supplement to the Offering Documents that the Initial Purchasers
reasonably believe necessary or advisable in connection with Exempt
Resales or such market-making activities.
(d) If, after the date hereof and prior to the earlier of the
completion of all Exempt Resales by the Initial Purchasers and the 90th
day after the Closing Date, any event shall occur as a result of which, in
the judgment of the Company or counsel to the Initial Purchasers, it
becomes necessary to amend or supplement the Offering Memorandum in order
to make the statements therein, in the light of the circumstances when
such Offering Memorandum is delivered to an Eligible Purchaser, not
misleading or if it is necessary to amend or supplement the Offering
Memorandum to comply with any law, statute, rule or regulation, to
forthwith prepare an appropriate amendment or supplement to such Offering
Memorandum so that the statements therein, as so amended or supplemented,
will not, in the light of the circumstances when it is so delivered, be
misleading, or so that such Offering Memorandum will comply with
applicable law.
-5-
<PAGE> 7
(e) To cooperate with the Initial Purchasers and counsel to the
Initial Purchasers in connection with the registration or qualification of
the Senior Subordinated Notes under the state securities or Blue Sky laws
of such jurisdictions as the Initial Purchasers may request, to continue
such registration or qualification in effect so long as required for the
Exempt Resales and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification; provided, however, that the Company shall not be required
in connection therewith to register or qualify as a foreign corporation in
any jurisdiction in which the Company is not now so qualified, or take any
action that would subject the Company to general consent to service of
process or taxation, other than as to matters and transactions relating to
Exempt Resales, in any jurisdiction in which the Company is not now so
subject.
(f) For so long as the Notes are outstanding, to furnish without
charge to the Initial Purchasers promptly upon their becoming available
(i) all reports or other publicly available information that the Company
shall mail or otherwise make available to the Company's stockholders and
(ii) all reports, financial statements and proxy or information statements
filed by the Company or its subsidiaries with the Commission or any
national securities exchange and such other publicly available information
concerning the business and financial condition of the Company or its
subsidiaries, including without limitation, press releases, as the Initial
Purchasers may reasonably request.
(g) To use the net proceeds from the sale of the Senior Subordinated
Notes in the manner described in the Offering Memorandum (and any
amendments or supplements thereto) under the caption "Use of Proceeds."
(h) Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of any Notes.
(i) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement becomes effective or is terminated to
pay and be responsible for all costs, expenses, fees and taxes in
connection with or incident to:
(1) the preparation, printing, processing, duplicating, filing
and distribution of the Offering Documents (including, without
limitation, financial statements and exhibits) and all amendments
and supplements thereto;
(2) the preparation, printing and delivery of the Operative
Documents, the preliminary and final Blue Sky memoranda and all
other agreements, memoranda, correspondence and other documents
printed, distributed and delivered in connection herewith and with
the Exempt Resales (including in each case any disbursements of
counsel to the Initial Purchasers relating to such printing and
delivery);
-6-
<PAGE> 8
(3) the issuance, transfer and delivery by the Company and the
Subsidiary Guarantors of the Senior Subordinated Notes and the Note
Guarantees to the Initial Purchasers;
(4) the registration or qualification of the Notes and the
Note Guarantees for offer and sale under the securities or Blue Sky
laws of the jurisdictions referred to in Section 5(e) (including, in
each case, the fees and disbursements of counsel to the Initial
Purchasers relating to such registration or qualification and
memoranda relating thereto);
(5) furnishing such copies of the Preliminary Offering
Memorandum and the Offering Memorandum, and all amendments and
supplements thereto, as may be requested for use in connection with
the Exempt Resales;
(6) the preparation of certificates for the Notes (including,
without limitation, printing and engraving thereof);
(7) the rating of the Notes by investment rating agencies;
(8) the fees, disbursements and expenses of the Company's and
the Subsidiary Guarantors' counsel and accountants;
(9) all expenses and listing fees in connection with the
application for quotation of the Senior Subordinated Notes in the
National Association of Securities Dealers, Inc. ("NASD") Private
Offerings, Resales and Trading through Automated Linkages
("PORTAL");
(10) the fees and expenses of the Trustee and the Trustee's
counsel in connection with the Indenture and the Notes;
(11) all fees and expenses (including fees and expenses of
counsel to the Company) of the Company in connection with approval
of the Note by DTC for "book-entry" transfer; and
(12) the performance by the Company of its other obligations
under this Agreement and the other Operative Documents.
(j) If this Agreement shall be terminated pursuant to any of the
provisions hereof (other than a default by the Initial Purchasers) or if
for any reason the Company shall be unable or unwilling to perform their
obligations hereunder, the Company shall, except as otherwise agreed by
the parties hereto, reimburse the Initial Purchasers for the fees and
expenses to be paid or reimbursed pursuant to Section 5(i) above, and
reimburse the Initial Purchasers for all out-of-pocket expenses (including
the fees and expenses of counsel to the Initial Purchasers) rea-
-7-
<PAGE> 9
sonably incurred by the Initial Purchasers in connection with the
transactions contemplated by this Agreement.
(k) Prior to the consummation of the Exchange Offer, to furnish to
the Initial Purchasers, as soon as they have been prepared by the Company,
a copy of any consolidated financial statements of the Company for any
period subsequent to the period covered by the financial statements
appearing in the Offering Memorandum.
(l) Not to distribute prior to the Closing Date any offering
material in connection with the offering and sale of the Senior
Subordinated Notes other than the Offering Memorandum.
(m) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Senior Subordinated Notes in
a manner that would require the registration under the Act of the sale to
the Initial Purchasers or the Eligible Purchaser of the Senior
Subordinated Notes.
(n) For so long as any of the Notes remain outstanding and during
any period in which the Company is not subject to Section 13 or 15(d) of
the Exchange Act, to make available to any holder of Notes in connection
with any sale thereof and any prospective purchaser of such Notes from
such holder, the information ("Rule 144A Information") required by Rule
144A(d)(4) under the Act.
(o) To comply with all of their agreements set forth in the
Registration Rights Agreement, and all agreements set forth in the
representation letters of the Company to DTC relating to the approval of
the Notes by DTC for "book-entry" transfer.
(p) To cause the Exchange Offer to be made in the appropriate form
to permit registered New Senior Subordinated Notes to be offered in
exchange for the Senior Subordinated Notes and to comply with all
applicable federal and state securities laws in connection with the
Registered Exchange Offer.
(q) To use their respective best efforts to cause the Notes to be
eligible for trading through PORTAL and to obtain approval of the Notes by
DTC for "book-entry" transfer.
6. REPRESENTATIONS AND WARRANTIES. The Company and the Subsidiary
Guarantors represent and warrant to each of the Initial Purchasers that:
(a) The Offering Documents have been prepared in connection with the
Exempt Resales. The Preliminary Offering Memorandum and the Offering
Memorandum do not and any supplement or amendment thereto will not,
contain any untrue statement of a material fact or omit to state any
material fact required
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<PAGE> 10
to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except that the representations and warranties contained in this paragraph
(a) shall not apply to statements in or omissions from the Offering
Documents (or any amendment or supplement thereto) made in reliance upon
information relating to the Initial Purchasers furnished to the Company in
writing by the Initial Purchasers expressly for use therein. The Company
acknowledges for all purposes under this Agreement that the statements set
forth in the last paragraph on the cover page, the legend on the bottom of
the inside cover page and in the first and second sentences of the third
paragraph, the first sentence of the fourth paragraph, the fourth sentence
of the sixth paragraph, the first sentence of the seventh paragraph and
the eighth and ninth paragraphs under the caption "Plan of Distribution"
in the Offering Memorandum constitute the only written information
finished to the Company by the Initial Purchasers expressly for use in the
Offering Documents (or any amendment or supplement thereto). No stop order
preventing the use of the Offering Documents, or any amendment or
supplement thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the registration
requirements of the Act, has been issued.
(b) Each of the Company and its wholly owned subsidiaries
("subsidiaries") (i) has been, and after giving effect to the Combination
pursuant to the terms of the Combination Agreement will be, duly organized
and validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has, and after giving effect to the
Combination pursuant to the terms of the Combination Agreement will have,
all requisite corporate or comparable power and authority to carry on its
business as described in the Offering Memorandum and to own, lease and
operate its properties, and (iii) is, and after giving effect to the
Combination pursuant to the terms of the Combination Agreement will be,
duly qualified and in good standing as a foreign corporation authorized to
do business in each other jurisdiction in which the nature of its business
or its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a Material
Adverse Effect. As used herein, "Material Adverse Effect" shall mean, with
respect to any Person, any effect or group of related or unrelated effects
that (i) would be reasonably expected to result in a material adverse
effect on the assets, properties, business, results of operations,
condition (financial or otherwise) or prospects of the Company and its
subsidiaries, taken as a whole or (ii) would reasonably be expected to
interfere with, adversely affect or question the validity of the
execution, delivery and performance of any of the Operative Documents, the
issuance of the Notes and the Note Guarantees or the consummation of this
Agreement.
(c) All of the issued and outstanding shares of capital stock,
partnership interests or other interests of the Company and each of its
Subsidiaries have been duly and validly authorized and issued, and all of
the capital stock, partnership interests or other interests of each such
Subsidiary are owned, directly or indi-
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<PAGE> 11
rectly, by the Company. All such shares of capital stock, partnership
interests or other interests are fully paid and non-assessable and have
not been issued in violation of any preemptive or similar rights and are
owned free and clear of any security interest, mortgage, pledge, claim,
lien, limitation on voting rights or encumbrance (each, a "Lien"), except
for Liens granted pursuant to the New Credit Facility and except for
limitations voting rights with respect to shares of Atrium Parking, Inc.
held by the Company. Except as disclosed in the Offering Memorandum, there
are not currently, and will not be as a result of the Offering or the
consummation of the Combination pursuant to the terms of the Combination
Agreement, any outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or Liens related to or
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other securities evidencing equity ownership
interests in, the Company or any of its Subsidiaries.
(d) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Operative Documents
to which it is a party, and to consummate the transactions contemplated
hereby and thereby, including, without limitation, the corporate power and
authority to issue, sell and deliver the Senior Subordinated Notes to the
Initial Purchasers.
(e) The Subsidiary Guarantors have all necessary corporate or
comparable power and authority to enter into and perform their obligations
under the Operative Documents to which they are parties, and to issue,
sell and deliver the Note Guarantees to the Initial Purchasers.
(f) Neither the Company nor any of its Subsidiaries is, and after
giving effect to the Offering and the Combination pursuant to the terms of
the Combination Agreement will be, (i) in violation of its charter, bylaws
or other organizational documents, (ii) in default in the performance of
any obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any other agreement,
indenture or instrument, in each case, which is material to the conduct of
the business of the Company, to which the Company is a party or by which
it or any of the Company's Subsidiaries or their respective property is
bound, or (iii) in violation of any local, state or federal law, statute,
ordinance, rule, regulation, requirement, judgment or court decree
(including, without limitation, environmental laws, statutes, ordinances,
rules, regulations, judgments or court decrees) applicable to the Company,
its Subsidiaries or any of its assets or properties (whether owned or
leased), other than violations or defaults that would not reasonably be
expected to have a Material Adverse Effect. To the best knowledge of the
Company, there exists no condition that, with notice, the passage of time
or otherwise, would constitute a default under any such document or
instrument, except for such defaults that could not reasonably be expected
to have a Material Adverse Effect.
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<PAGE> 12
(g) None of (i) the execution, delivery or performance by the
Company or the Subsidiary Guarantors of this Agreement and the other
Operative Documents, (ii) the performance by the Company of the
Combination Agreement and consummation of the Combination pursuant to the
terms of the Combination Agreement, (iii) the issuance and sale of the
Notes by the Company or the issuance of the Note Guarantees by the
Subsidiary Guarantors and (iv) the consummation by the Company of the
transactions described in the Offering Memorandum under the caption "Use
of Proceeds," will conflict with or constitute a breach of any of the
terms or provisions of, or, after giving effect to the Combination
pursuant to the terms of the Combination Agreement, will violate, conflict
with or constitute a breach of any of the terms or provisions of, or a
default under, or result in the imposition of a lien or encumbrance on any
properties of the Company or the Subsidiary Guarantors, as the case may
be, or an acceleration of indebtedness pursuant to, (1) the respective
charter, bylaws or other organizational documents of the Company or the
Subsidiary Guarantors, as the case may be, (2) except as disclosed in the
Offering Memorandum, any bond, debenture, note, indenture, mortgage, deed
of trust or other agreement or instrument to which the Company or the
Subsidiary Guarantors, as the case may be, is a party or by which any of
their respective property is bound, or (3) any law or administrative
regulation applicable to the Company or the Subsidiary Guarantors, as the
case may be, or any of their assets or properties, or any judgment, order
or decree of any court or governmental agency or authority entered in any
proceeding to which the Company or the Subsidiary Guarantors, as the case
may be, was or is now a party or to which any of their respective
properties may be subject. No consent, approval, authorization or order
of, or filing or registration with, any regulatory body, administrative
agency, or other governmental agency (except as securities or Blue Sky
laws of the various states may require) is required for the execution,
delivery and performance of the Operative Documents and the valid issuance
and sale of the Securities. No consents or waivers from any person are
required to consummate the transactions contemplated by the Operative
Documents or the Offering Documents, other than such consents and waivers
as have been or will be obtained prior to the Closing Date or, in the case
of the Registration Rights Agreement and the transactions contemplated
thereby, will be obtained and made under the Act, the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act") and state securities or
Blue Sky laws and regulations.
(h) This Agreement has been duly authorized and, when validly
executed by the Company and the Subsidiary Guarantors and (assuming the
due execution and delivery thereof by the Initial Purchasers) is a legally
valid and binding obligation of the Company and the Subsidiary Guarantors,
enforceable against each in accordance with its terms, except as the
enforceability thereof may be (i) subject to applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws in effect which
affect the enforcement of creditors' rights generally, (ii) limited by
general principles of equity (whether considered in a proceeding at
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<PAGE> 13
law or in equity), and (iii) limited by securities laws prohibiting or
limiting the availability of, and public policy against, indemnification
or contribution.
(i) The Company and the Subsidiary Guarantors have duly authorized
the Indenture, and when the Company and the Subsidiary Guarantors have
duly executed and delivered the Indenture (assuming the due authorization,
execution and delivery thereof by the Trustee), the Indenture will be the
legally valid and binding obligation of each, enforceable against each in
accordance with its terms, except as the enforceability thereof may be (i)
subject to applicable bankruptcy, insolvency, moratorium, reorganization
or similar laws in effect which affect the enforcement of creditors'
rights generally, and (ii) limited by general principles of equity
(whether considered in a proceeding at law or in equity).
(j) The Company has duly authorized the Senior Subordinated Notes
and, when issued and authenticated in accordance with the terms of the
Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms hereof, will be the legally valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms, except as the enforceability thereof may be (i) subject
to applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws in effect which affect the enforcement of creditors' rights
generally, and (ii) limited by general principles of equity (whether
considered in a proceeding at law or in equity).
(k) The Subsidiary Guarantors have duly authorized the Note
Guarantees to be endorsed on the Senior Subordinated Notes and, when the
Senior Subordinated Notes are issued and authenticated in accordance with
the terms of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms hereof, the Note Guarantees will
be the legally valid and binding obligations of the Subsidiary Guarantors,
enforceable against the Subsidiary Guarantors in accordance with their
terms, except as the enforceability thereof may be (i) subject to
applicable bankruptcy, insolvency, moratorium, reorganization or similar
laws in effect which affect the enforcement of creditors' rights
generally, and (ii) limited by general principles of equity (whether
considered in a proceeding at law or in equity).
(l) The Company has duly authorized the New Senior Subordinated
Notes and, when issued and authenticated in accordance with the terms of
the Registered Exchange Offer and the Indenture, the New Senior
Subordinated Notes will be the legally valid and binding obligations of
the Company, enforceable against the Company in accordance with their
terms, except as the enforceability thereof may be (i) subject to
applicable bankruptcy, insolvency, moratorium, reorganization or similar
laws in effect which affect the enforcement of creditors' rights generally
and (ii) limited by general principles of equity (whether considered in a
proceeding at law or in equity).
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<PAGE> 14
(m) The Subsidiary Guarantors have duly authorized the Note
Guarantees to be endorsed on the New Senior Subordinated Notes and, when
the New Senior Subordinated Notes are issued and authenticated in
accordance with the terms of the Registered Exchange Offer and the
Indenture, the Note Guarantees will be the legally valid and binding
obligations of the Subsidiary Guarantors, enforceable against the
Subsidiary Guarantors in accordance with their terms, except as the
enforceability thereof may be (i) subject to applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws in effect which
affect the enforcement of creditors' rights generally and (ii) limited by
general principles of equity (whether considered in a proceeding at law or
in equity).
(n) The Registration Rights Agreement has been duly authorized and
when validly executed by the Company and the Subsidiary Guarantors will be
(assuming the due execution and delivery thereof by the Initial
Purchasers) the legally valid and binding obligation of each, enforceable
against each in accordance with its terms, except as the enforceability
thereof may be (i) subject to applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws in effect which affect the
enforcement of creditors' rights generally and (ii) limited by general
principles of equity (whether considered in a proceeding at law or in
equity).
(o) The Combination Agreement has been duly and validly authorized
by the Company and is a legally valid and binding agreement of the
Company, enforceable against it in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, moratorium, reorganization or other similar laws
and court decisions affecting or relating to the rights of creditors
generally or by general principles of equity, and except as rights to
indemnification may be limited by applicable law.
(p) The New Credit Facility has been duly authorized and when
validly executed by the Company and the subsidiaries of the Company that
are obligors thereunder will be the legally valid and binding obligation
of each, enforceable against each in accordance with its terms, except as
the enforceability thereof may be (i) subject to applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws in effect which
affect the enforcement of creditors' rights generally and (ii) limited by
general principles of equity (whether considered in a proceeding at law or
in equity).
(q) There is, and after giving effect to the Combination pursuant to
the terms of the Combination Agreement will be, (i) no action, suit,
proceeding or investigation before or by any court, arbitrator or
governmental agency, body or official, domestic or foreign, now pending,
threatened, or, to the knowledge of the Company, contemplated to which the
Company or the Subsidiary Guarantors is or may be a party or to which the
business or property of the Company or the Subsidiary Guarantors is or,
after giving effect to the Combination pursuant to the terms of the
Combination Agreement, may be subject, (ii) no statute, rule, regula-
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<PAGE> 15
tion or order that has been enacted, adopted or issued by any governmental
agency or, to the best knowledge of the Company, proposed by any
governmental body or (iii) no injunction, restraining order or order of
any nature issued by a federal or state court of competent jurisdiction to
which the Company or the Subsidiary Guarantors is or may be subject that,
in the case of clauses (i), (ii) and (iii) above, (1) is required to be
disclosed in the Offering Memorandum and that is not so disclosed, (2)
could reasonably be expected to have a Material Adverse Effect or (3)
would interfere with or adversely affect the issuance of the Senior
Subordinated Notes or the Note Guarantees.
(r) There are no holders of any security of the Company or the
Subsidiary Guarantors who by reason of the execution by the Company and
the Subsidiary Guarantors of this Agreement or any other Operative
Document or the consummation of the transactions contemplated hereby and
thereby, have the right to request or demand that the Company or the
Subsidiary Guarantors register under the Act, or analogous foreign laws
and regulations, securities held by them.
(s) The Company has delivered to the Initial Purchasers true and
correct executed copies of the Combination Agreement and all documents and
agreements related thereto and there have been no amendments, alterations,
modifications or waivers thereto or in the exhibits or schedules thereto,
except as have been delivered to the Initial Purchasers.
(t) The Company is not, and after giving effect to the Combination
pursuant to the terms of the Combination Agreement will not be, involved
in any material labor dispute nor, to the knowledge of the Company, is any
material dispute threatened which, if such dispute were to occur, could
have a Material Adverse Effect.
(u) The Company has not violated any safety or similar law
applicable to its business, nor any federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable federal or state wages and hours laws, nor any provisions of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or the rules and regulations promulgated thereunder, except for such
instances of noncompliance that, either singly or in the aggregate, could
not have a Material Adverse Effect.
(v) Each of the Company and the Subsidiary Guarantors is, and after
giving effect to the Combination pursuant to the terms of the Combination
Agreement will be, in compliance with all applicable existing federal,
state, local and foreign laws and regulations (collectively,
"Environmental Laws") relating to the protection of human health or the
environment or imposing liability or standards of conduct concerning any
Hazardous Material (as defined below), except for such instances of
noncompliance that, either singly or in the aggregate, could not have a
Material Adverse Effect. The term "Hazardous Material" means (i)
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<PAGE> 16
any "hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, (ii) any
"hazardous waste" as defined by the Resource Conservation and Recovery
Act, as amended, (iii) any petroleum or petroleum product, (iv) any
polychlorinated biphenyl and (v) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material, waste or substance
regulated under or within the meaning of any other Environmental Law.
Except as set forth in the Offering Memorandum, there is no alleged
liability, or, to the best knowledge and information of the Company,
potential liability (including, without limitation, alleged or potential
liability for investigatory costs, cleanup costs, governmental response
costs, natural resource damages, property damages, personal injuries, or
penalties) of the Company or any of its Subsidiaries arising out of, based
on, or resulting from (1) the presence or release into the environment of
any Hazardous Material at any location currently or previously owned by
the Company or any of its Subsidiaries or at any location currently or
previously used or leased by the Company or any of its Subsidiaries, or
(2) any violation or alleged violation of any Environmental Law, except in
each case with respect to clause (1) and (2), alleged or potential
liabilities that, singly or in the aggregate, could not have a Material
Adverse Effect.
(w) The Company and each of its Subsidiaries have and, after giving
effect to the Combination pursuant to the terms of the Combination
Agreement, will have, such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits"),
including, without limitation, under any applicable Environmental Laws, as
are necessary or will be necessary, to own, lease and operate their
respective properties and to conduct their respective businesses in the
manner described in the Offering Memorandum, except for those permits the
absence of which could not reasonably be expected to have a Material
Adverse Effect; the Company and each of its Subsidiaries have and, after
giving effect to the Combination pursuant to the terms of the Combination
Agreement, will have, fulfilled and performed all of its obligations with
respect to such permits, except for such obligations the failure of which
to be fulfilled or performed could not reasonably be expected to have a
Material Adverse Effect and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder of
any such permit, except for such event, that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect; and, except as described in the Offering Memorandum, such permits
contain no restrictions that are or will be materially burdensome to the
Company or any of its Subsidiaries.
(x) The Company and its Subsidiaries own or possess free and clear
of all Liens or has the right to use free and clear of any rights of third
parties that adversely affect such use by the Company and its Subsidiaries
and, after giving effect to the Combination pursuant to the terms of the
Combination Agreement, will own or possess free and clear of all Liens or
have the right to use free and clear of
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<PAGE> 17
any rights of third parties that adversely affect such use by the Company
and its Subsidiaries, all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
"Intellectual Property") presently employed by either of them or which are
proposed to be employed by either of them in connection with the
businesses now operated by either of them or which are proposed to be
operated by them, except where the failure to own or possess such
Intellectual Property could not, either singly or in the aggregate, have a
Material Adverse Effect. The use of such Intellectual Property in
connection with the business and operations of the Company and its
Subsidiaries does not to the Company's knowledge, infringe on the rights
or claimed rights of any person. No other person is, to the Company's
knowledge, infringing upon any of the Intellectual Property of the Company
or has notified the Company or any of its Subsidiaries that it is claiming
ownership of, or the right to use any Intellectual Property owned by the
Company or its Subsidiaries. The Company and its Subsidiaries have taken
all reasonable steps to protect the Intellectual Property from
infringement by any other person, except where the failure to take such
steps would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. Other than in connection with the use of so-called
"off-the-shelf" software and except as otherwise disclosed in the Offering
Memorandum, neither the Company nor its Subsidiaries are obligated or
under any liability whatsoever to make any payment in excess of $150,000
per fiscal year, in the aggregate, by way of royalties, fees or otherwise
to any persons with respect to the use of the Intellectual Property.
Neither the Company nor any of its Subsidiaries has received (i) any
notice of infringement of or conflict with assessed rights of others with
respect to any Intellectual Property or (ii) any notice of an action or
proceeding seeking to limit, cancel or question the validity of any
Intellectual Property, which singly or in the aggregate, if the subject of
any unfavorable decision, ruling or finding, might have a Material Adverse
Effect on the Company.
(y) All federal and state tax returns required to be filed by the
Company or any of its Subsidiaries in any jurisdiction have been filed,
and all material taxes (including, without limitation, withholding taxes,
penalties and interest, assessments, fees and other charges due or claimed
to be due from any taxing authority) have been paid other than those being
contested in good faith and for which adequate reserves have been
provided. To the knowledge of the Company, there are, and after giving
effect to the Combination pursuant to the terms of the Combination
Agreement will be, no material proposed additional tax assessments against
the Company, any of its Subsidiaries or the assets or property of the
Company or any of its Subsidiaries.
(z) The Company and its Subsidiaries have and, after giving effect
to the Combination pursuant to the terms of the Combination Agreement,
will have all certificates, consents, exemptions, orders, permits,
franchises, licenses,
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<PAGE> 18
authorizations, or other approvals (each, an "Authorization") of and from,
and has made all declarations and filings with and notices to, all
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals,
necessary or required to own, lease, license, operate and use their
respective properties and assets and to conduct their business in the
manner described in the Offering Memorandum except for such Authorizations
the absence of which could not reasonably be expected to have a Material
Adverse Effect on the Company and except with respect to any parking
facility contracts with governmental entities; all such Authorizations are
and, after giving effect to the Combination pursuant to the terms of the
Combination Agreement, will be valid and in full force and effect; the
Company and its Subsidiaries are in compliance with the terms and
conditions of all such Authorizations and with the rules and regulations
of the regulatory authorities and governing bodies having jurisdiction
with respect thereto; and neither the Company nor any of its Subsidiaries
has received any notice, or has any knowledge or belief (or any basis
therefor), that any governmental body or agency is considering limiting,
suspending or revoking any such Authorization.
(aa) Except as set forth in the Offering Memorandum and except as
could not reasonably be expected to have a Material Adverse Effect on the
Company, (i) the Company and its Subsidiaries have and, after giving
effect to the Combination pursuant to the terms of the Combination
Agreement, will have good and marketable title, free and clear of all
Liens except Liens for taxes not yet due and payable and Liens granted
pursuant to and permitted by the New Credit Facility, to all property and
assets described in the Offering Memorandum as being owned by each of
them. Except for leases of parking facilities, all material leases to
which the Company or any of its Subsidiaries is a party are and, after
giving effect to the Combination pursuant to the terms of the Combination
Agreement, will be legally valid and binding and, to the best of the
Company's knowledge, no default has occurred or is continuing thereunder
which could reasonably be expected to have a Material Adverse Effect on
the Company, and the Company and its Subsidiaries enjoy peaceful and
undisturbed possession under all such leases to which the Company and its
Subsidiaries are a party as lessee with such exceptions as do not
materially interfere with the use currently made by the Company or its
Subsidiaries, as the case may be.
(ab) The Company maintains and, after giving effect to the
Combination pursuant to the terms of the Combination Agreement, will
endeavor to maintain adequate insurance customary for the parking
facilities management industry for its business and the value of its
properties (including, without limitation, public liability insurance,
third party property damage insurance and replacement value insurance),
and, to the best of the Company's knowledge, all such insurance is
outstanding and in force as of the date hereof.
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<PAGE> 19
(ac) The financial statements, together with related notes forming
part of the Offering Documents (and any amendment or supplement thereto),
present fairly the consolidated financial position, results of operations
and changes in financial position of the Company on the basis stated in
the Offering Documents at the respective dates or for the respective
periods to which they apply, and such financial statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein and the other financial and
statistical information and data set forth in the Offering Documents (and
any amendment or supplement thereto) is, in all material respects,
accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company. The pro
forma financial data are, in all material respects, accurately presented
and prepared in good faith on the basis of the assumptions described
therein, and such assumptions are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(ad) The Company and the Subsidiary Guarantors maintain and, after
giving effect to the Combination pursuant to the terms of the Combination
Agreement, will maintain a system of internal accounting controls
sufficient to provide assurance that: (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and
to maintain accountability for assets; and (iii) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect thereto.
(ae) Subsequent to the dates for which information is given in the
Offering Documents and up to the Closing Date, unless set forth in the
Offering Memorandum or the Company has notified the Initial Purchasers:
(i) neither the Company nor the Subsidiary Guarantors has incurred any
liabilities or obligations, direct or contingent, which are or, after
giving effect to the Combination pursuant to the terms of the Combination
Agreement, could reasonably be expected to have a Material Adverse Effect
on the Company or the Subsidiary Guarantors, nor has either entered into
any material transactions not in the ordinary course of business; (ii)
there has not been any decrease in the Company's or the Subsidiary
Guarantors' capital stock or any increase in long-term indebtedness to
meet working capital requirements or any material increase in short-term
indebtedness of the Company or the Subsidiary Guarantors or any payment of
or declaration to pay any dividends or any other distribution with respect
to the Company's or the Subsidiary Guarantors' capital stock; and (iii)
there has not been any event or series of events that could reasonably be
expected to have a Material Adverse Effect.
(af) Prior to and immediately after the issuance of the Senior
Subordinated Notes and, after giving effect to the Combination pursuant to
the terms of
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<PAGE> 20
the Combination Agreement, (i) the present fair saleable value of the
assets of the Company and its subsidiaries exceeded and will exceed the
amount that will be required to be paid on, or in respect of, the debts
and other liabilities (including contingent liabilities) of the Company
and its subsidiaries as they become absolute and matured, (ii) the assets
of the Company and its subsidiaries do not constitute and will not
constitute unreasonably small capital to carry out their businesses as
conducted or as proposed to be conducted, and (iii) the Company and its
subsidiaries do not intend to, or believe that it will, incur debts or
other liabilities beyond its ability to pay such debts and liabilities as
they mature. In computing the amount of such contingent liabilities at any
time, it is intended that such liabilities will be computed at the amount
that, in light of all the facts and circumstances existing at such time,
represents the amount than can reasonably be expected to become an actual
or matured liability.
(ag) Except as would not otherwise be unlawful, the Company has not
(i) taken, directly or indirectly, any action designed to cause or to
result in, or that has constituted or which might reasonably be expected
to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Notes or
(ii) since the date of the Preliminary Offering Memorandum (A) sold, bid
for, purchased, or paid anyone other than the Initial Purchasers any
compensation for soliciting purchases of, the Senior Subordinated Notes or
(B) paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.
(ah) Neither the Company nor any of its subsidiaries nor any agent
thereof acting on the behalf of them, has taken or will take any action
that might cause this Agreement or the issuance or sale of the Notes to
violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part
220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part
224) of the Board of Governors of the Federal Reserve System, in each case
as in effect now or as the same may hereafter be in effect on the Closing
Date.
(ai) Neither the Company nor any of its subsidiaries is or, after
giving effect to the Combination pursuant to the terms of the Combination
Agreement, will be an "investment company" or a company "controlled" by an
investment company within the meaning of the Investment Company Act of
1940, as amended.
(aj) The accountants, Ernst & Young LLP and Altschuler, Melvoin and
Glasser, LLP, that have certified the financial statements and supporting
schedules included in the Offering Memorandum are independent public
accountants, as required by the Act and the Exchange Act. The historical
financial statements, together with related schedules and notes, set forth
in the Offering Memorandum comply as to form in all material respects with
the requirements applicable to registration statements on Form S-1 under
the Act.
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<PAGE> 21
(ak) When the Senior Subordinated Notes are issued and delivered
pursuant to this Agreement, such Senior Subordinated Notes will not be of
the same class (within the meaning of Rule 144A under the Act) as
securities of the Company that are listed on a national securities
exchange registered under Section 6 of the Exchange Act or that are quoted
in a United States automated inter-dealer quotation system.
(al) Assuming (i) that the representations and warranties of the
Initial Purchasers in Section 7 hereof are true, (ii) that the Initial
Purchasers complied with their covenants as set forth in Section 7 hereof,
(iii) that none of the Eligible Purchasers is an affiliate of the Company
and (iv) that each of the Eligible Purchasers is a QIB or is purchasing
the Senior Subordinated Notes pursuant to the exemption provided for under
Regulation S, the purchase and resale of the Senior Subordinated Notes
pursuant hereto (including pursuant to be Exempt Resales) is exempt from
the registration requirements of the Act. No form of general solicitation
or general advertising was used by the Company or any of its
representatives (other than the Initial Purchasers, as to whom the Company
makes no representation) in connection with the offer and sale of the
Senior Subordinated Notes, including, but not limited to, articles,
notices or other communications published in any newspaper, magazine, or
similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or
general advertising. No securities of the same class as the Senior
Subordinated Notes have been issued and sold by the Company within the
six-month period immediately prior to the date hereof.
(am) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Securities to be purchased by the
Eligible Purchasers will not involve any prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code with respect
to any employee benefit plan of the Company. The representation made by
the Company in the preceding sentence is made in reliance upon and subject
to the accuracy of, and compliance with, the representations and covenants
made or deemed made by the Eligible Purchaser as set forth in the Offering
Documents under the Section entitled "Notice to Investors."
(an) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date contains, and as of the Closing Date will
contain, all the information specified in, and meeting the requirements
of, Rule 144A(d)(4) under the Act.
(ao) None of the Company, its subsidiaries or any of its or their
affiliates or any person acting on its or their behalf has engaged or will
engage in any directed selling efforts within the meaning of Regulation S
with respect to the Senior Subordinated Notes, and the Company, its
subsidiaries and its or their affiliates and all persons acting on its or
their behalf have complied or will comply
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<PAGE> 22
with the offering restrictions requirements of Regulation S in connection
with the offering of the Senior Subordinated Notes outside the United
States.
(ap) There is no "substantial U.S. market interest" as defined in
rule 902(n) of Regulation S for the Senior Subordinated Notes or any
security of the same class as the Senior Subordinated Notes.
(aq) The sale of the Senior Subordinated Notes in offshore
transactions pursuant to Regulation S is not part of a plan or scheme to
evade the registration provisions of the Act.
7. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE INITIAL
PURCHASERS. Each of the Initial Purchasers, severally and not jointly,
represents and warrants to the Company as follows:
(a) Such Initial Purchaser is a QIB with such knowledge and
experience in financial and business matters as is necessary in order to
evaluate the merits and risks of an investment in the Senior Subordinated
Notes.
(b) Such Initial Purchaser (i) is not acquiring the Senior
Subordinated Notes with a view to any distribution thereof that would
violate the Act or the securities laws of any state of the United States
or any other applicable jurisdiction and (ii) will be reoffering and
reselling the Senior Subordinated Notes only to QIBs in reliance on the
exemption from the registration requirements of the Act provided by Rule
144A and to persons outside the United States in reliance on the exemption
from the registration requirements of the Act provided by Regulation S.
(c) No form of general solicitation or general advertising (within
the meaning of Regulation D under the Act) has been or will be used by the
Initial Purchasers or any of its representatives in connection with the
offer and sale of any of the Senior Subordinated Notes, including, but not
limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection with the
Exempt Resales, it will solicit offers to buy the Senior Subordinated
Notes only from, and will offer to sell the Senior Subordinated Notes only
to, Eligible Purchasers. Such Initial Purchaser further agrees that it
will offer to sell the Senior Subordinated Notes only to, and will solicit
offers to buy the Senior Subordinated Notes only from, persons who in
purchasing such Senior Subordinated Notes will be deemed to have
represented and agreed (i) if such Eligible Purchasers are QIBs, that they
are purchasing the Senior Subordinated Notes for their own account or
accounts with respect to which they exercise sole investment discretion
and that they or such accounts are QIBs, (ii) that such Senior
Subordinated Notes will not have
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<PAGE> 23
been registered under the Act and may be resold, pledged or otherwise
transferred, only (1) (a) inside the United States to a person who the
seller reasonably believes is a "qualified institutional buyer" within the
meaning of Rule 144A under the Act in a transaction meeting the
requirements of Rule 144A, (b) in a transaction meeting the requirements
of Rule 144A under the Act, (c) outside the United States to a foreign
person in a transaction meeting the requirements of Rule 904 under the Act
or (d) in accordance with another exemption from the registration
requirements of the Act (and based in the case of clauses (b) and (c)
above upon an opinion of counsel if the Company so requests), (2) to the
Company or (3) pursuant to an effective registration statement under the
Act, in each case, in accordance with any applicable securities laws of
any state of the United States or any other applicable jurisdiction, and
(iii) that the holder will, and each subsequent holder is required to,
notify purchaser from it of the security evidenced thereby of the resale
restrictions set forth in (ii) above. Accordingly, the Initial Purchasers
represents and agrees that neither it, its affiliates nor any persons
acting on its or their behalf has engaged or will engage in any directed
selling efforts within the meaning of Rule 901(b) of Regulation S with
respect to the Senior Subordinated Notes, and it, or its affiliates and
all persons acting on its or their behalf have complied and will comply
with the offering restrictions requirements of Regulation S.
(e) Such Initial Purchaser represents and agrees that the Senior
Subordinated Notes offered and sold in reliance on Regulation S have been
and will be offered and sold only in offshore transactions and that such
securities have been and will be represented upon issuance by a global
security that may not be exchanged for definitive securities until the
expiration of the Restricted Period and only upon certification of
beneficial ownership of the securities by a non-U.S. person or a U.S.
person who purchased such securities in a transaction that was exempt from
the registration requirements of the Act, which U.S. person will acquire
an interest in a Transfer Restricted Security.
(f) Such Initial Purchaser agrees that, at or prior to confirmation
of a sale of Senior Subordinated Notes (other than a sale pursuant to Rule
144A), it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases the Senior
Subordinated Notes from it during the Restricted Period a confirmation or
notice to substantially the following effect:
"The Senior Subordinated Notes covered hereby have not been
registered under the U.S. Securities Act of l933, as amended (the
"Securities Act") and may not be offered and sold within the United
States or to, or for the account or benefit of, U.S. persons (i) as
part of their distribution at any time or (ii) otherwise until 40
days after the later of the commencement of the offering and the
closing date, except in either case in accordance with
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<PAGE> 24
Regulation S (or Rule 144A if available) under the Securities Act.
Terms used above have the same meanings assigned to them in
Regulation S."
(g) Such Initial Purchaser agrees not to cause any advertisement of
the Senior Subordinated Notes to be published in any newspaper or
periodical or posted in any public place and not to issue any circular
relating to the Senior Subordinated Notes, except such advertisements as
include the statements required by Regulation S.
(h) The sale of the Senior Subordinated Notes in offshore
transactions pursuant to Regulation S is not part of a plan or scheme to
evade the registration provisions of the Act.
(i) Such Initial Purchaser is not a pension or welfare plan (as
defined in Section 3 of ERISA) and is not acquiring the Senior
Subordinated Notes on behalf of a pension or welfare plan.
(j) Prior to consummating the Eligible Resales, the Initial
Purchasers shall have delivered a copy of the Offering Memorandum and any
supplements or amendments thereto to each Eligible Purchaser.
(k) Such Initial Purchaser also understands that the Company and,
for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Sections 9(d) and (e) hereof, counsel to the Company and
counsel to the Initial Purchasers will rely upon the accuracy and truth of
the foregoing representations and such Initial Purchasers hereby consent
to such reliance.
8. INDEMNIFICATION.
(a) The Company and each Subsidiary Guarantor agree, jointly and
severally, to indemnify and hold harmless (i) each Initial Purchaser, its
directors, its officers and each person, if any, who controls such Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any legal or
other expenses reasonably incurred in connection with investigating or
defending any matter, including any action, that could give rise to any
such losses, claims, damages, liabilities or judgments) caused by any
untrue statement or alleged untrue statement of a material fact contained
in the Offering Memorandum (or any amendment or supplement thereto), the
Preliminary Offering Memorandum or any Rule 144A Information provided by
the Company or any Subsidiary Guarantor to any holder or prospective
purchaser of Senior Subordinated Notes pursuant to Section 5(n) or caused
by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
(in the light of the circumstances under which they were made) not
misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or
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<PAGE> 25
omission or alleged untrue statement or omission based upon information
relating to the Initial Purchasers furnished in writing to the Company by
such Initial Purchaser; provided, however, that the foregoing indemnity
agreement with respect to any Preliminary Offering Memorandum shall not
inure to the benefit of any Initial Purchasers who failed to deliver a
Final Offering Memorandum (as then amended or supplemented, provided by
the Company to the several Initial Purchasers in the requisite quantity
and on a timely basis to permit proper delivery on or prior to the Closing
Date) to the person asserting any losses, claims, damages and liabilities
and judgments caused by any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Offering Memorandum, or
caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, if such material misstatement or omission or
alleged material misstatement or omission was cured in the Final Offering
Memorandum.
(b) The Initial Purchasers agree to indemnify and hold harmless the
Company and the Subsidiary Guarantors, and their respective directors and
officers and each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) the Company or
the Subsidiary Guarantors, to the same extent as the foregoing indemnity
from the Company and the Subsidiary Guarantors to the Initial Purchasers
but only with reference to information relating to the Initial Purchasers
furnished in writing to the Company by the Initial Purchasers expressly
for use in the Preliminary Offering Memorandum or the Offering Memorandum.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "indemnified party"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party shall assume the defense of
such action, including the employment of counsel reasonably satisfactory
to the indemnified party and the payment of all fees and expenses of such
counsel, as incurred (except that in the case of any action in respect of
which indemnity may be sought pursuant to both Sections 8(a) and 8(b), the
Initial Purchasers shall not be required to assume the defense of such
action pursuant to this Section 8(c), but may employ separate counsel and
participate in the defense thereof, but the fees and expenses of such
counsel, except as provided below, shall be at the expense of the Initial
Purchasers). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of the
indemnified party unless (i) the employment of such counsel shall have
been specifically authorized in writing by the indemnifying party, (ii)
the indemnifying party shall have failed to assume the defense of such
action or employ counsel reasonably satisfactory to the indemnified party
or (iii) the named parties to any such action (including any impleaded
parties) include both the indemnified party and the indemnifying party,
and the in-
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<PAGE> 26
demnified party shall have been advised by such counsel that there may be
one or more legal defenses available to it which are different from or
additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such
action on behalf of the indemnified party). In any such case, the
indemnifying party shall not, in connection with any one action or
separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred.
Such firm shall be designated in writing by Donaldson, Lufkin & Jenrette
Securities Corporation, in the case of the parties indemnified pursuant to
Section 8(a), and by the Company, in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall indemnify and hold
harmless the indemnified party from and against any and all losses,
claims, damages, liabilities and judgments by reason of any settlement of
any action (i) effected with its written consent or (ii) effected without
its written consent if the settlement is entered into more than thirty
business days after the indemnifying party shall have received a request
from the indemnified party for reimbursement for the fees and expenses of
counsel (in any case where such fees and expenses are at the expense of
the indemnifying party) and, prior to the date of such settlement, the
indemnifying party shall have failed to comply with such reimbursement
request. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement or compromise of, or consent
to the entry of judgment with respect to, any pending or threatened action
in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder
by the indemnified party, unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act, by or on behalf of the indemnified
party.
(d) To the extent the indemnification provided for in this Section 8
is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages, liabilities or judgments referred to herein, then
each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities and judgments (i)
in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Subsidiary Guarantors, on the one hand,
and the Initial Purchasers on the other hand from the offering of the
Senior Subordinated Notes or (ii) if the allocation provided by clause
8(d)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause 8(d)(i) above but also the relative fault of the Company and the
Subsidiary Guarantors, on the one hand, and the Initial Purchasers, on the
other hand, in connection with the statements or
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<PAGE> 27
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Subsidiary Guarantors,
on the one hand and the Initial Purchasers, on the other hand, shall be
deemed to be in the same proportion as the total net proceeds from the
offering of the Senior Subordinated Notes (after underwriting discounts
and commissions, but before deducting expenses) received by the Company,
and the total discounts and commissions received by the Initial Purchasers
bear to the total price to investors of the Senior Subordinated Notes, in
each case as set forth in the table on the cover page of the Offering
Memorandum. The relative fault of the Company and the Subsidiary
Guarantors, on the one hand, and the Initial Purchasers, on the other
hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied
by the Company or the Subsidiary Guarantors, on the one hand, or the
Initial Purchasers, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Subsidiary Guarantors, and the Initial Purchasers
agree that it would not be just and equitable if contribution pursuant to
this Section 8(d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
matter, including any action, that could have given rise to such losses,
claims, damages, liabilities or judgments. Notwithstanding the provisions
of this Section 8, the Initial Purchasers shall not be required to
contribute any amount in excess of the amount by which the total discounts
and commissions received by such Initial Purchaser exceed the amount of
any damages which the Initial Purchasers has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
(e) The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
9. CONDITIONS OF THE INITIAL PURCHASERS' OBLIGATIONS. The several
obligations of the Initial Purchasers to purchase and pay for the Senior
Subordinated Notes as provided herein, shall be subject to the satisfaction of
each of the following conditions:
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<PAGE> 28
(a) All the representations and warranties of the Company and the
Subsidiary Guarantors contained in this Agreement shall be true and
correct on the Closing Date, with the same force and effect as if made on
and as of the date hereof and the Closing Date, respectively. Each of the
Company and the Subsidiary Guarantors shall have performed or complied
with its obligations and agreements and satisfied the conditions to be
performed, complied with or satisfied by it on or prior to the Closing
Date.
(b) (1) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 9:00 a.m., New York
City time, on the day following the date of this Agreement, or at such
later date and time as to which the Initial Purchasers may approve;
(2) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency that would, as of the Closing Date, prevent the
issuance of the Senior Subordinated Notes or the Note Guarantees;
(3) No injunction, restraining order or order of any nature by
a federal or state court of competent jurisdiction shall have been issued
as of the Closing Date or, to the best knowledge of the Company,
threatened against, the Company or the Subsidiary Guarantors which would
prevent the issuance of the Senior Subordinated Notes or the Note
Guarantors; and
(4) No stop order preventing the use of the Offering
Documents, or any amendment or supplement thereto, or suspending the
qualification or exemption from qualification of the Senior Subordinated
Notes for sale in any jurisdiction designated by the Initial Purchasers
pursuant to Section 5(f) hereof shall have been issued and no proceedings
for that purpose shall have been commenced or shall be pending, threatened
or, to the Company's knowledge contemplated.
(c) (1) (i) Since the date of the latest balance sheet in the
Offering Memorandum, there shall not have been any material adverse
change, or any development involving a prospective material adverse
change, in the assets, properties, business, results of operations,
condition (financial or otherwise) or prospects, whether or not arising in
the ordinary course of business, of the Company and its subsidiaries,
taken as a whole, (ii) since the date of the latest balance sheet included
in the Offering Memorandum, there shall not have been any material change,
or any development that is reasonably likely to result in a material
change, in the capital stock or in the long-term debt, or material
increase in short-term debt, of the Company and its subsidiaries, taken as
a whole, from that set forth in the Offering Memorandum and (iii) except
as set forth in the Offering Memorandum, neither the Company nor any of
its subsidiaries shall have any liability or obligation, direct or
contingent, which is material to the Company;
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<PAGE> 29
(2) The Company and the Subsidiary Guarantors shall not have
any material liability or obligation, direct or contingent, other than
those reflected in the Offering Memorandum; and
(3) The Initial Purchasers shall have received certificates
dated the Closing Date, signed on behalf of the Company and each of the
Subsidiary Guarantors by (i) the President and (ii) the Chief Financial
Officer of the Company and the Subsidiary Guarantors, confirming all
matters set forth in Sections 9(a), (b) and (c) hereof.
(d) On the Closing Date, the Initial Purchasers shall have received
an opinion (satisfactory to the Initial Purchasers and counsel to the
Initial Purchasers) dated the Closing Date, of Wachtell, Lipton, Rosen &
Katz, special counsel for the Company and the Subsidiary Guarantors,
substantially to the effect that:
(1) The Company (i) is duly organized and validly existing as
a corporation in good standing under the laws of its jurisdiction
and (ii) has all requisite corporate power and authority to carry on
its business as described in the Offering Memorandum and to own,
lease and operate its properties.
(2) The Company has all necessary corporate power and
authority to enter into and perform its obligations under the
Operative Documents, and to issue, sell and deliver the Notes to the
Initial Purchasers.
(3) The Company is not, and after giving effect to the
Offering will not be, (i) in violation of its charter or bylaws (ii)
except as disclosed in the Offering Memorandum, in default in the
performance of any obligation, agreement or condition contained in
any bond, debenture, note or any other evidence of indebtedness or
in any other agreement, indenture or instrument, in each case known
to counsel which is material to the conduct of the business of the
Company, or by which the Company or its property is bound, or (iii)
in violation of any local, state or federal law, statute, ordinance,
rule, regulation, requirement, judgment or court decree (including,
without limitation, environmental laws, statutes, ordinances, rules,
regulations, judgments or court decrees) in each case under the
Subject Laws (the laws of the State of New York, the laws of the
State of Delaware and the laws of the United States (the "Subject
Laws")), applicable to the Company, its subsidiaries or any of its
assets or properties (whether owned or leased), other than
violations or defaults that would not reasonably be expected to have
a Material Adverse Effect. To the best knowledge of such counsel,
there exists no condition that, with notice, the passage of time or
otherwise, would constitute a default under any such document or
instrument, except for such defaults that would not reasonably be
expected
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<PAGE> 30
to have a Material Adverse Effect.
(4) None of (i) the execution, delivery or performance by the
Company of this Agreement and the other Operative Documents and (ii)
the issuance of the Notes by the Company will conflict with or
constitute a breach of any of the terms or provisions of any of the
terms or provisions of, or a default under, or result in the
imposition of a lien or encumbrance on any properties of the
Company, or an acceleration of indebtedness pursuant to, (1) the
charter or bylaws of the Company, (2) to the best of its knowledge,
any bond, debenture, note, indenture, mortgage, deed of trust or
other agreement or instrument in each case known to such counsel and
which is material in the conduct of the business of the Company, by
which the Company or its property is bound, or (3) any law or
administrative regulation, in each case under the Subject Laws
applicable to the Company or any of its assets or properties, or, to
the knowledge of such counsel, any judgment, order or decree of any
court or governmental agency or authority entered in any proceeding
to which The Company was or is now a party or to which any of its
properties may be subject except as would not reasonably be expected
to have a Material Adverse Effect.
(5) This Agreement has been duly authorized and, when validly
executed by the Company (assuming the due execution and delivery
thereof by the Initial Purchasers) will be a legally valid and
binding obligation of the Company, enforceable against the Company
in accordance with its terms, except that (i) such enforceability
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, (whether general or specific) or similar
laws now or hereafter in effect relating to or affecting creditors'
rights and remedies generally, (ii) such enforceability may be
limited by the effects of general principles of equity and by the
discretion of the court before which any proceeding therefor may be
brought (whether such proceeding is at law or in a bankruptcy
proceeding), (iii) rights to contribution or indemnification may be
limited by the laws, rules or regulations or any governmental
authority or agency thereof or by public policy, and (iv) waivers as
to usury, stay or extension laws may be unenforceable.
(6) The Company has duly authorized the Indenture, and when
the Company has duly executed and delivered the Indenture (assuming
the due authorization, execution and delivery thereof by the
Trustee), the Indenture will be the legally valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except that (i) such enforceability may
be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, (whether general or specific) or similar
laws now or hereafter in effect relating to or affecting creditors'
rights and remedies generally, (ii) such enforceability may be
limited by
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<PAGE> 31
the effects of general principles of equity and by the discretion of
the court before which any proceeding therefor may be brought
(whether such proceeding is at law or in a bankruptcy proceeding),
(iii) rights to contribution or indemnification may be limited by
the laws, rules or regulations or any governmental authority or
agency thereof or by public policy, and (iv) waivers as to usury,
stay or extension laws may be unenforceable.
(7) The Company has duly authorized the Notes to be endorsed
on the Senior Subordinated Notes and, when the Senior Subordinated
Notes are issued and authenticated in accordance with the terms of
the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms hereof, the Notes will be
the legally valid and binding obligations of The Company,
enforceable against the Company in accordance with their terms,
except that (i) such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium,
(whether general or specific) or similar laws now or hereafter in
effect relating to or affecting creditors' rights and remedies
generally, (ii) such enforceability may be limited by the effects of
general principles of equity and by the discretion of the court
before which any proceeding therefor may be brought (whether such
proceeding is at law or in a bankruptcy proceeding), (iii) rights to
contribution or indemnification may be limited by the laws, rules or
regulations or any governmental authority or agency thereof or by
public policy, and (iv) waivers as to usury, stay or extension laws
may be unenforceable.
(8) The Company has duly authorized the Notes to be endorsed
on the New Senior Subordinated Notes and, when the New Senior
Subordinated Notes are issued and authenticated in accordance with
the terms of the Registered Exchange Offer and the Indenture, the
Notes will be the legally valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except that (i) such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, (whether general or specific) or similar laws now or
hereafter in effect relating to or affecting creditors' rights and
remedies generally, (ii) such enforceability may be limited by the
effects of general principles of equity and by the discretion of the
court before which any proceeding therefor may be brought (whether
such proceeding is at law or in a bankruptcy proceeding), (iii)
rights to contribution or indemnification may be limited by the
laws, rules or regulations or any governmental authority or agency
thereof or by public policy, and (iv) waivers as to usury, stay or
extension laws may be unenforceable.
(9) The Registration Rights Agreement has been duly authorized
and when validly executed by the Company will be (assuming the due
execution and delivery thereof by the Initial Purchasers) the
legally valid
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<PAGE> 32
and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except that (i) such
enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, (whether general or
specific) or similar laws now or hereafter in effect relating to or
affecting creditors' rights and remedies generally, (ii) such
enforceability may be limited by the effects of general principles
of equity and by the discretion of the court before which any
proceeding therefor may be brought (whether such proceeding is at
law or in a bankruptcy proceeding), (iii) rights to contribution or
indemnification may be limited by the laws, rules or regulations or
any governmental authority or agency thereof or by public policy,
and (iv) waivers as to usury, stay or extension laws may be
unenforceable.
(10) The New Credit Facility has been duly authorized and when
validly executed by the Company will be the legally valid and
binding obligation of the Company, enforceable against the Company
in accordance with its terms, except that (i) such enforceability
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, (whether general or specific) or similar
laws now or hereafter in effect relating to or affecting creditors'
rights and remedies generally, (ii) such enforceability may be
limited by the effects of general principles of equity and by the
discretion of the court before which any proceeding therefor may be
brought (whether such proceeding is at law or in a bankruptcy
proceeding), (iii) rights to contribution or indemnification may be
limited by the laws, rules or regulations or any governmental
authority or agency thereof or by public policy, and (iv) waivers as
to usury, stay or extension laws may be unenforceable.
(11) To the best knowledge of such counsel, there is and,
after giving effect to the Combination pursuant to the terms of the
Combination Agreement, will be (i) no action, suit, proceeding or
investigation before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending,
threatened, or contemplated to which the Company is or may be a
party or to which the business or property of the Company is or,
after giving effect to the Combination pursuant to the terms of the
Combination Agreement, may be subject, (ii) no statute, rule,
regulation or order that has been enacted, adopted or issued by any
governmental agency or proposed by any governmental body or (iii) no
injunction, restraining order or order of any nature issued by a
federal or state court of competent jurisdiction to which the
Company is or may be subject that, in the case of clauses (i), (ii)
and (iii) above, (1) is required to be disclosed in the Offering
Memorandum and that is not so disclosed, (2) might have a Material
Adverse Effect or (3) would interfere with or adversely affect the
issuance of the Senior Subordinated Notes or the Note Guarantees.
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(12) To the best knowledge of such counsel, there are no
holders of any security of the Company who by reason of the
execution by the Company of this Agreement or any other Operative
Document or the consummation of the transactions contemplated hereby
and thereby, have the right to request or demand that the Company
register under the Act, or analogous foreign laws and regulations,
securities held by them.
(13) The statements under the captions "Description of Notes,"
"Description of Indebtedness" and "The Transactions--The
Combination" in the Offering Memorandum, insofar as such statements
constitute a summary of legal matters, documents or proceedings
referred to therein, are correct in all material respects.
(14) Neither the Company nor any of its Subsidiaries nor any
agent thereof acting on the behalf of them, has taken or will take
any action that might cause this Agreement or the issuance or sale
of the Notes to violate Regulation G (12 C.F.R. Part 207),
Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221)
or Regulation X (12 C.F.R. Part 224) of the Board of Governors of
the Federal Reserve System, in each case as in effect now or as the
same may hereafter be in effect on the Closing Date.
(15) Neither the Company nor any of its Subsidiaries is or,
after giving effect to the Combination pursuant to the terms of the
Combination Agreement, will be an "investment company" or a company
"controlled" by an investment company within the meaning of the
Investment Company Act of 1940, as amended.
(16) When the Senior Subordinated Notes are issued and
delivered pursuant to this Agreement, such Senior Subordinated Notes
will not be of the same class (within the meaning of Rule 144A under
the Act) as securities of the Company that are listed on a national
securities exchange registered under Section 6 of the Exchange Act
or that are quoted in a United States automated inter-dealer
quotation system.
(17) The Indenture is not required to be qualified under the
Trust Indenture Act prior to the first to occur of (i) the
Registered Exchange Offer and (ii) the effectiveness of the Shelf
Registration Statement.
(18) Assuming (i) that the representations and warranties of
the Initial Purchasers in Section 7 hereof and those of the Company
in this Agreement relating to (a) the absence of general
solicitation, (b) offerings of similar securities, (c) the Company's
status as an investment company and (d) whether the Senior
Subordinated Notes are of the same class as other securities of the
Company listed on a national securities exchange registered under
Section 6 of the Exchange Act or that are quoted in a
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<PAGE> 34
United States automated inter-dealer quotation system are accurate
and will be complied with, (ii) that the Initial Purchasers complied
with their covenants as set forth in Section 7 hereof, (iii) that
none of the Eligible Purchasers is an affiliate of the Company and
(iv) that each of the Eligible Purchasers is a QIB or is purchasing
in a transaction pursuant to Regulation S, the purchase and resale
of the Senior Subordinated Notes pursuant hereto (including pursuant
to the Exempt Resales) is exempt from the registration requirements
of the Act.
(19) The Offering Memorandum, as of its date, and each
amendment or supplement thereto, as of its date (except for the
financial statement and the notes thereto and schedules and other
financial, statistical and accounting data included therein, as to
which such counsel expresses no opinion), complied as to form in all
material respects with the requirements of Rule 144A of the Act.
In addition, such counsel shall state that it has participated in
conferences with representatives of the Company, representatives of the
Company's accountants, the Initial Purchasers' representatives and counsel for
the Initial Purchasers, at which conferences the contents of the Offering
Documents and related matters were discussed, and, although such counsel has not
independently verified and is not passing upon and assumes no responsibility for
the accuracy, completeness or fairness of the statements contained in the
Offering Documents (other than those that such counsel must opine on pursuant to
Section 9(d)(l5) of this Agreement), no facts have come to such counsel's
attention which led it to believe that the Offering Memorandum, on the date
thereof or on the date of such opinion, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no view with respect to the financial statements
and data and related notes, the financial statement schedules and other
financial, statistical and accounting data included in the Offering Documents).
(e) On the Closing Date, the Initial Purchasers shall have received
an opinion (satisfactory to the Initial Purchasers and counsel to the
Initial Purchasers) dated the Closing Date, of Robert N. Sacks, General
Counsel for the Company and the Subsidiary Guarantors. In giving such
opinion, Robert N. Sacks will rely upon the opinion of Michael K. Wolf as
to all matters with respect to Standard Parking, L.P., Standard Parking
Corporation, Standard Parking Corporation IL, Standard Parking
Corporation, MW, Standard Auto Park, Inc., Standard/Wabash Parking
Corporation, Standard Parking of Canada, L.P., Standard Parking I, L.L.C.
and Standard Parking II, L.L.C. Such opinion will be substantially to the
effect that:
(1) Each of the Company and the non-Delaware Subsidiary
Guarantors (i) is, and after giving effect to the Combination
pursuant to the terms of the Combination Agreement will be, duly
organized and val-
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<PAGE> 35
idly existing and in good standing under the laws of its
jurisdiction of its organization, (ii) has, and after giving effect
to the Combination pursuant to the terms of the Combination
Agreement will have, all requisite corporate or comparable power and
authority to carry on its business as described in the Offering
Memorandum and to own, lease and operate its properties, and (iii)
is, and after giving effect to the Combination pursuant to the terms
of the Combination Agreement will be, duly qualified and is in good
standing as a foreign business or organization authorized to do
business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification
except where the failure to be so qualified would not reasonably be
expected to have a Material Adverse Effect.
(2) All of the issued and outstanding shares of capital stock
or partnership interests of, or other securities evidencing equity
ownership interests in, the Company and each of its Subsidiaries
have been duly and validly authorized and issued, and, except
otherwise disclosed in the Offering Memorandum, all of the shares of
capital stock of, or other securities evidencing equity ownership
interests in, each such Subsidiary are owned, directly or
indirectly, by the Company. All such shares of capital stock are
fully paid and non-assessable and have not been issued in violation
of any preemptive or similar rights and are owned free and clear of
any Lien, except for Liens granted pursuant to the New Credit
Facility and except for limitations on voting rights with respect to
shares of Atrium Parking, Inc. held by the Company. Except as
disclosed in the Offering Memorandum, there are not currently, and
will not be as a result of the Offering or the consummation of the
Combination pursuant to the terms of the Combination Agreement, any
outstanding subscriptions, rights, warrants, options, calls,
convertible securities, commitments of sale or Liens related to or
entitling any person to purchase or otherwise to acquire any shares
of the capital stock of, or other securities evidencing equity
ownership interests in, the Company or any of its Subsidiaries.
(3) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Operative Documents to which it is a party, and to consummate the
transactions contemplated thereby, including, without limitation,
the corporate power and authority to issue, sell and deliver the
Senior Subordinated Notes to the Initial Purchasers.
(4) The non-Delaware Subsidiary Guarantors have all necessary
corporate or comparable power and authority to enter into and
perform their obligations under the Operative Documents, and to
issue, sell and deliver the Note Guarantees to the Initial
Purchasers.
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<PAGE> 36
(5) Neither the Company nor any of its non-Delaware Subsidiary
Guarantors is, and after giving effect to the Offering and the
Combination pursuant to the terms of the Combination Agreement will
be, (i) in violation of its charter or bylaws or partnership
agreement or other organizational documents, as the case may be,
(ii) except as disclosed in the Offering Memorandum, in default in
the performance of any obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of indebtedness
or in any other agreement, indenture or instrument, in each case
which is material to the conduct of the business of the Company, to
which the Company is a party or by which it or any of the Company's
non-Delaware Subsidiary Guarantors or their respective property is
bound, or (iii) in violation of any local, state or federal law,
statute, ordinance, rule, regulation, requirement, judgment or court
decree (including, without limitation, environmental laws, statutes,
ordinances, rules, regulations, judgments or court decrees) in each
case under the laws of the State of Ohio, the laws of the State of
Illinois, the laws of the State of Delaware, and the laws of the
United States (the "General Counsel Subject Laws"), applicable to
the Company, its non-Delaware Subsidiary Guarantors or any of its
assets or properties (whether owned or leased), other than
violations or defaults that could not reasonably be expected to have
a Material Adverse Effect. To the best knowledge of the Company,
there exists no condition that, with notice, the passage of time or
otherwise, would constitute a default under any such document or
instrument, except for such defaults that would not reasonably be
expected to have a Material Adverse Effect.
(6) None of (i) the execution, delivery or performance by the
Company or the non-Delaware Subsidiary Guarantors of this Agreement
and the other Operative Documents, (ii) the performance by the
Company of the Combination Agreement and consummation of the
Combination pursuant to the terms of the Combination Agreement,
(iii) the issuance and sale of the Notes by the Company or the
issuance of the Note Guarantees by the non-Delaware Subsidiary
Guarantors and (iv) the consummation by the Company of the
transactions described in the Offering Memorandum under the caption
"Use of Proceeds," will conflict with or constitute a breach of any
of the terms or provisions of, or, after giving effect to the
Combination pursuant to the terms of the Combination Agreement, will
violate, conflict with or constitute a breach of any of the terms or
provisions of, or a default under, or result in the imposition of a
lien or encumbrance on any properties of the Company or the
non-Delaware Subsidiary Guarantors, as the case may be, or an
acceleration of indebtedness pursuant to, (1) the respective charter
or bylaws of the Company or the non-Delaware Subsidiary Guarantors,
as the case may be, (2) to the best of its knowledge, any bond,
debenture, note, indenture, mortgage, deed of trust or other
agreement or instrument to which the Company or the non-
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<PAGE> 37
Delaware Subsidiary Guarantors, as the case may be, is a party or by
which any of their respective property is bound, or (3) any law or
administrative regulation in each case under the General Counsel
Subject Laws applicable to the Company or the non-Delaware
Subsidiary Guarantors, as the case may be, or any of their assets or
properties, or any judgment, order or decree of any court or
governmental agency or authority entered in any proceeding to which
the Company or the non-Delaware Subsidiary Guarantors, as the case
may be, was or is now a party or to which any of their respective
properties may be subject except as would not have a Material
Adverse Effect. No consent, approval, authorization or order of, or
filing or registration with, any regulatory body, administrative
agency, or other governmental agency (except as securities or Blue
Sky laws of the various states may require) is required for the
execution, delivery and performance of the Operative Documents and
the valid issuance and sale of the Securities. No consents or
waivers from any person are required to consummate the transactions
contemplated by the Operative Documents or the Offering Documents,
other than such consents and waivers as have been or will be
obtained prior to the Closing Date or, in the case of the
Registration Rights Agreement and the transactions contemplated
thereby, will be obtained and made under the Act, the Trust
Indenture Act and state securities or Blue Sky laws and regulations.
(7) This Agreement has been duly authorized and, when validly
executed by the Company and the non-Delaware Subsidiary Guarantors
and (assuming the due execution and delivery thereof by the Initial
Purchasers) is a legally valid and binding obligation of the Company
and the non-Delaware Subsidiary Guarantors, enforceable against each
in accordance with its terms, except that (i) such enforceability
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, (whether general or specific) or similar
laws now or hereafter in effect relating to or affecting creditors'
rights and remedies generally, (ii) such enforceability may be
limited by the effects of general principles of equity and by the
discretion of the court before which any proceeding therefor may be
brought (whether such proceeding is at law or in a bankruptcy
proceeding), (iii) rights to contribution or indemnification may be
limited by the laws, rules or regulations or any governmental
authority or agency thereof or by public policy, and (iv) waivers as
to the usury, stay or extension laws may be unenforceable.
(8) The Company and the non-Delaware Subsidiary Guarantors
have duly authorized the Indenture, and when the Company and the
non-Delaware Subsidiary Guarantors have duly executed and delivered
the Indenture (assuming the due authorization, execution and
delivery thereof by the Trustee), the Indenture will be the legally
valid and binding obligation of each, enforceable against each in
accordance with its terms, except that
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<PAGE> 38
(i) such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium, (whether general
or specific) or similar laws now or hereafter in effect relating to
or affecting creditors' rights and remedies generally, (ii) such
enforceability may be limited by the effects of general principles
of equity and by the discretion of the court before which any
proceeding therefor may be brought (whether such proceeding is at
law or in a bankruptcy proceeding), (iii) rights to contribution or
indemnification may be limited by the laws, rules or regulations or
any governmental authority or agency thereof or by public policy,
and (iv) waivers as to usury, stay or extension laws may be
unenforceable.
(9) The Company has duly authorized the Senior Subordinated
Notes and, when issued and authenticated in accordance with the
terms of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms hereof, will be the legally
valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, except that (i) such
enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, (whether general or
specific) or similar laws now or hereafter in effect relating to or
affecting creditors' rights and remedies generally, (ii) such
enforceability may be limited by the effects of general principles
of equity and by the discretion of the court before which any
proceeding therefor may be brought (whether such proceeding is at
law or in a bankruptcy proceeding), (iii) rights to contribution or
indemnification may be limited by the laws, rules or regulations or
any governmental authority or agency thereof or by public policy,
and (iv) waivers as to the usury, stay or extension laws may be
unenforceable.
(10) The non-Delaware Subsidiary Guarantors have duly
authorized the Note Guarantees to be endorsed on the Senior
Subordinated Notes and, when the Senior Subordinated Notes are
issued and authenticated in accordance with the terms of the
Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms hereof, the Note Guarantees will be the
legally valid and binding obligations of the non-Delaware Subsidiary
Guarantors, enforceable against the non-Delaware Subsidiary
Guarantors in accordance with their terms, except that (i) such
enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, (whether general or
specific) or similar laws now or hereafter in effect relating to or
affecting creditors' rights and remedies generally, (ii) such
enforceability may be limited by the effects of general principles
of equity and by the discretion of the court before which any
proceeding therefor may be brought (whether such proceeding is at
law or in a bankruptcy proceeding), (iii) rights to contribution or
indemnification may be limited by the laws, rules or regulations or
any governmental authority or agency thereof or by
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<PAGE> 39
public policy, and (iv) waivers as to the usury, stay or extension
laws may be unenforceable.
(11) The Company has duly authorized the New Senior
Subordinated Notes and, when issued and authenticated in accordance
with the terms of the Registered Exchange Offer and the Indenture,
the New Senior Subordinated Notes will be the legally valid and
binding obligations of the Company, enforceable against the Company
in accordance with their terms, except that (i) such enforceability
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, (whether general or specific) or similar
laws now or hereafter in effect relating to or affecting creditors'
rights and remedies generally, (ii) such enforceability may be
limited by the effects of general principles of equity and by the
discretion of the court before which any proceeding therefor may be
brought (whether such proceeding is at law or in a bankruptcy
proceeding), (iii) rights to contribution or indemnification may be
limited by the laws, rules or regulations or any governmental
authority or agency thereof or by public policy, and (iv) waivers as
to usury, stay or extension laws may be unenforceable.
(12) The non-Delaware Subsidiary Guarantors have duly
authorized the Note Guarantees to be endorsed on the New Senior
Subordinated Notes and, when the New Senior Subordinated Notes are
issued and authenticated in accordance with the terms of the
Registered Exchange Offer and the Indenture, the Note Guarantees
will be the legally valid and binding obligations of the
non-Delaware Subsidiary Guarantors, enforceable against the
non-Delaware Subsidiary Guarantors in accordance with their terms,
except that (i) such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium,
(whether general or specific) or similar laws now or hereafter in
effect relating to or affecting creditors' rights and remedies
generally, (ii) such enforceability may be limited by the effects of
general principles of equity and by the discretion of the court
before which any proceeding therefor may be brought (whether such
proceeding is at law or in a bankruptcy proceeding), (iii) rights to
contribution or indemnification may be limited by the laws, rules or
regulations or any governmental authority or agency thereof or by
public policy, and (iv) waivers as to the usury, stay or extension
laws may be unenforceable.
(13) The Registration Rights Agreement has been duly
authorized and when validly executed by the Company and the
non-Delaware Subsidiary Guarantors will be (assuming the due
execution and delivery thereof by the Initial Purchasers) the
legally valid and binding obligation of each, enforceable against
each in accordance with its terms, except that (i) such
enforceability may be limited by bankruptcy, insolvency, fraudu-
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<PAGE> 40
lent conveyance, reorganization, moratorium, (whether general or
specific) or similar laws now or hereafter in effect relating to or
affecting creditors' rights and remedies generally, (ii) such
enforceability may be limited by the effects of general principles
of equity and by the discretion of the court before which any
proceeding therefor may be brought (whether such proceeding is at
law or in a bankruptcy proceeding), (iii) rights to contribution or
indemnification may be limited by the laws, rules or regulations or
any governmental authority or agency thereof or by public policy,
and (iv) waivers as to the usury, stay or extension laws may be
unenforceable.
(14) The Combination Agreement has been duly and validly
authorized by the Company and is a legally valid and binding
agreement of the Company, enforceable against it in accordance with
its terms, except that (i) such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, (whether general or specific) or similar laws now or
hereafter in effect relating to or affecting creditors' rights and
remedies generally, (ii) such enforceability may be limited by the
effects of general principles of equity and by the discretion of the
court before which any proceeding therefor may be brought (whether
such proceeding is at law or in a bankruptcy proceeding), (iii)
rights to contribution or indemnification may be limited by the
laws, rules or regulations or any governmental authority or agency
thereof or by public policy, and (iv) waivers as to the usury, stay
or extension laws may be unenforceable.
(15) The New Credit Facility has been duly authorized and when
validly executed by the Company and the subsidiaries of the Company
that are obligors thereunder will be the legally valid and binding
obligation of each, enforceable against each in accordance with its
terms, except that (i) such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, (whether general or specific) or similar laws now or
hereafter in effect relating to or affecting creditors' rights and
remedies generally, (ii) such enforceability may be limited by the
effects of general principles of equity and by the discretion of the
court before which any proceeding therefor may be brought (whether
such proceeding is at law or in a bankruptcy proceeding), (iii)
rights to contribution or indemnification may be limited by the
laws, rules or regulations or any governmental authority or agency
thereof or by public policy, and (iv) waivers as to usury, stay or
extension laws may be unenforceable.
(16) To the best knowledge of such counsel, there is and,
after giving effect to the Combination pursuant to the terms of the
Combination Agreement, will be (i) no action, suit, proceeding or
investigation before or by any court, arbitrator or governmental
agency, body or official, do-
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<PAGE> 41
mestic or foreign, now pending, threatened, or, to the knowledge of
the Company, contemplated to which the Company or the non-Delaware
Subsidiary Guarantors is or may be a party or to which the business
or property of the Company or the non-Delaware Subsidiary Guarantors
is or, after giving effect to the Combination pursuant to the terms
of the Combination Agreement, may be subject, (ii) no statute, rule,
regulation or order that has been enacted, adopted or issued by any
governmental agency or, to the best knowledge of the Company,
proposed by any governmental body or (iii) no injunction,
restraining order or order of any nature issued by a federal or
state court of competent jurisdiction to which the Company or the
non-Delaware Subsidiary Guarantors is or may be subject that, in the
case of clauses (i), (ii) and (iii) above, (1) is required to be
disclosed in the Offering Memorandum and that is not so disclosed,
(2) might have a Material Adverse Effect or (3) would interfere with
or adversely affect the issuance of the Senior Subordinated Notes or
the Note Guarantees.
(17) To the best knowledge of such counsel, there are no
holders of any security of the Company or the non-Delaware
Subsidiary Guarantors who by reason of the execution by the Company
and the non-Delaware Subsidiary Guarantors of this Agreement or any
other Operative Document or the consummation of the transactions
contemplated hereby and thereby, have the right to request or demand
that the Company or the non-Delaware Subsidiary Guarantors register
under the Act, or analogous foreign laws and regulations, securities
held by them.
(18) The statements under the captions "The Business -
Litigation" in the Offering Memorandum, insofar as such statements
constitute a summary of legal matters, documents or proceedings
referred to therein, are correct in all material respects.
In addition, such counsel shall state that he has participated in
conferences with representatives of the Company, representatives of the
Company's accountants, the Initial Purchasers' representatives and counsel for
the Initial Purchasers, at which conferences the contents of the Offering
Documents and related matters were discussed, and, although such counsel has not
independently verified and is not passing upon and assumes no responsibility for
the accuracy, completeness or fairness of the statements contained in the
Offering Documents, no facts have come to such counsel's attention which led him
to believe that the Offering Memorandum, on the date thereof or on the date of
such opinion, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the statements
contained therein, in the light of the circumstances under which they were made,
not misleading (it being understood that such counsel need express no view with
respect to the financial statements and data and related notes, the financial
statement schedules and other financial, statistical and accounting data
included in the Offering Documents).
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<PAGE> 42
(f) The Initial Purchasers shall have received on the Closing Date
an opinion, dated the Closing Date, of Latham & Watkins, in form and
substance satisfactory to the Initial Purchasers.
(g) The Initial Purchasers shall have received customary comfort
letters from (i) Ernst & Young LLP, independent public accountants for the
Company and (ii) Altschuler, Melvoin and Glasser, LLP, independent public
accountants for Standard, in each case, dated as of the date of this
Agreement and as of the Closing Date, in form and substance satisfactory
to the Initial Purchasers and counsel to the Initial Purchasers, with
respect to the financial statements and certain financial information
contained in the Offering Memorandum.
(h) The Company, the Subsidiary Guarantors and the Trustee shall
have entered into the Indenture and the Initial Purchasers shall have
received counterparts, conformed as executed, thereof.
(i) The Company, the Subsidiary Guarantors and the Initial
Purchasers shall have entered into the Registration Rights Agreement for
the benefit of the Initial Purchasers and the benefit of the other
purchasers, in the form attached hereto as Exhibit A, and the Initial
Purchasers shall have received counterparts, conformed as executed,
thereof.
(j) The Company shall have entered into the New Credit Facility (the
form and substance of which shall be acceptable to the Initial Purchasers)
and the Initial Purchasers shall have received counterparts, conformed as
executed thereof and of all other documents and agreements entered into in
connection therewith.
(k) The Company shall have fully performed or complied with any of
the agreements herein contained and required to be performed or complied
with by the Company on or prior to the Closing Date.
(l) Latham & Watkins shall have been furnished with such documents
and opinions, in addition to those set forth above, as they may reasonably
require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 9 and in order to evidence the
accuracy, completeness or satisfaction in all material respects of any of
the representations, warranties or conditions herein contained.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective upon the execution and
delivery of this Agreement by the parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by the Initial Purchasers by written notice to the Company if any of the
following has occurred: (i) any outbreak or escalation of hostilities or other
national or international calamity or crisis or
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<PAGE> 43
change in economic conditions or in the financial markets of the United States
or elsewhere that, in the Initial Purchasers' judgment, is material and adverse
and, in the Initial Purchasers' judgment, makes it impracticable to market the
Senior Subordinated Notes on the terms and in the manner contemplated in the
Offering Memorandum, (ii) the suspension or material limitation of trading in
securities or other instruments on the New York Stock Exchange, the American
Stock Exchange, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange, the Chicago Board of Trade or the Nasdaq National Market or limitation
on prices for securities or other instruments on any such exchange or the Nasdaq
National Market, (iii) the suspension of trading of any securities of the
Company or any Guarantor on any exchange or in the over-the-counter market, (iv)
the enactment, publication, decree or other promulgation of any federal or state
statute, regulation, rule or order of any court or other governmental authority
which in your the Initial Purchasers' reasonable opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in the Initial Purchasers' reasonable opinion has a
material adverse effect on the financial markets in the United States.
(b) If on the Closing Date, any of the Initial Purchasers shall fail
or refuse to purchase Senior Subordinated Notes which it has agreed to purchase
hereunder on such date, and the aggregate principal amount of such Senior
Subordinated Notes that such defaulting Initial Purchaser agreed but failed or
refused to purchase does not exceed 10% of the total principal amount of such
Senior Subordinated Notes that all of the Initial Purchasers are obligated to
purchase on such Closing Date, the non-defaulting Initial Purchasers shall be
obligated to purchase the Senior Subordinated Notes that such defaulting Initial
Purchasers agreed but failed or refused to purchase on such date. If, on the
Closing Date, any of the Initial Purchasers shall fail or refuse to purchase
Senior Subordinated Notes in an aggregate principal amount that exceeds 10% of
such total principal amount of the Senior Subordinated Notes and arrangements
satisfactory to the other Initial Purchasers and the Company for the purchase of
such Senior Subordinated Notes are not made within 48 hours after such default,
this Agreement shall terminate without liability on the part of the
non-defaulting Initial Purchasers or the Company, except as otherwise provided
in this Section 10. In any such case that does not result in termination of this
Agreement, the Initial Purchasers or the Company may postpone the Closing Date
for not longer than seven days, in order that the required changes, if any, in
the Offering Memorandum or any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve a defaulting Initial
Purchaser from liability in respect of any default by any such Initial Purchaser
under this Agreement.
11. AGREEMENT OF THE INITIAL PURCHASERS.
The Initial Purchasers agree, severally and not jointly, that upon their
receipt of any written notice from the Company of the existence of any fact or
the happening of any event that requires the making of any additions to or
changes in any offering memorandum, registration statement or prospectus, or
amendment or supplement thereto, referred to in Section 5(d) hereof in order
that such document will not contain any untrue statement of a material fact or
omission
-42-
<PAGE> 44
to state any material fact necessary in order to make the statements therein, in
the light of the circumstances existing as of the date such document was
delivered, not misleading, such Initial Purchasers shall forthwith discontinue
disposition of the applicable Notes pursuant to such document until (i) such
Initial Purchasers receive from the Company copies of an amended or supplemented
document that the Company states in writing may be used by such Initial
Purchasers or (ii) such Initial Purchasers are advised in writing by the Company
that the use of such document may be resumed.
12. MISCELLANEOUS.
(a) Notices given pursuant to any provision of this Agreement shall
be addressed as follows: (i) if to the Company, to APCOA, Inc., 800
Superior Avenue, Cleveland, Ohio 44114, Attention: General Counsel and
(ii) if to the Initial Purchasers, to Donaldson, Lufkin & Jenrette
Securities Corporation, 277 Park Avenue, New York, New York 10172,
Attention: Syndicate Department, and (iii) if to the Initial Purchasers
pursuant to Section 11 hereof, (A) to Donaldson, Lufkin & Jenrette
Securities Corporation, 277 Park Avenue, New York, New York 10172,
Attention: Syndicate Department & Compliance Department and (B) to First
Chicago Capital Markets, Inc., 611 Woodward, 2nd Floor, Detroit, Michigan
48226, Attention: Syndicate Department & Compliance Department or in any
case to such other address as the person to be notified may have requested
in writing.
(b) The respective indemnities, contribution agreements,
representations, warranties and other statements set forth in or made
pursuant to this Agreement shall remain operative and in full force and
effect, and will survive delivery of and payment for the Senior
Subordinated Notes, regardless of (i) any investigation, or statement as
to the results thereof, made by or on behalf of any such person, (ii)
acceptance of the Senior Subordinated Notes and payment for them hereunder
and (iii) termination of this Agreement.
(c) Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Subsidiary Guarantors, the Initial Purchasers, any controlling persons
referred to herein and their respective successors and assigns, all as and
to the extent provided in this Agreement, and no other person shall
acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include a purchaser of any of the
Senior Subordinated Notes from any of the Initial Purchasers merely
because of such purchase.
(d) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS
MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK.
-43-
<PAGE> 45
(e) This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument. Please confirm that
the foregoing correctly sets forth the agreement between the Company, the
Subsidiary Guarantors and the Initial Purchasers.
(f) In any provision hereunder purporting to give effect to the
Combination, such statements are made with respect to facts known as of
the date hereof (and not future events other than the consummation of the
Combination) and are meant only to account for consummation of the
Combination in accordance with the terms of the Combination Agreement.
(g) All representations and warranties hereunder made by the Company
or the Subsidiary Guarantors, and the opinions of Wachtell, Lipton, Rosen
& Katz and Robert N. Sacks are qualified by the information contained in
the Preliminary Offering Memorandum and the Offering Memorandum.
[signature pages follow]
-44-
<PAGE> 46
Very truly yours,
APCOA, INC.
By: /s/ Michael J. Celebrezze
----------------------------------
Name: Michael J. Celebrezze
Title: Senior Vice President,
Chief Financial Officer
Treasurer
TOWER PARKING, INC.
By: /s/ Michael J. Celebrezze
----------------------------------
Name: Michael J. Celebrezze
Title: Vice President, Treasurer
GRAELIC, INC.
By: /s/ Michael J. Celebrezze
----------------------------------
Name: Michael J. Celebrezze
Title: Vice President, Treasurer
APCOA CAPITAL CORPORATION
By: /s/ Michael J. Celebrezze
----------------------------------
Name: Michael J. Celebrezze
Title: Vice President, Treasurer
-45-
<PAGE> 47
A-1 AUTO PARK, INC.
By: /s/ Michael J. Celebrezze
----------------------------------
Name: Michael J. Celebrezze
Title: Vice President, Treasurer
METROPOLITAN PARKING SYSTEM, INC.
By: /s/ Michael J. Celebrezze
----------------------------------
Name: Michael J. Celebrezze
Title: Treasurer
EVENTS PARKING CO., INC.
By: /s/ Michael J. Celebrezze
----------------------------------
Name: Michael J. Celebrezze
Title: Treasurer
-46-
<PAGE> 48
STANDARD PARKING, L.P.
By: /s/ Myron C. Warshauer
----------------------------------
Name: Myron C. Warshauer
Title: President
STANDARD PARKING CORPORATION
By: /s/ Myron C. Warshauer
----------------------------------
Name: Myron C. Warshauer
Title: President
STANDARD PARKING CORPORATION, IL
By: /s/ Myron C. Warshauer
----------------------------------
Name: Myron C. Warshauer
Title: President
STANDARD PARKING CORPORATION, MW
By: /s/ Myron C. Warshauer
----------------------------------
Name: Myron C. Warshauer
Title: President
-47-
<PAGE> 49
STANDARD AUTO PARK, INC.
By: /s/ Myron C. Warshauer
----------------------------------
Name: Myron C. Warshauer
Title: President
STANDARD/WABASH PARKING CORPORATION
By: /s/ Myron C. Warshauer
----------------------------------
Name: Myron C. Warshauer
Title: President
STANDARD PARKING OF CANADA
By: /s/ Myron C. Warshauer
----------------------------------
Name: Myron C. Warshauer
Title: President of Standard
Parking Corporation,
General Partner of Standard
Parking of Canada, L.P.
STANDARD PARKING I, L.L.C.
By: /s/ Myron C. Warshauer
----------------------------------
Name: Myron C. Warshauer
Title: President of Standard
Parking Corporation,
Managing Member of Standard
Parking I, L.L.C.
-48-
<PAGE> 50
STANDARD PARKING II, L.L.C.
By: /s/ Myron C. Warshauer
----------------------------------
Name: Myron C. Warshauer
Title: President of Standard
Parking Corporation,
Managing Member of Standard
Parking II, L.L.C.
-49-
<PAGE> 51
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written
by Donaldson, Lufkin & Jenrette Se-
curities Corporation on behalf
of the Initial Purchasers.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Timothy White
-------------------------------
Name: Timothy White
Title: Vice President
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<PAGE> 52
SCHEDULE I
Subsidiary Guarantors
Tower Parking, Inc.
Graelic, Inc.
APCOA Capital Corporation
A-1 Auto Park, Inc.
Metropolitan Parking System, Inc.
Events Parking Co., Inc.
Standard Parking, L.P.
Standard Parking Corporation
Standard Parking Corporation, IL
Standard Parking Corporation, MW
Standard Auto Park, Inc.
Standard/Wabash Parking Corporation
Standard Parking of Canada, L.P.
Standard Parking I, L.L.C.
Standard Parking II, L.L.C.
-51-
<PAGE> 53
SCHEDULE II
Donaldson, Lufkin & Jenrette Securities Corporation.................
First Chicago Capital Markets, Inc..................................
-52-
<PAGE> 54
EXHIBIT A
Form of Registration Rights Agreement
-53-
<PAGE> 1
Exhibit 2.1
==============================================================================
COMBINATION AGREEMENT
by and among
THE STANDARD OWNERS
NAMED ON THE SIGNATURE PAGES HERETO
and
APCOA, INC.
dated as of
January 15, 1998
==============================================================================
<PAGE> 2
TABLE OF CONTENTS
Page
Number
------
ARTICLE I
Certain Definitions
Section 1.1. "Accounting Firm".......................................... 1
Section 1.2. "Action"................................................... 1
Section 1.3. "Affiliate"................................................ 1
Section 1.4. "Agreement"................................................ 2
Section 1.5. "AMG"...................................................... 2
Section 1.6. "Antitrust Laws"........................................... 2
Section 1.7. "APCOA".................................................... 2
Section 1.8. "APCOA Affiliated Group"................................... 2
Section 1.9. "APCOA Balance Sheet"...................................... 2
Section 1.10. "APCOA Business Condition"................................. 2
Section 1.11. "APCOA Common Stock"....................................... 2
Section 1.12. "APCOA Damages"............................................ 2
Section 1.13. "APCOA Financial Statements"............................... 2
Section 1.14. "APCOA Income Statement"................................... 2
Section 1.15. "APCOA Indemnitees"........................................ 2
Section 1.16. "APCOA Leased Real Property"............................... 2
Section 1.17. "APCOA Leases"............................................. 2
Section 1.18. "APCOA Licenses ".......................................... 2
Section 1.19. "APCOA Preferred Stock".................................... 3
Section 1.20. "APCOA Statement of Cash Flows"............................ 3
Section 1.21. "APCOA's Warranty Period".................................. 3
Section 1.22. "Audited 1997 APCOA Financial Statements".................. 3
Section 1.23. "Audited 1997 Standard Financial Statements"............... 3
Section 1.24. "Audited Standard Financial Statements".................... 3
Section 1.25. "Basket"................................................... 3
Section 1.26. "Century".................................................. 3
Section 1.27. "Claims"................................................... 3
Section 1.28. "Closing".................................................. 3
Section 1.29. "Closing Date"............................................. 3
Section 1.30. "Code"..................................................... 3
Section 1.31. "Combination".............................................. 3
Section 1.32. "Company Employee Benefit Plans"........................... 3
Section 1.33. "Consulting Agreement"..................................... 3
Section 1.34. "CTC"...................................................... 3
Section 1.35. "Current Employees"........................................ 4
-i-
<PAGE> 3
Page
Number
------
Section 1.36. "Distribution Amount"...................................... 4
Section 1.37. "Due Diligence Agreement".................................. 4
Section 1.38. "Due Diligence Out Termination Date"....................... 4
Section 1.39. "Employee Benefit Plans"................................... 4
Section 1.40. "Employees"................................................ 4
Section 1.41. "Employment Agreement"..................................... 4
Section 1.42. "Encumbrances"............................................. 4
Section 1.43. "Environmental Law"........................................ 4
Section 1.44. "ERISA".................................................... 4
Section 1.45. "ERISA Affiliate".......................................... 4
Section 1.46. "Escrow Agent"............................................. 4
Section 1.47. "Escrow Agreement"......................................... 4
Section 1.48. "Escrowed Amount".......................................... 4
Section 1.49. "Estimated DA Statement"................................... 4
Section 1.50. "Estimated Distribution Amount"............................ 5
Section 1.51. "Excluded Assets".......................................... 5
Section 1.52. "Final DA Statement"....................................... 5
Section 1.53. "Former Employees"......................................... 5
Section 1.54. "FY 1997".................................................. 5
Section 1.55. "Government Authority"..................................... 5
Section 1.56. "Guarantee"................................................ 5
Section 1.57. "Historical Standard Balance Sheet"........................ 5
Section 1.58. "Historical Standard Financial Statements"................. 5
Section 1.59. "Historical Standard Income Statement"..................... 5
Section 1.60. "Historical Standard Statement of Cash Flows".............. 5
Section 1.61. "Holberg".................................................. 5
Section 1.62. "HSR Act".................................................. 5
Section 1.63. "Indemnified Party"........................................ 5
Section 1.64. "Indemnifying Party"....................................... 5
Section 1.65. "Initial DA Statement"..................................... 5
Section 1.66. "IPO"...................................................... 6
Section 1.67. "IRS"...................................................... 6
Section 1.68. "Letter Agreement"......................................... 6
Section 1.69. "Management Contracts"..................................... 6
Section 1.70. "Multiemployer Plan"....................................... 6
Section 1.71. "Notice of Disagreement"................................... 6
Section 1.72. "Parties".................................................. 6
Section 1.73. "Pension Plan"............................................. 6
Section 1.74. "Permitted Debt"........................................... 6
Section 1.75. "Permitted Encumbrance".................................... 6
Section 1.76. "person"................................................... 6
Section 1.77. "Purchase Price"........................................... 7
Section 1.78. "Returns".................................................. 7
Section 1.79. "Schedules Date"........................................... 7
-ii-
<PAGE> 4
Page
Number
------
Section 1.80. "Special Management Contracts"............................. 7
Section 1.81. "Standard Advisors Fee".................................... 7
Section 1.82. "Standard Affiliated Group"................................ 7
Section 1.83. "Standard APCOA Shares".................................... 7
Section 1.84. "Standard Business"........................................ 7
Section 1.85. "Standard Business Condition".............................. 7
Section 1.86. "Standard Companies"....................................... 7
Section 1.87. "Standard Interests"....................................... 7
Section 1.88. "Standard Leased Real Property"............................ 7
Section 1.89. "Standard Leases".......................................... 7
Section 1.90. "Standard Licenses"........................................ 7
Section 1.91. "Standard Owners".......................................... 7
Section 1.92. "Standard Owners Damages".................................. 7
Section 1.93. "Standard Owners Indemnitees".............................. 8
Section 1.94. "Standard Owners' Warranty Period"......................... 8
Section 1.95. "Standard Transferred Companies"........................... 8
Section 1.96. "Stockholders Agreement"................................... 8
Section 1.97. "Subsidiary"............................................... 8
Section 1.98. "Taxes".................................................... 8
Section 1.99. "Taxing Authority"......................................... 8
Section 1.100. "338 Election"............................................ 8
Section 1.101. "to the knowledge of APCOA"............................... 8
Section 1.102. "to the knowledge of Standard Owners and
the Standard Companies".................................. 8
Section 1.103. "Withdrawal Liability".................................... 8
ARTICLE II
Transfer of Standard Interests; Closing
Section 2.1. Combination and Transfer................................... 8
Section 2.2. Consideration.............................................. 9
Section 2.3. Time and Place of Closing.................................. 9
Section 2.4. Closing Distribution Amount................................ 10
ARTICLE III
Representations and Warranties of Standard Owners
Section 3.1. Incorporation; Authorization; Etc.......................... 12
Section 3.2. Capitalization............................................. 13
Section 3.3. Financial Statements....................................... 14
Section 3.4. Undisclosed Liabilities.................................... 15
Section 3.5. Properties................................................. 15
-iii-
<PAGE> 5
Page
Number
------
Section 3.6. Personal Property.......................................... 16
Section 3.7. Absence of Certain Changes................................. 17
Section 3.8. Litigation; Orders......................................... 17
Section 3.9. Intellectual Property...................................... 17
Section 3.10. Licenses, Approvals, Other Authorizations,
Consents, Reports, Etc................................... 17
Section 3.11. Labor Matters.............................................. 18
Section 3.12. Compliance with Laws....................................... 19
Section 3.13. Insurance.................................................. 19
Section 3.14. Material Contracts......................................... 19
Section 3.15. Management Contracts....................................... 19
Section 3.16. Brokers, Finders, Etc...................................... 20
Section 3.17. Hazardous Materials........................................ 20
Section 3.18. Knowledge Regarding Representations........................ 21
Section 3.19. Acquisition of Shares for Investment....................... 21
ARTICLE IV
Representations and Warranties of APCOA
Section 4.1. Incorporation; Authorization; Etc.......................... 21
Section 4.2. Capitalization............................................. 22
Section 4.3. Financial Statements....................................... 23
Section 4.4. Undisclosed Liabilities.................................... 23
Section 4.5. Properties................................................. 23
Section 4.6. Personal Property.......................................... 24
Section 4.7. Absence of Certain Changes................................. 25
Section 4.8. Litigation; Orders......................................... 25
Section 4.9. Intellectual Property...................................... 25
Section 4.10. Licenses, Approvals, Other Authorizations,
Consents, Reports, Etc................................... 25
Section 4.11. Labor Matters.............................................. 26
Section 4.12. Compliance with Laws....................................... 26
Section 4.13. Insurance.................................................. 26
Section 4.14. Material Contracts......................................... 26
Section 4.15. Management Contracts....................................... 27
Section 4.16. Brokers, Finders, Etc...................................... 27
Section 4.17. Hazardous Materials........................................ 28
Section 4.18. Knowledge Regarding Representations........................ 28
-iv-
<PAGE> 6
Page
Number
------
ARTICLE V
Covenants of Standard Owners and APCOA
Section 5.1 Investigation of Business; Access to
Properties and Records, Etc.............................. 28
Section 5.2. Efforts; Obtaining Consents; Antitrust Laws................ 29
Section 5.3. Further Assurances......................................... 29
Section 5.4. Conduct of Business........................................ 29
Section 5.5. Public Announcements....................................... 31
Section 5.6. Financial Statements....................................... 32
Section 5.7. Schedules.................................................. 32
ARTICLE VI
Employee Benefits
Section 6.1. Employee Benefit Plans..................................... 33
ARTICLE VII
Tax Matters
Section 7.1. Standard Tax Returns....................................... 34
Section 7.2. APCOA Tax Returns.......................................... 36
Section 7.3. Definitions................................................ 38
Section 7.4. Section 338(h)(10)......................................... 38
Section 7.5. Section 754 Election....................................... 39
Section 7.6. Survival................................................... 39
ARTICLE VIII
Conditions of APCOA's Obligation to Close
Section 8.1. Representations, Warranties and Covenants of
Standard Owners.......................................... 39
Section 8.2. Filings; Consents; Waiting Periods......................... 39
Section 8.3. No Injunction.............................................. 39
Section 8.4. Other Agreements........................................... 39
Section 8.5. Financing.................................................. 40
-v-
<PAGE> 7
Page
Number
------
ARTICLE IX
Conditions to Standard Owners' Obligation to Close
Section 9.1. Representations, Warranties and Covenants of
APCOA.................................................... 40
Section 9.2. Filings; Consents; Waiting Periods......................... 40
Section 9.3. No Injunction.............................................. 40
Section 9.4. Other Agreements........................................... 40
ARTICLE X
Escrow
Section 10.1 Escrowed Amount............................................ 41
Section 10.2 Designee................................................... 41
ARTICLE XI
Survival; Indemnification
Section 11.1. Survival of Standard Owners' Representations............... 41
Section 11.2. Indemnification by Standard Owners......................... 42
Section 11.3. Survival of APCOA's Representations........................ 43
Section 11.4. Indemnification by APCOA................................... 43
Section 11.5. Conditions of Indemnification.............................. 44
Section 11.6. Indemnification Sole Remedy................................ 45
ARTICLE XII
Termination
Section 12.1. Termination................................................ 45
Section 12.2. Procedure and Effect of Termination........................ 46
ARTICLE XIII
Miscellaneous
Section 13.1. Counterparts............................................... 47
Section 13.2. Governing Law; Jurisdiction and Forum...................... 47
Section 13.3. Entire Agreement; Third-Party Beneficiary.................. 48
Section 13.4. Expenses................................................... 48
Section 13.5. Notices.................................................... 48
Section 13.6. Successors and Assigns..................................... 50
Section 13.7. Headings; Definitions...................................... 50
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<PAGE> 8
Page
Number
------
Section 13.8. Amendments and Waivers..................................... 50
Section 13.9. Interpretation; Absence of Presumption..................... 50
Section 13.10. Severability............................................. 51
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<PAGE> 9
SCHEDULES
Schedule 1.53 Excluded Assets
Schedule 2.2 Allocation of Consideration
Schedule 3.1(b) Standard Owners Violations
Schedule 3.2 Standard Capitalization
Schedule 3.3(a) Standard Financial Statements
Schedule 3.3(d) Standard Transactions with Affiliates of Standard Owners
Schedule 3.4 Standard Undisclosed Liabilities
Schedule 3.5(a) Standard Properties
Schedule 3.5(b) Standard Improvements
Schedule 3.6 Standard Personal Property
Schedule 3.7 Standard Conduct of Business Since October 31, 1997
Schedule 3.8 Standard Litigation; Orders
Schedule 3.9 Standard Intellectual Property
Schedule 3.10(a) Standard Government Licenses, etc.
Schedule 3.10(b) Standard Consents, etc.
Schedule 3.11 Standard Labor Matters
Schedule 3.12 Standard Compliance with Laws
Schedule 3.13 Standard Insurance
Schedule 3.14 Standard Contracts
Schedule 3.15 Standard Management Contracts
Schedule 3.17 Standard Hazardous Materials
Schedule 4.1(b) APCOA Owners Violations
Schedule 4.2 APCOA Capitalization
Schedule 4.3(a) APCOA Financial Statements
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<PAGE> 10
Schedule 4.3(d) APCOA Transactions with Affiliates
Schedule 4.4 APCOA Undisclosed Liabilities
Schedule 4.5(a) APCOA Properties
Schedule 4.5(b) APCOA Improvements
Schedule 4.6 APCOA Personal Property
Schedule 4.7 APCOA Conduct of Business Since September 30, 1997
Schedule 4.8 APCOA Litigation; Orders
Schedule 4.9 APCOA Intellectual Property
Schedule 4.10(a) APCOA Government Licenses, etc.
Schedule 4.10(b) APCOA Consents, etc.
Schedule 4.11 APCOA Labor Matters
Schedule 4.12 APCOA Compliance with Laws
Schedule 4.13 APCOA Insurance
Schedule 4.14 APCOA Contracts
Schedule 4.15 APCOA Management Contracts
Schedule 4.17 APCOA Hazardous Materials
Schedule 5.1(a) Amended and Restated Due Diligence Agreement
Schedule 5.4(a) Standard Conduct of Business
Schedule 5.4(b) APCOA Conduct of Business
Schedule 6.1(a) Employee Benefit Plans
Schedule 6.1(f) Multiemployer Plans
Schedule 7.1(c) Standard Affiliated Groups
Schedule 7.1(d) Standard Tax Liens, Assertions and Unresolved Disputes
Schedule 7.2(c) APCOA Tax Liens, Assertions and Unresolved Disputes
Schedule 7.4 Allocation Schedule
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<PAGE> 11
Schedule 11.2(a) Percentages for Standard Owners Several Liability
Schedule 13.9S Persons Whose Actual Knowledge Constitutes Knowledge of
Standard Owners and the Standard Companies
Schedule 13.9A Persons Whose Actual Knowledge Constitutes Knowledge of
APCOA
-x-
<PAGE> 12
EXHIBITS
Exhibit A Form of Stockholders Agreement
Exhibit B Form of Escrow Agreement
Exhibit C Form of Employment Agreement
Exhibit D Form of Consulting Agreement
-xi-
<PAGE> 13
This COMBINATION AGREEMENT (this "Agreement"), dated as of January
15, 1998, is by and among Myron C. Warshauer, Stanley Warshauer, Steven A.
Warshauer, Dosher Partners, L.P., a Delaware limited partnership, SP Parking
Associates, an Illinois general partnership, and SP Associates, an Illinois
general partnership (collectively, "Standard Owners"), and APCOA, Inc., a
Delaware corporation ("APCOA" and, together with Standard Owners, the
"Parties").
WHEREAS, Standard Owners are engaged through the Standard Companies
in the operation of various parking businesses (excluding the business related
to the Excluded Assets, the "Standard Business"), the operations of which are
reflected in the Historical Standard Financial Statements; and
WHEREAS, Standard Owners wish to sell, convey and transfer to APCOA,
and APCOA wishes to purchase, acquire and receive from Standard Owners, the
Standard Interests, upon the terms and subject to the conditions set forth
herein;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound hereby, the Parties
hereby agree as follows:
ARTICLE I
Certain Definitions
As used in this Agreement, the following terms shall have the
following respective meanings:
Section 1.1. "Accounting Firm" shall mean KPMG Peat Marwick
LLP, or if such firm is unable or unwilling to undertake the responsibilities
required of the Accounting Firm hereunder, or has any material relationship with
any Party, such other nationally recognized independent public accounting firm
as shall be agreed upon by the Parties in writing.
Section 1.2. "Action" shall mean any actual or threatened
action, suit, arbitration, inquiry, proceeding or investigation.
Section 1.3. "Affiliate" (and, with a correlative meaning,
"Affiliated") shall mean, with respect to any person, any other person that
directly, or through one or more intermediaries, controls or is controlled by or
is under common control with such person, and, if such a person is an
individual, any member of the immediate family (including parents, spouse and
children) of such individual and any trust whose principal beneficiary is such
individual or one or more members of such immediate family and any person who is
controlled by any such member or trust. As used in this definition, "control"
(including, with correlative meanings, "controlled by" and "under common control
with") shall mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise).
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Section 1.4. "Agreement" shall have the meaning set forth in the
first paragraph hereof.
Section 1.5. "AMG" shall have the meaning set forth in Section 2.4.
Section 1.6. "Antitrust Laws" shall mean and include the Sherman
Act, as amended, the Clayton Act, as amended, the HSR Act, the Federal Trade
Commission Act, as amended, and all other federal, state, foreign and
multinational (including European Community) statutes, rules, regulations,
orders, decrees, administrative and judicial doctrines, and other laws that are
designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade.
Section 1.7. "APCOA" shall have the meaning set forth in the first
paragraph hereof.
Section 1.8. "APCOA Affiliated Group" shall have the meaning set
forth in Section 7.2(a).
Section 1.9. "APCOA Balance Sheet" shall have the meaning set forth
in Section 4.3(b).
Section 1.10. "APCOA Business Condition" shall mean the assets,
properties, operations, business, prospects or financial condition of APCOA's
business taken as a whole.
Section 1.11. "APCOA Common Stock" shall have the meaning set forth
in Section 4.2.
Section 1.12. "APCOA Damages" shall have the meaning set forth in
Section 11.2(a).
Section 1.13. "APCOA Financial Statements" shall have the meaning
set forth in Section 4.3(a).
Section 1.14. "APCOA Income Statement" shall have the meaning set
forth in Section 4.3(b).
Section 1.15. "APCOA Indemnitees" shall have the meaning set forth
in Section 11.2(a).
Section 1.16. "APCOA Leased Real Property" shall have the meaning
set forth in Section 4.5(a).
Section 1.17. "APCOA Leases" shall have the meaning set forth in
Section 4.5(a).
Section 1.18. "APCOA Licenses" shall have the meaning set forth in
Section 4.10(a).
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Section 1.19. "APCOA Preferred Stock" shall have the meaning set
forth in Section 4.2.
Section 1.20. "APCOA Statement of Cash Flows" shall have the meaning
set forth in Section 4.3(b).
Section 1.21. "APCOA's Warranty Period" shall have the meaning set
forth in Section 11.3.
Section 1.22. Audited 1997 APCOA Financial Statements" shall have
the meaning set forth in Section 5.6(b).
Section 1.23. "Audited 1997 Standard Financial Statements" shall
have the meaning set forth in Section 5.6(a).
Section 1.24. "Audited Standard Financial Statements" shall have the
meaning set forth in Section 5.6(a).
Section 1.25. "Basket" shall have the meaning set forth in Section
11.2(b).
Section 1.26. "Century" shall mean Century Parking Inc. and its
affiliated entities.
Section 1.27. "Claims" shall have the meaning set forth in Section
11.5.
Section 1.28. "Closing" (and, with a correlative meaning, "Close")
shall mean the consummation of the Combination.
Section 1.29. "Closing Date" shall mean the date which is three days
from the date on which the conditions set forth in Articles VIII and IX shall be
satisfied or duly waived, or, if the Parties agree on a different date, the date
upon which they have mutually agreed.
Section 1.30. "Code" shall mean the Internal Revenue Code of 1986,
as amended, and any successor thereto.
Section 1.31. "Combination" shall mean the consummation of the
transactions described in Section 2.1.
Section 1.32. "Company Employee Benefit Plans" shall have the
meaning set forth in Section 6.1(a).
Section 1.33. "Consulting Agreement" shall mean the Consulting
Agreement by and between APCOA and Sidney Warshauer in the form attached as
Exhibit D to be dated as of the Closing Date.
Section 1.34. "CTC" shall have the meaning set forth in Section
13.2(c).
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Section 1.35. "Current Employees" shall have the meaning set forth
in Section 6.1(a).
Section 1.36. "Distribution Amount" shall have the meaning set forth
in Section 2.4(c).
Section 1.37. "Due Diligence Agreement" shall have the meaning set
forth in Section 5.1.
Section 1.38. "Due Diligence Out Termination Date" shall have the
meaning set forth in Section 12.1.
Section 1.39. "Employee Benefit Plans" shall have the meaning set
forth in Section 6.1(a).
Section 1.40. "Employees" shall have the meaning set forth in
Section 6.1(a).
Section 1.41. "Employment Agreement" shall mean the Employment
Agreement by and between APCOA and Myron C. Warshauer in the form attached as
Exhibit C to be dated as of the Closing Date.
Section 1.42. "Encumbrances" shall mean mortgages, liens,
encumbrances, security interests, covenants, conditions, restrictions,
rights-of-way, easements, encroachments, options, rights of first offer, rights
of first refusal, claims and any other matters affecting title.
Section 1.43. "Environmental Law" shall have the meaning set forth
in Section 3.17.
Section 1.44. "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, and any successor thereto.
Section 1.45. "ERISA Affiliate" shall mean, with respect to any
entity, trade or business, any other entity, trade or business that is a member
of a group described in Section 414(b), (c), (m) or (o) of the Code or Section
4001(b)(1) of ERISA that includes the first entity, trade or business, or that
is a member of the same "controlled group" as the first entity, trade or
business pursuant to Section 4001(a)(14) of ERISA.
Section 1.46. "Escrow Agent" shall have the meaning set forth in
Section 10.1.
Section 1.47. "Escrow Agreement" shall have the meaning set forth in
Section 10.1.
Section 1.48. "Escrowed Amount" shall have the meaning set forth in
Section 10.1.
Section 1.49. "Estimated DA Statement" shall have the meaning set
forth in Section 2.4(a).
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<PAGE> 17
Section 1.50. "Estimated Distribution Amount" shall have the meaning
set forth in Section 2.4(a).
Section 1.51. "Excluded Assets" shall mean those assets listed on
Schedule 1.51.
Section 1.52. "Final DA Statement" shall have the meaning set forth
in Section 2.4(c).
Section 1.53. "Former Employees" shall have the meaning set forth in
Section 6.1(a).
Section 1.54. "FY 1997" shall have the meaning set forth in Section
2.4(a).
Section 1.55. "Government Authority" shall mean any government or
state (or any subdivision thereof), whether domestic, foreign or multinational
(including European Community), or any agency, authority, bureau, commission,
department or similar body or instrumentality thereof, or any governmental court
or tribunal.
Section 1.56. "Guarantee" shall have the meaning set forth in
Section 10.1.
Section 1.57. "Historical Standard Balance Sheet" shall have the
meaning set forth in Section 3.3(b).
Section 1.58. "Historical Standard Financial Statements" shall have
the meaning set forth in Section 3.3(a).
Section 1.59. "Historical Standard Income Statement" shall have the
meaning set forth in Section 3.3(b).
Section 1.60. "Historical Standard Statement of Cash Flows" shall
have the meaning set forth in Section 3.3(b).
Section 1.61. "Holberg" shall mean Holberg Industries, Inc., a
Delaware corporation.
Section 1.62. "HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
Section 1.63. "Indemnified Party" shall have the meaning set forth
in Section 11.5(a)
Section 1.64. "Indemnifying Party" shall have the meaning set forth
in Section 11.5(a)
Section 1.65. "Initial DA Statement" shall have the meaning set
forth in Section 2.4(c).
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<PAGE> 18
Section 1.66. "IPO" shall have the meaning set forth in Section
11.1.
Section 1.67. "IRS" shall mean the United States Internal Revenue
Service.
Section 1.68. "Letter Agreement" shall have the meaning set forth in
Section 5.1(b).
Section 1.69. "Management Contracts" shall mean all contracts,
agreements or other arrangements (including leases) pursuant to which a person
has agreed to manage, operate or lease a parking facility.
Section 1.70. "Multiemployer Plan" shall have the meaning set forth
in Section 6.1(e).
Section 1.71. "Notice of Disagreement" shall mean APCOA's written
notice of its disagreement with the Initial DA Statement.
Section 1.72. "Parties" shall have the meaning set forth in the
first paragraph hereof.
Section 1.73. "Pension Plan" shall have the meaning set forth in
Section 6.1(c).
Section 1.74. "Permitted Debt" shall mean, as of the Closing Date,
debt (including obligations in respect of capital leases and earnout
obligations, and including related fees, costs and expenses) incurred or assumed
in connection with any acquisition of Century by the Standard Companies if such
acquisition and debt is approved by APCOA in accordance with the provisions of
Section 5.4, and other debt not in excess of $630,000, provided that all of such
debt is prepayable at any time without penalty or premium), and provided that
such debt will not include any debt incurred to finance any Excluded Assets or
which would not properly be reflected in a Standard Balance Sheet prepared as of
the Closing Date.
Section 1.75. "Permitted Encumbrance" shall mean (i) with respect to
the Standard Business, those Encumbrances listed in Schedule 3.5(a) or 3.6, and,
with respect to APCOA, those Encumbrances listed in Schedule 4.5(a) or 4.6, (ii)
liens for current ad valorem taxes not yet due and payable and (iii) such
Encumbrances not known to the applicable Party as do not in any respect detract
from the value of the property subject thereto (other than in an amount not
material with respect to such property and, together with all other such
Encumbrances, not material to and which would not reasonably be expected to have
a material adverse effect on the business condition of the applicable Party) or
interfere with or impair the present and continued use thereof in the usual and
normal conduct of their business (other than in a manner not material with
respect to such property and, together with all other such Encumbrances, not
material to and which could not reasonably be expected to have a material
adverse effect on the business condition of the applicable Party).
Section 1.76. "person" shall mean any individual, corporation,
partnership, joint venture, trust, unincorporated organization, other form of
business or legal entity or Government Authority.
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<PAGE> 19
Section 1.77. "Purchase Price" shall mean (i) the Standard APCOA
Shares plus (ii) $65,000,000.
Section 1.78. "Returns" shall have the meaning set forth in Section
7.3(a).
Section 1.79. "Schedules Date" shall have the meaning set forth in
Section 5.7.
Section 1.80. "Special Management Contracts" shall have the meaning
set forth in Section 3.15.
Section 1.81. "Standard Advisors Fee" shall have the meaning set
forth in Section 3.16.
Section 1.82. "Standard Affiliated Group" shall have the meaning set
forth in Section 7.1(a).
Section 1.83. "Standard APCOA Shares" shall mean 5.009523 shares of
APCOA Common Stock.
Section 1.84. "Standard Business" shall have the meaning set forth
in the second paragraph hereof.
Section 1.85. "Standard Business Condition" shall mean the assets,
properties, operations, business, prospects or financial condition of the
Standard Business taken as a whole.
Section 1.86. "Standard Companies" shall mean all of the Standard
Transferred Companies and their respective Subsidiaries, including Standard
Parking I, L.L.C., a Delaware limited liability company; Standard Parking II,
L.L.C., a Delaware limited liability company; and Standard Parking of Canada,
L.P., an Illinois limited partnership.
Section 1.87. "Standard Interests" shall mean all of the outstanding
capital stock, partnership and other equity interests of the Standard
Transferred Companies.
Section 1.88. "Standard Leased Real Property" shall have the meaning
set forth in Section 3.5(a).
Section 1.89. "Standard Leases" shall have the meaning set forth in
Section 3.5(a).
Section 1.90. "Standard Licenses" shall have the meaning set forth
in Section 3.10(a).
Section 1.91. "Standard Owners" shall have the meaning set forth in
the first paragraph hereof.
Section 1.92. "Standard Owners Damages" shall have the meaning set
forth in Section 11.4(a).
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Section 1.93. "Standard Owners Indemnitees" shall have the meaning
set forth in Section 11.4(a).
Section 1.94. "Standard Owners' Warranty Period" shall have the
meaning set forth in Section 11.1.
Section 1.95. "Standard Transferred Companies" shall mean Standard
Parking Corporation, an Illinois corporation; Standard Auto Park, Inc., an
Illinois corporation; Standard Parking Corporation, MW, an Illinois corporation;
Standard Parking, L.P., a Delaware limited partnership; Standard Parking
Corporation, IL, an Illinois corporation; Standard/Wabash Parking Corporation,
an Illinois corporation.
Section 1.96. "Stockholders Agreement" shall mean the Stockholders
Agreement by and among Standard Owners, APCOA, Holberg, APA Acquisition, Inc.
and AP Holdings, Inc. in the form attached as Exhibit A to be dated as of the
Closing Date.
Section 1.97. "Subsidiary" of any person shall mean any corporation,
partnership, limited liability company or other business entity of which at
least a majority of the outstanding capital stock (or similar interests) having
voting power under ordinary circumstances to elect directors (or similar
governing body members) shall at the time be held, directly or indirectly, by
such person and/or by one or more Subsidiaries of such person.
Section 1.98. "Taxes" shall have the meaning set forth in Section
7.3(b).
Section 1.99. "Taxing Authority" shall have the meaning set forth in
Section 7.3(c).
Section 1.100. "338 Election" shall have the meaning set forth in
Section 7.4.
Section 1.101. "to the knowledge of APCOA" shall have the meaning
set forth in Section 13.9(a).
Section 1.102. "to the knowledge of Standard Owners and the Standard
Companies" shall have the meaning set forth in Section 13.9(a).
Section 1.103. "Withdrawal Liability" shall have the meaning set
forth in Section 6.1(f).
ARTICLE II
Transfer of Standard Interests; Closing
Section 2.1. Combination and Transfer. On the Closing Date, and
subject to the terms and conditions set forth in this Agreement, each Standard
Owner shall sell, convey, assign, transfer and deliver to APCOA, and APCOA shall
purchase and acquire from such Standard Owner, all of such Standard Owner's
right, title and interest in and to the Standard Interests owned by such
Standard Owner, which are listed in Schedule 2.2 and which, together with the
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other Standard Interests listed in Schedule 2.2, represent all Standard
Interests, in return for the Purchase Price payable as set forth in Section 2.2.
Section 2.2. Consideration. (a) Subject to the terms and conditions
hereof, at the Closing, APCOA shall convey to Standard Owners (including to the
Escrow Agent as contemplated and required hereby) the Purchase Price, (i) by
delivery of the Standard APCOA Shares, duly issued and registered in the names
and amounts set forth in Schedule 2.2, and (ii) by wire transfer of immediately
available funds of the cash portion of the Purchase Price (in the amounts, by
Standard Owner, set forth in Schedule 2.2) to the account or accounts specified
to APCOA by Standard Owners by written notice delivered to APCOA at least two
business days prior to the Closing (including in each case by delivery of the
Escrowed Amount to the Escrow Agent to be held in accordance with the terms of
the Escrow Agreement).
(b) In addition to the other things required to be done hereunder,
at the Closing, Standard Owners shall deliver or cause to be delivered to APCOA
the following: (i) a certificate, dated the Closing Date and validly executed on
behalf of Standard Owners, to the effect that the condition set forth in Section
8.1 has been satisfied; (ii) a copy of the resolutions of the board of directors
of each Standard Owner (or similar enabling document in the case of entities
other than corporate entities) authorizing the execution, delivery and
performance of this Agreement by such Standard Owner, together with a
certificate of the secretary or assistant secretary of such Standard Owner,
dated as of the Closing Date, that such resolutions were duly adopted and are in
full force and effect; (iii) evidence or copies of any consents, approvals,
orders, qualifications or waivers required pursuant to Section 8.2; and (iv)
certificates or other documents evidencing the Standard Interests, together with
any stock or other powers, endorsements or other documents required for their
sale, conveyance, assignment, transfer and delivery, and such other instruments
of sale, conveyance, assignment, transfer and delivery reasonably requested by
APCOA, as may be necessary or appropriate to confirm or carry out the provisions
of this Agreement.
(c) In addition to the payment of the Purchase Price and the other
things required to be done hereunder, at the Closing, APCOA shall deliver, or
cause to be delivered, to Standard Owners the following: (i) a certificate,
dated the Closing Date and validly executed on behalf of APCOA, to the effect
that the condition set forth in Section 9.1 shall have been satisfied; (ii) a
copy of the resolutions of the board of directors of APCOA (or its executive
committee), or similar enabling document, authorizing the execution, delivery
and performance of this Agreement by APCOA, together with a certificate of the
secretary or assistant secretary of APCOA, dated as of the Closing Date, that
such resolutions were duly adopted and are in full force and effect; (iii)
evidence or copies of any consents, approvals, orders, qualifications or waivers
required pursuant to Section 9.2; (iv) if not previously delivered to Standard
Owners, all other certificates, documents, instruments and writings required
pursuant hereto to be delivered by or on behalf of APCOA at or before the
Closing; and (v) such other instruments as may be reasonably requested by
Standard Owners, as may be necessary or appropriate to confirm or carry out the
provisions of this Agreement.
Section 2.3. Time and Place of Closing. The Closing shall take place
on the Closing Date at 10:00 a.m., New York City time, at the offices of
Wachtell, Lipton, Rosen & Katz, New York, New York, unless otherwise agreed by
the Parties.
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Section 2.4. Closing Distribution Amount. (a) Prior to the Closing
Date, Standard Owners and APCOA shall work together in the preparation of a
statement (the "Estimated DA Statement") setting forth a reasonable estimate of
the following amount (the "Estimated Distribution Amount") as of the Closing
Date and the calculation thereof: such calculation shall be comprised of (i)
$5,283,000 less distributions made on or prior to the Closing Date (whether in
cash, property or otherwise, but excluding the distribution of any Excluded
Assets expressly permitted in accordance with the terms hereof) with respect to
earnings of the Standard Business for the fiscal year ending December 31, 1997
("FY 1997"), plus (ii) $1,200,000 (which Standard Owners represent and warrant
to be a portion of the amount of the original capital contribution by Standard
Owners to the Standard Companies), plus (iii) an amount equal to (x) $5,400,000
divided by 365, multiplied by (y) the number of days from January 1, 1998
through the Closing Date, less distributions (whether in cash, property or
otherwise) made on or prior to the Closing Date with respect to earnings of the
Standard Business during such period, minus (iv) the incentive compensation of
the Standard Companies accrued and not received by the Standard Companies for FY
1997, minus (v) the retroactive payments in respect of policies of insurance
maintained by the Standard Companies accrued for FY 1997 based on experience
history for the Standard Companies but not yet received by the Standard
Companies or received, but as to which binding written confirmations of finality
from the applicable insurance carrier or broker has not been obtained, provided
that the numbers used in such calculation shall be derived from financial
records prepared in accordance with generally accepted accounting principles
consistently applied (and consistent with the Audited 1997 Standard Financial
Statements (to the extent available at the relevant time)) and such calculation
shall be consistent with this Agreement and with past practices, but excluding,
for purposes of such calculation, the Standard Advisors Fees.
(b) At the Closing, APCOA shall convey the Estimated Distribution
Amount, to the extent not already distributed in accordance with the provisions
of Section 5.4(c)(i), to Standard Owners in the amounts specified in the
Estimated DA Statement.
(c) On or prior to July 1, 1998, Standard Owners shall deliver to
APCOA a revision of the Estimated DA Statement reflecting actual results for FY
1997 (the "Initial DA Statement"), which statement shall be accompanied by a
report thereon of Altschuler, Melvoin and Glasser LLP ("AMG") to the effect
that, in the opinion of such firm, (x) such statement fairly presents a
calculation of an amount equal to the Estimated Distribution Amount, computed
without deducting the amounts deducted pursuant to clauses (iv) and (v) in the
calculation of the Estimated Distribution Amount to the extent that such amounts
have been actually collected, and, with respect to the amounts described in
clause (v) only, binding written confirmation of finality with respect thereto
obtained from the applicable insurance carrier or broker, as of July 1, 1998
(or, if previously collected but not final, to the extent that binding written
confirmation of finality with respect to such amounts have been obtained from
the applicable insurance carrier or broker) (such amount, the "Distribution
Amount") based upon financial records prepared in accordance with generally
accepted accounting principles consistently applied and (y) that such
calculation is consistent with this Agreement and with past practices. APCOA
shall assist Standard Owners in the preparation of the Initial DA Statement and
shall be provided full access to the properties, books and records relating to
Standard Owners and the Standard Business for such purpose. During the 60 days
immediately following APCOA's receipt of the Initial DA Statement, AP-
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<PAGE> 23
COA shall be permitted to review Standard Owners' (and AMG's) working papers
relating to the Initial DA Statement. The Initial DA Statement shall become
final and binding upon the Parties (and shall thereupon become the "Final DA
Statement") on the 60th day following receipt thereof by APCOA unless APCOA
shall provide a Notice of Disagreement to Standard Owners prior to such date.
Any Notice of Disagreement shall specify in reasonable detail the nature of any
disagreement so asserted. If a timely Notice of Disagreement is received by
Standard Owners, then the Initial DA Statement shall become final and binding
upon the Parties (and shall thereupon become the "Final DA Statement") on the
earlier of (x) the date on which the Parties resolve in writing any differences
they may have with respect to any matter specified in the Notice of
Disagreement, and agree upon a Final DA Statement, or (y) the date on which the
Accounting Firm finally resolves in writing any matters with respect to the
Initial DA Statement that are in dispute by providing the Parties with a Final
DA Statement. During the 60 days immediately following the delivery of a Notice
of Disagreement, Standard Owners and APCOA shall seek in good faith to resolve
in writing (and thereby agree on a Final DA Statement) any differences which
they may have with respect to any matter specified in the Notice of
Disagreement. During such period, Standard Owners shall have access to the
working papers of APCOA prepared in connection with APCOA's preparation of the
Notice of Disagreement. At the end of such 60-day period, Standard Owners and
APCOA shall submit to the Accounting Firm for review and resolution any and all
matters which remain in dispute and which were included in the Notice of
Disagreement, and the Accounting Firm shall make a final determination (which
shall thereupon become the "Final DA Statement"), binding on the Parties, of the
Distribution Amount. The fees of the Accounting Firm incurred pursuant to this
Section shall be borne equally by APCOA and Standard Owners. If the Distribution
Amount reflected on the Final DA Statement exceeds the Estimated Distribution
Amount, APCOA shall, and if the Estimated Distribution Amount exceeds the
Distribution Amount reflected on the Final DA Statement, Standard Owners shall,
within 10 business days after the DA Statement becomes final and binding on the
Parties, make payment of the difference to the other Party by wire transfer in
immediately available funds of the amount of such excess, together with interest
thereon at a rate equal to the rate of interest from time to time announced
publicly by Citibank, N.A. as its base rate, calculated on the basis of the
actual number of days elapsed over 365 from the Closing Date to the date of
payment.
(d) With respect to any FY 1997 retroactive payments on account of
any policies of insurance maintained by the Standard Companies received by the
Standard Companies prior to July 1, 1998, but as to which binding written
confirmations of finality from the applicable insurance carrier or broker were
not obtained prior to July 1, 1998, and which have not previously or otherwise
been distributed to the Standard Owners, such amounts shall be distributed by
the Standard Companies to the Standard Owners after July 1, 1998, either (i) at
such time as written confirmations of finality from the applicable insurance
carrier or broker are obtained with respect thereto, or (ii) at such time as the
insurance carrier's legal right to file a claim to recover any portion thereof
has expired.
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ARTICLE III
Representations and Warranties of Standard Owners
Each Standard Owner hereby represents and warrants to APCOA as to
itself (but not as to any other Standard Owner) and as to each Standard Company
as follows:
Section 3.1. Incorporation; Authorization; Etc. (a) (i) Such
Standard Owner (other than any natural person) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization. Such Standard Owner (other than any natural person) (A) has all
requisite corporate or comparable power to own its properties and assets and to
carry on its business as it is now being conducted and (B) is in good standing
and is duly qualified to transact business in each domestic jurisdiction in
which the nature of property owned or leased by it or the conduct of its
business requires it to be so qualified, except where the failure to be in good
standing or to be duly qualified to transact business, would not, individually
or in the aggregate, have a material adverse effect on the Standard Business
Condition or otherwise impair consummation of the Combination. (ii) Each
Standard Company is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization. Each Standard Company (A) has
all requisite corporate or comparable power to own its properties and assets and
to carry on its business as it is now being conducted and (B) is in good
standing and is duly qualified to transact business in each domestic
jurisdiction in which the nature of property owned or leased by it or the
conduct of its business requires it to be so qualified, except where the failure
to be in good standing or to be duly qualified to transact business, would not,
individually or in the aggregate, have a material adverse effect on the Standard
Business Condition or otherwise impair consummation of the Combination.
(b) Such Standard Owner has full corporate or comparable power to
execute and deliver this Agreement and to perform its obligations hereunder. The
execution and delivery of this Agreement and the performance of such Standard
Owner's (other than a natural person) obligations hereunder have been duly and
validly authorized by all necessary proceedings on the part of such Standard
Owner and no other proceedings or actions on the part of such Standard Owner,
its board of directors (or similar governing body) or stockholders (or other
interest owners) are necessary therefor. Except as set forth in Schedule 3.1(b),
the execution, delivery and performance by such Standard Owner (other than any
natural person) of this Agreement will not (i) violate any provision of such
Standard Owner's certificate of incorporation or by-laws or other organizational
documents, (ii) except for Management Contracts or as disclosed in Schedule
3.1(b), violate any provision of, or be an event that is (or with the passage of
time will result in) a violation of, or result in the acceleration of or entitle
any party to accelerate (whether after the giving of notice or lapse of time or
both) any obligation under, or result in the imposition of any lien upon or the
creation of a security interest in the assets of any Standard Company pursuant
to, any mortgage, lien, lease, agreement, instrument, order, arbitration award,
judgment, injunction or decree to which any Standard Company is a party or by
which any of them is bound, or (iii) except as disclosed in Schedule 3.1(b) or
3.12, violate or conflict with any statute, rule or regulation applicable to
such Standard Owner or any Standard Company or any of its properties or assets
or any other material restriction of any kind or character to which such
Standard Owner or any Standard Company is subject, that, in the case of any of
clauses (ii) and (iii), would, indi-
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<PAGE> 25
vidually or in the aggregate, have a material adverse effect on the Standard
Business Condition or impair the consummation of the Combination. This Agreement
has been duly executed and delivered by such Standard Owner, and, assuming the
due execution and delivery hereof by APCOA, constitutes the legal, valid and
binding obligation of such Standard Owner, enforceable against such Standard
Owner in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting
the rights and remedies of creditors generally and to general principles of
equity (regardless of whether in equity or at law). The execution of the
Employment Agreement and the Consulting Agreement by APCOA, and all payments
that may become due thereunder, will, prior to Closing, be approved in a manner
satisfying the requirements of Section 280G(b)(5)(A)(ii) and 280G(b)(5)(B) of
the Code with respect to the change of control of Standard Parking and its
affiliates that will occur as of the Closing Date.
Section 3.2. Capitalization. (a) All of the outstanding shares of
capital stock, partnership interests or other interests of each Standard Company
have been validly authorized and duly issued and are fully paid and
non-assessable. All of the outstanding shares of capital stock, partnership
interests or other interests of each Standard Transferred Company, (i) except as
set forth on Schedule 3.2, are free of preemptive rights and are owned as set
forth in Schedule 2.2 by such Standard Owner free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal, agreements,
limitations on voting rights, charges and other legal or equitable encumbrances
of any nature whatsoever and (ii) are included in the Standard Interests. All of
the outstanding shares of capital stock, partnership interests or other
interests of each Standard Company (other than any Standard Transferred
Company), except as set forth on Schedule 3.2, are free of preemptive rights and
are owned as set forth in Schedule 3.2 by a Standard Transferred Company free
and clear of all security interests, liens, claims, pledges, options, rights of
first refusal, agreements, limitations on voting rights, charges and other legal
or equitable encumbrances of any nature whatsoever. Except pursuant to this
Agreement, and except as set forth on Schedule 3.2, there are no options,
warrants, calls, rights or agreements to which such Standard Owner or any
Standard Company is a party or by which any of them is bound obligating any
Standard Company to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock, partnership interests or other equity
interests of any Standard Company, or securities convertible into or
exchangeable for such interests or obligating any Standard Company to grant,
extend or enter into any such option, warrant, call, right or agreement. Except
as set forth on Schedule 3.2, there are no outstanding contractual obligations
of such Standard Owner or any Standard Company (i) restricting the transfer of,
(ii) affecting the voting rights of, (iii) requiring the repurchase, redemption
or disposition of, (iv) requiring the registration for sale of or (v) granting
any preemptive or antidilutive right with respect to any shares of capital
stock, partnership interests or other interests on any Standard Company. All
outstanding shares of capital stock, partnership interests or other interests of
each Subsidiary of any Standard Transferred Company are duly authorized, validly
issued, fully paid, nonassessable and free of preemptive rights and owned by a
Standard Transferred Company or a Standard Company, free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on voting rights, charges and other legal or equitable
encumbrances of any nature whatsoever. No Standard Company is the record or
beneficial owner of any capital stock of, or
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joint venture or other investment or equity interest in, any person other than
(i) another Standard Company and (ii) the Excluded Assets.
(b) The Standard Interests listed on Schedule 2.2 collectively
represent all Standard Interests. Except as set forth on Schedule 3.2, no
Standard Owner or any Affiliate of Myron C. Warshauer or any member of his
family is engaged or owns an interest in any parking or parking-related business
other than which is a part of the Standard Business (or the Excluded Assets).
Upon consummation of the Combination at the Closing, as contemplated by this
Agreement, such Standard Owner shall deliver to APCOA good title to the Standard
Interests of such Standard Owner free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal, agreements,
limitations on voting rights, charges and other legal or equitable encumbrances
of any nature whatsoever, other than those created by or through APCOA (if any).
Section 3.3. Financial Statements. (a) Attached as Schedule 3.3(a)
are (i) true and complete copies of the audited balance sheets of the Standard
Business on a consolidated basis as of December 31, 1995 and December 31, 1996
and the audited income statements and statements of cash flows of the Standard
Business on a consolidated basis for the 12-month periods ending December 31,
1994, December 31, 1995 and December 31, 1996, and which in each case (other
than those for the 12-month period ended December 31, 1994) have been audited by
AMG, and are accompanied by an unqualified opinion of AMG, and (ii) true and
complete copies of the unaudited balance sheet of the Standard Business on a
consolidated basis as of October 31, 1997 and the unaudited income statement of
the Standard Business on a consolidated basis for the ten-month period ending
October 31, 1997 (collectively, the "Historical Standard Financial Statements").
In each case herein in which the Standard Business is referred to in the context
of a balance sheet, income statement, statement of cash flows or other financial
statement, such balance sheet, income statement, statement of cash flows or
other financial statement has been prepared without taking into account the
Excluded Assets or any results of operations related to the ownership thereof in
any way (but including results of operations that are not related to the
ownership of the Excluded Assets and that will continue following the
consummation of the Combination such as lease payments or management fees made
to the Standard Companies in respect of operations located on Excluded Assets),
and otherwise reflecting the Standard Business as the same will be conveyed in
the Combination.
(b) Each balance sheet included in the Historical Standard Financial
Statements may be hereinafter referred to as a "Historical Standard Balance
Sheet," and each income statement included in the Historical Standard Financial
Statements may be hereinafter referred to as a "Historical Standard Income
Statement" and each statement of cash flows included in the Historical Standard
Financial Statements may be hereinafter referred to as a "Historical Standard
Statement of Cash Flows."
(c) The Historical Standard Financial Statements (including, in each
case, any notes thereto) are accurate and complete in all material respects,
were prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto) and, in the case of any Historical
Standard Balance Sheet, fairly present the consolidated financial position of
the Standard Companies or the Standard Business, as the case may be, at the date
thereof or, in the case of any
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Historical Standard Income Statement, and Historical Standard Statement of Cash
Flows, fairly present the consolidated results of operations of the Standard
Companies or the Standard Business, as the case may be, for the periods then
ended (subject, in the case of unaudited Historical Standard Financial
Statements, to any other adjustments described therein and normal year-end audit
adjustments), and without taking into account the Excluded Assets or any results
of operations related to the ownership thereof in any way (but including results
of operations that are not related to the ownership of the Excluded Assets and
that will continue following the consummation of the Combination, such as lease
payments or management fees made to the Standard Companies in respect of
operations located on Excluded Assets), and otherwise reflects the Standard
Business as the same will be conveyed in the Combination. No Standard Company
has, since January 1, 1996, made any change in the accounting practices or
policies applied in the preparation of the Historical Standard Financial
Statements. The books and records of the Standard Companies have been, and are
being, maintained in accordance with generally accepted accounting principles
and other applicable legal and accounting requirements.
(d) The Historical Standard Balance Sheets do not include any assets
which were not included in the Standard Business (including the Excluded Assets)
and owned by a Standard Company at the relevant date, and the Historical
Standard Income Statements and Historical Standard Statement of Cash Flows do
not reflect the operations of any entity or business which were not included in
the Standard Business (including the Excluded Assets and the operations related
thereto) and owned by a Standard Company during the relevant period. Schedule
3.3(d) contains a true and complete list of all transactions with Affiliates of
Standard Owners involving the Standard Business for the periods covered by the
Historical Standard Financial Statements. Except as specified in Schedule
3.3(d), all transactions involving Affiliates of Standard Owners have been
accounted for on the Historical Standard Financial Statements.
(e) Each Standard Company conducts business the revenues of which
(excluding revenues derived from bank accounts, securities and similar
investments (such as interests in any Standard Company)) were material to the
Standard Business for FY 1997.
Section 3.4. Undisclosed Liabilities. Except as reflected, reserved
against or otherwise disclosed in the Historical Standard Balance Sheet as of
October 31, 1997, and except as set forth on Schedule 3.4, and except, as of the
Closing Date, for the Permitted Debt, there are no liabilities, debts (including
obligations in respect of capital leases), or obligations of or claims against
any Standard Company or otherwise relating to or arising in connection with the
Standard Business (of any nature whether or not required to be disclosed
pursuant to generally accepted accounting principles) which would individually
or in the aggregate reasonably be expected to have a material adverse effect on
the Standard Business Condition or that would have been required to be reflected
on such balance sheet or in the related notes in accordance with United States
generally accepted accounting principles consistently applied by such Standard
Company.
Section 3.5. Properties. (a) Except for, as of the date hereof,
Excluded Assets, no real property is owned by the Standard Business. Schedule
3.5(a) describes all leases for real property leased by any Standard Company as
lessee or lessor other than Management Contracts (the "Standard Leased Real
Property"), such description including an identification of the lease
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agreement therefor and any and all amendments, modifications, side letters and
other agreements relating thereto, the names of the lessor and lessee
thereunder, the title and date thereof, the address of the premises leased
thereunder, and the term, including any extension options, if not apparent from
the lease agreement. All leases with respect to the Standard Leased Real
Property ("Standard Leases") are in effect in accordance with their terms and
create a valid and binding interest in the Standard Leased Real Property in
favor of a Standard Company and, except as set forth in Schedule 3.5(a), all
rents and other amounts (including taxes, insurance and utilities) required to
be paid under such Standard Leases, which have become due, have been paid. To
the actual knowledge of Standard Owners and the Standard Companies, except as
set forth in Schedule 3.5(a), there are no condemnation proceedings, special
assessments, impact fees or similar charges pending or, to the actual knowledge
of Standard Owners and the Standard Companies, threatened against the Standard
Leased Real Property, and Standard Owners have not received or been served with
any notice with respect to any of the foregoing. To the actual knowledge of
Standard Owners and the Standard Companies, the current use by the Standard
Companies of the Standard Leased Real Property complies in all respects with all
applicable zoning laws and building and use restrictions (including all
agreements of the Standard Companies applicable thereto) and condominium
restrictions, except as could not be reasonably expected, individually or in the
aggregate, to have a material adverse effect with respect to the Standard
Business Condition. Standard Owners and the Standard Companies have no actual
knowledge of any proposed change in the zoning or building ordinances affecting
the Standard Leased Real Property.
(b) Except as disclosed in Schedule 3.5(b), no lease of Standard
Leased Real Property requires a Standard Company to make any structural repairs
or maintenance beyond routine maintenance. To the actual knowledge of Standard
Owners and the Standard Companies, except as disclosed in Schedule 3.5(b), all
buildings, structures, improvements and fixtures on, under, over or within
Standard Leased Real Property, and all other aspects of each Standard Leased
Real Property: (i) are in good operating condition and repair (subject to normal
wear and tear) and are structurally sound and free of any material defects; (ii)
are suitable, sufficient and appropriate in all respects for their current uses,
except for such failures as, together with all other such failures, could not
reasonably be expected to have a material adverse effect on the Standard
Business Condition; (iii) comply with all applicable codes and rules of national
and local associations and boards of insurance underwriters; (iv) are within the
boundary lines of their respective Standard Leased Real Property; and (v)
consist of sufficient land, parking areas, sidewalks, driveways and other
improvements to permit the continued use of such facilities in the manner and
for the purposes to which they are presently devoted. There are no outstanding
or, to the actual knowledge of Standard Owners and the Standard Companies,
threatened requirements by any insurance company which has issued an insurance
policy covering any Standard Leased Real Property, or by any board of fire
underwriters or other body exercising similar functions, requiring any material
repairs or work to be done on any Standard Leased Real Property.
Section 3.6. Personal Property. Schedule 3.6 sets forth a list of
all personal property (including fixed assets) owned by a Standard Company with
an initial purchase price or book value in excess of $25,000 and all
Encumbrances thereon. Each Standard Company has good and marketable title to
such property free and clear of Encumbrances, except Permitted Encumbrances and
except for those Encumbrances set forth in Schedule 3.6. All such personal
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property is in good operating condition and repair in all material respects,
ordinary wear and tear excepted, and is sufficient for the operation of the
Standard Business consistent with past practice.
Section 3.7. Absence of Certain Changes. Since December 31, 1996,
there has been no material adverse change in, and there has not been any
occurrence which, when taken together with all other such changes or
occurrences, would reasonably be expected to have a material adverse effect on
the Standard Business Condition. Since October 31, 1997, except as set forth on
Schedule 3.7, no Standard Company has taken any action which would have been
prohibited by the provisions of Section 5.4 had this Agreement been in effect at
the time of such action.
Section 3.8. Litigation; Orders. Except for litigation in the
ordinary course of business which is fully covered by insurance without
significant deductibles (none of which is individually or in the aggregate
material) or as disclosed in Schedule 3.8, (i) there are no lawsuits, actions,
administrative or arbitration or other proceedings or Government Authority
investigations pending or, to the actual knowledge of Standard Owners and the
Standard Companies, threatened against any Standard Company or respecting any
Standard Interests by any person or Government Authority and (ii) there are no
judgments or outstanding orders, injunctions, decrees, stipulations or awards
(whether rendered by a court or administrative agency, or by arbitration)
against any Standard Company or any of the properties of any Standard Company or
respecting any Standard Interests, in each of clauses (i) or (ii) that would
reasonably be expected to, individually or in the aggregate, have a material
adverse effect on the Standard Business Condition or that would impair the
consummation of the Combination.
Section 3.9. Intellectual Property. Schedule 3.9 lists all material
patents, trademarks, trade names, service marks, registered copyrights and
pending applications owned by any Standard Company or used in the Standard
Business as of the date hereof. The intellectual property listed on Schedule 3.9
is sufficient for the conduct of the Standard Business as conducted as of the
date hereof and to the actual knowledge of Standard Owners and the Standard
Companies, the Standard Companies have the right to use all such intellectual
property. Except as disclosed in Schedule 3.9, no claims which would,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the Standard Business Condition have been asserted by any
person (i) to the effect that the conduct of business by any Standard Company
infringes on any patents, trademarks, trade names, service marks or registered
copyrights, (ii) against the use by any Standard Company of any trademarks,
trade names, technology, know-how or processes necessary to the business of such
Standard Company or (iii) challenging the ownership, validity or effectiveness
of any of the patents, trademarks, trade names, service marks, registered
copyrights or applications therefor listed on Schedule 3.9.
Section 3.10. Licenses, Approvals, Other Authorizations, Consents,
Reports, Etc. (a) "Standard Licenses" means all material licenses, permits,
franchises and other authorizations of any Government Authority possessed by or
granted to any Standard Company. To the knowledge of Standard Owners and the
Standard Companies, except as disclosed in Schedule 3.10(a), all Standard
Licenses are in full force and effect except for those whose failure to be in
full force and effect would not reasonably be expected to, individually or in
the aggregate, have a
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material adverse effect on the Standard Business Condition. Except as disclosed
in Schedule 3.10(a), no proceeding is pending, or, to the actual knowledge of
Standard Owners and the Standard Companies, threatened, seeking the revocation
or limitation of any such Standard License that, individually or in the
aggregate, would reasonably be expected to have a material adverse effect on the
Standard Business Condition.
(b) Schedule 3.10(b) lists all registrations, filings, applications,
notices, consents, approvals, orders, qualifications and waivers required to be
made, filed, given or obtained by any Standard Company with, to or from any
person (other than under Management Contracts), including any Government
Authority, in connection with the consummation of the Combination except for
those the failure to make, file, give or obtain which would not, individually or
in the aggregate, either have a material adverse effect on the Standard Business
Condition or impair the consummation of the Combination.
Section 3.11. Labor Matters. Except as described in Schedule 3.11,
no Standard Company has any written or oral contracts of employment with any
employee in a position of assistant vice president level or above and, except as
described in Schedule 3.11, no such contract provides for any severance
compensation or benefits or similar "change-of-control" provisions that would
give rise to a right or entitlement as a result of the consummation of the
transactions contemplated hereby or because of any change in his position,
authority, title, duties, reporting responsibilities, status, or other similar
matter, resulting from or arising after or in connection with such consummation.
Except as described in Schedule 3.11, no Standard Company has been in the past
five years or is presently a party to any collective bargaining agreement,
subject to a legal duty to bargain with any labor organization on behalf of its
employees or the object of any attempt to organize employees for collective
bargaining or similar purposes or is presently operating under an expired
collective bargaining agreement. Schedule 3.11 contains a complete and accurate
list as of the date hereof of all employees in positions of assistant vice
president level or above of each Standard Company by department and location and
their titles, salaries and all other forms of compensation, dates of hire, and
indicating which of such employees have severance arrangements or are covered by
change-of-control provisions applicable to such employees. No Standard Company
is a party to or subject to any pending or, to the knowledge of Standard Owners
and the Standard Companies, threatened labor dispute (including a strike, work
stoppage, organizing attempt, picketing, boycott or similar activity). To the
knowledge of Standard Owners and the Standard Companies, each Standard Company
has complied in all material respects with all applicable federal, state, and
local laws, ordinances, rules and regulations and requirements relating to the
employment, payment and termination of labor, including the provisions thereof
relative to wages, hours, severance, vacation, collective bargaining, employee
benefits, and employee benefit plans, contributions, unemployment, withholding
taxes and occupational health and safety and equal opportunity and
non-discrimination laws (including the Americans with Disabilities Act). Each
Standard Company has made all deductions required by law to be made for
employees' wages, and salaries and either remitted the same to appropriate
Government Authorities or provided for the same in its accounts and is not
liable for any arrears of wages or any taxes or penalties for failure to comply
with the payment or repayment of any of the foregoing.
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Section 3.12. Compliance with Laws. Except as may be indicated in
Schedule 3.12, the conduct of the Standard Business complies with all statutes,
laws, regulations, ordinances, rules, judgments, orders or decrees applicable
thereto, and has so complied at all time periods prior hereto, except for
violations or failures so to comply, if any, that, individually or in the
aggregate, would not reasonably be expected to have a material adverse effect on
the Standard Business Condition.
Section 3.13. Insurance. Schedule 3.13 lists all insurance policies
owned or held by any Standard Company which may cover the business or assets of
any Standard Company. All such policies are in full force and effect and have
not lapsed in coverage, all premiums with respect thereto covering all current
periods have been paid to the extent due, and no written notice of cancellation
or termination has been received with respect to any such policy. All claims
with respect to retroactive insurance premia rebated to any Standard Company for
FY 1996 have been closed and such rebates have become final.
Section 3.14. Material Contracts. Except as disclosed in Schedule
3.5(a), 3.11 or 3.14, no Standard Company is a party to any (i) employment or
consulting agreement having a remaining term of at least one year and requiring
payments of base salary in excess of $100,000 per year or aggregate payments of
base salary in excess of $300,000, (ii) sales representative or agency contract
which is not terminable on 12 months' (or less) notice, (iii) other than
Management Contracts, lease of real or personal property with an annual base
rental obligation of more than $25,000, or a total remaining rental obligation
of more than $100,000, (iv) joint venture or partnership agreement, except as
relates solely to the Excluded Assets, (v) contract or agreement as to the sale,
transfer or other disposition of any assets (other than the Excluded Assets or
de minimis assets), or as to any joint venture or partnership, or as to the
purchase of any assets or securities of any person (other than de minimis assets
or securities), (vi) agreement limiting in any way any Standard Company's
ability to compete with any person in any geographic location or any line of
business, or (vii) other than Management Contracts, other contract, agreement or
arrangement, entered into other than in the ordinary course of business,
requiring future payment or payments in excess of $25,000 per year or otherwise
material to the Standard Business. With respect to all contracts listed on
Schedule 3.14, except as disclosed on Schedule 3.14, such contracts are valid
and binding and no Standard Company is in material breach thereof or material
default thereunder and there does not exist under any provision thereof any
event that, with the giving of notice or the lapse of time or both, would
constitute such a breach or default, except for such failures to be valid and
binding and such breaches, defaults and events as to which requisite waivers or
consents have been or are obtained or which could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
Standard Business Condition. Schedule 3.14 lists all notes, mortgages,
indentures and other obligations and agreements and other instruments for or
relating to any lending or borrowing (including assumed debt) with a remaining
principal of $25,000 or more effected by any Standard Company or to which any
assets of any Standard Company are subject (except with respect to any such
lending or borrowing among Standard Companies).
Section 3.15. Management Contracts. Schedule 3.15 is a list of all
Management Contracts as of the date hereof except for those Management Contracts
for which certain
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information regarding such Management Contracts is Special Evaluation Material
as defined in Schedule 5.1(a) ("Special Management Contracts"), together with,
as to each, the location name, the address, the start date (or, if not
available, the approximate start date), the end date, the renewals, the
operating profit for FY 1995 and 1996 and YTD 1997, a description of any change
of control or similar provision contained therein and a notation indicating
whether such Management Contract is written or oral and as to the Special
Management Contracts, the aggregate operating profit for FY 1995 and 1996 and
YTD 1997. With respect to each Management Contract, such Management Contract is
valid and binding and no Standard Company is in material breach thereof or
material default thereunder and there does not exist under any provision thereof
any event that, with the giving of notice or the lapse of time or both, would
constitute such a breach or default, and there is no threatened breach by a
party to a Management Contract and there are no circumstances known to any
Standard Owner or Standard Company which would cause a Management Contract to
become not valid or binding or would cause a breach or default in a Management
Contract except for such failures to be valid and binding and such breaches,
defaults and events as could not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the Standard Business
Condition. No Standard Company or Standard Owner has knowledge of any plan or
intention of JMB Realty Corporation or Equity Office Properties Trust or any of
their respective Affiliates to alter its relationship with the Standard
Business, except in each case, as could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the Standard
Business Condition, and except in connection with ordinary-course dispositions
of portfolio properties by such persons.
Section 3.16. Brokers, Finders, Etc. Standard Owners have employed
no broker, finder, consultant or other intermediary in connection with the
Combination or the other matters contemplated hereby who would have a valid
claim for a fee or commission from APCOA or any Standard Company in connection
with the Combination or such transactions, other than Goldman, Sachs & Co., AMG
and Katten Muchin & Zavis. Up to, but no more than, $2,000,000 of the actual
fees of such firms shall be a permitted liability of the Standard Companies at
the Closing (such amount, the "Standard Advisors Fee").
Section 3.17. Hazardous Materials. Except as set forth in Schedule
3.17, (i) there is no liability resulting from a violation of any applicable
Environmental Law and (ii) there are no claims pending or, to the knowledge of
Standard Owners, threatened, and none of Standard Owners or any Standard Company
has received notice, alleging that a Standard Company is or has been in
violation of any applicable Environmental Law. Schedule 3.17 contains a true and
accurate list of any Standard Leased Real Property or property under a
Management Contract on which any petroleum products (including gasoline and oil
but excluding cleaning solvents not customarily considered petroleum products)
or diesel fuel is presently stored (other than in the fuel tanks of vehicles
which are parked on such Standard Leased Real Property) or sold by any Standard
Company, or, to the actual knowledge of Standard Owners and the Standard
Companies, was stored or sold by any Standard Company. For the purpose of this
Agreement, "Environmental Law" shall mean any law, statute, regulation, court
order, consent decree or settlement agreement which imposes any liability for or
standards of conduct concerning the manufacture, processing, generation,
distribution, use, treatment, storage, disposal, cleanup, transport or handling
of hazardous materials, including the Comprehensive Environmental Response,
Compen-
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sation and Liability Act of 1980, as amended, the Resource Conservation and
Recovery Act of 1976, as amended, any other so-called "Superfund" or "Superlien"
law and the Toxic Substances Control Act or any similar federal, state or local
statute.
Section 3.18. Knowledge Regarding Representations. No Standard
Owners or any Standard Company is aware of any inaccuracy or misstatement in, or
breach of, any representation or warranty of APCOA contained herein.
Section 3.19. Acquisition of Shares for Investment. Standard Owners
have such knowledge and experience in financial and business matters that they
are capable of evaluating the merits and risks of their acquisition of the
Standard APCOA Shares. Standard Owners confirm that APCOA has, or prior to the
Diligence Out Termination Date will have, made available to Standard Owners the
opportunity to ask questions of the officers and management employees of APCOA
and to acquire additional information about the business and financial condition
of APCOA. Standard Owners are acquiring the Standard APCOA Shares for investment
and not with a view toward or for sale in connection with any distribution
thereof, or with any present intention of distributing or selling such shares,
in violation of applicable securities laws. Standard Owners understand and agree
that the Standard APCOA Shares may not be sold, transferred, offered for sale,
pledged, hypothecated or otherwise disposed of without registration under the
Securities Act of 1933, as amended, except pursuant to an exemption from such
registration available under such Act, and without compliance with state, local
and foreign securities laws, in each case, to the extent applicable, and in
compliance with the Stockholders Agreement.
ARTICLE IV
Representations and Warranties of APCOA
APCOA hereby represents and warrants to each Standard Owner as
follows:
Section 4.1. Incorporation; Authorization; Etc. (a) APCOA is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. APCOA (A) has all requisite corporate or
comparable power to own its properties and assets and to carry on its business
as it is now being conducted and (B) is in good standing and is duly qualified
to transact business in each domestic jurisdiction in which the nature of
property owned or leased by it or the conduct of its business requires it to be
so qualified, except where the failure to be in good standing or to be duly
qualified to transact business, would not, individually or in the aggregate,
have a material adverse effect on the APCOA Business Condition or otherwise
impair consummation of the Combination.
(b) APCOA has full corporate or comparable power to execute and
deliver this Agreement and to perform its obligations hereunder. The execution
and delivery of this Agreement and the performance of APCOA's obligations
hereunder have been duly and validly authorized by all necessary proceedings on
the part of APCOA and no other proceedings or actions on the part of APCOA, its
board of directors or stockholders are necessary therefor. Except as set forth
in Schedule 4.1(b), the execution, delivery and performance by APCOA of this
Agreement will not (i) violate any provision of APCOA's certificate of
incorporation or by-laws, (ii) except for Management Contracts or as disclosed
in Schedule 4.1(b), violate any provision
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of, or be an event that is (or with the passage of time will result in) a
violation of, or result in the acceleration of or entitle any party to
accelerate (whether after the giving of notice or lapse of time or both) any
obligation under, or result in the imposition of any lien upon or the creation
of a security interest in the assets of APCOA pursuant to, any mortgage, lien,
lease, agreement, instrument, order, arbitration award, judgment, injunction or
decree to which APCOA is a party or by which it is bound, or (iii) except as
disclosed in Schedule 4.1(b) or 4.12, violate or conflict with any statute, rule
or regulation applicable to APCOA or any of its properties or assets or any
other material restriction of any kind or character to which APCOA is subject,
that, in the case of any of clauses (ii) and (iii), would, individually or in
the aggregate, have a material adverse effect on the APCOA Business Condition or
impair the consummation of the Combination. This Agreement has been duly
executed and delivered by APCOA, and, assuming the due execution and delivery
hereof by each Standard Owner, constitutes the legal, valid and binding
obligation of APCOA, enforceable against APCOA in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or affecting the rights and remedies of creditors
generally and to general principles of equity (regardless of whether in equity
or at law. The execution of the Employment Agreement and the Consulting
Agreement by APCOA, and all payments that may become due thereunder, have been
approved in a manner that would satisfy the requirements of Section
280G(b)(5)(A)(ii) and 280G(b)(5)(B) of the Code with respect to a change of
control of APCOA and its affiliates, assuming such change of control were to
take place immediately after the Closing Date.
Section 4.2.. As of the date hereof, the authorized capital stock of
APCOA consists of 3,000 shares of Common Stock, par value $1.00 per share
("APCOA Common Stock"), and 2,000 shares of Preferred Stock (of any class or
series), par value $.01 per share ("APCOA Preferred Stock"). At the date hereof,
26.3 shares of APCOA Common Stock were issued and outstanding, all of which were
validly issued, fully paid and nonassessable and owned as set forth in Schedule
4.2. As of the date hereof, except for this Agreement and except as set forth on
Schedule 4.1, there are no options, warrants, calls, rights or agreements to
which APCOA or any of its Subsidiaries is a party or by which any of them is
bound obligating APCOA or any of its Subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock,
partnership interests or other equity interests of APCOA or any of its
Subsidiaries, or securities convertible into or exchangeable for such interest
or obligating Holberg or any of its Subsidiaries to grant, extend or enter into
any such option, warrant, call, right or agreement. As of the date hereof, there
are no outstanding contractual obligations of APCOA or any of its Subsidiaries
(i) restricting the transfer of, (ii) affecting the voting rights of, (iii)
requiring the repurchase, redemption or disposition of, (iv) requiring the
registration for sale of or (v) granting any preemptive or antidilutive right
with respect to, any shares of APCOA Common Stock or any capital stock,
partnership interests or other equity interests of any of its Subsidiaries. The
outstanding shares of capital stock, partnership interests or other equity
interests of each Subsidiary of APCOA are duly authorized, validly issued, fully
paid, nonassessable and free of preemptive rights and owned by APCOA or its
Subsidiary, free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on voting rights,
charges and other encumbrances of any nature whatsoever. Upon issuance in
accordance with the terms of this Agreement, the Standard APCOA Shares shall be
validly issued, fully paid and nonassessable shares of APCOA Common Stock.
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Section 4.3. Financial Statements. (a) Attached as Schedule 4.3(a)
are (i) true and complete copies of the audited balance sheets of APCOA on a
consolidated basis as of December 31, 1994, December 31, 1995 and December 31,
1996 and the audited income statements and statements of cash flows of APCOA on
a consolidated basis for the 12-month periods ending December 31, 1994, December
31, 1995 and December 31, 1996 and (ii) true and complete copies of the
unaudited balance sheet of APCOA on a consolidated basis as of September 30,
1997 and the unaudited income statement of APCOA on a consolidated basis for the
nine-month period ending September 30, 1997 (collectively, the "APCOA Financial
Statements").
(b). Each balance sheet included in the APCOA Financial Statements
may be hereinafter referred to as a "APCOA Balance Sheet," and each income
statement included in the APCOA Financial Statements may be hereinafter referred
to as a "APCOA Income Statement" and each statement of cash flows included in
the APCOA Financial Statements may be hereinafter referred to as a "APCOA
Statement of Cash Flows."
(c) The APCOA Financial Statements (including any notes thereto) are
accurate and complete in all material respects, were prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except as may be indicated therein or in the notes
thereto) and, in the case of any APCOA Balance Sheet, fairly present the
consolidated financial position of APCOA at the date thereof or, in the case of
any APCOA Income Statement and APCOA Statement of Cash Flows, fairly present the
consolidated results of operations of APCOA for the periods then ended (subject,
in the case of unaudited APCOA Financial Statements, to any other adjustments
described therein and normal year-end audit adjustments). Except for the
restatement of depreciation and amortization expense related to the purchase of
APCOA by Holberg, APCOA has not, since January 1, 1996, made any change in the
accounting practices or policies applied in the preparation of the APCOA
Financial Statements. The books and records of APCOA have been, and are being,
maintained in accordance with generally accepted accounting principles and other
applicable legal and accounting requirements.
Section 4.4. Undisclosed Liabilities. Except as reflected, reserved
against or otherwise disclosed in the APCOA Balance Sheet as of September 30,
1997, and except as set forth on Schedule 4.4, and except, as of the Closing
Date, for obligations incurred in connection with the transactions contemplated
hereby and related expenses, there are no liabilities, debts (including
obligations in respect of capital leases), or obligations of or claims against
APCOA (of any nature whether or not required to be disclosed pursuant to
generally accepted accounting principles) which would individually or in the
aggregate reasonably be expected to have a material adverse effect on the APCOA
Business Condition or that would have been required to be reflected on such
balance sheet or in the related notes in accordance with United States generally
accepted accounting principles consistently applied by APCOA.
Section 4.5. Properties. (a) No real property is owned by APCOA.
Schedule 4.5(a) describes all leases for real property leased by APCOA or its
Subsidiary as lessee or lessor other than Management Contracts (the "APCOA
Leased Real Property"), such description including an identification of the
lease agreement therefor and any and all amendments, modifications, side letters
and other agreements relating thereto, the names of the lessor and lessee
there-
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under, the title and date thereof, the address of the premises leased
thereunder, and the term, including any extension options, if not apparent from
the lease agreement. All leases with respect to the APCOA Leased Real Property
("APCOA Leases") are in effect in accordance with their terms and create a valid
and binding interest in the APCOA Leased Real Property in favor of APCOA or its
Subsidiary and, except as set forth in Schedule 4.5(a), all rents and other
amounts (including taxes, insurance and utilities) required to be paid by APCOA
or its Subsidiary under such APCOA Leases, which have become due, have been
paid. To the actual knowledge of APCOA, except as set forth in Schedule 4.5(a),
there are no condemnation proceedings, special assessments, impact fees or
similar charges pending or, to the actual knowledge of APCOA, threatened against
the APCOA Leased Real Property, and APCOA and its Subsidiaries have not received
or been served with any notice with respect to any of the foregoing. To the
actual knowledge of APCOA, the current use by APCOA and its Subsidiaries of the
APCOA Leased Real Property complies in all respects with all applicable zoning
laws and building and use restrictions (including all agreements of APCOA and
its Subsidiaries applicable thereto) and condominium restrictions, except as
could not be reasonably expected, individually or on the aggregate, to have a
material adverse effect with respect to the APCOA Business Condition. APCOA has
no actual knowledge of any proposed change in the zoning or building ordinances
affecting the APCOA Leased Real Property.
(b) Except as disclosed in Schedule 4.5(b), no lease of APCOA Leased
Real Property requires APCOA or its Subsidiary to make any structural repairs or
maintenance beyond routine maintenance. To the actual knowledge of APCOA, except
as disclosed in Schedule 4.5(b), all buildings, structures, improvements and
fixtures on, under, over or within APCOA Leased Real Property, and all other
aspects of each APCOA Leased Real Property: (i) are in good operating condition
and repair (subject to normal wear and tear) and are structurally sound and free
of any material defects; (ii) are suitable, sufficient and appropriate in all
respects for their current uses, except for such failures as, together with all
other such failures, could not reasonably be expected to have a material adverse
effect on the APCOA Business Condition; (iii) comply with all applicable codes
and rules of national and local associations and boards of insurance
underwriters; (iv) are within the boundary lines of their respective APCOA
Leased Real Property; and (v) consist of sufficient land, parking areas,
sidewalks, driveways and other improvements to permit the continued use of such
facilities in the manner and for the purposes to which they are presently
devoted. There are no outstanding or, to the actual knowledge of APCOA,
threatened requirements by any insurance company which has issued an insurance
policy covering any APCOA Leased Real Property, or by any board of fire
underwriters or other body exercising similar functions, requiring any material
repairs or work to be done on any APCOA Leased Real Property.
Section 4.6. Personal Property. Schedule 4.6 sets forth a list of
all personal property (including fixed assets) owned by APCOA with an initial
purchase price or book value in excess of $25,000 and all Encumbrances thereon.
APCOA has good and marketable title to such property free and clear of
Encumbrances, except Permitted Encumbrances and except for those Encumbrances
set forth in Schedule 4.6. All such personal property is in good operating
condition and repair in all material respects, ordinary wear and tear excepted,
and is sufficient for the operation of APCOA's business consistent with past
practice.
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Section 4.7. Absence of Certain Changes. Since December 31, 1996,
there has been no material adverse change in, and there has not been any
occurrence which, when taken together with all other such changes or
occurrences, would reasonably be expected to have a material adverse effect on
the APCOA Business Condition. Since September 30, 1997, except as set forth on
Schedule 4.7, APCOA has not taken any action which would have been prohibited by
the provisions of Section 5.4 had this Agreement been in effect at the time of
such action.
Section 4.8. Litigation; Orders. Except for litigation in the
ordinary course of business covered by customary insurance reserves which would
not, individually or in the aggregate, have a material adverse effect on the
APCOA Business Condition and except as disclosed in Schedule 4.8, (i) there are
no lawsuits, actions, administrative or arbitration or other proceedings or
Government Authority investigations pending or, to the actual knowledge of
APCOA, threatened against APCOA by any person or Government Authority and (ii)
there are no judgments or outstanding orders, injunctions, decrees, stipulations
or awards (whether rendered by a court or administrative agency, or by
arbitration) against APCOA or any of the properties of APCOA, in each of clauses
(i) or (ii) that would reasonably be expected to, individually or in the
aggregate, have a material adverse effect on the APCOA Business Condition or
that would impair the consummation of the Combination.
Section 4.9. Intellectual Property. Schedule 4.9 lists all material
patents, trademarks, trade names, service marks, registered copyrights and
pending applications owned by APCOA or used by APCOA as of the date hereof. The
intellectual property listed on Schedule 4.9 is sufficient for the conduct of
APCOA's business as conducted as of the date hereof and to the actual knowledge
of APCOA, APCOA have the right to use all such intellectual property. Except as
disclosed in Schedule 4.9, no claims which would, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the APCOA
Business Condition have been asserted by any person (i) to the effect that the
conduct of business by APCOA infringes on any patents, trademarks, trade names,
service marks or registered copyrights, (ii) against the use by APCOA of any
trademarks, trade names, technology, know-how or processes necessary to the
business of APCOA or (iii) challenging the ownership, validity or effectiveness
of any of the patents, trademarks, trade names, service marks, registered
copyrights or applications therefor listed on Schedule 4.9.
Section 4.10. Licenses, Approvals, Other Authorizations, Consents,
Reports, Etc. (a) "APCOA Licenses" means all material licenses, permits,
franchises and other authorizations of any Government Authority possessed by or
granted to APCOA. To the knowledge of APCOA, except as disclosed in Schedule
4.10(a), all APCOA Licenses are in full force and effect except for those whose
failure to be in full force and effect would not reasonably be expected to,
individually or in the aggregate, have a material adverse effect on the APCOA
Business Condition. Except as disclosed in Schedule 4.10(a), no proceeding is
pending, or, to the actual knowledge of APCOA, threatened, seeking the
revocation or limitation of any such APCOA License that, individually or in the
aggregate, would reasonably be expected to have a material adverse effect on the
APCOA Business Condition.
(b) Schedule 4.10(b) lists all registrations, filings, applications,
notices, consents, approvals, orders, qualifications and waivers required to be
made, filed, given or obtained
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by APCOA with, to or from any person (other than under Management Contracts),
including any Government Authority, in connection with the consummation of the
Combination except for those the failure to make, file, give or obtain which
would not, individually or in the aggregate, either have a material adverse
effect on the APCOA Business Condition or impair the consummation of the
Combination.
Section 4.11. Labor Matters. Except as described in Schedule 4.11,
APCOA has no written or oral contracts of employment with any employee in a
position of regional manager level or above and, except as described in Schedule
4.11, APCOA has not been in the past five years or is presently a party to any
collective bargaining agreement, subject to a legal duty to bargain with any
labor organization on behalf of its employees or the object of any attempt to
organize employees for collective bargaining or similar purposes or is presently
operating under an expired collective bargaining agreement. Schedule 4.11
contains a complete and accurate list as of the date hereof of all employees in
positions of regional manager level or above of APCOA by department and location
and their titles, salaries and all other forms of compensation, dates of hire,
and indicating which of such employees have severance arrangements or are
covered by change-of-control provisions applicable to such employees. APCOA is
not a party to or subject to any pending or, to the knowledge of APCOA,
threatened labor dispute (including a strike, work stoppage, organizing attempt,
picketing, boycott or similar activity). To the knowledge of APCOA, APCOA has
complied in all material respects with all applicable federal, state, and local
laws, ordinances, rules and regulations and requirements relating to the
employment, payment and termination of labor, including the provisions thereof
relative to wages, hours, severance, vacation, collective bargaining, employee
benefits, and employee benefit plans, contributions, unemployment, withholding
taxes and occupational health and safety and equal opportunity and
non-discrimination laws (including the Americans with Disabilities Act). APCOA
has made all deductions required by law to be made for employees' wages, and
salaries and either remitted the same to appropriate Government Authorities or
provided for the same in its accounts and is not liable for any arrears of wages
or any taxes or penalties for failure to comply with the payment or repayment of
any of the foregoing.
Section 4.12. Compliance with Laws. Except as may be indicated in
Schedule 4.12, the conduct of APCOA's business complies with all statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees applicable thereto,
and has so complied at all time periods prior hereto, except for violations or
failures so to comply, if any, that, individually or in the aggregate, would not
reasonably be expected to have a material adverse effect on the APCOA Business
Condition.
Section 4.13. Insurance. Schedule 4.13 lists all insurance policies
owned or held by APCOA which may cover the business or assets of APCOA. All such
policies are in full force and effect and have not lapsed in coverage, all
premiums with respect thereto covering all current periods have been paid to the
extent due, and no written notice of cancellation or termination has been
received with respect to any such policy.
Section 4.14. Material Contracts. Except as disclosed in Schedule
4.5(a), 4.11 or 4.14, APCOA is not a party to any (i) employment or consulting
agreement having a remaining term of at least one year and requiring payments of
base salary in excess of $100,000 per year
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or aggregate payments of base salary in excess of $300,000, (ii) sales
representative or agency contract which is not terminable on 12 months' (or
less) notice, (iii) other than Management Contracts, lease of real or personal
property with an annual base rental obligation of more than $25,000, or a total
remaining rental obligation of more than $100,000, (iv) joint venture or
partnership agreement, (v) contract or agreement as to the sale, transfer or
other disposition of any assets (other than de minimis assets), or as to any
joint venture or partnership, or as to the purchase of any assets or securities
of any person (other than de minimis assets or securities), (vi) agreement
limiting in any way APCOA's ability to compete with any person in any geographic
location or any line of business, or (vii) other than Management Contracts,
other contract, agreement or arrangement, entered into other than in the
ordinary course of business, requiring future payment or payments in excess of
$25,000 per year or otherwise material to the APCOA's business. With respect to
all contracts listed on Schedule 4.14, except as disclosed on Schedule 4.14,
such contracts are valid and binding and APCOA is not in material breach thereof
or material default thereunder and there does not exist under any provision
thereof any event that, with the giving of notice or the lapse of time or both,
would constitute such a breach or default, except for such failures to be valid
and binding and such breaches, defaults and events as to which requisite waivers
or consents have been or are obtained or which could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the APCOA
Business Condition. Schedule 4.14 lists all notes, mortgages, indentures and
other obligations and agreements and other instruments for or relating to any
lending or borrowing (including assumed debt) with a remaining principal of
$25,000 or more effected by APCOA or to which any assets of APCOA are subject
(except with respect to any such lending or borrowing on an inter-company
basis).
Section 4.15. Management Contracts. Schedule 4.15 is a list of all
Management Contracts as of the date hereof except for those Management Contracts
for which certain information regarding such Management Contracts is Special
Evaluation Material as defined in Schedule 5.1(a) ("Special Management
Contracts"), together with, as to each, the location name, the address, the
start date (or, if not available, the approximate start date), the end date, the
renewals, the operating profit for FY 1995 and 1996 and YTD 1997, a description
of any change of control or similar provision contained therein and a notation
indicating whether such Management Contract is written or oral and as to the
APCOA Special Management Contracts, the aggregate operating profit for FY 1995
and 1996 and YTD 1997. With respect to each Management Contract, such Management
Contract is valid and binding and APCOA is not in material breach thereof or
material default thereunder and there does not exist under any provision thereof
any event that, with the giving of notice or the lapse of time or both, would
constitute such a breach or default, and there is no threatened breach by a
party to a Management Contract and there are no circumstances known to APCOA
which would cause a Management Contract to become not valid or binding or would
cause a breach or default in a Management Contract except for such failures to
be valid and binding and such breaches, defaults and events as could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the APCOA Business Condition.
Section 4.16. Brokers, Finders, Etc. APCOA has not employed any
broker, finder, consultant or other intermediary in connection with the
Combination or the other matters
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contemplated hereby who would have a valid claim for a fee or commission from
any Standard Owner in connection with the Combination or such transactions.
Section 4.17. Hazardous Materials. Except as set forth in Schedule
4.17, (i) there is no liability resulting from a violation of any applicable
Environmental Law and (ii) there are no claims pending or, to the knowledge of
APCOA, threatened, and APCOA has not received any notice, alleging that APCOA is
or has been in violation of any applicable Environmental Law. Schedule 4.17
contains a true and accurate list of any APCOA Leased Real Property or property
under a Management Contract on which any petroleum products (including gasoline
and oil but excluding cleaning solvents not customarily considered petroleum
products) or diesel fuel is presently stored (other than in the fuel tanks of
vehicles which are parked on such APCOA Leased Real Property) or sold by APCOA,
or, to the actual knowledge of APCOA, was stored or sold by APCOA.
Section 4.18. Knowledge Regarding Representations. APCOA is not
aware of any inaccuracy or misstatement in, or breach of, any representation or
warranty of Standard Owners or the Standard Companies contained herein.
ARTICLE V
Covenants of Standard Owners and APCOA
Section 5.1. Investigation of Business; Access to Properties and
Records, Etc. (a) Subject to the Amended and Restated Due Diligence Agreement
dated as of November 24, 1997 (the "Due Diligence Agreement"), after the date
hereof, each Party shall cause to be afforded to the other Party and its
representatives reasonable access to its respective offices, properties, books
and records during normal business hours, in order that the other Party may have
full opportunity to make such investigations as it desires of the affairs of the
Company, provided that such investigation shall only be upon reasonable notice
and shall not unreasonably disrupt personnel and operations. All requests for
access to the offices, properties, books, and records of a Party shall be made
to such representatives of such Party as such Party shall designate, who shall
be solely responsible for coordinating all such requests and all access
permitted hereunder. It is further agreed that neither Party nor its
representatives shall contact any of the employees, customers, suppliers, joint
venture partners or other associates or Affiliates of the other Party in
connection with the transactions contemplated hereby, whether in person or by
telephone, mail or other means of communication, without the specific prior
written authorization of such representatives of the other Party. All notices
and applications to, filings with, and other contacts with any Government
Authority relating to the transactions contemplated hereby shall be made by
either Party only after prior consultation with and approval by the other Party,
which approval shall not be unreasonably withheld. If either Party discovers any
breach of any representation or warranty contained in this Agreement or any
circumstance or condition that upon Closing would constitute such a breach, such
Party covenants that it shall promptly so inform the other Party of such event
in writing.
(b) Any information provided to either Party or its representatives
pursuant to this Agreement or in connection with the transactions contemplated
hereby shall be held by such Party and its representatives in accordance with
and subject to the terms set forth under "Confi-
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dentiality" in that certain letter agreement, dated October 30, 1997, by and
among Standard Owners and certain of their Affiliates, APCOA and Holberg (the
"Letter Agreement"), and in accordance with the Due Diligence Agreement.
Section 5.2. Efforts; Obtaining Consents; Antitrust Laws. (a)
Subject to the terms and conditions herein provided, each Party shall use its
reasonable efforts to take or cause to be taken all actions and to do or cause
to be done all things necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions contemplated hereby, and
to cooperate with the other in connection with the foregoing, including using
all reasonable efforts (i) to seek all necessary waivers, consents and approvals
from other Parties to material loan agreements, leases and other contracts and
such estoppel certificates from landlords and other third parties as APCOA may
reasonably request (except that Standard Owners and the Standard Companies shall
not be obligated to seek waivers, consents, approvals or estoppel certificates
which respect to any Management Contracts (it being further understood and
agreed, however, that this exception shall not be construed in derogation of any
representation, warranty or condition contained herein)), (ii) to seek all
consents, approvals and authorizations that are required to be obtained under
any federal, state, local or foreign law or regulation, (iii) to lift or rescind
any injunction or restraining order or other order adversely affecting the
ability of the Parties hereto to consummate the transactions contemplated
hereby, (iv) to effect all necessary registrations and filings including filings
under the HSR Act and submissions of information requested by any Government
Authority and (v) to fulfill all conditions set forth in Articles VIII and IX.
Each Party further shall, with respect to any threatened or pending preliminary
or permanent injunction or other order, decree or ruling or statute, rule,
regulation or executive order that would adversely affect the ability of the
Parties hereto to consummate the transactions contemplated hereby, use all
reasonable efforts to prevent the entry, enactment or promulgation thereof, as
the case may be. Without limiting the generality of the foregoing, APCOA shall
use its reasonable efforts to obtain financing having terms no more onerous than
as described in Section 8.5.
(b) Each Party hereto shall promptly inform the other of any
material communication from the Federal Trade Commission, the United States
Department of Justice or any other Government Authority regarding any of the
transactions contemplated hereby. If either Party or any Affiliate thereof
receives a request for additional information or documentary material from any
such Government Authority with respect to the transactions contemplated hereby,
then such Party will endeavor in good faith to make or cause to be made, as soon
as reasonably practicable and after consultation with the other Party, an
appropriate response in compliance with such request.
Section 5.3. Further Assurances. Each Party agrees that, from time
to time, whether before, at or after the Closing Date, it shall, and shall cause
its Affiliates to, execute and deliver such further instruments of conveyance
and transfer and take such other action as may be necessary to carry out the
purposes and intents hereof.
Section 5.4. Conduct of Business. (a) From the date hereof to the
Closing, except as disclosed on Schedule 5.4(a) or otherwise provided for in
this Agreement, and, except as
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consented to or approved by APCOA in its reasonable discretion, Standard Owners
agree that, in respect of the Standard Companies and their respective
Subsidiaries:
(i) such parties shall operate their respective businesses in
the ordinary course in all material respects and shall use reasonable efforts to
preserve their respective businesses intact, to keep available the services of
employees and to preserve the goodwill of customers and others having business
relations with such parties;
(ii) such parties shall not (A) create, incur or assume any
long-term or short-term debt (including obligations in respect of capital
leases), except Permitted Debt or inter- and intra-company loans and advances
among Standard Companies, (B) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or otherwise) for the
obligations of any person other than such parties, or (C) make any loans,
advances or capital contributions to or investments in any person other than
such parties (except for customary loans or advances to employees);
(iii) unless required by the Employee Benefit Plans or law,
such parties shall not (A) increase in any manner the base compensation of, or
enter into any new bonus or incentive agreement or arrangement with, any of its
directors, officers or other key employees, other than in accordance with past
practice, (B) pay or enter into any agreement to pay any pension, retirement
allowance or similar employee benefit to any such director, officer or key
employee, whether past or present, (C) enter into any new employment, severance,
consulting, or other compensation agreement with any existing director, officer
or key employee or (D) commit to any additional pension, profit-sharing,
deferred compensation, group insurance, severance pay, retirement or other
employee benefit plan, fund or similar arrangement or amend or commit itself to
amend any of such plans, funds or similar arrangements;
(iv) such parties shall not (A) sell, transfer or otherwise
dispose of any assets (other than the Excluded Assets or de minimis assets), (B)
create any new security interest, lien or encumbrance on properties or assets,
(C) enter into any joint venture or partnership, or (D) purchase any assets or
securities of any person (other than de minimis assets or securities), it being
expressly understood and agreed that the proposed acquisition of Century shall
be prohibited hereby unless APCOA shall first have approved such acquisition, in
its sole discretion; and
(v) no such party shall agree to take any action prohibited by
this Section.
(b) From the date hereof to the Closing, except as disclosed on
Schedule 5.4(b) or otherwise provided for in this Agreement, and, except as
consented to or approved by Standard Owners in their reasonable discretion,
APCOA agrees that, in respect of it and its Subsidiaries:
(i) APCOA shall operate its businesses in the ordinary course
in all material respects and shall use reasonable efforts to preserve its
business intact, to keep available the services of employees and to preserve the
goodwill of customers and others having business relations with it;
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(ii) APCOA shall not (A) make distributions or pay dividends
on APCOA capital stock except as contemplated or permitted by this Agreement and
except for dividends in kind on outstanding APCOA Preferred Stock or (B) issue
any shares of APCOA Common Stock in a transaction which would require (X)
Standard Owners' consent or (Y) give rise to the exercise of preemptive rights
by Standard Owners pursuant to the Stockholders Agreement were such Stockholders
Agreement in effect at such time unless, in the case of (Y), such preemptive
rights are extended to Standard Owners in connection with the consummation of
the Combination;
(iii) APCOA shall not engage in any transaction with
Affiliates which would be prohibited pursuant to the Stockholders Agreement were
such Stockholders Agreement in effect at such time; and
(iv) APCOA shall not agree to take any action prohibited by
this Section.
(c) Notwithstanding the foregoing, nothing in this Agreement shall
be construed or interpreted to prevent the consummation of the following
transactions, at or prior to the Closing, which transactions shall be expressly
permitted and authorized:
(i) Standard Owners shall be able to cause the distribution by
the Standard Companies to Standard Owners of an amount in cash equal to the
Estimated Distribution Amount, computed and derived from financial records
prepared in accordance with generally accepted accounting principles
consistently applied, and in accordance with past practice, as to the
calculation of such distributions, and based on operations in accordance with
past practice.
(ii) APCOA shall be able to take action such that (1) all
intercompany obligations between APCOA and Holberg or its Affiliates (all of
which are summarized on Schedule 5.4(c)) shall be canceled or modified as set
forth on such Schedule, (2) upon Closing, the APCOA Preferred Stock shall be
eliminated, and (3) APCOA shall make a net cash payment of $8,000,000 to Holberg
in respect of the foregoing (it being understood and agreed that, if any of such
$8,000,000 is required not to be paid by APCOA in order to satisfy the condition
set forth in Section 8.5, with respect to the amount which cannot be paid,
Holberg (or its designated Affiliate) shall be entitled to retain or create a
non-convertible security of APCOA senior to APCOA Common Stock, which security
shall be repayable to Holberg (or its designated Affiliate) at any time as may
be permitted by applicable financing arrangements and at an interest rate or
dividend rate not to exceed the lesser of (x) 13.0% per annum and (y) a rate per
annum that is 250 basis points in excess of the rate on any subordinated
financing that may be incurred to finance the transactions contemplated hereby).
(iii) The Standard Owners shall, prior to the Closing, cause
all interests in Standard Parking/Marina, L.L.C. held by any Standard Company to
be conveyed to an entity which is not a Standard Company.
Section 5.5. Public Announcements. From the date hereof until the
Due Diligence Out Termination Date, except as required by law, no public
announcements with respect to
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the existence of this Agreement, the terms hereof or the transactions
contemplated hereby shall be made without the prior written consent of the
Parties or as required by law. The Parties shall consult with each other before
issuing any press release or other public announcement with respect to the
transactions contemplated hereby and shall not issue any such press release or
public announcement prior to such consultation.
Section 5.6. Financial Statements. (a) Not later than February 6,
1998, Standard Owners shall deliver to APCOA an audited balance sheet of the
Standard Business on a consolidated basis as of December 31, 1997 and an audited
income statement and statement of cash flows of the Standard Business on a
consolidated basis for the 12-month period ending December 31, 1997, in each
case accompanied by an unqualified opinion of AMG (collectively, the "Audited
1997 Standard Financial Statements" and, together with the Historical Standard
Financial Statements, the "Audited Standard Financial Statements"), which in
each case do not take into account the Excluded Assets or any results of
operations related to the ownership thereof in any way (but including results of
operations that are not related to the ownership of the Excluded Assets and that
will continue following the consummation of the Combination, such as lease
payments or management fees made to the Standard Companies in respect of
operations located on Excluded Assets), and otherwise reflecting the Standard
Business as the same will be conveyed in the Combination. From and after
delivery of the Audited 1997 Standard Financial Statements, all representations
and warranties in Section 3.3 as to the Historical Standard Financial Statements
and each Historical Standard Balance Sheet, Historical Standard Income Statement
and Historical Standard Statement of Cash Flows shall thereafter relate also and
in addition to the Audited 1997 Standard Financial Statements and each balance
sheet, income statement and statement of cash flows included therein.
(b) Not later than February 6, 1998, APCOA shall deliver to Standard
Owners an audited balance sheet of APCOA on a consolidated basis as of December
31, 1997 and an audited income statement and statement of cash flows of APCOA on
a consolidated basis for the 12-month period ending December 31, 1997, in each
case accompanied by an unqualified opinion of Ernst & Young LLP (collectively,
the "Audited 1997 APCOA Financial Statements"). From and after delivery of the
Audited 1997 APCOA Financial Statements, all representations and warranties in
Section 4.3 as to the APCOA Financial Statements shall thereafter relate also
and in addition to the Audited 1997 APCOA Financial Statements and each balance
sheet, income statement and statement of cash flows included therein.
(c) Time shall be of the essence with respect to the deliveries of
financial statements contemplated by this Section 5.6.
Section 5.7. Schedules. Each of APCOA and Standard Owners
acknowledge that for business and legal reasons, APCOA and Standard Owners have
not been able to compile the Schedules contemplated hereby prior to the date of
this Agreement. Each of APCOA and Standard Owners covenants that it shall
deliver to the other these Schedules (and make available for review and copying
all documents referred to therein) within seven (7) days after the execution and
delivery of this Agreement (the earlier of (x) such seventh (7th) day and (y)
the actual date of the delivery of the last of all APCOA or Standard Owners
Schedules being the "Schedules Date").
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ARTICLE VI
Employee Benefits
Section 6.1. Employee Benefit Plans. (a) Schedule 6.1(a) lists all
material compensation and benefit plans, contracts and arrangements (other than
routine administrative procedures or Government Authority-required programs, but
including all pension, profit sharing, savings and thrift, incentive or deferred
compensation, severance pay and medical, disability and life insurance plans)
for the benefit of any current employees (whether active or on leave of absence)
of any Standard Company ("Current Employees") or former employees of any
Standard Company ("Former Employees" and, together with Current Employees,
"Employees") or their respective dependents (collectively, "Employee Benefit
Plans"). Schedule 6.1(a) also specifies which Employee Benefit Plans are
maintained solely by a Standard Company ("Company Employee Benefit Plans").
(b) All Employee Benefit Plans that are "employee benefit plans," as
defined in Section 3(3) of ERISA, are in compliance in all material respects
with and have been administered in material compliance with all applicable
requirements of law, including the Code and ERISA, and all contributions
required to be made to each such plan under the terms of such Employee Benefit
Plan, ERISA or the Code prior to the Closing Date have been or will be, as the
case may be, timely made.
(c) With respect to any Employee Benefit Plan which is intended to
qualify under Section 401(a) of the Code ("Pension Plan"), a favorable
determination letter as to qualification under Section 401(a) of the Code has
been issued and the related trust has been determined to be exempt from taxation
under Section 501(a) of the Code and, to the knowledge of Standard Owners and
any Standard Company, any amendment made to any Pension Plan subsequent to the
date of such determination letter has not adversely affected the qualified
status of any such plan. Each Standard Company shall have performed all material
obligations required to be performed by them under, and are not in default under
or in violation of, the terms of any of the Employee Benefit Plans in any
material respect. To the knowledge of Standard Owners and any Standard Company,
none of Standard Owners, any Standard Company or any other "disqualified person"
(as defined in Section 4975 of the Code) has engaged in any non-exempt
"prohibited transaction" (as such term is defined in Section 4975 of the Code)
that could subject any Pension Plan (or its related trust), any Standard Company
or any officer, director or employee of any Standard Company to a material tax
or penalty imposed under Section 4975 of the Code.
(d) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) materially
increase any benefits otherwise payable under any Employee Benefit Plan or (ii)
result in the acceleration of the time of payment or vesting of any such
benefits to any material extent.
(e) No Employee Benefit Plan, other than a "multiemployer plan"
within the meaning of Section 4001(a)(3) of ERISA (a "Multiemployer Plan"), is
subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code.
There does not now exist, nor do any circumstances now exist that could result
in, any liability on the part of any Standard Company or any ERISA Affiliate of
a Standard Company (i) under Title IV of ERISA, (ii) under Section
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302 of ERISA, (iii) under Sections 412 and 4971 of the Code, or (iv) for failure
to comply with the continuation coverage requirements of section 601 et seq. of
ERISA and section 4980B of the Code, in each case other than liabilities
relating to the Multiemployer Plans listed on Schedule 6.1(f). Without limiting
the generality of the foregoing, no Standard Company and no ERISA Affiliate of a
Standard Company has engaged in any transaction described in Section 4204 of
ERISA or, to the knowledge of Standard Owners and the Standard Companies, any
transaction described in Section 4069 or 4212 of ERISA.
(f) The Employee Benefit Plans listed on Schedule 6.1(f) are the
only Employee Benefit Plans that are Multiemployer Plans to which any Standard
Company or any ERISA Affiliate of a Standard Company contributes, has an
obligation to contribute, or has at any time since January 1, 1991, contributed
or been obligated to contribute. With respect to each such Multiemployer Plan:
(i) neither any Standard Company nor any ERISA Affiliate of a Standard Company
has incurred any liability to a Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan, as those terms are defined in
Part I of Subtitle E of Title IV of ERISA (any such liability, a "Withdrawal
Liability") that has not been satisfied in full; (ii) if any Standard Company or
any ERISA Affiliate of a Standard Company were to experience a withdrawal or
partial withdrawal from such plan, no Withdrawal Liability would be incurred;
and (iii) no Standard Company and no ERISA Affiliate of a Standard Company has
any knowledge that any such plan is in reorganization, has been terminated, or
may reasonably be expected to be in reorganization or to be terminated within
the reasonably foreseeable future.
(g) No Standard Company has any liability for life, health, medical,
disability or other welfare benefits to former employees or beneficiaries or
dependents thereof, except for health continuation coverage as required by
Section 4980B of the Code or Part 6 of Title I of ERISA or conversion coverage
available under a group insurance contract.
ARTICLE VII
Tax Matters
Section 7.1. Standard Tax Returns. (a) All federal, state, local,
foreign and other Returns, relating to any Standard Company or any combined,
consolidated, affiliated or unitary tax group of which any Standard Company is
or has been a member (a "Standard Affiliated Group") and required to be filed
have been or will be timely filed. Such Returns are (or will, when filed, be)
true, correct and complete in all material respects. Except for Taxes the
non-payment of which would not, in the aggregate, be material, the following
Taxes have (or by the Closing Date will have) been duly and timely paid: (i) all
Taxes shown to be due on such Returns, (ii) all deficiencies and assessments of
Taxes of which written notice has been received by any Standard Company or any
Standard Affiliated Group that are payable by any Standard Company or chargeable
as a lien upon any assets of any Standard Company other than deficiencies or
assessments for Taxes that are being contested in good faith by appropriate
proceedings and have been reserved against in accordance with generally accepted
accounting principles and (iii) all other Taxes due and payable by any Standard
Company on or before the Closing Date for which neither filing of Returns nor
written notice of deficiency or assessment is required, of which Standard Owners
are aware, that are or may become payable by any Standard Company or chargeable
as a lien upon any assets of any Standard Company. Accruals and reserves have
been
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made on the Historical Standard Balance Sheet as of October 31, 1997 that will
be adequate for the payment of all Taxes due and payable by any Standard Company
for all periods (or portions thereof) ending on or before October 31, 1997. All
Taxes required to be withheld by or on behalf of any Standard Company have been
so withheld, and such withheld Taxes have either been duly and timely paid to
the proper Government Authorities or set aside in accounts for such purpose.
(b) No agreement or other document extending, or having the effect
of extending, the period of assessment or collection of any Taxes for which any
Standard Company may be held liable, and no power of attorney with respect to
any such Taxes, has been executed or filed with the IRS or any other Taxing
Authority.
(c) Except as set forth on Schedule 7.1(c), no Standard Company is
or has been a member of any Standard Affiliated Group for purposes of filing
Returns or paying Taxes at any time.
(d) Standard Owners have made available to APCOA complete and
accurate copies of the Returns filed by each Standard Company or any member of
its Standard Affiliated Group with respect to all federal, state, local, foreign
and other income, profits, franchise, gross receipts and capital Taxes that are
or have been required to be filed for all periods for which the statute of
limitations for assessment or collection of such Taxes has not expired, and have
delivered to APCOA copies of all such Returns relating to income Taxes. No lien
for Taxes exists with respect to any of the assets of any Standard Company.
There are no Taxes for which any Standard Company could be held liable asserted
in writing by any Taxing Authority to be due. No unresolved issue has been
raised in writing by any Government Authority in the course of any audit with
respect to Taxes for which any Standard Company could be held liable. Except as
set forth on Schedule 7.1(d), the audits of such Returns with respect to federal
income Taxes have been completed, or the statute of limitations with respect to
federal income Taxes has expired, for all Tax periods through and including the
year ended December 31, 1993. Except as set forth in Schedule 7.1(d), no Returns
filed by any Standard Company or any member of its Standard Affiliated Group
with respect to federal income Taxes are currently under audit by the IRS.
Except as set forth on Schedule 7.1(d), no other Returns filed by any Standard
Company or any member of its Standard Affiliated Group or Taxes for which any
Standard Company could be held liable are currently under audit by any other
Taxing Authority, and no Taxing Authority has given notice in writing that it
will commence any such audit. Except as set forth on Schedule 7.1(d), no Taxing
Authority is now asserting against any Standard Company any deficiency or claim
for additional Taxes or any adjustment of Taxes, and there is no reasonable
basis for any such assertion of which Standard Owners or any Standard Company is
aware.
(e) No election has been made to have the provisions of Section
341(f) of the Code apply to any Standard Company.
(f) No Standard Company is a party to or bound by any tax sharing or
similar agreement or arrangement.
(g) No assets of any Standard Company are subject to any lease under
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect
prior to the date of en-
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actment of the Tax Equity and Fiscal Responsibility Act of 1982. No assets of
any Standard Company are subject to a lease under Section 7701(h) of the Code or
under any predecessor provision.
(h) There are no elections in effect made by or with respect to any
Standard Company pursuant to Section 338 or Section 336(e) of the Code or the
regulations thereunder.
(i) No Standard Company has agreed, or is required, to make any
adjustment under Section 481 of the Code (or any comparable provision of state,
local or foreign law) by reason of a change in accounting methods or otherwise.
(j) Each of Standard Parking, L.P., a Delaware limited partnership,
Standard Parking I, L.L.C., a Delaware limited liability company, Standard
Parking II, L.L.C., a Delaware limited liability company, and Standard Parking
of Canada, L.P., an Illinois limited partnership (and any predecessor of any of
the foregoing) is and at all times has been properly classified for federal,
state and local income tax purposes as a partnership and not as an association
taxable as a corporation.
(k) Each of (i) Standard Parking Corporation, an Illinois
corporation, (ii) Standard Auto Park, Inc., an Illinois corporation, (iii)
Standard Parking Corporation, MW, an Illinois corporation, (iv) Standard Parking
Corporation, IL, an Illinois corporation, and (v) Standard/Wabash Parking
Corporation, an Illinois corporation made a valid election under Subchapter S of
the Code to which all persons who were shareholders on the date of such election
gave their (and if necessary each shareholder's spouse gave his or her) consent
and such elections became effective for each such corporation's tax year
beginning, respectively, January 1, 1985, January 1, 1972, April 12, 1993 (on
which date such corporation was incorporated), April 12, 1993 (on which date
such corporation was incorporated), and January 1, 1987, and each such
corporation is, and has been since such date, an S corporation (as defined in
Section 1361 of the Code).
Section 7.2. APCOA Tax Returns. (a) All federal, state, local,
foreign and other Returns, relating to APCOA or any combined, consolidated,
affiliated or unitary tax group of which APCOA is or has been a member (an
"APCOA Affiliated Group") and required to be filed have been or will be timely
filed. Such Returns are (or will, when filed, be) true, correct and complete in
all material respects. Except for Taxes the non-payment of which would not, in
the aggregate, be material, the following Taxes have (or by the Closing Date
will have) been duly and timely paid: (i) all Taxes shown to be due on such
Returns, (ii) all deficiencies and assessments of Taxes of which written notice
has been received by APCOA or any APCOA Affiliated Group that are payable by
APCOA or chargeable as a lien upon any assets of APCOA other than deficiencies
or assessments for Taxes that are being contested in good faith by appropriate
proceedings and have been reserved against in accordance with generally accepted
accounting principles and (iii) all other Taxes due and payable by APCOA on or
before the Closing Date for which neither filing of Returns nor written notice
of deficiency or assessment is required, of which APCOA is aware, that are or
may become payable by APCOA or chargeable as a lien upon any assets of APCOA.
All Taxes required to be withheld by or on behalf of APCOA have
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been so withheld, and such withheld Taxes have either been duly and timely paid
to the proper Government Authorities or set aside in accounts for such purpose.
(b) No agreement or other document extending, or having the effect
of extending, the period of assessment or collection of any Taxes for which
APCOA may be held liable, and no power of attorney with respect to any such
Taxes, has been executed or filed with the IRS or any other Taxing Authority.
(c) APCOA has made available to Standard Owners complete and
accurate copies of the Returns filed by APCOA or any member of the APCOA
Affiliated Group with respect to all federal, state, local, foreign and other
income, profits, franchise, gross receipts and capital Taxes that are or have
been required to be filed for all periods for which the statute of limitations
for assessment or collection of such Taxes has not expired, and has delivered to
Standard Owners copies of all such Returns relating to income Taxes. No lien for
Taxes exists with respect to any of the assets of APCOA. There are no Taxes for
which APCOA could be held liable asserted in writing by any Taxing Authority to
be due. No unresolved issue has been raised in writing by any Government
Authority in the course of any audit with respect to Taxes for which APCOA could
be held liable. Except as set forth on Schedule 7.2(c), the audits of such
Returns with respect to federal income Taxes have been completed, or the statute
of limitations with respect to federal income Taxes has expired, for all Tax
periods through and including the year ended December 31, 1991. Except as set
forth in Schedule 7.2(c), no Returns filed by APCOA or any member of the APCOA
Affiliated Group with respect to federal income Taxes are currently under audit
by the IRS. Except as set forth on Schedule 7.2(c), no other Returns filed by
APCOA or any member of the APCOA Affiliated Group or Taxes for which APCOA could
be held liable are currently under audit by any other Taxing Authority, and no
Taxing Authority has given notice in writing that it will commence any such
audit. Except as set forth on Schedule 7.2(c), no Taxing Authority is now
asserting against APCOA any deficiency or claim for additional Taxes or any
adjustment of Taxes, and there is no reasonable basis for any such assertion of
which APCOA is aware.
(d) No election has been made to have the provisions of Section
341(f) of the Code apply to APCOA.
(e) Except as set forth on Schedule 7.2, APCOA is not a party to or
bound by any tax sharing or similar agreement or arrangement (and the agreements
and arrangements set forth in such Schedule shall be amended prior to the
Closing as reasonably may be agreed by the Parties).
(f) No assets of APCOA are subject to any lease under Section
168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect prior
to the date of enactment of the Tax Equity and Fiscal Responsibility Act of
1982. No assets of APCOA are subject to a lease under Section 7701(h) of the
Code or under any predecessor provision.
(g) There are no elections in effect made by or with respect to
APCOA pursuant to Section 338 or Section 336(e) of the Code or the regulations
thereunder.
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(h) APCOA has not agreed, nor is it required, to make any adjustment
under Section 481 of the Code (or any comparable provision of state, local or
foreign law) by reason of a change in accounting methods or otherwise.
(i) APCOA had net operating loss carryforwards for federal income
tax purposes of not less than $21.4 million as of December 31, 1996, which were
available for carryforward to APCOA's 1997 taxable year and to APCOA's future
taxable years within the applicable carryforward period provided by Section
172(b)(1) of the Code. The acquisition by Standard Owners of the Standard APCOA
Shares, taken together with other transactions occurring during the "testing
period" (as defined in Section 382(i) of the Code) of such acquisition of the
Standard APCOA Shares, will not constitute an "ownership change" of APCOA as
defined in Section 382(g) of the Code.
Section 7.3. Definitions. For purposes of this Article, the
following terms shall have the meanings ascribed to them below:
(a) "Returns" (a) XE means returns, declarations, statements,
reports, forms or other documents or information required to be filed with or
supplied to any Taxing Authority.
(b) "Taxes" XE means (i) all taxes (whether federal, state, county,
local or foreign) based upon or measured by income and any other tax whatsoever,
including gross receipts, profits, windfall profits, sales, use, occupation,
value added, ad valorem, transfer, franchise, withholding, payroll, employment,
excise, stamp, premium, capital stock, production, business and occupation,
disability, severance, or real or personal property taxes, fees, assessments or
charges of any kind whatsoever imposed by any Taxing Authority together with any
interest or penalties imposed with respect thereto and (ii) any obligations
under any agreements or arrangements with respect to any Taxes described in
clause (i) above.
(c) "Taxing Authority" XE means any Government Authority having
jurisdiction over the assessment, determination, collection, or other imposition
of Tax.
Section 7.4. Section 338(h)(10). At APCOA's request, Standard Owners
will join with APCOA in making an election (the "338 Election") under Section
338(h)(10) of the Code and/or any similar state law provision in any state or
states as APCOA shall designate, with respect to the acquisition of any Standard
Company taxed as an S corporation designated by APCOA. Any such request shall be
delivered to Standard Owners in writing not later than 20 days prior to the last
date on which the 338 Election can legally be made. If the 338 Election is made
with respect to one or more Standard Companies, the parties will allocate the
"MADSP" as computed under Treasury Regulations Section 1.338(h)(10)-1(f) (or
similar state law provision) among such Standard Companies' assets for Tax
purposes in accordance with the allocation set forth in Schedule 7.4. APCOA and
Standard Owners agree to act in accordance with the allocations set forth in
Schedule 7.4 in any relevant Returns or similar filings. Notwithstanding
anything contained herein to the contrary, Standard Owners shall be responsible
for, and shall indemnify and hold harmless APCOA and each APCOA Indemnitee from,
any and all Taxes (and related APCOA Damages) resulting from the deemed sale of
the Standard Companies' assets in the event the 338 Election is made (including
any Tax imposed upon "net recognized built-in
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gain" XE "net recognized built-in gain under Section 1374 of the Code). Standard
Owners shall pay such Taxes, together with any related penalty or interest,
without set-off, deduction or other adjustment, directly to the relevant Taxing
Authority, on or prior to the time such Taxes are due and payable, as estimated
payments or otherwise.
Section 7.5. Section 754 Election. Following the Closing, at APCOA's
request, Standard Owners shall cause to be made an election under Section 754 of
the Code (and/or any similar state law provision in any state or states
designated by APCOA) for the partnership taxable year that includes the Closing
with respect to any Standard Company that is a partnership for federal (or, in
the case of any election under state law, state) income tax purposes and will
not seek to revoke any such election.
Section 7.6. Survival. The provisions of this Article VII shall
survive the Closing until the expiration of all applicable statutes of
limitations.
ARTICLE VIII
Conditions of APCOA's Obligation to Close
APCOA's obligation to consummate the Combination shall be subject to
the satisfaction or waiver by APCOA, on or prior to the Closing Date, of all of
the following conditions:
Section 8.1. Representations, Warranties and Covenants of Standard
Owners. The representations and warranties of Standard Owners contained in this
Agreement, in the aggregate, shall be true and correct in all material respects
on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date except for
representations and warranties that speak as of a specific date or time other
than the Closing Date (which need only be true and correct in all material
respects as of such date or time) and the covenants and agreements of Standard
Owners to be performed on or before the Closing Date in accordance with this
Agreement shall have been duly performed in all material respects.
Section 8.2. Filings; Consents; Waiting Periods. All registrations,
filings, applications, notices, consents, approvals, orders, qualifications and
waivers listed in Schedule 3.10(b) or 4.10(b) and indicated therein as being a
condition to the Closing for APCOA shall have been filed, made or obtained and
all waiting periods applicable under the HSR Act shall have expired or been
terminated.
Section 8.3. No Injunction. At the Closing Date, there shall be no
injunction, restraining order or decree of any nature of any court or Government
Authority of competent jurisdiction that is in effect that restrains or
prohibits the consummation of the Combination.
Section 8.4. Other Agreements. Each of the Stockholders Agreement,
the Employment Agreement, the Consulting Agreement and the Escrow Agreement
shall have been duly executed and delivered by the parties thereto (other than
APCOA, but including the spouse of each party thereto). Each employee of any
Standard Company who would otherwise be entitled to any severance compensation
or benefits or similar "change-of-control" benefits as a result of the
consummation of the transactions contemplated hereby or because of any change in
his
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position, authority, title, duties, reporting responsibilities, status, or other
similar matter, resulting from or arising after or in connection with such
consummation shall, to the extent of such entitlement, have waived such
entitlement. Binding written confirmation from the applicable insurance carrier
or broker that all retroactive insurance premia rebated to any Standard Company
for FY 1996 have been closed shall have been provided to APCOA, or the amount of
any retroactive insurance premia received but as to which binding written
confirmation of finality from the applicable insurance carrier or broker has not
been obtained shall have been contributed to the Standard Companies by the
Standard Owners.
Section 8.5. Financing. APCOA shall have received financing adequate
for consummation of the Combination and related transactions, on terms
reasonably satisfactory to APCOA (it being understood and agreed that this
condition shall be deemed to have been satisfied if APCOA shall have received
financing in an aggregate principal amount of $80 million or more with an
interest rate of 13% per annum or less and with a term of seven years or more
and carrying "equity kickers" (if any) in the form of warrants in an aggregate
amount not exceeding 3% of the fully diluted equity of APCOA and otherwise on
customary and reasonable terms).
ARTICLE IX
Conditions to Standard Owners'
Obligation to Close
Standard Owners' obligation to consummate the Combination is subject
to the satisfaction or waiver by Standard Owners, on or prior to the Closing
Date, of all of the following conditions:
Section 9.1. Representations, Warranties and Covenants of APCOA. The
representations and warranties of APCOA contained in this Agreement, in the
aggregate, shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date except for representations and warranties
that speak as of a specific date or time other than the Closing Date (which need
only be true and correct in all material respects as of such date or time) and
the covenants and agreements of APCOA to be performed on or before the Closing
Date in accordance with this Agreement shall have been duly performed in all
material respects.
Section 9.2. Filings; Consents; Waiting Periods. All registrations,
filings, applications, notices, consents, approvals, orders, qualifications and
waivers listed in Schedules 3.10(b) or 4.10(b) and indicated therein as being a
condition to the Closing for Standard Owners shall have been filed, made or
obtained and all applicable waiting periods under the HSR Act shall have expired
or been terminated.
Section 9.3. No Injunction. At the Closing Date, there shall be no
injunction, restraining order or decree of any nature of any court or Government
Authority of competent jurisdiction that is in effect that restrains or
prohibits the consummation of the Combination.
Section 9.4. Other Agreements. Each of the Stockholders Agreement,
the Employment Agreement, the Escrow Agreement and the Consulting Agreement
shall have been
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duly executed and delivered by the parties thereto (other than any Standard
Owners who are party thereto).
ARTICLE X
Escrow
Section 10.1. Escrowed Amount. Upon the Closing, APCOA shall
deliver, or shall cause to be delivered, directly to the escrow agent under the
Escrow Agreement (the "Escrow Agent"), such amount of the cash portion of the
Purchase Price (collectively with all interest and earnings thereon, the
"Escrowed Amount"), to be held in an escrow account pursuant to the terms set
forth herein and in an escrow agreement, substantially in the form attached as
Exhibit B (the "Escrow Agreement"), which, together with the amount of an
unconditional, personal guarantee from Myron C. Warshauer (in form to be agreed)
for an amount of up to $5 million (the "Guarantee"), totals $10,000,000. The
Escrowed Amount and the Guarantee shall be available to satisfy any obligations
of Standard Owners pursuant hereto, including under Section 2.4 or Article XI
(it being understood and agreed, however, that Standard Owners shall promptly
replenish any amount drawn against the Escrowed Amount, and any such amount
shall not reduce the aggregate liability under the Guarantee, in respect of any
obligation other than the indemnification obligations of Article XI (other than
in respect of a breach of the representations and warranties contained in
Sections 3.1(a)(i) and 3.2), so that the full Escrowed Amount and Guarantee
shall be available to satisfy such indemnification obligations). Payments to
APCOA from the Escrowed Amount or under the Guarantee shall be treated as
reductions in the Purchase Price. The Escrowed Amount and payments on the
Guarantee, or portions thereof, shall be paid to APCOA, or, in the case of the
Escrowed Amount, to Standard Owners, from time to time as provided for and in
accordance with Articles X and XI and in the Guarantee and the Escrow Agreement.
Section 10.2. Designee. Standard Owners will, at the Closing, as
contemplated by the Escrow Agreement, designate a committee of representatives
to act on behalf of Standard Owners and their successors under the Escrow
Agreement with the powers and authorities provided therein and is authorized to
act on behalf of all Standard Owners and for all purposes under the Escrow
Agreement, including settling any claims that may arise following the Closing
under the indemnification provisions of Article XI.
ARTICLE XI
Survival; Indemnification
Section 11.1. Survival of Standard Owners' Representations. The
representations, warranties, covenants and agreements made by Standard Owners in
this Agreement or pursuant hereto shall survive the Closing for a period of two
years thereafter (except for those contained in Sections 3.1 and 3.2, which
shall survive forever, and in Sections 3.17, 6.1 and 7.1, which shall survive
until the expiration of all applicable statutes of limitations), provided that,
in the event of an initial public offering ("IPO") of shares of APCOA Common
Stock within two years of the Closing, such survival shall terminate on the
later of (x) the consummation of such IPO and (y) the 15-month anniversary of
the Closing, and provided further that such limitation shall not affect any
claim for indemnification written notice of which was provided to Standard
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<PAGE> 54
Owners prior to the expiration of the applicable time limitation (the period of
survival, the "Standard Owners' Warranty Period") and in addition shall survive
and shall be unaffected by (and shall not be deemed waived by) any
investigation, audit, appraisal or inspection at any time made by or on behalf
of APCOA. Any claims for indemnification made by APCOA in accordance with this
Section prior to the expiration of the Standard Owners' Warranty Period shall
survive and shall not be extinguished by the expiration of such period.
Section 11.2. Indemnification by Standard Owners. (a) Subject to the
limitations of Section 11.1 and this Section 11.2, Standard Owners, on a several
basis, as set forth on Schedule 11.2(a), agree to indemnify, defend and hold
harmless APCOA, its officers, directors, employees, agents, advisors,
representatives and Affiliates, including the Standard Companies, and each of
their respective successors and assigns (collectively, "APCOA Indemnitees") from
and against any and all demands, claims, complaints, Actions or causes of
action, suits, proceedings, investigations, arbitrations, assessments, losses,
damages, liabilities, costs and expenses, including interest, penalties and
reasonable attorneys' and accounting fees and disbursements (including those
relating to the enforcement of this indemnity) ("APCOA Damages"), asserted
against, imposed upon or incurred by any APCOA Indemnitee, directly or
indirectly, by reason of, relating to or resulting from (i) any nonfulfillment
of any covenant or agreement on the part of Standard Owners contained herein or
(ii) any breach of representation or warranty on the part of Standard Owners
contained herein or any Schedule or certificate, document or other instrument
delivered in connection herewith, provided that notice of any claim for
indemnification shall be submitted by the relevant APCOA Indemnitee prior to the
expiration of the Standard Owners' Warranty Period and reasonably promptly after
the occurrence or discovery of the matter giving rise to the claim for
indemnification (provided that, if such notice is actually served within
Standard Owners' Warranty Period, the failure to so reasonably promptly notify
Standard Owners shall not release Standard Owners from any liability which they
may have for indemnification except and only to the extent that the failure to
so reasonably promptly notify prejudices Standard Owners).
(b) Standard Owners shall not be obligated to make any
indemnification with respect to APCOA Damages pursuant to Section 11.2(a) unless
and until the aggregated amount of APCOA Damages sustained by APCOA Indemnitees
as a whole exceeds $2,000,000 (the "Basket"), provided that, once such Basket
has been satisfied, any indemnification with respect to APCOA Damages shall be
made by Standard Owners to the extent of any excess over the Basket, and
provided further that, for purposes of determining whether any breach has
occurred respecting a claim for indemnification or measuring APCOA Damages
hereunder, any requirement or qualification in any representation, warranty,
covenant or agreement of Standard Owners contained in this Agreement that an
event or fact be material or have a material adverse effect or similar language,
or qualification by such terms or by knowledge or similar language, shall be
ignored (other than with respect to the last sentence of Section 3.15, as to
which the knowledge qualification in this clause shall not apply) and all
representations, warranties, covenants and agreements shall be deemed to have
been made without any qualification by materiality, material adverse effect,
knowledge or similar language. In addition, the aggregate liability of the
Standard Owners in respect of their indemnification obligations set forth in the
foregoing paragraph (a) arising from the breach of any representation or
warranty (other than those contained in Sec-
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tions 3.1(a)(i) and 3.2, as to which this limit shall not be applicable) shall
not exceed the aggregate amount available under the Escrow Agreement and the
Guarantee. With respect to a breach by a Standard Owner of a representation and
warranty made by such Standard Owner in Sections 3.1(a)(i) or 3.2, APCOA may
recover APCOA Damages from such Standard Owner (i) first, from such Standard
Owner's interest in the Escrowed Amount or Guarantee, as applicable, and (ii)
upon exhaustion of such Standard Owner's interest in the Escrowed Amount or
Guarantee, as applicable, directly from such Standard Owner.
(c) Each Standard Owner shall severally indemnify and hold harmless
APCOA and each APCOA Indemnitee against all Taxes (and related APCOA Damages)
relating to the Standard Companies for any period (or portion thereof) ending on
or prior to the Closing Date, except to the extent that such Taxes are reflected
as liabilities on the face of the Historical Standard Balance Sheet as of
October 31, 1997 (or, if a later dated Historical Standard Balance Sheet is
delivered to APCOA prior to the date that is two days prior to the Due Diligence
Out Termination Date, except to the extent that such Taxes are reflected as
liabilities on the face of such Historical Standard Balance Sheet) or incurred
in the ordinary course of business consistent with past practice and this
Agreement since such date, and, notwithstanding any other provisions in this
Agreement, such indemnification pursuant to this Section shall not be subject to
the Basket nor to any maximum amount.
(d) Myron C. Warshauer, and each Standard Owner severally, shall
indemnify and hold harmless APCOA and each APCOA Indemnitee against all APCOA
Damages relating to or arising out of the Excluded Assets, and, notwithstanding
any other provisions in this Agreement, such indemnification pursuant to this
Section shall not be subject to the Basket nor to any maximum amount.
Section 11.3. Survival of APCOA's Representations. The
representations, warranties, covenants and agreements made by APCOA in this
Agreement or pursuant hereto shall survive the Closing for a period of two years
thereafter (except for those contained in Sections 4.1 and 4.2 hereof, which
shall survive forever, and in Sections 4.17 and 7.2 hereof, which shall survive
until the expiration of all applicable statutes of limitations), provided that,
in the event of an IPO of shares of APCOA Common Stock within two years of the
Closing, such survival shall terminate on the later of (x) the consummation of
such IPO and (y) the 15-month anniversary of the Closing, and provided further
that such limitation shall not affect any claim for indemnification written
notice of which was provided to APCOA prior to the expiration of the applicable
time limitation (the period of survival, "APCOA's Warranty Period") and in
addition shall survive and shall be unaffected by (and shall not be deemed
waived by) any investigation, audit, appraisal or inspection at any time made by
or on behalf of Standard Owners. Any claims for indemnification made by Standard
Owners in accordance with this Section prior to the expiration of APCOA's
Warranty Period shall survive and shall not be extinguished by the expiration of
such period.
Section 11.4. Indemnification by APCOA. (a) Subject to the
limitations of Section 11.3 and this Section 11.4, APCOA agrees to indemnify,
defend and hold harmless Standard Owners, its officers, directors, employees,
agents, advisors, representatives and Affiliates (collectively, "Standard Owners
Indemnitees") from and against any and all demands, claims,
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complaints, Actions or causes of action, suits, proceedings, investigations,
arbitrations, assessments, losses, damages, liabilities, costs and expenses,
including interest, penalties and reasonable attorneys' and accounting fees and
disbursements (including those relating to the enforcement of this indemnity)
("Standard Owners Damages"), asserted against, imposed upon or incurred by any
Standard Owner Indemnitee, directly or indirectly, by reason of, relating to or
resulting from (i) any nonfulfillment of any covenant or agreement on the part
of APCOA contained herein or (ii) any breach of representation or warranty on
the part of APCOA contained herein or any Schedule hereto or certificate,
document or other instrument delivered in connection herewith, provided that
notice of any claim for indemnification shall be submitted by the relevant
Standard Owner Indemnitee prior to the expiration of APCOA's Warranty Period and
reasonably promptly after the occurrence or discovery of the matter giving rise
to the claim for indemnification (provided that, if such notice is actually
served within APCOA's Warranty Period, the failure to so reasonably promptly
notify APCOA shall not release APCOA from any liability which they may have for
indemnification except and only to the extent that the failure to so reasonably
promptly notify prejudices APCOA).
(b) APCOA shall not be obligated to make any indemnification with
respect to Standard Owners Damages pursuant to Section 11.4(a) unless and until
the aggregated amount of Standard Owners Damages sustained by Standard Owners
Indemnitees as a whole (or not covered by insurance) exceeds the Basket,
provided that, once such Basket has been satisfied, any indemnification with
respect to Standard Owners Damages shall be made by APCOA to the extent of any
excess over the Basket, and provided further that, for purposes of determining
whether any breach has occurred respecting a claim for indemnification or
measuring Standard Owners Damages hereunder, any requirement or qualification in
any representation, warranty, covenant or agreement of APCOA contained in this
Agreement that an event or fact be material or have a material adverse effect or
similar language, or qualification by such terms or by knowledge or similar
language, shall be ignored and all representations, warranties, covenants and
agreements shall be deemed to have been made without any qualification by
materiality, material adverse effect, knowledge or similar language. In
addition, the aggregate liability of APCOA in respect of its indemnification
obligations set forth in the foregoing paragraph (a) arising from the breach of
any representation or warranty (other than those contained in Sections 4.1 and
4.2, as to which this limit shall not be applicable) shall not exceed an amount
equal to $10,000,000.
Section 11.5. Conditions of Indemnification. The obligations and
liabilities of the Parties with respect to the indemnities provided in this
Article XI resulting from any claim or other assertion of liability by third
parties (collectively, "Claims"), shall be subject to the following terms and
conditions:
(a) The APCOA Indemnitee or Standard Owner Indemnitee seeking
indemnification (the "Indemnified Party") shall give the relevant indemnitor or
indemnitors (the "Indemnifying Party") written notice of any such Claim within
the time period provided in Section 11.4.
(b) The Indemnifying Party shall have the right to undertake, by
counsel or other representatives of its own choosing, the defense of such Claim.
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(c) In the event that the Indemnifying Party shall elect not to
undertake such defense, or within a reasonable time after notice of any such
Claim from the Indemnified Party shall fail to defend, the Indemnified Party
(upon further written notice to the Indemnifying Party) shall have the right to
undertake the defense, compromise or settlement of such Claim, by counsel or
other representatives of its own choosing, on behalf of and for the account and
risk of the Indemnifying Party.
(d) Anything in this Section 11.5 to the contrary notwithstanding:
(i) an Indemnified Party shall have the right, at its own cost
and expense, to have its own counsel to protect its own interests and
participate in the defense, compromise or settlement of any Claim;
(ii) an Indemnifying Party shall not, without the Indemnified
Party's written consent, settle or compromise any Claim or consent to entry of
any judgment which includes any non-monetary performance as a term thereof and
which does not include as an unconditional term thereof the giving by the
claimant or the plaintiff to the Indemnified Party of a release from all
liability in respect of such Claim; and
(iii) the Indemnified Party, by counsel or other
representative of its own choosing and at its sole cost and expense, shall have
the right to consult with the Indemnifying Party and its counsel or other
representatives concerning such Claim and the Indemnifying Party and the
Indemnified Party and their respective counsel shall cooperate with respect to
such Claim.
Section 11.6. Indemnification Sole Remedy. Each Party hereby
acknowledges and agrees that its sole and exclusive remedy with respect to any
and all monetary claims arising from any breach of any representation, warranty,
covenant or agreement set forth herein shall be pursuant to the indemnification
provisions set forth in this Article.
ARTICLE XII
Termination
Section 12.1. Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by mutual consent of the Parties; or
(b) by either Party, during the period ending on the earlier of the
30th day following the Schedules Date or such earlier time, at least 2 business
days following the Schedules Date, following notice to such effect by APCOA (the
earlier of such dates, the "Due Diligence Out Termination Date"), if, as a
result of the due diligence investigation being conducted by such Party any
matter comes to the attention of such Party that makes it inadvisable to proceed
with the transactions contemplated hereby, provided that the Party seeking to
terminate this Agreement under this clause (b) is not then in material breach of
this Agreement; or
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(c) by APCOA on April 10, 1998, if the Closing shall not have
occurred by such date, provided that APCOA may not terminate this Agreement
under this clause (c) if it is then in material breach of this Agreement and
provided further that the right to terminate this Agreement under this clause
(c) shall not be available to APCOA if it has failed to fulfill any obligation
under this Agreement, and which failure has been the cause of, or resulted in,
the failure of the Closing to occur on or before such date; or
(d) by either Party, on or after April 30, 1998, if the Closing
shall not have occurred by such date, provided that the Party seeking to
terminate this Agreement under this clause (d) is not then in material breach of
this Agreement and provided further that the right to terminate this Agreement
under this clause (d) shall not be available to any Party whose failure to
fulfill any obligation under this Agreement has been the cause of, or resulted
in, the failure of the Closing to occur on or before such date; or
(e) by either Party, if any court of competent jurisdiction or other
Government Authority shall have issued an order, decree or ruling enjoining or
otherwise prohibiting the transactions contemplated by this Agreement (unless
such order, decree or ruling has been withdrawn, reversed or otherwise made
inapplicable), provided that the Party seeking to terminate this Agreement under
this clause (e) is not then in material breach of this Agreement and provided
further that the right to terminate this Agreement under this clause (e) shall
not be available to any Party who shall not have used best efforts to avoid the
issuance of such order, decree or ruling; or
(f) by APCOA, if there has been a violation or breach by Standard
Owners of any agreement, representation or warranty of Standard Owners contained
in this Agreement which (i) if curable, has not been cured by Standard Owners
within 15 days after receipt of notice from APCOA or (ii) has rendered the
satisfaction of any condition to the obligations of APCOA impossible and such
violation or breach has not been waived by APCOA, provided that APCOA is not
then in material breach of this Agreement; or
(g) by Standard Owners, if there has been a violation or breach by
APCOA of any agreement, representation or warranty of APCOA contained in this
Agreement which (i) if curable, has not been cured by APCOA within 15 days after
receipt of notice from Standard Owners or (ii) has rendered the satisfaction of
any condition to the obligation of Standard Owners impossible and such violation
or breach has not been waived by Standard Owners, provided that Standard Owners
are not then in material breach of this Agreement.
Section 12.2. Procedure and Effect of Termination. In the event of
termination of this Agreement pursuant to Section 12.1, written notice thereof
shall forthwith be given by the terminating Party to the other Party hereto, and
this Agreement shall thereupon terminate and become void and have no effect, and
the transactions contemplated hereby shall be abandoned without further action
by the Parties hereto, except that the provisions of Sections 5.1(b) and Article
XIII shall survive the termination of this Agreement, provided that such
termination shall not relieve any Party hereto of any liability for any breach
of this Agreement, and provided further that, in the event that either Party
terminates this Agreement pursuant to Section 12.1(d) and at the time of such
termination all conditions to the consummation of the Combination set forth
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in Articles VIII and IX are satisfied or satisfiable other than the condition
set forth in Section 8.5 (and such condition is unsatisfied or unsatisfiable
other than as a result of any breach by Standard Owners or any Standard
Company), upon such termination, APCOA shall pay to Standard Owners by wire
transfer to the account or accounts specified by Standard Owners in writing the
sum of $2,500,000 in immediately available funds as liquidated damages hereunder
and APCOA shall be released from all obligations arising in connection with this
Agreement. If this Agreement shall be terminated, all filings, applications and
other submissions made in accordance with this Agreement shall, to the extent
practicable, be withdrawn from the persons to which they were made.
ARTICLE XIII
Miscellaneous
Section 13.1. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more counterparts have been signed by
each of the Parties and delivered to the other Party. Copies of executed
counterparts transmitted by telecopy shall be considered original executed
counterparts for purposes of this Section.
Section 13.2. Governing Law; Jurisdiction and Forum. (a) This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware without reference to the choice of law principles thereof.
(b) The Parties hereto agree that the appropriate and exclusive
forum for any disputes between any of the Parties hereto arising out of this
Agreement or the transactions contemplated hereby shall be any state or federal
court in the State of Delaware. The Parties hereto further agree that neither
Party shall bring suit with respect to any disputes arising out of this
Agreement or the transactions contemplated hereby, except as expressly set forth
below for the execution or enforcement of judgment, in any court or jurisdiction
other than the above specified court. The foregoing shall not limit the rights
of any Party to obtain execution of judgment in any other jurisdiction. The
Parties further agree, to the extent permitted by law, that a final and
unappealable judgment against any of them in any action or proceeding
contemplated above shall be conclusive and may be enforced in any other
jurisdiction within or outside the United States by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of the fact
and amount of such judgment.
(c) By the execution and delivery of this Agreement, each Party (i)
irrevocably designates and appoints The Corporation Trust Company ("CTC") care
of CT Corporation System at its offices in Wilmington, Delaware, as its
authorized agent upon which process may be served in any Action or proceeding
arising out of or relating to this Agreement, (ii) submits to the personal
jurisdiction of any state or federal court in the State of Delaware in any such
Action or proceeding and (iii) agrees that service of process upon CTC shall be
deemed in every respect effective service of process upon such person in any
such Action or proceeding. Each Party further agrees to take any and all
actions, including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment
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of CTC in full force and effect so long as this Agreement shall be in effect.
The foregoing shall not limit the rights of any Party to serve process in any
other manner permitted by law.
(d) To the extent that any Party has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, such
person hereby irrevocably waives such immunity in respect of its obligations
with respect to this Agreement.
Section 13.3. Entire Agreement; Third-Party Beneficiary. This
Agreement (including agreements incorporated herein) and the Schedules and
Exhibits hereto contain the entire agreement between the Parties with respect to
the subject matter hereof and there are no agreements, understandings,
representations or warranties between the Parties other than those set forth or
referred to herein. Except for those provisions hereof respecting APCOA or
Standard Indemnitees, which are intended to benefit and to be enforceable by the
APCOA or Standard Indemnitees, this Agreement is not intended to confer upon any
person not a Party hereto (or their successors and assigns permitted hereby) any
rights or remedies hereunder.
Section 13.4. Expenses. Except as set forth in this Agreement,
whether or not the Combination is consummated, all advisory, legal and other
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the Party incurring such costs
and expenses, except for the Standard Advisors Fee, which to the extent the
Combination is consummated shall be borne as provided in Section 3.16 (it being
understood and agreed that all advisory, legal and other costs and expenses
incurred by APCOA or its Affiliates in connection with this Agreement and the
transactions contemplated hereby shall be borne by APCOA).
Section 13.5. Notices. All notices and other communications
hereunder shall be sufficiently given for all purposes hereunder if in writing
and delivered personally or sent by documented overnight delivery service or, to
the extent receipt is confirmed and a copy also sent thereafter by personal
delivery or documented overnight delivery service, telecopy, telefax or other
electronic transmission service to the appropriate address or number as set
forth below. Notices to APCOA shall be addressed to:
Holberg Industries, Inc.
545 Steamboat Road
Greenwich, Connecticut 06830
Attention: Chief Financial Officer
Telecopy Number: (203) 661-5756
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with copies to:
APCOA, Inc.
1000 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114-2601
Attention: General Counsel
Telecopy Number: (216) 523-8080
and
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Adam O. Emmerich, Esq.
Telecopy Number: (212) 403-2000
or at such other address and to the attention of such other person as APCOA
may designate by written notice to Standard Owners. Notices to Standard
Owners shall be addressed to:
Standard Parking, L.P.
200 East Randolph Drive, Suite 4800
Chicago, Illinois 60601
Attention: Myron C. Warshauer
Telecopy Number: (312) 240-0191
with copies to:
Standard Parking, L.P.
200 East Randolph Drive, Suite 4800
Chicago, Illinois 60601
Attention: Michael K. Wolf, Esq.
Telecopy Number: (312) 240-0191
Standard Parking, L.P.
200 East Randolph Drive, Suite 4800
Chicago, Illinois 60601
Attention: Stanley Warshauer
Telecopy Number: (312) 240-0191
Standard Parking, L.P.
200 East Randolph Drive, Suite 4800
Chicago, Illinois 60601
Attention: Steven Warshauer
Telecopy Number: (312) 240-0191
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<PAGE> 62
SP Associates c/o JMB Realty Corp.
900 North Michigan Avenue, 19th Floor
Chicago, Illinois 60611
Attention: Patrick J. Meara
Telecopy Number: (312) 915-2310
Mayer Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Attention: Edward S. Best, Esq.
Telecopy Number: (312) 701-7711
and
Katten Muchin & Zavis
525 West Monroe Street, Suite 1600
Chicago, Illinois 60661
Attention: Howard S. Lanznar, Esq.
Telecopy Number: (312) 902-1061
or at such other address and to the attention of such other person as Standard
Owners may designate by written notice to APCOA.
Section 13.6. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Parties hereto and their respective
successors and assigns, provided that no Party hereto may assign its rights or
delegate its obligations under this Agreement without the express prior written
consent of each other Party hereto.
Section 13.7. Headings; Definitions. The Section, Article and other
headings contained in this Agreement are inserted for convenience of reference
only and shall not affect the meaning or interpretation of this Agreement. All
references to Sections or Articles contained herein mean Sections or Articles of
this Agreement unless otherwise stated.
Section 13.8. Amendments and Waivers. This Agreement may not be
modified or amended except by an instrument or instruments in writing signed by
the Party against whom enforcement of any such modification or amendment is
sought. Either Party hereto may, only by an instrument in writing, waive
compliance by the other Party hereto with any term or provision hereof on the
part of such other Party hereto to be performed or complied with. The waiver by
any Party hereto of a breach of any term or provision hereof shall not be
construed as a waiver of any subsequent breach.
Section 13.9. Interpretation; Absence of Presumption. (a) For the
purposes hereof, (i) "to the knowledge of Standard Owners and the Standard
Companies" shall mean the actual knowledge of the persons listed on Schedule
13.9S after reasonable inquiry and "to the actual knowledge of Standard Owners
and the Standard Companies" shall mean the same but
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without any obligation of inquiry and "to the knowledge of APCOA" shall have a
correlative meaning as to the persons listed on Schedule 13.9A, (ii) words in
the singular shall be held to include the plural and vice versa and words of one
gender shall be held to include the other gender as the context requires, (iii)
the terms "hereof," "herein," and "herewith" and words of similar import shall,
unless otherwise stated, be construed to refer to this Agreement as a whole
(including all of the Schedules and Exhibits hereto) and not to any particular
provision of this Agreement, and Article, Section, paragraph and Schedule and
Exhibit references are to the Articles, Sections, paragraphs, Schedules and
Exhibits to this Agreement unless otherwise specified, (iv) the word "including"
and words of similar import when used in this Agreement shall mean "including,
without limitation," unless the context otherwise requires or unless otherwise
specified, (v) the word "or" shall not be exclusive, and (vi) provisions shall
apply, when appropriate, to successive events and transactions.
(b) This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the Party
drafting or causing any instrument to be drafted.
(c) It is understood and agreed that neither the specification of
any dollar amount in the representations and warranties contained in this
Agreement nor the inclusion of any specific item in Schedules to this Agreement
is intended to imply that such amounts or higher or lower amounts, or the items
so included or other items, are or are not material, and neither Party shall use
the fact of the setting of such amounts or the fact of the inclusion of any such
item in the Schedules to this Agreement in any dispute or controversy between
the Parties as to whether any obligation, item or matter is or is not material
for purposes hereof.
Section 13.10. Severability. Any provision hereof which is invalid
or unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions hereof.
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IN WITNESS WHEREOF, this Agreement has been signed by or on behalf
of each of the Parties as of the day first above written.
/s/ Myron C. Warshauer
------------------------------
Myron C. Warshauer
/s/ Stanley Warshauer
by Myron C. Warshauer
Attorney in fact
------------------------------
Steven A. Warshauer
/s/ Steven A. Warshauer
by Myron C. Warshauer
Attorney in fact
------------------------------
Steven A. Warshauer
DOSHER PARTNERS, L.P.
By Standard Parking Corp.
By: /s/ Myron C. Warshauer
------------------------------
Name: Myron C. Warshauer
Title: President
SP PARKING ASSOCIATES
By: SP Parking Managers, L.P.
By: Standard Managers, Inc.
By: /s/ Patrick Meara
------------------------------
Name: Patrick Meara
Title: Vice President
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<PAGE> 65
SP ASSOCIATES
By: SP Managers, L.P.
By: Standard Managers, Inc.
By: /s/ Patrick Meara
------------------------------
Name: Patrick Meara
Title: Vice President
APCOA, INC.
By: /s/ John V. Holten
------------------------------
Name: John V. Holten
Title: Chairman of the Board
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<PAGE> 1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
APCOA, INC.
(Originally incorporated on September 24, 1981, under the name of
120 OAKLAND PLACE, INC.)
APCOA, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"),
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, has duly
adopted resolutions setting forth a proposed amendment and restatement of the
Certificate of Incorporation of the Corporation and declaring said amendment and
restatement to be advisable. The resolution setting forth the proposed amendment
and restatement is as follows:
RESOLVED, that the Corporation's Certificate of Incorporation be
amended in accordance with Section 242 of the General Corporation Law of
the State of Delaware to effect certain changes in said Certificate of
Incorporation, and that the Amended and Restated Certificate of
Incorporation attached hereto be adopted, in accordance with Sections 242
and 245 of the General Corporation Law of the State of Delaware, as the
Amended and Restated Certificate of Incorporation of the Corporation.
SECOND: That in lieu of a meeting and vote of stockholders, both of
the stockholders of the Corporation have given their written consent to said
amendment and restatement was duly adopted in accordance with the applicable
provisions of Sections 242, 245 and 228 of the General Corporation Law of the
State of Delaware.
THIRD: That the capital of the Corporation shall not be reduced
under or by reason of said amendment and restatement.
<PAGE> 2
IN WITNESS WHEREOF, said APCOA, Inc. has caused this certificate to
be signed by its President, and attested by its Assistant Secretary, this 24th
day of February, 1994.
By: /s/ G. Walter Stuelpe, Jr.
--------------------------------------
Name: G. Walter Stuelpe, Jr.
Title: President
ATTEST:
By: /s/ William J. Montis
--------------------------------
Name: William J. Montis
Assistant Secretary
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AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
APCOA, INC.
ARTICLE I
The name of the corporation (which is hereinafter referred to as the
"Corporation") is:
APCOA, Inc.
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is The Corporation Trust Center, 1209 Orange Street in the City of
Wilmington, County of New Castle. The name of the Corporation's registered agent
at such address is The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation shall be to engage in any lawful act
or activity for which corporations may be organized and incorporated under the
General Corporation Law of the State of Delaware.
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ARTICLE IV
Section 1. The Corporation shall be authorized to issue 5,000 shares of capital
stock, of which 3000 shares shall be shares of Common Stock, $1.00 par value
("Common Stock"), and 2000 shares shall be shares of Preferred Stock, $.01 par
value ("Preferred Stock").
Section 2. Shares of Preferred Stock may be issued from time to time
in one or more series. The Board of Directors of the Corporation (hereinafter
referred to as the "Board") is hereby authorized to fix the voting rights, if
any, designations, powers, preferences and the relative, participation, optional
or other rights, if any, and the qualifications, limitations or restrictions
thereof, of any unissued series of Preferred Stock; and to fix the number of
shares constituting such series, and to increase or decrease the number of
shares of any such series (but not below the number of shares thereof then
outstanding).
Section 3. Except as otherwise provided by law or by the resolution
or resolutions adopted by the Board designating the rights, power and
preferences of any series of Preferred Stock, the Common Stock shall have the
exclusive right to vote for the election of directors and for all other
purposes. Each share of Common Stock shall have one vote, and the Common Stock
shall vote together as a single class.
ARTICLE V
Unless and except to the extent that the By-Laws of the Corporation
shall so require, the election of directors of the Corporation need not be by
written ballot.
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ARTICLE VI
In furtherance and not in limitation of the powers conferred by law,
the Board is expressly authorized and empowered to make, alter and repeal the
By-Laws of the Corporation by a majority vote at any regular or special meeting
of the Board or by written consent, subject to the power of the stockholders of
the Corporation to alter or repeal any By-Laws made by the Board.
ARTICLE VII
The Corporation reserves the right at any time from time to time to
amend, alter, change or repeal any provision contained in this Certificate of
Incorporation, and any other provisions authorized by the laws of the State of
Delaware at the time in force may be added or inserted, in the manner now or
hereafter prescribed by law; and all rights, preferences and privileges of
whatsoever nature conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Certificate of Incorporation in its present
form or as hereafter amended are granted subject to the right reserved in this
Article.
ARTICLE VIII
Section 1. Elimination of Certain Liability of Directors. A director of the
Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions
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not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the director derived an
improper personal benefit.
Section 2. Indemnification and Insurance.
(a) Right to Indemnification. Each person who was or is made a party
or is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding'), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the General Corporation Law of the State of Delaware, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide prior
to such amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred or suffered by such person
in connection therewith and
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such indemnification shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of his or
her heirs, executors and administrators; provided, however, that, except as
provided in paragraph (b) hereof, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board. The right to indemnification conferred in this Section
shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in advance of
its final disposition; provided, however, that, if the General Corporation Law
of the State of Delaware requires, the payment of such expenses incurred by a
director or officer in his or her capacity as a director or officer (and not in
any other capacity in which service was or is rendered by such person while a
director or officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of a proceeding, shall be made
only upon delivery to the Corporation of an undertaking, by or on behalf of such
director or officer, to repay all amounts so advanced if it shall ultimately be
determined that such director or officer is not entitled to be indemnified under
this Section or otherwise. The Corporation may, by action of the Board, provide
indemnification to employees and agents of the Corporation with the same scope
and effect as the foregoing indemnification of directors and officers.
(b) Right of Claimant to Bring Suit. If a claim under paragraph (a)
of this Section is not paid in full by the Corporation within thirty days after
a written claim
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has been received by the Corporation, the claimant may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the claim
and, if successful in whole or in part, the claimant shall be entitled to be
paid also the expense of prosecuting such claim. It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the General Corporation Law of the State of Delaware for
the Corporation to indemnify the claimant for the amount claimed, but the burden
of proving such defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior the commencement of such action
that indemnification of the claimant is proper in the circumstances because he
or she has met the applicable standard of conduct set forth in the General
Corporation Law of the State of Delaware, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
(c) Non-Exclusivity of Rights. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section shall not be exclusive of any other right
which any
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person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, By-Law, agreement, vote of stockholders or
disinterested directors or otherwise.
(d) Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the General Corporation Law of the State of Delaware.
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Exhibit 3.2
BY-LAWS
of
120 OAKLAND PLACE, INC.
ARTICLE I
Meetings of Stockholders
Section 1. Annual Meeting. The annual meeting of stockholders of
the corporation for the election of directors and for the transaction of other
business shall be held at such time and such place within or without the State
of Delaware as shall be determined by the Board of Directors or the President
and stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. Special Meetings. A special meeting of stockholders may
be called by the Board of Directors or the President, and shall be called by the
President, the Secretary or an Assistant Secretary at the request in writing of
a majority of the Board of Directors, or at the request in writing of the
holders of record of a majority of the outstanding shares of the stock of the
corporation entitled to vote at the meeting. Each special meeting of
stockholders shall be held at such time and place within or without the State of
Delaware as shall be stated in the notice of the meeting or in a duly executed
waiver of notice thereof. Business transacted at any special meeting of
stockholders shall be limited to the purpose or purposes stated in the notice of
the meeting.
Section 3. Notice and Purpose of Meetings. Written notice of every
meeting of stockholders stating the place, date and hour of the meeting and, in
the case of a special meeting, in general terms, the purpose or purposes for
which the meeting is called, shall be given not
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less than ten nor more than sixty days before the meeting to each stockholder of
record entitled to vote at the meeting. If mailed, such notice shall be deemed
to be given when deposited in the United States mail, with first-class postage
thereon prepaid, directed to each stockholder at his address as it appears on
the records of the corporation.
Section 4. List of Stockholders. The officer who has charge of the
stock ledger of the corporation shall prepare and make, at least ten days before
every meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares of the stock of the corporation
registered in the name of each stockholder. Such list shall be open to
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. The list shall also be produced and kept
at the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
Section 5. Quorum. Except as otherwise required by law or the
certificate of incorporation, a quorum at all meetings of stockholders shall
consist of the holders of record of not less than a majority of the outstanding
shares of the stock of the corporation entitled to vote at the meeting, present
in person or by proxy, except when the stockholders are required to vote by
class, in which event the holders of record of not less than a majority of the
outstanding shares of the appropriate class shall be present in person or by
proxy.
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Section 6. Adjournments. The stockholders entitled to vote who are
present in person or by proxy at any meeting of stockholders, whether or not a
quorum shall be present at the meeting, shall have power by a majority of the
votes cast to adjourn the meeting from time to time without notice other than
announcement at the meeting of the time and place to which the meeting is
adjourned. At any adjourned meeting held without notice at which a quorum shall
be present any business may be transacted that might have been transacted on the
original date of the meeting. If the adjournment is for more than thirty days,
or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the adjourned meeting.
Section 7. Voting; Proxies. Unless otherwise provided in the
certificate of incorporation, each stockholder of record shall be entitled at
every meeting of stockholders to one vote for each share of the stock of the
corporation standing in his name on the record of stockholders on the record
date fixed for the meeting or, if no record date for the meeting was fixed, on
the date of the meeting. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may act in person or may authorize another person to act for
him by proxy, but no proxy shall be voted or acted upon after three years from
its date unless it provides for a longer period.
Directors elected at any meeting of stockholders shall, except as
otherwise required by law, be elected by a plurality of the votes cast. All
other corporate action to be taken by vote of stockholders shall, except as
otherwise required by law or the certificate of incorporation, be authorized by
a majority of the votes cast. Unless otherwise provided in the certificate of
incorporation, the vote for directors shall be by ballot, but the vote upon any
other question be-
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fore a meeting of stockholders shall not be by ballot unless required by law or
unless the person presiding at such meeting shall so direct or unless any
stockholder present in person or by proxy and entitled to vote thereon shall so
demand.
Section 8. Consent of Stockholders in Lieu of Meeting. Unless
otherwise provided in the certificate of incorporation, any action required to
be taken at any annual or special meeting of stockholders, or any action
(including, without limitation, adoption, amendment or repeal of by-laws) which
may be taken at any annual or special meeting of stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding shares of the stock of the corporation having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing.
Section 9. Waiver of Notice. Whenever notice is required by law or
these by-laws to be given to any stockholder, a written waiver thereof, signed
by such stockholder in person or by proxy, whether before or after the time
stated therein, shall be deemed equivalent to notice. The attendance of any
stockholder at a meeting in person or by proxy shall constitute a waiver of
notice of such meeting, except where the person attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the pur-
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pose of, any annual or special meeting of the stockholders need be specified in
any written waiver of notice.
Section 10. Inspectors of Election. The Board of Directors may, in
advance of any meeting of the stockholders, appoint one or more inspectors to
act at the meeting or any adjournment thereof. If inspectors are not so
appointed in advance of the meeting, the person presiding at such meeting may,
and on the request of any stockholder entitled to vote thereat shall, appoint
one or more inspectors. In case any inspector appointed fails to appear or act,
the vacancy may be filled by appointment made by the Board of Directors in
advance of the meeting or at the meeting by the person presiding thereat. Each
inspector, before entering upon the discharge of his duties, shall take and sign
an oath faithfully to execute the duties of inspector at such meeting with
strict impartiality and according to the best of his ability. No person who is a
candidate for the office of director of the corporation shall act as an
inspector at any meeting of the stockholders at which directors are elected.
Section 11. Duties of Inspectors of Election. Whenever one or more
inspectors of election may be appointed as provided in these by-laws, he or they
shall determine the number of shares outstanding and entitled to vote, the
shares represented at the meeting, the existence of a quorum, the validity and
effect of proxies, and shall receive votes, ballots or consents, hear and
determine all challenges and questions arising in connection with the right to
vote, count and tabulate all votes, ballots, or consents, determine the result,
and do such acts as are proper to conduct the election or vote with fairness to
all stockholders.
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ARTICLE II
Directors
Section 1. General Powers. The property, business and affairs of
the corporation shall be managed by or under the direction of its Board of
Directors.
Section 2. Number and Qualifications. The Board of Directors shall
consist of one or more members. The exact number of directors shall be fixed
from time to time by action of the stockholders or by vote of a majority of the
entire Board of Directors.
Section 3. Election and Term of Office. Except as otherwise
required by law or these by-laws, each director shall be elected at the annual
meeting of stockholders of the corporation and shall hold office until the next
annual meeting of stockholders and until his successor has been elected and
qualified, or until his earlier death, resignation or removal.
Section 4. Resignation. Any director may resign at any time by
giving written notice to the corporation. Such resignation shall take effect at
the time specified therein; unless otherwise specified therein, the acceptance
of such resignation shall not be necessary to make it effective.
Section 5. Removal of Directors. Except as otherwise provided by
law, any director or the entire Board of Directors may be removed, with or
without cause, by the holders of a majority of the shares of the stock of the
corporation then entitled to vote at an election of directors.
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Section 6. Vacancies. Newly created directorships and vacancies in
the Board of Directors, including vacancies resulting from the resignation of
directors effective immediately or at a future date or from the removal of
directors, with or without cause, may be filled by vote of the stockholders, by
vote of a majority of the directors then in office (including directors whose
resignations are effective at a future date), although less than a quorum, or by
the sole remaining director. Each director so chosen shall hold office until the
next annual meeting of stockholders and until his successor has been elected and
qualified, or until his earlier death, resignation or removal. A vote to fill a
vacancy or vacancies created by the resignation or resignations of a director or
directors effective at a future date shall take effect when the resignation or
resignations become effective.
Section 7. First Meeting of Newly Elected Directors. The first
meeting of the newly elected Board of Directors may be held immediately after
the annual meeting of stockholders and at the same place as the annual meeting
of stockholders, provided a quorum be present, and no notice of the meeting
shall be necessary. In the event the first meeting of the newly elected Board of
Directors is not held at said time and place, it shall be held as provided in
Section 8 or 9 of this Article II.
Section 8. Regular Meetings of Directors. Regular meetings of the
Board of Directors may be held without notice at such time and such place within
or without the State of Delaware as may be fixed from time to time by resolution
of the Board of Directors. If any day fixed for a regular meeting shall be a
legal holiday at a place where the meeting is to be held, then the meeting which
would otherwise be held on that day shall be held at the same hour on the next
succeeding business day.
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Section 9. Special Meetings of Directors. A special meeting of the
Board of Directors may be called by the President, or, in the absence or
disability of the President, any Vice President, or by any two directors or if
there is only one director, by that one director. Each special meeting of the
Board of Directors may be held at such time and such place within or without the
State of Delaware as shall be stated in the notice of the meeting or in a duly
executed waiver of notice thereof.
Section 10. Notice of Special Meetings. Notice of each special
meeting of the Board of Directors, stating the time and place thereof, shall be
given by the President, any Vice President, the Secretary, any Assistant
Secretary or any member of the Board of Directors, to each member of the Board
of Directors (a) not less than three days before the meeting by depositing the
notice in the United States mail, with first-class postage thereon prepaid,
directed to each member of the Board of Directors at the address designated by
him for such purpose (or, if none is designated, at his last known address), or
(b) not less than twenty-four hours before the meeting by either (i) delivering
the same to each member of the Board of Directors personally, (ii) sending the
same by telephone, telegraph, cable or wireless to address designated by him for
such purposes (or, if none is designated, to his last known address) or (iii)
delivering the notice to the address designated by him for such purpose (or, if
none is designated, to his last known address). The notice of any meeting of the
Board of Directors need not specify the purpose or purposes for which the
meeting is called, except as otherwise required by law or these by-laws.
Section 11. Quorum and Action by the Board. At all meetings of the
Board of Directors, except as otherwise required by law or these by-laws, a
quorum shall be required for the transaction of business and shall consist of
not less than a majority of the entire Board of Di-
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rectors, and the vote of a majority of the directors present shall decide any
question that may come before the meeting. A majority of the directors present,
whether or not a quorum is present, may adjourn any meeting to another time or
place without notice other than announcement at the meeting of the time and
place to which the meeting is adjourned.
Section 12. Procedure. The order of business and all other matters
of procedure at every meeting of directors may be determined by the person
presiding at the meeting.
Section 13. Committees of Directors. The Board of Directors may, by
resolution adopted by vote of a majority of the entire Board of Directors
designate one or more committees, each committee to consist of one or more of
the directors of the corporation. The Board may designate one or more directors
as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member or alternate member of a committee, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any such absent or
disqualified member or alternate member. Any such committee, to the extent
provided in the resolution of the Board of Directors, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the property, business and affairs of the corporation, and may
authorize the seal of the corporation to be affixed to all papers which may
require it; but no such committee shall have the power or authority of the Board
of Directors in reference to amending the certificate of incorporation, adopting
an agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the corporation's
property and assets, recommending to the stock-
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holders a dissolution of the corporation or a revocation of a dissolution,
amending the by-laws of the corporation, declaring a dividend or authorizing the
issuance of stock. Each such committee shall keep regular minutes of its
proceedings and report the same to the Board of Directors when required. A
majority vote of all the members of any such committee may fix its rules or
procedure, determine its actions and fix the time and place within or without
the State of Delaware for its meetings and specify the number of members
required to constitute a quorum and what notice thereof, if any, shall be given,
unless the Board of Directors shall otherwise provide. The Board of Directors
may at any time fill vacancies in, change the membership of or discharge any
such committee.
Section 14. Compensation of Directors. The Board of Directors shall
have the authority to fix the compensation of directors. The directors may be
paid their expenses, if any, of attendance at each meeting of the Board of
Directors and may be paid a fixed sum for attendance at each meeting of the
Board of Directors or a stated salary as director. No such payment shall
preclude any director from serving the corporation in any other capacity and
receiving compensation therefor. Members of committees of the Board of Directors
may be allowed like compensation for attending committee meetings.
Section 15. Action Without a Meeting. Any action required or
permitted to be taken by the Board of Directors or any committee thereof may be
taken without a meeting if all members of the Board of Directors or the
committee consent in writing to the adoption of a resolution authorizing the
action. The resolution and the written consents thereto by the members of the
Board of Directors or committee shall be filed with the minutes of the
proceedings of the Board of Directors or committee.
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Section 16. Presence at Meeting by Telephone. Members of the Board
of Directors or any committee thereof may participate in a meeting of the Board
of Directors or committee by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in a meeting by such means shall
constitute presence in person at the meeting.
Section 17. Waiver of Notice. Whenever notice is required by law or
these by-laws to be given to any director, a written waiver thereof, signed by
such director, whether before or after the time stated therein, shall be deemed
equivalent to notice.
ARTICLE III
Officers
Section 1. Officers; Term of Office. The Board of Directors shall
annually, at the first meeting of the Board of Directors after the annual
meeting of stockholders, elect a Chairman of the Board, a President, one or more
Vice Presidents, a Secretary, and a Treasurer. The Board of Directors may from
time to time elect or appoint such additional officers as it may determine. Such
additional officers shall have such authority and perform such duties as the
Board of Directors may from time to time prescribe.
The Chairman of the Board, the President, each Vice-President, the
Secretary and the Treasurer shall each, unless otherwise determined by the Board
of Directors, hold office until the first meeting of the Board of Directors
following the next annual meeting of stockholders and until his successor has
been elected and qualified, or until his earlier death, resignation or removal.
Each additional officer appointed or elected by the Board of Directors shall
hold office
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for such term as shall be determined from time to time by the Board of Directors
and until his successor has been elected or appointed and qualified, or until
his earlier death, resignation or removal.
Section 2. Removal. Any officer may be removed or have his
authority suspended by the Board of Directors at any time, with or without
cause.
Section 3. Resignation. Any officer may resign at any time by
giving written notice to the corporation. Such resignation shall take effect at
the time specified therein; unless otherwise specified therein, the acceptance
of such resignation shall not be necessary to make it effective.
Section 4. Vacancies. A vacancy in any office arising for any
reason may be filled by the Board of Directors.
Section 5. Chairman of the Board. The Chairman of the Board shall
preside at all meetings of stockholders and of the Board of Directors and shall
be entitled to vote upon all questions.
Section 6. The President. The President shall be the chief
executive officer of the corporation. In the absence of the Chairman of the
Board, the President preside at all meetings of stockholders and of the Board of
Directors. He shall have the powers and duties of immediate supervision and
management of the corporation which usually pertain to his office, and shall
perform all such other duties as are properly required of him by the Board of
Directors.
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Section 7. The Vice Presidents. The Vice Presidents may be
designated by such title or titles as the Board of Directors may determine, and
each Vice President in such order of seniority as may be determined by the Board
of Directors shall, in the absence or disability of the President, or at his
request, perform the duties and exercise the powers of the President. Each of
the Vice Presidents also shall have such powers as usually pertain to his office
and shall perform such duties as usually pertain to his office or as are
properly required of him by the Board of Directors.
Section 8. The Secretary and Assistant Secretaries. The Secretary
shall issue notices of all meetings of stockholders and of the Board of
Directors where notices of such meetings are required by law or these by-laws.
He shall attend meetings of stockholders and of the Board of Directors and keep
the minutes thereof in a book or books to be provided for that purpose. He shall
affix the corporate seal to and sign such instruments as require the seal and
his signature and shall perform such other duties as usually pertain to his
office or as are properly required of him by the Board of Directors.
Section 9. The Treasurer and Assistant Treasurers. The Treasurer
shall have the care and custody of all the moneys and securities of the
corporation. He shall cause to be entered in books of the corporation to be kept
for that purpose full and accurate accounts of all moneys received by him and
paid by him on account of the corporation. He shall make and sign such reports,
statements and instruments as may be required of him by the Board of Directors
or by the laws of the United States or of any state, country or other
jurisdiction in which the corporation transacts business, and shall perform such
other duties as usually pertain to his office or as are properly required of him
by the Board of Directors.
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Section 10. Officers Holding Two or More Offices. Any two or more
offices may be held by the same person but no officer shall execute, acknowledge
or verify any instrument in more than one capacity if such instrument be
required by law or otherwise to be executed or verified by two or more officers.
Section 11. Duties of Officers May be Delegated. In case of the
absence or disability of any officer of the corporation, or in case of a vacancy
in any office or for any other reason that the Board of Directors may deem
sufficient, the Board of Directors, except as otherwise provided by law, may
temporarily delegate the powers or duties of any officer to any other officer or
to any director.
Section 12. Compensation. The compensation of all officers shall be
determined by the Board of Directors. The compensation of all other employees
shall be fixed by the President within such limits as may be prescribed by the
Board of Directors.
Section 13. Security. The corporation may secure the fidelity of
any or all of its officers or agents by bond or otherwise, as may be required
from time to time by the Board of Directors.
ARTICLE IV
Indemnification of Officers and Directors
Section 1. Right of Indemnification. Every person now or hereafter
serving as a director or officer of the corporation and every such director or
officer serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, shall be indemnified by the corporation in accordance with
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and to the fullest extent permitted by law for the defense of, or in connection
with, any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative.
Section 2. Expenses. Expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid by the corporation in advance of
the final disposition of such action, suit or proceeding as authorized by the
Board of Directors in the specific case upon receipt of an undertaking by or on
behalf of the director or officer to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this Article IV.
Section 3. Other Rights of Indemnification. The right of
indemnification herein provided shall not be deemed exclusive of any other
rights to which any such director or officer may now or hereafter be entitled
under any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director or officer and shall inure to the benefit of the
heirs, executors and administrators of such person.
ARTICLE V
Shares and Their Transfer
Section 1. Certificates. Every stockholder of the corporation shall
be entitled to a certificate or certificates, to be in such form as the Board of
Directors shall prescribe, certifying the number of shares of the stock of the
corporation owned by him.
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<PAGE> 16
Section 2. Issuance of Certificates. Certificates representing
shares of stock of the corporation shall be numbered in the order in which they
are issued and shall be signed by the President or any Vice President and the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary
of the corporation. Any of or all the signatures on the certificate may be a
facsimile. In case any officer or officers of the corporation who shall have
signed, or whose facsimile signature or signatures shall have been used on, any
such certificate shall have ceased to be such officer or officers before such
certificate is issued, such certificate may nevertheless be issued as though the
person or persons who signed such certificate, or whose facsimile signature or
signatures shall have been affixed thereto, had not ceased to be such officer or
officers.
Section 3. More Than One Class of Stock. If the corporation shall
be authorized to issue more than one class of stock or more than one series of
any class, the powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualification, limitations or restrictions of such preferences and/or rights
shall be set forth in full or summarized on the face or back of the certificate
which the corporation shall issue to represent such class or series of stock,
provided that, except for restrictions on transfer of stock (as provided in
section 202 of the General Corporation Law of Delaware), in lieu of the
foregoing requirements, there may be set forth on the face or back of the
certificate which the corporation shall issue to represent such class or series
of stock, a statement that the corporation will furnish without charge to each
stockholder who so requests the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights.
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<PAGE> 17
Section 4. Stock Ledger. A record shall be kept by the Secretary,
transfer agent or by any other officer, employee or agent designated by the
Board of Directors of the name of the individual, firm or corporation holding
the shares of the stock of the corporation represented by each certificate, the
number of shares represented y such certificate, the date of issue thereof and,
in case of cancellation, the date of cancellation thereof.
Section 5. Transfer of Shares. Upon surrender to the corporation or
the transfer agent of the corporation of a certificate representing shares of
the stock of the corporation duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books. Whenever any
transfer of shares shall be made for collateral security, and not absolutely, it
shall be so expressed in the entry of the transfer if, when the certificates are
presented to the corporation for transfer, both the transferor and transferee
request the corporation to do so.
Section 6. Registered Stockholders. The corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares of the stock of the corporation to receive dividends, and to
vote as such owner, and to hold liable for call and assessments a person
registered on its books as the owner of such shares, and shall not be bound to
recognize any equitable or other claim to or interest in such shares on the part
of any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by the laws of Delaware.
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<PAGE> 18
Section 7. Regulations. The Board of Directors may make such rules
and regulations as it may deem expedient, not inconsistent with law, the
certificate of incorporation or these by-laws, concerning the issue, transfer
and registration of certificates representing shares of the stock of the
corporation. It may appoint, or authorize any officer or officers to appoint,
one or more transfer clerks or one or more transfer agents or one or more
registrars, and may require all such certificates to bear the signature or
signatures of any of them.
Section 8. Lost, Stolen and Destroyed Certificates. The Board of
Directors may in its discretion cause a new certificate representing shares of
the stock of the corporation to be issued in place of any certificate
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon satisfactory proof of that fact by the person claiming the
certificate to have been lost, stolen or destroyed; but the Board of Directors
may in its discretion refuse to issue a new certificate except upon the order of
a court having jurisdiction in such matters. When authorizing such issue of a
new certificate, the Board of Directors may, in its discretion, and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificate, or his legal representative, to give the
corporation a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
Section 9. Fixing of Record Date. In order that the corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect to any change, conversion or exchange of shares
of the stock
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<PAGE> 19
of the corporation, or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be more than sixty
or less than ten days before the date of such meeting, nor more than sixty days
prior to any other action. Only such stockholders as shall be stockholders of
record on the date so fixed shall be entitled to notice of, and to vote at such
meeting of stockholders and any adjournment thereof, or to receive payment of
such dividend or such other distribution or such allotment of rights, or to
exercise such rights in respect to any such change, conversion or exchange of
shares of the stock of the corporation, or to participate in such other action,
or to give such consent, as the case may be, notwithstanding any transfer of any
shares of the stock of the corporation on the books of the corporation after any
such record date so fixed. A determination of stockholders of record entitled to
notice of or to vote at any meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.
If no record date is fixed by the Board of Directors, (a) the record
date for determining stockholders entitled to notice of or to vote at any
meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given or, if notice is waived, at the close
of business on the day next preceding the day on which the meeting is held, (b)
the record date for determining stockholders entitled to express consent to
corporate action in writing without a meeting, when no prior action by the Board
of Directors is necessary, shall be the day on which the first written consent
is expressed, and (c) the record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
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<PAGE> 20
ARTICLE VI
Finances
Section 1. Corporate Funds. The funds of the corporation shall be
deposited in its name with such banks, trust companies or other depositories as
the Board of Directors may from time to time designate. All checks, notes,
drafts and other negotiable instruments of the corporation shall be signed by
such officer or officers, employee or employees, agent or agents as the Board of
Directors may from time to time designate. No officers, employees or agents of
the corporation, alone or with others, shall have power to make any checks,
notes, drafts or other negotiable instruments in the name of the corporation or
to bind the corporation thereby, except as provided in this Section 1.
Section 2. Fiscal Year. The fiscal year of the corporation shall be
the calendar year unless otherwise provided by the Board of Directors.
Section 3. Dividends; Reserves. Dividends upon the stock of the
corporation, payable out of funds legally available therefor, may be declared by
the Board of Directors at any regular or special meeting. Dividends may be paid
in cash, in property, or in shares of the stock of the corporation. Before
declaring any dividend, the Board of Directors may set aside out of any funds of
the corporation legally available for dividends such sum or sums as the Board of
Directors from time to time in its discretion shall deem proper as a reserve for
working capital, for contingencies, for equalizing dividends or for such other
purpose or purposes as the Board of Directors shall deem conducive to the
interests of the corporation, and the Board of Directors may modify or abolish
any such reserve in the manner in which it was created.
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<PAGE> 21
Section 4. Loans to Employees and Officers. The corporation may
lend money to or guarantee any obligation of, or otherwise assist any officer or
other employee of the corporation, including any officer or employee who is also
a director of the corporation, whenever in the judgment of the directors, such
loan, guaranty or assistance may reasonably be expected to benefit the
corporation. The loan, guaranty or other assistance may be with or without
interest, and may be unsecured or secured in such manner as the Board of
Directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation.
ARTICLE VII
Corporate Seal
Section 1. Form of Seal. The corporate seal shall have inscribed
thereon the name of the corporation, the year of its incorporation and the words
"Corporate Seal" and "Delaware", and shall otherwise be in such form as shall be
prescribed from time to time by the Board of Directors.
Section 2. Use of Seal. The corporate seal may be used by causing
it or a facsimile thereof to be impressed or affixed or reproduced in any
manner.
ARTICLE VIII
Amendments
Section 1. Procedure For Amending By-Laws. By-laws of the
corporation may be adopted, amended or repealed (a) at any meeting of
stockholders, notice of which shall have referred to the proposed action, by the
holders of a majority of the shares of the corporation then entitled to vote at
an election of directors, or (b), if the power to adopt, amend or repeal by-
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<PAGE> 22
laws shall have been conferred upon the directors in the certificate of
incorporation, at any meeting of the Board of Directors, notice of which shall
have referred to the proposed action, by the vote of a majority of the entire
Board of Directors.
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<PAGE> 1
EXHIBIT 3.3
UNITED STATES OF AMERICA,
STATE OF OHIO, }
OFFICE OF THE SECRETARY OF STATE.
I, SHEEROD BROWN,
Secretary of State of the State of Ohio, do hereby certify that the foregoing is
an exemplified copy , carefully compared by me with the original record now in
my official custody as Secretary of State, and found to be true and correct, of
the
ARTICLES OF INCORPORATION
OF
TOWER PARKING, INC.
(AN OHIO CORPORATION)
CHARTER NO. 463819
Filed in this office on the 28th day of February A.D. 1975
and recorded on Roll E42, Frame 1642 of
the Records of Incorporations.
WITNESS my hand and official seal at
Columbus, Ohio, on this 30th day
of December A.D. 1985
/s/Sherrod Brown
SHERROD BROWN
[ SEAL ]
<PAGE> 2
ARTICLES OF INCORPORATION
OF
TOWER PARKING, INC.
The undersigned, being a citizen of the United States and
desiring to form a corporation for profit under Section 1701.01 et seq. of the
Revised Code of Ohio, does hereby certify:
FIRST: The name of the corporation shall be TOWER PARKING,
INC.
SECOND: The place in Ohio where its principal office is to be
located is Columbus, Franklin County.
THIRD: The purposes for which it is formed are:
To engage in any lawful activity or act for which corporations
may be formed under Section 1701.01 to 1701.98, inclusive of
the Revised Code.
FOURTH: The number of shares which the corporation is
authorized to have outstanding is Five Hundred (500) shares of common stock, all
of which shall be without par value.
FIFTH: The amount of stated capital with which the corporation
shall begin business is Five Hundred Dollars ($500.00).
SIXTH: No holder of shares of the corporation shall have any
preemptive right to subscribe for or to purchase any shares of the corporation
of any class whether such shares or such class be now or hereafter authorized.
SEVENTH: The corporation may purchase, hold, sell, and
transfer the shares of its own capital stock, bonds and other obligations of the
corporation from time to time to such extent and in such manner and upon such
terms as its Board of Directors shall determine; provided that the Corporation
shall not use any of its funds or property for the purchase of its own shares of
capital stock when such use would cause any impairment of the capital of the
corporation; and further provided that shares of its own capital stock belonging
to the corporation shall not be voted upon directly or indirectly.
<PAGE> 3
EIGHTH: Any director or officer of the corporation shall not
be disqualified by his office from dealing or contracting with the corporation
as a vendor, purchaser, employee, agent, lessor, leasee or otherwise. No
transaction, contract or other act of the corporation shall be void or voidable
or in any way affected or invalidated by reason of the fact that any director or
officer, or any firm or corporation in which such director or officer is a
member or is a shareholder, director or officer, is in any way interested in
such transaction, contract or other act provided the fact that such director,
officer, firm or corporation is so interested shall be disclosed or shall be
known to the Board of Directors or such members thereof as shall be present at
any meeting of the Board of Directors at which action upon any such transaction,
contract or other act shall be taken; nor shall any director or officer be
accountable or responsible to the corporation for or in respect of any
transaction, contract or other act of the corporation or for any gains or
profits realized by him by reason of the fact that he or any firm of which he is
a member or any corporation of which he is a shareholder, director or officer is
interested in such transaction, contract or other act; and any such director may
be counted in determining the existence of a quorum at any meeting of the Board
of Directors of the corporation which shall authorize or take action in respect
of any transaction, contract or other act, and may vote thereat to authorize,
ratify or approve any such transaction, contract or other act, with like force
and effect as if he or any firm of which he is a member or any corporation of
which he is a shareholder, director or officer were not interested in such
transaction, contract or other act.
NINTH: The corporation shall indemnify each person who is or
was a director or officer of the Corporation against any and all liability and
reasonable expense that may be incurred by him in connection with or resulting
from any action, claim, or suit or proceeding, civil or criminal, in which he
may become involved by reason of his being or having been a director or officer
of the Corporation, or by reason of any past or future action taken in his
capacity as such director or officer, whether or not he continues to be such at
the time such liability or expense is incurred, provided such director or
officer acted in good faith, in what he reasonably believed to be the best
interests of the Corporation and provided further that such director or officer
is not adjudged liable for negligence or misconduct in the performance of his
duty in such action, suit or proceeding, and in connection with any criminal
action or proceeding, provided he had no reasonable
<PAGE> 4
cause to believe that his conduct was unlawful. As set forth in the Article, the
terms "liability" and "expense" shall include, but shall not be limited to,
counsel fees, proper expenses and disbursements, and amounts of judgments, fines
or penalties, and amounts paid in settlements by such director or officer of the
Corporation. In the event that a question arises as to whether or not such
director or officer has met the standards of conduct hereinabove set forth in
this Article, such question shall be conclusively determined by either (1) the
Board of Directors acting by a quorum consisting of directors who are not
involved in such claim, action, suit or proceeding, or (2) by the written
opinion of reputable disinterested legal counsel selected by the Corporation. If
any word, clause or provision of this Article shall, for any reason, be
determined to be invalid, the provisions hereof shall not otherwise be affect
thereby, but shall remain in full force and effect. The foregoing rights of
indemnification shall not be exclusive of other rights to which any such
director or officer may be entitled by contract or as a matter of law, and shall
inure to the benefit of the heirs, legatees and personal representative of any
such person.
IN WITNESS WHEREOF, I have hereunto subscribed my name this 21
day of February, 1975.
TOWER PARKING, INC.
By /s/ Roderick H. Willcox
Roderick H. Willcox
Incorporator
<PAGE> 5
FORM C-103 PRESCRIBED BY SECRETARY OF STATE TED W. BROWN
ORIGINAL APPOINTMENT OF AGENT
The undersigned, being at least a majority of the incorporators of
Tower Parking, Inc. ,
(Name of Corporation)
hereby appoint F. Herbert Hoffman, Jr.
(Name of Agent)
a natural person resident in the country in which the corporation has its
principal office, a corporation having a business address in the county in which
Tower Parking Inc.
(Name of Corporation)
has its principal office (strike out phrase not applicable), upon whom (which)
any process, notice or demand required or permitted by stature to be served upon
the corporation may be served. His (its) complete address is
11th Floor, 16 E. Broad Street ,
(Street or Avenue)
Columbus , Franklin________ County, Ohio, 43215.
(City or Village) (Zip Code)
Tower Parking, Inc.
(Name of Corporation)
/s/ Roderick H. Willcox
Robert H. Willcox
(Incorporators' name should be typed or printed beneath signatures)
Columbus , Ohio
February 21 , 1975
Tower Parking, Inc
(Name of Corporation)
Gentlemen, I, It (strike out word not applicable) hereby accept(s)
appointment as agent of your corporation upon whom process, tax notices or
demands may be served.
/s/ [illegible]
(Signature of Agent of Name of Corporation)
By ________________________________________
(Signature of Officer Signing and Title)
<PAGE> 6
Remarks. All articles of incorporation must be accompanied by an original
appointment or agent. There is no filing fee for this appointment.
<PAGE> 7
UNITED STATES OF AMERICA
STATE OF OHIO
OFFICE THE SECRETARY OF STATE
I, BOB TAFT, Secretary of State of the State of Ohio do
hereby certify that the foregoing is a true and correct copy consisting
of 4 pages, as taken from the original record now in my official
capacity as Secretary of State.
WITNESS my hand and official seal at Columbus,
Ohio this 27th day of
March AD 1998
/s/ Bob Taft
BOB TAFT
Secretary of State
/s/
NOTICE: This is an official certification copy when reproduced in red ink.
<PAGE> 1
EXHIBIT 3.4
CODE OF REGULATIONS
OF
TOWER PARKING, INC.
ARTICLE I
SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of shareholders shall be held in
the month of December of each year for the election of Directors and the
consideration of reports to be laid before such meeting. Upon due notice, there
may also be considered and acted upon at an annual meeting any matter which
could properly be considered and acted upon at a special meeting, in which case
and for which purpose the annual meeting shall also be considered as and shall
be a special meeting. Then the annual meeting is not held or Directors are not
elected thereat, they may be elected at a special meeting called for that
purpose.
Section 2. Special Meetings. Special meetings of shareholders may be
called by the President, or the Vice President or the Secretary or the Treasurer
or by Directors by action at a meeting or by any two of the Directors acting
without a meeting or by any two holders of shares outstanding and entitled to
vote on any proposal to be submitted at said meeting.
Section 3. Place of Meeting. Any meeting of shareholders may be held
either at the principal office of the corporation in Columbus, Ohio, or at such
other place within or without the State of Ohio as may be designated in the
notice of said meeting.
Section 4. Notice of Meetings. Not more than fifteen (15) days nor less
than seven (7) days before the date fixed for a meeting of shareholders, whether
annual or special, written notice of the time, place and purpose of such meeting
shall be given by or at the direction of the President, a Vice-President, the
Secretary or an Assistant Secretary. Such notice shall be given either by
personal delivery or by mail to each shareholder of record entitled to notice of
such meeting. If such notice is mailed, it shall be addressed to the
shareholders at their respective addresses as they appear on the records of the
corporation, and notice shall be deemed to have been given on the day so mailed.
Notice of adjournment of a meeting need not be given if the time and place to
which it is adjourned are fixed and announced at such meeting.
Section 5. Shareholders Entitled to Notice and to Vote. If a record
date shall not be fixed pursuant to statutory authority, the record date for the
determination of shareholders who are entitled to notice of a meeting of
shareholders shall be the close of business on the date next preceding the day
on which notice is given. The record date for the determination of shareholders
who are entitled to vote at a meeting of shareholders shall be the close of
business on the date next preceding the date on which the meeting is held.
<PAGE> 2
Section 6. Quorum; Adjournment. To constitute a quorum at any meeting
of shareholders, there shall be present in person or by proxy shareholders of
record entitled to exercise a majority of the voting power of the corporation in
respect of any one of the purposes for which the meeting is called.
The shareholders present in person or by proxy, whether or not a quorum
be present, may adjourn the meeting from time to time.
Section 7. Action Without a Meeting. Any action which may be authorized
or taken at a meeting of the shareholders may be authorized or taken without a
meeting in a writing or writings signed by all of the shareholders who would be
entitled to notice of a meeting for such purpose, which writing or writings
shall be filed with or entered upon the record of the corporation.
Section 8. Inspection of Books and Records. Any shareholder, upon five
(5) days written notice, shall have the unqualified right to examine, in person
or by agent or attorney, all corporate books, records and correspondence and to
make copies or extracts thereof.
Section 9. Close Corporation Agreement. In the event that the
shareholders enter into a close corporation agreement in accordance with Ohio
Revised Code Section 1701.591 to govern the internal affairs of the corporation
and shareholder relations, then the terms of such agreement shall be construed
consistently with these regulations and, in the event of any inconsistency
between the agreement and these regulations, the terms of the agreement shall
govern.
Section 10. Approval and Ratification of Acts of Officers and Board.
Except as otherwise provided by the Articles of Incorporation or by law, any
contract, act or transaction, prospective or past, of the company or of the
Board or of the officers may be approved or ratified by the affirmative vote at
a meeting of the shareholders, or by the written consent, with or without a
meeting, of the holders of shares entitling them to exercise a majority of the
voting power of the company, and such approval or ratification shall be as valid
and binding as though affirmatively voted for or consented to by every
shareholder of the company.
ARTICLE II
DIRECTORS
Section 1. Election, Number and Term of Office. The Directors shall be elected
at the annual meeting of shareholders, or if not so elected, at a special
meeting of shareholders for that purpose, and each Director shall hold office
until the date fixed by these Regulations for the next succeeding annual meeting
of shareholders and until his successor is elected or until his earlier
resignation, removal from office or death. At any meeting of shareholders at
which Directors are to be elected, only persons nominated as candidates shall be
eligible for election.
The number of Directors to be elected shall be determined from time to
time by the shareholders entitled to vote.
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<PAGE> 3
Section 2. Meetings. Regular meetings of the Directors shall be held
immediately after the annual meeting of shareholders and at such other times and
places as may be fixed by the Directors.
Special meetings of the Directors may be called by the President or
Secretary or Treasurer of the corporation or by any two of the Directors. Notice
of the time and place of a special meeting shall be served upon or telephoned to
each Director personally at least twenty-four (24) hours, or mailed, telegraphed
or cabled to each Director at least seventy-two (72) hours prior to the time of
the meeting.
Section 3. Quorum. A majority of the number of Directors then in office
shall be necessary to constitute a quorum for the transaction of business; but
if at any meeting of the Directors there shall be less than a quorum present, a
majority of those present may adjourn the meeting from time to time without
notice other than announcement at the meeting until a quorum shall attend.
Section 4. Action Without a Meeting. Any action which may be authorized
or taken at a meeting of the Directors may be authorized or taken without a
meeting in a writing or writings signed by all of the Directors, which writing
or writings shall be filed with or entered upon the records of the corporation.
Section 5. Vacancy. A vacancy in the Board of Directors may be filled
by the vote of a majority of the whole authorized number of Directors. A
Director elected to fill a vacancy shall be a Director until his successor is
elected by the shareholders.
Section 6. Committees. The Board of Directors may, from time to time,
appoint certain of its members but not less than three (3) to act as a committee
and may delegate to such committee powers and/or duties to be exercised and
performed under the control and direction of the Board of Directors. In
particular, the Board of Directors may create from its membership and define the
powers and duties of an Executive Committee of not less than three members.
During the intervals between the meetings of the Board of Directors, the
Executive Committee, unless restricted by resolution of the Board, shall possess
and may exercise under the control and direction of the Board of Directors, all
of the powers of the Corporation. All action taken by the Executive Committee
shall be reported to the Board of Directors at its first meeting thereafter and
shall be subject to revision or rescission by the Board of Directors, provided,
however, that rights of third parties shall not be adversely affected by any
such action of the Board of Directors. In every case, the affirmative vote of
the majority or consent of all the members of the Executive Committee shall be
necessary for the approval of any action, but action may be taken by the
Executive Committee without a formal meeting. The Executive Committee shall meet
at the call of any members thereof and shall keep a written record of all
actions taken by it.
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<PAGE> 4
ARTICLE III
OFFICERS
Section 1. Officers. The corporation shall have a President, a Secretary and a
Treasurer. The corporation may also have one or more Vice Presidents and such
Assistant Secretaries and Assistant Treasurers as the Directors may deem
necessary. All of the officers and assistant officers shall be elected by the
Directors. Any two or more offices may be held by the same person but no officer
shall execute, acknowledge or verify any instrument in more than one capacity.
The President may hold the additional office of Chairman of the Board of
Directors and he may hold the office of Treasurer provided he is elected as
Treasurer by the unanimous vote of the Directors.
The corporation may also elect a Chairman of the Board of Directors who
may or may not have executive duties. If no one else is so elected, then the
President shall be the Chairman of the Board of Directors.
Section 2. Authority, Duties and Compensation of Officers. The officers
of the corporation shall have such authority and shall perform such duties as
are customarily incident to their respective offices or as may be specified from
time to time by the Directors regardless of whether such authority and duties
are customarily incident to such office.
Upon request of the president of the company as to any other officer or
officers and upon request of a majority of the members of the Board of Directors
acting individually, as to the president, any officer receiving compensation
shall enter into an agreement between the company and himself and thereby such
officer shall agree to reimburse the company for any amount of the officer's
salary, the deduction for which is disallowed the company by the Internal
Revenue Service as being unreasonable in amount. The president is authorized to
execute such agreements on behalf of the company except where the subject
agreement concerns the president's salary, in which case any other officer shall
be authorized to execute the agreement on behalf of the company. Execution of
such a reimbursement agreement upon request, as set forth above, is a condition
of future employment, and the president is authorized to discharge any officer
who refuses to comply with the provisions herein, and likewise the Board of
Directors is empowered to discharge the president from office if he refuses so
to comply. Although all compensation will be bargained for on an arm's length
basis, and every effort will be made to establish reasonable compensation, the
application of tax laws are subject to uneven interpretation and the company
needs to examine its economic cost of compensation and its deductibility is a
factor that significantly affects that economic cost to the company, as well as
the company's cash flow and profit.
Section 3. Removal. Any officer elected or appointed by the Board of
Directors may be removed at any time by the Board of Directors whenever, in the
judgment of the Board, the best interests of the Corporation would be served
thereby.
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<PAGE> 5
ARTICLE IV
MISCELLANEOUS
Section 1. Certificates. Every shareholder in the corporation shall be entitled
to have a certificate of shares signed in the name of the Corporation certifying
the number and class of shares represented by such certificate.
Section 2. Transfer and Registration of Certificate. The Directors
shall have authority to make such rules and regulations as they deem expedient
concerning the issuance, transfer and registration of certificates for shares
and the shares represented thereby and may appoint transfer agents and
registrars thereof.
Section 3. Substituted Certificates. In case a certificate of shares is
lost, stolen or destroyed, a new certificate may be issued therefor upon such
terms and indemnity to the Corporation as the Board of Directors may determine.
Section 4. Voting Upon Shares Held by the Corporation. Unless otherwise
ordered by the Directors, the President, in person or by proxy or proxies
appointed by him, shall have full power and authority on behalf of the
Corporation to vote, act and consent with respect to any shares issued by other
corporations which the Corporation may own.
Section 5. Corporate Seal. The Corporation shall not have a corporate
seal.
Section 6. Articles to Govern. If any provision of these Regulations
shall be inconsistent with the Articles, the Articles shall govern.
Section 7. Transactions Among Related Parties. If any person who is a
member of the Board of Directors or a shareholder of the company causes the
rental of real or personal property to the company, the rental agreement shall
be fair, shall be bargained for at arm's length and as a condition of any rental
agreement, shall, at the company's request, provide that said Lessor agrees to
reimburse the company for any amount paid under said agreement the deduction for
which is disallowed the company by the Internal Revenue Service as being
unreasonable in amount, or bargained for not at arm's length. The president is
authorized to execute such agreements on behalf of the company. It is in this
manner that the company can evaluate the true economic cost of payment under the
agreement in that its deductibility is a factor that significantly affects that
economic cost to the company, as well as the company's cash flow and profit.
Section 8. Amendments. These Regulations may be amended by the
affirmative vote or the written consent of the shareholders of record entitled
to exercise a majority of the voting power on such proposal, provided, however,
that if an amendment is adopted by written consent without a meeting of the
shareholders, the Secretary shall mail a copy of such amendment to each
shareholder of record who would have been entitled to vote thereon and did not
participate in the adoption thereof.
-5-
<PAGE> 1
EXHIBIT 3.5
DEPARTMENT OF STATE
THE STATE OF OHIO
ANTHONY J. CELEBREZZE, JR.
Secretary of State
565964
CERTIFICATE
IT IS HEREBY CERTIFIED that the Secretary of State of Ohio has custody of the
Records of Incorporation and Miscellaneous Filings, that said records show the
filing and recording of: AMD CHIN
of:
GRALEIC, INC. FORMERLY GRAELICK, INC.
Recorded on Roll E867 at Frame 0358 of
the Records of Incorporation and Miscellaneous Filings.
WITNESS MY HAND AND THE SEAL OF THE SECRETARY OF STATE, AT THE
CITY OF COLUMBUS, OHIO, THIS 12th DAY OF FEB,
A.D. 1981 .
ANTHONY J. CELEBREZZE, JR.
SECRETARY OF STATE
-1-
<PAGE> 2
Prescribed by Shares ___________
ANTHONY J. CELEBREZZE, JR. E867-0358 Approved by ______
Secretary of State Date _____________
Fees______________
CERTIFICATE OF AMENDMENT
(BY SHAREHOLDERS)
TO THE ARTICLES OF INCORPORATION OF
GRAELICK, INC.
(Name of Corporation)
( ) Chairman of Board
HELEN STOCKS , who is (x) President (check one)
( ) Vice President
and GERALD STOCKS , who is (x) Secretary (check one)
( ) Assistant Secretary
of the above named Ohio corporation for profit with its principal location at
5357 Mill Creek Lane, North Ridgeville, Ohio do hereby certify that: (check the
appropriate box and complete appropriate statements)
____ a meeting of the shareholders was duly called and
____ held on , 19 , at which meeting a quorum of
the shareholders was present in person or by
proxy, and by the affirmative vote of the holders
of shares entitling them to exercise % of the
voting power of the corporation,
X in writing signed by all of the shareholders who
____ would be entitled to a notice of a meeting held
for that purpose,
the following resolution was adopted to amend the articles:
That the name of the corporation be changed from Graelick, Inc. to Graelic, Inc.
IN WITNESS WHEREOF, the above named officers, acting for and on behalf
of the corporation, have subscribed their names this __________ day of January,
1981.
/s/ Helen Stocks
(President)
/s/ Gerald Stocks
(Secretary)
-2-
<PAGE> 3
NOTE: Ohio law does not permit one officer to sign in two capacities. Two
separate signatures are required, even if this necessitates the
election of a second officer before the filing can be made.
-3-
<PAGE> 4
UNITED STATES OF AMERICA,
STATE OF OHIO,
OFFICE OF THE SECRETARY OF STATE
I, BOB TAFT, Secretary of State of the State of Ohio, do
hereby certify that the foregoing is a true and correct copy,
consisting of 1 pages, as taken from the original record now in my
official custody as Secretary of State.
WITNESS my hand and official seal at
Columbus, Ohio, this 27th day of March AD
1998
/s/ Bob Taft
BOB TAFT
Secretary of State
by: /s/
NOTICE: This is an official certification only when reproduced in red ink.
-4-
<PAGE> 5
DEPARTMENT OF STATE
THE STATE OF OHIO
ANTHONY J. CELEBREZZE, JR.
Secretary of State
565964
CERTIFICATE
IT IS HEREBY CERTIFIED that the Secretary of State of Ohio has custody of the
Records of Incorporation and Miscellaneous Filings; that said records show the
filing and recording of: ARF
of:
GRAELICK, INC.
Recorded on Roll E844 at Frame 1955 of
the Records of Incorporation and Miscellaneous Filings.
WITNESS MY HAND AND THE SEAL OF THE SECRETARY OF STATE, AT THE
CITY OF COLUMBUS, OHIO, THIS 15th DAY OF DEC, A.D. 1980.
ANTHONY J. CELEBREZZE, JR.
SECRETARY OF STATE
-5-
<PAGE> 6
ARTICLES OF INCORPORATION
OF
GRAELICK, INC.
The undersigned, a majority of whom are citizens of the United States,
desiring to form a corporation, for profit, under Sections 1701.01 et seq. Of
the Revised Code of Ohio, do hereby certify:
FIRST. The name of said corporation shall be GRAELICK, INC.
SECOND. The place in Ohio where its principal office is to be located
is 5357 Mills Creek Lane, North Ridgeville, Lorain County, Ohio.
THIRD. The purposes for which it is formed are:
To engage in advertising, marketing and consulting work in connection
therewith and any other lawful act or activity for which corporations
may be formed under Sections 1701.01 to 1701.98, inclusive, of the Ohio
Revised Code.
FOURTH. The maximum number of shares which the Corporation is
authorized to have outstanding is Seven Hundred Fifty Dollars ($750.00), all of
which shall be Common shares without par value.
The designation and the powers, preferences and rights of each class of
stock of the Corporation, and the qualifications, limitations or restrictions
thereof, shall be as follows:
(a) Except as may be provided by statute, the Common Stock shall have
equal voting powers and the holders thereof shall be entitled to one
(1) vote in person or by proxy for each share of stock held.
(b) The shares of stock of this Corporation shall be issued only upon
the full payment of the sums represented by them.
(c) No holder of shares of the Corporation shall have any preemptive
right to subscribe for or to purchase any shares of the Corporation of
any class whether such shares or such class be now or hereafter
authorized.
(d) Out of any surplus or net profits of the Corporation, dividends may
be declared and paid on the Common Stock when and as declared by the
Board of Directors;
-6-
<PAGE> 7
(e) Notwithstanding any provision of the General Corporation Law of
Ohio, now or hereafter in force, requiring for any purpose the vote or
consent of the holders of shares entitling them to exercise Two-Thirds
(2/3) of the voting power of the Corporation or of any class or classes
of shares thereof, such action, unless otherwise expressly required by
statute, or otherwise herein stated, may be taken by vote or consent of
the holders of shares entitling them to exercise a majority of voting
power of the Corporation or of such class of shares thereof.
(f) On the death or adjudication of incompetency of any stockholder,
the shares owned by such stockholder shall be purchased by the
Corporation at the fair market value determined by the Board of
Directors.
FIFTH. Any article in these Articles of Incorporation shall be subject
to amendment or repeal, and new articles may be made by the affirmative vote of
the holders of record of a majority of the outstanding stock of the Corporation
entitled to vote in respect thereof, given at any annual meeting or at any
special meeting, provided notice of the proposed amendment or repeal or of the
proposed new articles be included in the notice of such meeting.
SIXTH. This Corporation may be dissolved at any time by an affirmative
vote of stockholders of Common Stock holding Fifty One Percent (51%) of its
voting capital stock at a meeting of such stockholders called for that purpose
in the manner not inconsistent with law. In the event of such dissolution, the
affairs of the corporation shall be wound up in the manner provided in the
Articles of Incorporation.
SEVENTH. The Corporation, through its Board of Directors, shall have
the right and power to repurchase any of its outstanding shares at such price
and upon such terms as may be agreed upon between the Corporation and the
selling shareholder or shareholders.
EIGHTH. A Director or officer of the Corporation shall not be
disqualified by his office from dealing or contracting with the Corporation as a
vendor, purchaser, employee, agent or otherwise; nor shall any transaction,
contract or act of the Corporation be void or voidable or in any way affected or
invalidated by reason of the fact that any Director or Officer or any firm of
which such Director of Officer is a member or any corporation of which such
Director or Officer is a shareholder, Director or Officer is in any way _______
________________________________________________________________________
Director, Officer, firm or corporation is so interested shall be disclosed or
shall be known to the Board of Directors or such members thereof as shall be
present at any meeting of the Board of Directors at which action upon any such
contract, transaction, or act shall be taken, nor shall any such Director or
officer be accountable or responsible to the Corporation for or in respect of
any such transaction, contract or act of the Corporation, or for any gains or
profits realized by him by reason of the fact that he or any firm of which he is
a member, or any corporation of which he is a shareholder, officer or Director,
is interested in such
-7-
<PAGE> 8
transaction, contract or act and any such Director or Officer, if such Officer
is a Director, may be counted in determining the existence of quorum at any
meeting of the Board of Directors of the Corporation which shall authorize or
take action in respect of any such contract, transaction, contract or act, with
like force and effect as if he or any firm of which he is a member, or any
corporation of which he is shareholder, officer or director, were not interested
in such transaction, contract or act.
NINTH. Any action required or permitted to be taken by the Board of
Directors may be taken without a meeting if all members of the Board
individually or collectively consent in writing to such action. Such written
consent or consents shall be filed with the minutes of the proceedings of the
Board and shall have the same force and effect as a unanimous vote of the
Directors.
TENTH. The amount of stated capital with which the Corporation shall
begin business is Seven Hundred Fifty Dollars ($750.00).
IN WITNESS WHEREOF, I have hereunto subscribed my name this 9th day of
December, 1980.
---------------------------------------
JON R. BURNEY
---------------------------------------
JOHN E. SHEPHERD
---------------------------------------
DOLORES M. LEDERER
-8-
<PAGE> 9
ORIGINAL APPOINTMENT OF AGENT
OF
GRAELICK, INC.
The undersigned, being all of the Incorporators of GRAELICK,
INC. hereby appoint JON R. BURNEY, a natural person residing in the County in
which the corporation's principal office is located, as agent for said
corporation, upon whom any process, notice or demand required or permitted by
statute, to be served upon the corporation, may be served. His complete address
is:
Suburban West building, Suite 205
20800 Center Ridge Road
Rocky River, Ohio 44116
-----------------------------------------
JON R. BURNEY
-----------------------------------------
JOHN E. SHEPHERD
-----------------------------------------
DOLORES M. LEDERER
* * * * * *
Cleveland, Ohio
Date: December 11, 1980
Gentlemen:
I hereby accept appointment as agent for your corporation upon whom all
process, tax notices or demands may be served.
-----------------------------------------
JON R. BURNEY
-9-
<PAGE> 10
UNITED STATES OF AMERICA,
STATE OF OHIO,
OFFICE OF THE SECRETARY OF STATE
I, BOB TAFT, Secretary of State of the State of Ohio, do
hereby certify that the foregoing is a true and correct copy,
consisting of 4 pages, as taken from the original record now in my
official custody as Secretary of State.
WITNESS my hand and official seal at Columbus,
Ohio, this 27th day of
March AD 1998
/s/ Bob Taft
BOB TAFT
Secretary of State
By: /s/
NOTICE: This is an official certification only when reproduced in red ink.
-10-
<PAGE> 1
EXHIBIT 3.6
ACTION BY WRITTEN CONSENT OF SHAREHOLDERS
CODE OF REGULATIONS
OF
GRAELIC INC.
ARTICLE I.
MEETINGS OF SHAREHOLDERS
(a) ANNUAL MEETINGS. The annual meeting of the shareholders of this corporation
shall be held at the principal office of the corporation, in North Ridgeville,
Ohio, on the 15th day in December of each year, at 10:00 o'clock A.M., if not a
legal holiday, then on the day following at the same hour. The first annual
meeting of the corporation shall be held in 19 .
(b) SPECIAL MEETINGS. of the shareholders of this corporation shall be
called by the Secretary, pursuant to a resolution of the Board of Directors, or
upon the written request of two directors, or by shareholders representing 25%
of the shares issued and entitled to vote. Calls for special meetings shall
specify the time, place and object or objects thereof, and no business other
than that specified in the call therefor shall be considered at any such
meetings.
(c) NOTICE OF MEETINGS. A written or printed notice of any special
meeting of the shareholders, stating the time and place, and in case of special
meetings, the objects thereof, shall be given to each shareholder entitled to
vote at such meeting appearing on the books of the corporation, by mailing same
to his address as the same appears on the records of the corporation or of its
Transfer Agent, or Agents, at least Ten (10) days before any such meeting;
provided, however, that no failure or irregularity of notice of any annual
meeting shall invalidate the same or any proceeding thereat.
All notices with respect to any shares to which persons are jointly
entitled may be given to that one of such persons who is named first upon the
books of the Corporation and notice so given shall be sufficient notice to all
the holders of such shares.
(d) QUORUM. A majority in number of the shares authorized, issued and
outstanding, represented by the holders of record thereof, in person or by
proxy, shall be requisite to constitute a quorum at any meeting of shareholders,
but less than such majority may adjourn the meeting of shareholders from time to
time and at any such adjourned meeting any business may be transacted which
might have been transacted if the meeting had been as originally called.
(e) PROXIES. Any shareholder entitled to vote a meeting of shareholders
may be represented and vote thereat by proxy appointed by an instrument in
writing, subscribed by each shareholder, or by his duly authorized attorney, and
submitted to the Secretary at or before such meeting.
<PAGE> 2
*MINUTES OF FIRST SHAREHOLDERS' MEETING OR
*ACTION BY WRITTEN CONSENT OF SHAREHOLDERS
- --------------------------------------------------------------------------------
ARTICLE II.
SEAL
The seal of the corporation shall be circular, about two inches in
diameter, with the name of the corporation engraved around the margin and the
word "SEAL" engraved across the center. It shall remain in the custody of the
Secretary, and it or a facsimile thereof shall be affixed to all certificates of
the corporation's shares. If deemed advisable by the Board of Directors, a
duplicate seal may be kept and used by any other officer of the corporation, or
by any Transfer Agent of its shares.
ARTICLE III.
SHARES
SECTION 1. -- Certificates. Certificates evidencing the ownership of shares of
the corporation shall be issued to those entitled to them by transfer or
otherwise. Each certificate for shares shall bear a distinguishing number, the
signature of the President or Vice-President, and of the Secretary or an
Assistant Secretary, the seal of the corporation, and such recitals as may be
required by law. The certificates for shares shall be of such tenor and design
as the Board of Directors from time to time may adopt.
SECTION 2. -- Transfers. (a) The shares may be transferred on the
proper books of the corporation by the registered holders thereof, or by their
attorneys legally constituted, or their legal representatives, by surrender of
the certificate therefor for cancellation and a written assignment of the shares
evidenced thereby. The Board of Directors may, from time to time, appoint such
Transfer Agents or Registrars of shares as it may deem advisable, and may define
their powers and duties.
(b) All endorsements, assignments, transfers, share powers or other
instruments of transfer of securities standing in the name of the corporation
shall be executed for and in the name of the corporation by any two of the
following officers, to-wit: the President or a Vice-President, and the Treasurer
or Secretary, or an Assistant Treasurer or an Assistant Secretary; or by any
person or persons thereunto authorized by the Board of Directors.
SECTION 3. -- Lost Certificates. The Board of Directors may order a new
certificate or certificates of shares to be issued in place of any certificate
or certificates alleged to have been lost or destroyed, but in every such case
the owner of the lost certificate or certificates shall first cause to be given
to the corporation a bond, with surety or sureties satisfactory to the
corporation in such sum as said Board of Directors may in its discretion deem
sufficient as indemnity against any loss or liability that the corporation may
incur by reason of the issuance of such new certificates; but the Board of
Directors may, in its discretion, refuse to issue such new certificate save
<PAGE> 3
*MINUTES OF FIRST SHAREHOLDERS' MEETING OR
*ACTION BY WRITTEN CONSENT OF SHAREHOLDERS
- --------------------------------------------------------------------------------
upon the order of some court having jurisdiction in such matters pursuant to the
statute made and provided.
SECTION 4. -- Closing of Transfer Books. The share transfer books of
the corporation may be closed by order of the Board of Directors for a period
not exceeding ten (10) days prior to any meeting of the shareholders, and for a
period not exceeding ten (10) days prior to the payment of any dividend. The
times during which the books may be closed shall, from time to time, be fixed by
the Board of Directors.
ARTICLE IV.
DIRECTORS
The number of members of the Board of Directors shall be determined
pursuant to law, by resolution of the shareholders entitled to vote, but shall
not be less than three (3) members. The election of directors shall be held at
the annual meeting of the shareholders, or at a special meeting called for that
purpose.
Directors shall hold office until the expiration of the term for which
they were elected and shall continue in office until their respective successors
shall have been duly elected and qualified.
ARTICLE V.
VACANCIES IN THE BOARD
A resignation from the Board of Directors shall be deemed to take
effect upon its receipt by the Secretary, unless some other time is specified
therein. In case of any vacancy in the Board of Directors, through death,
resignation, disqualification, or other cause deemed sufficient by the Board,
the remaining directors, though less than a majority of the whole board, by
affirmative vote of a majority of those present at any duly convened meeting
may, except as hereinafter provided, elect a successor to hold office for the
unexpired portion of the term of the director whose place shall be vacant, and
until the election and qualification of a successor.
ARTICLE VI.
REGULAR MEETINGS
Regular meetings of the Board of Directors shall be held monthly on
such dates as the Board may designate.
-2-
<PAGE> 4
*MINUTES OF FIRST SHAREHOLDERS' MEETING OR
*ACTION BY WRITTEN CONSENT OF SHAREHOLDERS
- --------------------------------------------------------------------------------
ARTICLE VII.
SPECIAL MEETINGS
Special meetings of the Board of Directors shall be called by the
Secretary and held at the request of the President or any two of the directors.
ARTICLE VIII.
NOTICE OF MEETINGS
The Secretary shall give notice of each meeting of the Board of
Directors, whether regular or special, to each member of the Board.
ARTICLE IX.
QUORUM
A majority of the Directors in office at the time shall constitute a
quorum at all meetings thereof.
ARTICLE X.
PLACE OF MEETINGS
The Board of Directors may hold its meetings at such place or places
within or without the State of Ohio as the Board may, from time to time,
determine.
ARTICLE XI.
COMPENSATION
Directors, as such, shall not receive any stated salary for their
services, but, on resolution of the Board, a fixed sum for expenses of
attendance, if any, may be allowed for attendance at each meeting, regular or
special, provided that nothing herein contained shall be construed to preclude
any Director from serving the corporation in any other capacity and receiving
compensation therefor. Members of either executive or special committees may be
allowed such compensation as the Board of Directors may determine for attending
committee meetings.
-3-
<PAGE> 5
*MINUTES OF FIRST SHAREHOLDERS' MEETING OR
*ACTION BY WRITTEN CONSENT OF SHAREHOLDERS
- --------------------------------------------------------------------------------
ARTICLE XII.
ELECTION OF OFFICERS
At the first meeting of the Board of Directors in each year (at which a
quorum shall be present) held next after the annual meeting of the shareholders,
and at any special meeting provided in Article VII, the Board of Directors shall
elect officers of the corporation (including the President), and designate and
appoint such subordinate officers and employees as it shall determine. They may
also appoint an executive committee or committees from their number and define
their powers and duties.
ARTICLE XIII.
OFFICERS
The officers of this corporation shall be a President, who shall be a
director, and also a Vice-President, a Secretary, a Treasurer and a
who may or may not be directors. Said officers shall be chosen by the Board of
Directors, and shall hold office for one year, and until their successors are
elected and qualified. Additional Vice-Presidents may be elected from time to
time as determined by the Directors who may also appoint one or more Assistant
Secretaries, and one or more Assistant Treasurers, and such other officers and
agents of the corporation as it may from time to time determine.
Any officer or employee elected or appointed by the Board of Directors,
other than that of director, may be removed at any time upon vote of the
majority of the whole Board of Directors.
The same person may hold more than one office, other than that of
President and Vice-President, or Secretary and Assistant Secretary, or Treasurer
and Assistant Treasurer.
In case of the absence of any officer of the corporation, or for any
other reason which the Board of Directors may deem sufficient, the Board of
Directors may delegate the powers or duties of such officer to any other officer
or to any director, provided a majority of the whole Board of Directors concur
therein.
ARTICLE XIV.
DUTIES OF OFFICERS
(a) President. The President shall preside at all meetings of shareholders and
directors. He shall exercise, subject to the control of the Board of Directors
and the shareholders of the corporation, a general supervision over the affairs
of the corporation, and shall perform generally all duties incident to the
office and such other duties as may be assigned to him from time to time by the
Board of Directors.
-4-
<PAGE> 6
*MINUTES OF FIRST SHAREHOLDERS' MEETING OR
*ACTION BY WRITTEN CONSENT OF SHAREHOLDERS
- --------------------------------------------------------------------------------
(b) Vice-President. The Vice-President shall perform all duties of the
President in his absence or during his inability to act, and shall have such
other and further powers, and shall perform such other and further duties as may
be assigned to him by the Board of Directors.
(c) Secretary. The Secretary shall keep the minutes of all proceedings
of the Board of Directors and of the shareholders and make a proper record of
the same, which shall be attested by him. He shall keep such books as may be
required by the Board of Directors, and shall take charge of the seal of the
corporation, and generally perform such duties as may be required by the Board
of Directors.
(d) Treasurer. The Treasurer shall have the custody of the funds and
securities of the corporation which may come into his hands, and shall do with
the same as may be ordered by the Board of Directors. When necessary or proper
he may endorse on behalf of the corporation for collection, checks, notes and
other obligations. He shall deposit the funds of the corporation to its credit
in such banks and depositaries as the Board of Directors may, from time to time,
designate. The fiscal year of the corporation shall be co-extensive with the
calendar year. He shall submit to the annual meeting of the shareholders, a
statement of the financial condition of the corporation, and whenever required
by the Board of Directors, shall make and render a statement of his accounts,
and such other statements as may be required. He shall keep in books of the
corporation, full and accurate accounts of all moneys received and paid by him
for account of the corporation. He shall perform such other duties as may, from
time to time, be assigned to him by the Board of Directors.
ARTICLE XV.
ORDER OF BUSINESS
1. Call meeting to order.
2. Selection of chairman and secretary.
3. Proof of notice of meeting.
4. Roll call, including filing of proxies with secretary.
5. Appointment of tellers.
6. Reading and disposal of previously unapproved minutes.
7. Reports of officers and committees.
8. If annual meeting, or meeting called for that purpose, election of
directors.
9. Unfinished business.
10. New business.
11. Adjournment.
-5-
<PAGE> 7
CODE OF REGULATIONS
- --------------------------------------------------------------------------------
This order may be changed by the affirmative vote of a majority in
interest of the shareholders present.
ARTICLE XVI.
AMENDMENTS
No action of the directors of this corporation shall be valid unless
approved by all members of the Board of Directors by their unanimous vote,
whether or not present at a meeting. No action of the shareholders of the
corporation shall be valid unless approved by the unanimous vote of all
shareholders, whether or not present at a meeting. These regulations may be
amended only by the unanimous vote of all shareholders, whether or not present
at a meeting.
ARTICLE XVII.
STOCK RESTRICTION
No present shareholder or future shareholder of this corporation shall
sell, transfer, assign or otherwise dispose of any of his shares of stock in
this corporation without first offering such shares, for the same price, and
upon the same terms and conditions, as the same are being offered to a third
person (disclosing the name of the proposed purchaser), to the corporation, and
the corporation shall have a period of thirty (30) days in which to accept such
offer. Failing a timely acceptance, the selling shareholder shall then offer
such shares for the same price, terms and conditions as they are being offered
to a third person, to the remaining shareholders of the corporation, pro rata.
The remaining shareholders shall have a period of thirty (30) days in which to
accept said offer. Failing a timely acceptance by the remaining shareholders,
the selling shareholder shall be free to sell such shares, but only to the
prospective purchaser so disclosed, but for no more favorable price, terms
and/or conditions, provided such sale is consummated within sixty (60) days
following the expiration of the last option created herein. After such sixty
(60) day period, the shares of stock shall be again subject to the provisions of
this Article.
All shares of stock of this corporation shall be appropriately endorsed
to reflect the restriction upon transferability contained herein.
-6-
<PAGE> 1
EXHIBIT 3.7
CERTIFICATE OF AMENDMENT
of
CERTIFICATE OF INCORPORATION
of
HOLBERG REAL ESTATE, INC.
Holberg Real Estate, Inc., a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY:
FIRST: That by the unanimous written consent of the members of
the Board of Directors of Holberg Real Estate, Inc., resolutions were duly
adopted setting forth a proposed amendment of the Certificate of Incorporation
of said corporation and declaring said amendment to be advisable. The resolution
setting forth the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this
corporation be amended by changing Article 1 so that, as
amended said Article shall read as follows:
The name of the corporation (which is hereinafter
referred to as the "Corporation") is:
APCOA Capital Corporation
SECOND: That in lieu of a meeting and vote of stockholders,
the stockholders of the corporation have given unanimous written consent to said
amendment in accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware.
THIRD: That the amendment was duly adopted in accordance with
the provisions of Sections 228 and 242 of the General Corporation Law of the
State of Delaware.
FOURTH: That the capital of said corporation shall not be
reduced under or by reason of said amendment.
<PAGE> 2
IN WITNESS WHEREOF, said Holberg Real Estate, Inc. has caused
this certificate to be signed by its President, and attested by its Secretary,
this 10th day of March 1993.
BY: ____________________________________
President
ATTEST: _________________________________
Secretary
-2-
<PAGE> 3
CERTIFICATE OF AMENDMENT
of
CERTIFICATE OF INCORPORATION
of
AM GROUP II, INC.
AM Group II, Inc., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
FIRST: That by the unanimous written consent of the members of
the Board of Directors of AM Group II, Inc., resolutions were duly adopted
setting forth a proposed amendment of the Certificate of Incorporation of said
corporation and declaring said amendment to be advisable. The resolution setting
forth the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this
corporation be amended by changing Article 1 so that, as
amended said Article shall read as follows:
The name of the corporation (which is hereinafter
referred to as the "Corporation") is:
Holberg Real Estate, Inc.
SECOND: That in lieu of a meeting and vote of stockholders,
the stockholders of the corporation have given unanimous written consent to said
amendment in accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware.
THIRD: That the amendment was duly adopted in accordance with
the provisions of Sections 228 and 242 of the General Corporation Law of the
State of Delaware.
FOURTH: That the capital of said corporation shall not be
reduced under or by reason of said amendment.
<PAGE> 4
IN WITNESS WHEREOF, said AM Group II, Inc. has caused this
certificate to be signed by its President, and attested by its Secretary, this
6th day of January, 1992.
BY: /s/ G. Walter Stuelpe
-------------------------------
G. Walter Stuelpe, Jr.
President
ATTEST: /s/ Robert N. Sacks
---------------------------
Robert N. Sacks
Secretary
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CERTIFICATE OF INCORPORATION
OF
AM GROUP II, INC.
I, the undersigned, for the purpose of incorporating and
organizing a corporation under the General Corporation Law of the State of
Delaware, do hereby execute this Certificate of Incorporation and do hereby
certify as follows:
ARTICLE I
The name of the corporation (which is hereinafter referred to as the
"Corporation") is: AM Group II, Inc.
ARTICLE II
The address of the Corporation's registered office in the
State of Delaware is The Corporation Trust Center, 1209 Orange Street in the
City of Wilmington, County of New Castle. The name of the Corporation's
registered agent at such address is The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation shall be to engage in any
lawful act or activity for which corporations may be organized and incorporated
under the General Corporation Law of the State of Delaware.
<PAGE> 6
ARTICLE IV
SECTION 1. The Corporation shall be authorized to issue 1000 shares of
capital stock, of which 500 shares shall be shares of Common Stock, $.01 par
value ("Common Stock"), and 500 shares shall be shares of Preferred Stock, $.10
par value ("Preferred Stock").
SECTION 2. Shares of Preferred Stock may be issued from time to time in
one or more series. The Board of Directors of the Corporation (hereinafter
referred to as the "Board") is hereby authorized to fix the voting rights, if
any, designations, powers preferences and the relative, participation, optional
or other rights, if any, and the qualifications, limitations or restrictions
thereof, of any unissued series of Preferred Stock; and to fix the number of
shares constituting such series, and to increase or decrease the number of
shares of any such series (but not below the number of shares thereof then
outstanding).
SECTION 3. Except as otherwise provided by law or by the resolution or
resolutions adopted by the Board designating the rights, powers and preferences
of any series of Preferred Stock, the Common Stock shall have the exclusive
right to vote for the election of directors and for all other purposes. Each
share of Common Stock shall have one vote, and the Common Stock shall vote
together as a single class.
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ARTICLE V
Unless and except to the extent that the By-Laws of the Corporation
shall so require, the election of directors of the Corporation need not be by
written ballot.
ARTICLE VI
In furtherance and not in limitation of the powers conferred by law,
the Board is expressly authorized and empowered to make, alter and repeal the
By-Laws of the Corporation by a majority vote at any regular or special meeting
of the Board or by written consent, subject to the power of the stockholders of
the Corporation to alter or repeal any By-Laws made by the Board.
ARTICLE VII
The Corporation reserves the right at any time from time to time to
amend, alter, change or repeal any provision contained in this Certificate of
Incorporation, and any other provisions authorized by the laws of the State of
Delaware at the time in force may be added or inserted, in the manner now or
hereafter prescribed by law; and all rights, preferences and privileges of
whatsoever nature conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Certificate of Incorporation in its present
form or as hereafter amended are granted subject to the right reserved in this
Article.
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<PAGE> 8
ARTICLE VIII
SECTION 1. Elimination of Certain Liability of Directors. A director of
the Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.
SECTION 2. Indemnification and Insurance.
a. Right to Indemnification. Each person who was or is made a party or
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be
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amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid
in settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit of
his or her heirs, executors and administrators; provided, however, that, except
as provided in paragraph (b) hereof, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board. The right to indemnification conferred in this Section
shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in advance of
its final disposition; provided, however, that, if the Delaware General
Corporation Law requires, the payment of such expenses incurred by a director or
officer in his or her capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such person while a director or
officer, including, without limitation, service to an employee benefit plan) in
advance of the final disposition of a proceeding, shall be made only upon
delivery to the Corporation of an undertaking, by or on behalf of such director
or officer, to repay all amounts so advanced if it shall ultimately be
determined that such director or officer is not entitled to be indemnified under
this Section or otherwise. The Corporation may, by action of the Board,
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provide indemnification to employees and agents of the Corporation with the same
scope and affect as the foregoing indemnification of directors and officers.
b. Right of Claimant to Bring Suit. If a claim under paragraph (a) of
this Section 5 is not paid in full by the Corporation within thirty days after a
written claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the Delaware General Corporation Law for the Corporation to
indemnify the claimant for the amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
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c. Non-Exclusivity of Rights. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, provision of
the Certificate of Incorporation, By-law, agreement, vote of stockholders or
disinterested directors or otherwise;
d. Insurance. The Corporation may maintain insurance, at its expense,
to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
ARTICLE IX
The name and mailing address of the incorporator is Adam O.
Emmerich, Esq., c/o Wachtell, Lipton, Rosen & Katz, 299 Park Avenue, New York,
New York 10171.
IN WITNESS WHEREOF, I, the undersigned, being the incorporator
hereinbefore named, do hereby further certify that the facts hereinabove stated
are truly set forth and, accordingly, I have hereunto set my hand this 13th day
of November, 1990.
________________________________
Adam O. Emmerich
Incorporator
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<PAGE> 1
EXHIBIT 3.8
BY-LAWS
OF
AM GROUP II, INC.
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE -- The registered office of AM Group II,
Inc. (the "Corporation") shall be established and maintained at the office of
The Corporation Trust Company at The Corporation Trust Center, 1209 Orange
Street in the City of Wilmington, County of New Castle, State of Delaware, and
said Corporation Trust Company shall be the registered agent of the Corporation
in charge thereof.
SECTION 2. OTHER OFFICES -- The Corporation may have other offices,
either within or without the State of Delaware, at such place or places as the
board of directors may from time to time select or the business of the
Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS -- Annual meetings of stockholders for the
election of directors, and for such other business as may be stated in the
notice of the meeting, shall be held at such place, either within or without the
State of Delaware, and at such time and date as the board of directors, by
resolution, shall determine and as set forth in the notice of the meeting. If
the board of directors fails so to determine the time, date and place of
meeting, the annual meeting of stockholders shall be held at the registered
office of the Corporation on the first Tuesday in April. If the date of the
annual meeting shall fall upon a legal holiday, the meeting shall be held on the
next succeeding business day. At each annual meeting, the stockholders entitled
to vote shall elect a board of directors and they may transact such other
corporate business as shall be stated in the notice of the meeting.
SECTION 2. SPECIAL MEETINGS -- Special meetings of the stockholders for
any purpose or purposes may be called by the Chairman of the Board, the
President or the Secretary, or by resolution of the board of directors.
SECTION 3. VOTING -- Each stockholder entitled to vote in accordance
with the terms of the Certificate of Incorporation of the Corporation and these
By-Laws may vote in person or by proxy, but no proxy shall be voted after three
years from its date unless such proxy provides for a longer period. All
elections for directors shall be decided by plurality vote; all other questions
shall be decided by majority vote except as otherwise provided by the
Certificate of Incorporation or the laws of the State of Delaware.
<PAGE> 2
A complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, with the address of each, and the
number of shares held by each, shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof, and may be inspected by any
stockholder who is entitled to be present.
SECTION 4. QUORUM -- Except as otherwise required by law, by the
Certificate of Incorporation of the Corporation or by these By-Laws, the
presence, in person or by proxy, of stockholders holding shares constituting a
majority of the voting power of the Corporation shall constitute a quorum at all
meetings of the stockholders. In case a quorum shall not be present at any
meeting, a majority in interest of the stockholders entitled to vote thereat,
present in person or by proxy, shall have power to adjourn the meeting from time
to time, without notice other than announcement at the meeting, until the
requisite amount of stock entitled to vote shall be present. At any such
adjourned meeting at which the requisite amount of stock entitled to vote shall
be represented, any business may be transacted that might have been transacted
at the meeting as originally noticed; but only those stockholders entitled to
vote at the meeting as originally noticed shall be entitled to vote at any
adjournment or adjournments thereof.
SECTION 5. NOTICE OF MEETINGS -- Written notice, stating the place,
date and time of the meeting, and the general nature of the business to be
considered, shall be given to each stockholder entitled to vote thereat at his
address as it appears on the records of the Corporation, not less than ten nor
more than sixty days before the date of the meeting. No business other than that
stated in the notice shall be transacted at any meeting without the unanimous
consent of all the stockholders entitled to vote thereat.
SECTION 6. ACTION WITHOUT MEETING -- Unless otherwise provided by the
Certificate of Incorporation of the Corporation, any action required or
permitted to be taken at any annual or special meeting of stockholders may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
SECTION 1. NUMBER AND TERM -- The business and affairs of the
Corporation shall be managed under the direction of a board of directors which
shall consist of not less
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than one person. The exact number of directors shall initially be one and may
thereafter be fixed from time to time by the board of directors. Directors shall
be elected at the annual meeting of stockholders and each director shall be
elected to serve until his successor shall be elected and shall qualify. A
director need not be a stockholder.
SECTION 2. RESIGNATIONS -- Any director may resign at any time. Such
resignation shall be made in writing, and shall take effect at the time
specified therein, and if no time be specified, at the time of its receipt by
the Chairman of the Board, the President or the Secretary. The acceptance of a
resignation shall not be necessary to make it effective.
SECTION 3. VACANCIES -- If the office of any director becomes vacant,
the remaining directors in the office, though less than a quorum, by a majority
vote, may appoint any qualified person to fill such vacancy, who shall hold
office for the unexpired term and until his successor shall be duly chosen. If
the office of any director becomes vacant and there are no remaining directors,
the stockholders, by the affirmative vote of the holders of shares constituting
a majority of the voting power of the Corporation, at a special meeting called
for such purpose, may appoint any qualified person to fill such vacancy.
SECTION 4. REMOVAL -- Except as hereinafter provided, any director or
directors may be removed either for or without cause at any time by the
affirmative vote of the holders of a majority of the voting power entitled to
vote for the election of directors, at an annual meeting or a special meeting
called for the purpose, and the vacancy thus created may be filled, at such
meeting, by the affirmative vote of holders of shares constituting a majority of
the voting power of the Corporation.
SECTION 5. COMMITTEES -- The board of directors may, by resolution or
resolutions passed by a majority of the whole board, designate one or more
committees, each committee to consist of two or more directors of the
Corporation.
Any such committee, to the extent provided in the resolution of the
board of directors, or in these By-Laws, shall have and may exercise all the
powers and authority of the board of directors in the management of the business
and affairs of the Corporation, and may authorize the seal of the Corporation to
be affixed to all papers which may require it.
SECTION 6. MEETINGS -- The newly elected directors may hold their first
meeting for the purpose of organization and the transaction of business, if a
quorum be present, immediately after the annual meeting of the stockholders; or
the time and place of such meeting may be fixed by consent of all the directors.
Regular meetings of the directors may be held without notice at such
places and times as shall be determined from time to time by resolution of the
directors.
Special meetings of the board of directors may be called by the
Chairman of the Board or the President, or by the Secretary on the written
request of any director, on at least two days' notice to each director (except
that notice to any director may be waived in writing by such
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director) and shall be held at such place or places as may be determined by the
directors, or as shall be stated in the call of the meeting.
Unless otherwise restricted by the Certificate of Incorporation of the
Corporation or these By-Laws, members the board of directors, or any committee
designated by the board of directors, may participate in any meeting of the
board of directors or any committee thereof by means of a conference telephone
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
SECTION 7. QUORUM -- A majority of the directors shall constitute a
quorum for the transaction of business. If at any meeting of the board of
directors there shall be less than a quorum present, a majority of those present
may adjourn the meeting from time to time until a quorum is obtained, and no
further notice thereof need be given other than by announcement at the meeting
which shall be so adjourned. The vote of the majority of the directors present
at a meeting at which a quorum is present shall be the act of the board of
directors unless the Certificate of Incorporation of the Corporation or these
By-Laws shall require the vote of a greater number.
SECTION 8. COMPENSATION -- Directors shall not receive any stated
salary for their services as directors or as members of committees, but by
resolution of the board of directors a fixed fee and expenses of attendance may
be allowed for attendance at each meeting. Nothing herein contained shall be
construed to preclude any director from serving the Corporation in any other
capacity as an officer, agent or otherwise, and receiving compensation therefor.
SECTION 9. ACTION WITHOUT MEETING -- Any action required or permitted
to be taken at any meeting of the board of directors or of any committee thereof
may be taken without a meeting if a written consent thereto is signed by all
members of the board of directors or of such committee, as the case may be, and
such written consent is filed with the minutes of proceedings of the board of
directors or such committee.
ARTICLE IV
OFFICERS
SECTION 1. OFFICERS -- The officers of the Corporation shall be a
Chairman of the Board, a President, one or more Vice Presidents, a Treasurer and
a Secretary, all of whom shall be elected by the board of directors and shall
hold office until their successors are elected and qualified. In addition, the
board of directors may elect such Assistant Secretaries and Assistant Treasurers
as they may deem proper. The board of directors may appoint such other officers
and agents as it may deem advisable, who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board of directors.
SECTION 2. CHAIRMAN OF THE BOARD -- The Chairman of the Board shall be
the Chief Executive Officer of the Corporation. He shall preside at all meetings
of the
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<PAGE> 5
board of directors and shall have and perform such other duties as may be
assigned to him by the board of directors. The Chairman of the Board shall have
the power to execute bonds, mortgages and other contracts on behalf of the
Corporation, and to cause the seal of the Corporation to be affixed to any
instrument requiring it, and when so affixed, the seal shall be attested to by
the signature of the Secretary or the Treasurer or an Assistant Secretary or an
Assistant Treasurer.
SECTION 3. PRESIDENT -- The President shall be the Chief Operating
Officer of the Corporation. He shall have the general powers and duties of
supervision and management usually vested in the office of President of a
corporation. The President shall have the power to execute bonds, mortgages and
other contracts on behalf of the Corporation, and to cause the seal to be
affixed to any instrument requiring it and when so affixed the seal shall be
attested to by the signature of the Secretary or the Treasurer or an Assistant
Secretary or an Assistant Treasurer.
SECTION 4. VICE-PRESIDENTS -- Each Vice-President shall have such
powers and shall perform such duties as shall be assigned to him by the board of
directors.
SECTION 5. TREASURER -- The Treasurer shall be the Chief Financial
Officer of the Corporation. He shall have the custody of the Corporate funds and
securities and shall keep full and accurate account of receipts and
disbursements in books belonging to the Corporation. He shall deposit all moneys
and other valuables in the name and to the credit of the Corporation in such
depositaries as may be designated by the board of directors. He shall disburse
the funds of the Corporation as may be ordered by the board of directors, the
Chairman of the Board, or the President, taking proper vouchers for such
disbursements. He shall render to the Chairman of the Board, the President and
board of directors at the regular meetings of the board of directors, or
whenever they may request it, an account of all his transactions as Treasurer
and of the financial condition of the Corporation. If required by the board of
directors, he shall give the Corporation a bond for the faithful discharge of
his duties in such amount and with such surety as the board of directors shall
prescribe.
SECTION 6. SECRETARY -- The Secretary shall give, or cause to be given,
notice of all meetings of stockholders and directors and all other notices
required by law or by these By-Laws, and in case of his absence or refusal or
neglect so to do, any such notice may be given by any person thereunto directed
by the Chairman of the Board or the President, or by the directors, upon whose
request the meeting is called as provided in these By-Laws. He shall record all
the proceedings of the meetings of the board of directors, any committees
thereof and the stockholders of the Corporation in a book to be kept for that
purpose, and shall perform such other duties as may be assigned to him by the
board of directors, the Chairman of the Board or the President. He shall have
the custody of the seal of the Corporation and shall affix the same to all
instruments requiring it, when authorized by the board of directors, the
Chairman of the Board or the President, and attest to the same.
SECTION 7. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES -- Assistant
Treasurers and Assistant Secretaries, if any, shall be elected and shall have
such
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powers and shall perform such duties as shall be assigned to them, respectively,
by the board of directors.
ARTICLE V
MISCELLANEOUS
SECTION 1. CERTIFICATES OF STOCK -- A certificate of stock shall be
issued to each stockholder certifying the number of shares owned by such
stockholder in the Corporation. Certificates of stock of the Corporation shall
be of such form and device as the Board of Directors may from time to time
determine.
SECTION 2. LOST CERTIFICATES -- A new certificate of stock may be
issued in the place of any certificate theretofore issued by the Corporation,
alleged to have been lost or destroyed, and the board of directors may, in its
discretion, require the owner of the lost or destroyed certificate, or such
owner's legal representatives, to give the Corporation a bond, in such sum as
they may direct, not exceeding double the value of the stock, to indemnify the
Corporation against any claim that may be made against it on account of the
alleged loss of any such certificate, or the issuance of any such new
certificate.
SECTION 3. TRANSFER OF SHARES -- The shares of stock of the Corporation
shall be transferable only upon its books by the holders thereof in person or by
their duly authorized attorneys or legal representatives, and upon such transfer
the old certificates shall be surrendered to the Corporation by the delivery
thereof to the person in charge of the stock and transfer books and ledgers, or
to such other person as the board of directors may designate, by whom they shall
be cancelled, and new certificates shall thereupon be issued. A record shall be
made of each transfer and whenever a transfer shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of the
transfer.
SECTION 4. STOCKHOLDERS RECORD DATE -- In order that the Corporation
may determine the stockholders entitled to notice of or to vote at any meeting
of stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the board of directors may fix, in
advance, a record date, which shall not be more than sixty (60) nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any adjournment
of the meeting; provided, however, that the board of directors may fix a new
record date for the adjourned meeting.
SECTION 5. DIVIDENDS -- Subject to the provisions of the Certificate of
Incorporation of the Corporation, the board of directors may, out of funds
legally available therefor at any regular or special meeting, declare dividends
upon stock of the Corporation as and when they deem appropriate. Before
declaring any dividend there may be set apart out of any funds of
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the Corporation available for dividends, such sum or sums as the directors from
time to time in their discretion deem proper for working capital or as a reserve
fund to meet contingencies or for equalizing dividends or for such other
purposes as the directors shall deem conducive to the interests of the
Corporation.
SECTION 6. SEAL -- The corporate seal of the Corporation shall be in
such form as shall be determined by resolution of the board of directors. Said
seal may be used by causing it or a facsimile thereof to be impressed or affixed
or reproduced or otherwise imprinted upon the subject document or paper.
SECTION 7. FISCAL YEAR -- The fiscal year of the Corporation shall be
determined by resolution of the board of directors.
SECTION 8. CHECKS -- All checks, drafts or other orders for the payment
of money, notes or other evidences of indebtedness issued in the name of the
Corporation shall be signed by such officer or officers, agent or agents of the
Corporation, and in such manner as shall be determined from time to time by
resolution of the board of directors.
SECTION 9. NOTICE AND WAIVER OF NOTICE -- Whenever any notice is
required to be given under these By-Laws, personal notice is not required unless
expressly so stated, and any notice so required shall be deemed to be sufficient
if given by depositing the same in the United States mail, postage prepaid,
addressed to the person entitled thereto at his address as it appears on the
records of the Corporation, and such notice shall be deemed to have been given
on the day of such mailing. Stockholders not entitled to vote shall not be
entitled to receive notice of any meetings except as otherwise provided by law.
Whenever any notice is required to be given under the provisions of any law, or
under the provisions of the Certificate of Incorporation of the Corporation or
of these By-Laws, a waiver thereof, in writing and signed by the person or
persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent to such required notice.
ARTICLE VI
AMENDMENTS
These By-Laws may be altered, amended or repealed at any
annual meeting of the stockholders (or at any special meeting thereof if notice
of such proposed alteration, amendment or repeal to be considered is contained
in the notice of such special meeting) by the affirmative vote of the holders of
shares constituting a majority of the voting power of the Corporation. Except as
otherwise provided in the Certificate of Incorporation of the Corporation, the
board of directors may by majority vote of those present at any meeting at which
a quorum is present alter, amend or repeal these By-Laws, or enact such other
By-Laws as in their judgment may be advisable for the regulation and conduct of
the affairs of the Corporation.
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EXHIBIT 3.9
ARTICLE OF AMENDMENT
A-1 AUTO PARKING, INC.
I.
The name of the corporation is "A-1 AUTO PARKING, INC.", and the
purpose of this Amendment is to amend the Articles of Incorporation to change
the name of the Corporation to "A-1 AUTO PARK, INC."
II.
This Amendment to the Articles of Incorporation was adopted by the
Corporation on September 11, 1978, said Amendment being for the sole purpose of
changing the name of the Corporation to "A-1 AUTO PARK, INC." Hereafter the name
of the corporation shall be and is "A-1 AUTO PARK, INC."
III.
This Amendment is made by the Incorporator prior to the issuance of any
shares of stock of the Corporation.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Amendment.
/s/Harley J. Bell
-----------------------------------
HARLEY J. BELL, Incorporator
Attorney for Incorporator:
Robert E. Price
Suite 950 Pharr Center
550 Pharr Road, N.E.
Atlanta, Georgia 30305
<PAGE> 2
ARTICLES OF INCORPORATION OF
A-1 AUTO PARKING, INC.
I.
The name of the corporation is A-1 AUTO PARKING, INC.
II.
The corporation has perpetual duration.
III.
The corporation is a corporation for profit and is organized for the
following purposes:
(a) To engage in all facets of the automobile parking business,
including buying, renting, or leasing real estate, providing management and
other related services, and to do each and every thing in furtherance thereof.
(b) To engage in all other activities or business otherwise lawful
under the Georgia Business Corporation Code, as amended, or other laws of the
State of Georgia.
IV.
The corporation has authority to issue not more than 50,000 shares of
common stock of ten cent ($.10) par value.
V.
The corporation shall not commence business until it shall have
received not less than $500.00 in payment for the issuance of shares of stock.
<PAGE> 3
VI.
The initial registered office of the corporation is located at 1720
Peachtree Street, N.W., Suite 340, Atlanta, Fulton County, Georgia, 30309, and
the name its registered agent at such address is Harley J.
Bell.
VII.
The initial Board of Directors shall consist of one (1) member who is:
Harley J. Bell
1470 Moores Mill Road, N.W.
Atlanta, Georgia 30327
VIII.
The name and address of the Incorporator is Harley J. Bell, 1470 Moores
Mill Road, N.W., Atlanta, Georgia, 30327.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Incorporation.
/s/Harley J. Bell
----------------------------------
Incorporator
Robert E. Price
Suite 950 Pharr Center
550 Pharr Road, N.E.
Atlanta, Georgia 30305
(404) 231-2103
Attorney for Incorporator
-2-
<PAGE> 1
AMENDED AND RESTATED
BY-LAWS
OF
A-1 AUTO PARKING, INC.
ARTICLE ONE
OFFICES
1.1 The address of the registered office of the corporation is 1720
Peachtree Street, N.W., Suite 340, Atlanta, Georgia 30309, and the name of the
registered agent at such address is Harley J. Bell. The principal place of
business of the corporation is 1720 Peachtree Street, N.W., Suite 340, Atlanta,
Georgia 30309.
1.2 The corporation may have other offices at such place or places within
or without the State of Georgia as the Board of Directors may from time to time
designate or the business of the corporation may require or make desirable.
ARTICLE TWO
SHAREHOLDERS MEETINGS
2.1 All meetings of the stockholders shall be held at the principal place
of business of the corporation in the State of Georgia or at such other place
within or without the State of Georgia as may be determined by the Board of
Directors or the President and as shall be designated in the notice of said
meeting.
2.2 The annual meeting of the shareholders shall be held on the first
Tuesday in October of each year beginning with the year 1979, if not a legal
holiday, and, if a legal holiday, on the next day thereafter which is not a
legal holiday, at 10:00 o'clock in the forenoon, local time, at which the
shareholders shall elect by a plurality vote a Board of Directors and transact
such other business as may properly be brought before the meeting. In no event
shall annual meetings of the shareholders be more than 120 days following the
close of the corporation's fiscal year.
2.3 Special meetings of the shareholders, for any purpose or purposes,
unless otherwise prescribed by statute and shall be called by the President or
the Secretary when so directed by the Board of Directors, or at the request in
writing of any two or more directors, or at the request in writing of
shareholders owning a majority in amount of the entire capital stock of the
corporation issued and outstanding and entitled to vote. Such request shall
state with reasonable definiteness the purpose or purposes of the proposed
meeting.
2.4 Except as otherwise required by statute or the articles of
incorporation, written notice of each meeting of the shareholders, whether
annual or special, shall be served, either personally or by mail, upon each
shareholder of record entitled to vote at such meeting, not less than ten nor
more than 50 days before such meeting. If mailed, such notice shall be directed
to a shareholder at his post office address last shown on the records of the
corporation. Notice of any
<PAGE> 2
special meeting of shareholders shall not be required to be given to any
shareholder who, in person or by proxy, either before or after such meeting,
shall waive such notice. Attendance of a shareholder at a meeting, either in
person or by proxy, shall of itself constitute waiver of notice and waiver of
any and all objections to the place of the meeting, the time of the meeting, and
the manner in which it has been called or convened, except when a shareholder
attends a meeting solely for the purpose of stating, at the beginning of the
meeting, any such objection or objections to the transaction of business. Notice
of any adjourned meeting need not be given otherwise than by announcement at the
meeting at which the adjournment is taken.
2.5 The holders of a majority of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall be
requisite and shall constitute a quorum at all meetings of the shareholders for
the transaction of business, except as otherwise provided by law, by the
articles of incorporation, or by these by-laws. If, however, such majority shall
not be present or represented at any meeting of the shareholders, the
shareholders entitled to vote thereat, present in person or by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until the requisite amount of voting stock shall be
present. At such adjourned meeting at which a quorum shall be present in person
or by proxy, any business may be transacted that might have been transacted at
the meeting as originally called.
2.6 At every meeting of the shareholders, including (but without
limitation of the generality of the foregoing language) meetings of shareholders
for the election of directors, any shareholder having the right to vote shall be
entitled to vote in person or by proxy, but no proxy shall be voted after eleven
months from its date, unless said proxy provides for a longer period. Each
shareholder shall have one vote for each share of stock having voting power,
registered in his name on the books of the corporation. If a quorum is present,
the affirmative vote of the majority of the shares represented at the meeting
and entitled to vote on the subject matter shall be the act of the shareholders,
except as otherwise provided by law, by the articles of incorporation or by
these bylaws.
2.7 Whenever the vote of shareholders at a meeting thereof is required or
permitted to be taken in connection with any corporate action, the meeting and
vote of the shareholders may be dispensed with, if all of the shareholders who
would have been entitled to vote upon the action if such meeting were held shall
consent in writing (which consent may be by signature of proxy) to such
corporate action being taken.
ARTICLE THREE
DIRECTORS
3.1 Except as may be otherwise provided by agreement among shareholders,
the property and business of the corporation shall be managed by its Board of
Directors. In addition to the powers and authority by these by-laws expressly
conferred upon it, the Board of Directors may exercise all such powers of the
corporation and do all such lawful acts and things as are not by law, by
agreement among shareholders, by the articles of incorporation or by these
by-laws directed or required to be exercised or done by the shareholders.
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3.2 If there are less than three shareholders, the Board of Directors
shall consist of not less than the number of shareholders; provided, however,
that if there are three or more shareholders, the Board of Directors shall
consist of not less than three nor more than nine members, the precise number to
be fixed by resolution of the shareholders from time to time. Each director
(whether elected at an annual meeting of shareholders or otherwise) shall hold
office until the annual meeting of shareholders held next after his election and
until a qualified successor shall be elected, or until his earlier death,
resignation, incapacity to serve or removal. Directors need not be shareholders.
3.3 If any vacancy shall occur among the directors by reason of death,
resignation, incapacity to serve, increase in the number of directors, or
otherwise, the remaining directors shall continue to act, and such vacancies may
be filled by a majority of the directors then in office, though less than a
quorum, and, if not theretofore filled by action of the directors, may be filled
by the shareholders at any meeting held during the existence of such vacancy.
3.4 Directors may be allowed such compensation and expenses for attendance
at regular or special meetings of the Board of Directors and of any special or
standing committee thereof as may be from time to time determined by resolution
of the Board of Directors.
3.5 Any director may be removed from office, with or without cause, upon
the majority vote of the shareholders, at a meeting with respect to which notice
of such purpose is given.
ARTICLE FOUR
COMMITTEES
4.1 (a) The Board of Directors may by resolution adopted by a majority of
the entire Board, designate an Executive Committee of three or more directors.
Each member of the Executive Committee shall hold office until the first meeting
of the Board of Directors after the annual meeting of shareholders next
following his election and until his successor member of the Executive Committee
is elected, or until his death, resignation or removal, or until he shall cease
to be a director.
(b) During the intervals between the meetings of the Board of
Directors, the Executive Committee may exercise all the authority of the Board
of Directors; provided, however, that the Executive Committee shall not have the
power to amend or repeal any resolution of the Board of Directors which by its
terms is not subject to amendment or repeal by the Executive Committee, and the
Executive Committee shall not have the authority of the Board of Directors with
reference to (1) amending the articles of incorporation or By-laws of the
corporation; (2) adopting a plan of merger or consolidation; (3) the sale,
lease, exchange or other disposition of all or substantially all the property
and assets of the corporation; or (4) a voluntary dissolution of the corporation
or a revocation of any such voluntary dissolution.
(c) The Executive Committee shall meet from time to time on call of
the President or of any two or more members of the Executive Committee. Meetings
of the Executive Committee may be held at such place or places, within or
without the State of Georgia,
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as the Executive Committee shall determine or as may be specified or fixed in
the respective notices or waivers of such meetings. The Executive Committee may
fix its own rules of procedure, including provision for notice of its meetings.
It shall keep a record of its proceedings and shall report these proceedings to
the Board of Directors at the meeting thereof held next after they have been
taken, and all such proceedings shall be subject to revision or alteration by
the Board of Directors except to the extent that action shall have been taken
pursuant to or in reliance upon such proceedings prior to any such revision or
alteration.
(d) The Executive Committee shall act by a majority vote of its
members.
(e) The Board of Directors, by resolution adopted in accordance with
paragraph (a) of this Article, may designate one or more directors as alternate
members of any such committee, who may act in the place and stead of any absent
member or members at any meeting of such committee.
4.2 The Board of Directors, by resolution adopted by a majority of the
entire Board, may designate one or more additional committees, each committee to
consist of three or more of the Directors of the corporation, which shall have
such name or names and shall have and may exercise such power of the Board of
Directors, except the powers denied to the Executive Committee as may be
determined from time to time by the Board of Directors.
4.3 The Board of Directors shall have the power at any time to remove any
member of any committee, with or without cause, and to fill vacancies in and to
dissolve any such committee.
ARTICLE FIVE
MEETINGS OF THE BOARD OF DIRECTORS
5.1 Each newly elected Board of Directors shall meet at the place and time which
shall have been determined, in accordance with the provisions of these by-laws,
for the holding of the regular meeting of the Board of Directors scheduled to be
held next following the annual meeting of the shareholders at which the newly
elected Board of Directors shall have been elected, or, if no place and time
shall have been fixed for the holding of such meeting of the Board of Directors,
then immediately following the close of such annual meeting of shareholders and
at the place thereof, or such newly elected Board of Directors may hold such
meeting at such place and time as shall be fixed by the consent in writing of
all the Directors. In any such case no notice of such meeting to the newly
elected Directors shall be necessary in order legally to constitute the meeting.
5.2 Annual meetings of the Board of Directors may be held without notice
at the same place as and following the annual meeting of the shareholders.
5.3 Special meetings of the Board of Directors may be called at any time
by the President on not less than two days' notice by mail, telegram, cablegram
or personal delivery to each director, and shall be called by the President or
the Secretary in like manner and on like notice on the written request of any
two or more Directors. Any such special meeting shall be
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<PAGE> 5
held at such time and place (within or without the State of Georgia) as shall be
stated in the notice of meeting.
5.4 No notice of any meeting of the Board of Directors need state the
purposes thereof.
5.5 At all meetings of the Board of Directors, the presence of one-third
of the authorized number of Directors, but not less than two Directors, shall be
necessary and sufficient to constitute a quorum for the transaction of business.
The act of a majority of the Directors present at any meeting at which there is
a quorum shall be the act of the Board of Directors, except as may be otherwise
specifically provided by law, by the Articles of Incorporation or by these
By-laws. In the absence of a quorum a majority of the directors present at any
meeting may adjourn the meeting from time to time until a quorum be had. Notice
of any adjourned meeting need only be given by announcement at the meeting at
which the adjournment is taken.
5.6 Any action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without a meeting
if, prior to such action, a written consent thereto is signed by all members of
the Board or of such committee, as the case may be, and such written consent is
filed with the minutes of the proceedings of the Board or committee.
ARTICLE SIX
OFFICERS
6.1 The Board of Directors at its first meeting after each annual meeting of
shareholders shall elect the following officers: A President, a Vice President,
a Secretary and a Treasurer. The Board of Directors at any time and from time to
time may appoint such other officers as it shall deem necessary, including one
or more additional Vice Presidents (one of whom may be designated as Executive
Vice President), one or more Assistant Vice Presidents, one or more Assistant
Treasurers and one or more Assistant Secretaries, who shall hold their offices
for such terms as shall be determined by the Board of Directors and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board of Directors or the President.
6.2 Any person may hold any two or more offices, except that no person may
hold both the offices of President and Secretary.
6.3 The salaries of the officers of the corporation shall be fixed by the
Board of Directors, except that the Board of Directors may delegate to the
President the duty to fix the salary of any officer appointed in accordance with
the second sentence of Section 6.1 of these By-laws.
6.4 Each officer of the corporation shall hold office until his successor
is chosen or until his earlier resignation, death or removal, or the termination
of his office. Any officer may be removed by the Board of Directors whenever in
its judgment the best interests of the corporation will be served thereby.
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President
6.5 The President shall be the chief executive officer of the corporation
and shall have general and active management of the business of the corporation
and shall see that all orders and resolutions of the Board of Directors are
carried into effect. He shall be ex officio a member of all standing committees,
unless otherwise provided in the resolution appointing the same. The President
shall call meetings of the shareholders, the Board of Directors and the
Executive Committee to order and shall act as Chairman of such meetings.
Vice Presidents
6.6 The Vice Presidents shall perform such duties as are generally
performed by vice presidents. The Vice Presidents shall perform such other
duties and exercise such other powers as the Board of Directors or the President
shall request or delegate. The Assistant Vice Presidents shall have such powers,
and shall perform such duties, as may be prescribed from time to time by the
Board of Directors or by the President.
Secretary
6.7 The Secretary shall attend all sessions of the Board of Directors and
all meetings of the shareholders and record all votes and minutes of all
proceedings in books to be kept for that purpose and shall perform like duties
for the standing committees when required. He shall give, or cause to be given,
any notice required to be given of any meetings of the shareholders and of the
Board of Directors, and shall perform such other duties as may be prescribed by
the Board of Directors or by the President under whose supervision he shall be.
The Assistant Secretary or Assistant Secretaries shall, in the absence or
disability of the Secretary, or at his request, perform his duties and exercise
his powers and authority.
Treasurer
6.8 The Treasurer shall have charge of and be responsible for all funds,
securities, receipts and disbursements of the corporation and shall deposit, or
cause to be deposited, in the name of the corporation, all monies or other
valuable effects, in such banks, trust companies or other depositories as shall,
from time to time, be selected by the Board of Directors; he shall render to the
President and to the Board of Directors, whenever requested, an account of the
financial condition of the corporation, and in general, he shall perform all the
duties incident to the office of a Treasurer of a corporation, and such other
duties as may be assigned to him by the Board of Directors or by the President.
6.9 In case of the absence of any officer of the corporation, or for any
other reason that the Board of Directors may deem sufficient, the Board of
Directors may delegate, for the time being, any or all of the powers or duties
of such officer or to any Director.
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ARTICLE SEVEN
CAPITAL STOCK
7.1 The interest of each shareholder shall be evidenced by a certificate or
certificates representing shares of stock of the corporation which shall be in
such form as the Board of Directors may from time to time adopt and shall be
numbered and shall be entered in the books of the corporation as they are
issued. Each certificate shall exhibit the holder's name, the number of shares
and class of shares and series, if any, represented thereby, a statement that
the corporation is organized under the laws of the State of Georgia, and the par
value of each share or a statement that the shares are without par value. Each
certificate shall be signed by the President and the Treasurer or the Secretary
and shall be sealed with the seal of the corporation, provided, however, that
where such certificate is signed by a transfer agent, or by a transfer clerk
acting on behalf of the corporation and a registrar, the signature of any such
officer and such seal may be facsimile. In case any officer or officers who
shall have signed, or whose facsimile signature or signatures shall have been
used on, any such certificate or certificates shall cease to be such officer or
officers of the corporation, whether because of death, resignation or otherwise,
before such certificate or certificates shall have been delivered by the
corporation, such certificate or certificates may nevertheless be delivered as
though the person or persons who signed such certificate or certificates or
whose facsimile signatures shall have been used thereon had not ceased to be
such officer or officers.
7.2 The corporation shall keep a record of the shareholders of the
corporation which readily shows, in alphabetical order or by alphabetical index,
and by classes or series of stock, if any, the names of the shareholders
entitled to vote, with the address of and the number of shares held by each.
Said record shall be present at all meetings of the shareholders.
7.3 Transfers of stock shall be made on the books of the corporation only
by the person named in the certificate, or by an attorney lawfully constituted
in writing, and upon surrender of the certificate therefor, or in the case of a
certificate alleged to have been lost, stolen or destroyed, upon compliance with
the provisions of Section 7.7 of these By-laws.
7.4 (a) For the purpose of determining shareholders entitled to notice of
or to vote at any meeting of shareholders or any adjournment thereof, or
entitled to receive payment of any dividend, or in order to make a determination
of shareholders for any other proper purpose, the Board of Directors may provide
that stock transfer books shall be closed for a stated period but not to exceed
50 days. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten days immediately
preceding such meeting.
(b) In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date as the record date for any such
determination of shareholders, such date to be not more than 50 days and, in
case of a meeting of shareholders, not less than ten days, prior to the date on
which the particular action requiring such determination of shareholders is to
be taken.
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7.5 The corporation shall be entitled to treat the holder of record of any
share of stock of the corporation as the person entitled to vote such share, to
receive any dividend or other distribution with respect to such share, and for
all other purposes and accordingly shall not be bound to recognize any equitable
or other claim to or interest in such share on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by law.
7.6 The Board of Directors may appoint one or more transfer agents and one
or more registrars and may require each stock certificate to bear the signature
or signatures of a transfer agent or a registrar or both.
7.7 Any person claiming a certificate of stock to be lost, stolen or
destroyed shall make an affidavit or affirmation of the fact and in such manner
as the Board of Directors may require and shall if the directors so require,
give the corporation a bond of indemnity in form and amount and with one or more
sureties satisfactory to the Board of Directors, whereupon an appropriate new
certificate may be issued in lieu of the one alleged to have been lost, stolen
or destroyed.
ARTICLE EIGHT
MISCELLANEOUS
Fiscal Year
8.1 The fiscal year of the corporation shall be
Seal
8.2 The corporate seal shall be in such form as the Board of Directors may
from time to time determine.
Annual Statements
8.3 Not later than four months after the close of each fiscal year, and in
any case prior to the next annual meeting of shareholders, the corporation shall
prepare:
(1) A balance sheet showing in reasonable detail the financial
condition of the corporation as of the close of its fiscal year, and
(2) A profit and loss statement showing the results of its
operations during its fiscal year. Upon written request, the corporation
promptly shall mail to any shareholder of record a copy of the most recent such
balance sheet and profit and loss statement.
Indemnification
8.4 (a) Under the circumstances prescribed in paragraphs (c) and (d) of
this section, the corporation shall indemnify and hold harmless any person who
was or is a party or is threatened to be made a party to any threatened,
pending, or completed action, suit or proceeding,
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whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation. and with of the corporation, and with respect to
any criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(b) Under the circumstances prescribed in paragraphs (c) and (d) of
this section, the corporation shall indemnify and hold harmless any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact he is or was a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation, unless and only to
the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnify for such expenses which the court shall deem proper.
(c) To the extent that a Director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in paragraphs (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Except as provided in paragraph (c) of this section and except
as may be ordered by a court, any indemnification under paragraphs (a) and (b)
of this section shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (a) and (b). Such
determination shall be made (1) by the Board of Directors by a majority vote of
a quorum consisting of Directors who were not parties to such action, suit or
proceeding, or (2) if such quorum is not obtainable, or, even if obtainable, if
a quorum of disinterested Directors so directs, by the firm of independent legal
counsel then employed by the corporation, in a written opinion, or (3) by the
affirmative vote of a majority of the shareholders entitled to vote thereon.
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(e) Expenses incurred in defending a civil or criminal action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding as authorized by the Board of Directors in
the specific case upon receipt of an undertaking by or on behalf of the
Director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this section.
(f) The indemnification provided by this section shall not be deemed
exclusive of any other rights, in respect of indemnification or otherwise, to
which those seeking indemnification may be entitled under any by-law or
resolution approved by the affirmative vote of the holders of a majority of the
shares entitled to vote thereon taken at a meeting the notice of which specified
that such by-law or resolution would be placed before the shareholders, both as
to action by a Director, officer, employee or agent in his official capacity and
as to action in another capacity while holding such office or position, and
shall continue as to a person who has ceased to be a Director, officer, employee
or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(g) The corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of this section.
(h) If any expenses or other amounts are paid by way of
indemnification, otherwise than by court order or by an insurance carrier
pursuant to insurance maintained by the corporation, the corporation shall, not
later than the next annual meeting of the shareholders, unless such meeting is
held within three months from the date of such payment, and, in any event,
within three months from the date of such payment, send by first class mail to
its shareholders of record at the time entitled to vote for the election of
directors, a statement specifying the persons paid, the amounts paid, and the
nature and status at the time of such payment of the litigation or threatened
litigation.
Disallowed Deductions
8.5 Any payments made to an officer of the corporation such as a salary,
commission, bonus, interest, or rent, or entertainment expense incurred by him
which shall be disallowed in whole or in part as a deductible expense by the
Internal Revenue Service shall be reimbursed by such officer to the corporation
to the full extent of such disallowance. It shall be the duty of the Directors,
as a Board, to enforce payment of each such amount disallowed. In lieu of
payment by the officer, subject to the determination of the Directors,
proportionate amounts may be withheld from his future compensation payments
until the amount owed to the corporation has been recovered.
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ARTICLE NINE
NOTICES: WAIVERS OF NOTICE
9.1 Except as otherwise specifically provided in these By-laws, whenever under
the provisions of these By-laws notice is required to be given to any
shareholder, director or officer, it shall not be construed to mean personal
notice, but such notice may be given either by personal notice or by radio,
cable or telegraph, or by mail by depositing the same in the post office or
letter box in a postpaid sealed wrapper, addressed to such shareholder, officer
or director at such address as appears on the books of the corporation, and such
notice shall be deemed to be given at the time when the same shall be thus sent
or mailed.
9.2 When any notice whatever is required to be given by law, by the
articles of incorporation or by these Bylaws, a waiver thereof by the person or
persons entitled to said notice given before or after the time stated therein,
in writing, which shall include a waiver given by telegraph, radio, or cable,
shall be deemed equivalent thereto. No notice of any meeting need be given to
any person who shall attend such meeting, except when a shareholder attends a
meeting solely for the purpose of stating at the beginning of the meeting any
objection to the transaction of business, and so states his objection at the
beginning of the meeting.
ARTICLE TEN
EMERGENCY POWERS
10.1 The Board of Directors may adopt emergency by-laws, subject to repeal or
change by action of the shareholders, which shall, notwithstanding any provision
of law, the Articles of Incorporation or these By-laws, be operative in the
conduct of the business of the corporation during any emergency resulting from
an attack on the United States or on a locality in which the corporation
conducts its business or customarily holds meetings of its Board of Directors or
its shareholders, or during any nuclear or atomic disaster, or during the
existence of any catastrophe, or other similar emergency condition, as a result
of which a quorum of the Board of Directors or a standing committee thereof
cannot readily be convened for action. The emergency By-laws may make any
provision that may be practical and necessary for the circumstances of the
emergency.
10.2 The Board of Directors, either before or during any such emergency,
may provide, and from time to time modify, lines of succession in the event that
during such an emergency any or all officers or agents of the corporation shall
for any reason be rendered incapable of discharging their duties.
10.3 The Board of Directors, either before or during any such emergency,
may, effective in the emergency, change the head office or designate several
alternative head offices or regional offices, or authorize the officers to do
so.
10.4 To the extent not inconsistent with any emergency By-laws so adopted,
these By-laws shall remain in effect during any such emergency and upon its
termination the emergency By-laws shall cease to be operative.
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10.5 Unless otherwise provided in emergency By-laws, notice of any meeting
of the Board of Directors during any such emergency may be given only to such of
the directors as it may be feasible to reach at the time, and by such means as
may be feasible at the time, including publication, radio or television.
10.6 To the extent required to constitute a quorum at any meeting of the
Board of Directors during any such emergency, the officers of the corporation
who are present shall, unless otherwise provided in emergency By-laws, be
deemed, in order of rank and within the same rank in order of seniority,
directors for such meeting.
10.7 No officer, Director, agent or employee acting in accordance with any
emergency By-laws shall be liable except for willful misconduct. No officer,
Director, agent or employee shall be liable for any action taken by him in good
faith in such an emergency in furtherance of the ordinary business affairs of
the corporation even though not authorized by the By-laws then in effect.
ARTICLE ELEVEN
AMENDMENTS
11.1 The By-laws of the corporation may be altered or amended and new
By-laws may be adopted by the shareholders at any annual or special meeting of
the shareholders or by the Board of Directors by unanimous written consent or at
any regular or special meeting of the Board of Directors; provided, however,
that, if such action is to be taken at a meeting of the shareholders, notice of
the general nature of the proposed change in the By-laws shall be given in the
notice of the meeting.
12
<PAGE> 1
The Commonwealth of Massachusetts
PAUL GUZZI
Secretary of the Commonwealth
STATE HOUSE
BOSTON, MASS 02133
ARTICLES OF ORGANIZATION
(Under G.L Ch. 156b)
Incorporators
NAME POST OFFICE ADDRESS
Include given name in full in case of natural persons; in case of a
corporation, give state of incorporation.
JEAN M. BLOOMBERG 50 Barney Hill Road, Wayland
The above-named incorporator(s) do hereby associate (themselves) with the
intention of forming a corporation under the provisions of General Laws, Chapter
156B and hereby state(s):
1. The name by which the corporation shall be known is:
METROPOLITAN PARKING SYSTEM, INC.
2. The purposes for which the corporation is formed are as follows: To build,
maintain and operate buildings, storage house and garages for the storing,
caring for and keeping for hire therein of automobiles, motorcycles and motor
vehicles of every kind, nature and description; to engage in the business of
operating parking lots, garages and similar establishments primarily involved in
the business of renting space for the parking of automobiles and other vehicles;
to establish, maintain and carry on a general business for the parking of
automobiles, motor vehicles and other vehicles of all sorts; to deal in, sell,
operate and let for hire automobiles, motorcycles and motor vehicles of every
kind, nature and description; to purchase, sell, acquire, hold, dispose of,
encumber or deal in all kinds of personal property; to purchase or lease, sell,
mortgage, or otherwise acquire, hold and dispose of any buildings or real
estate, or interests therein in connection with the conduct of the business; to
own, lease or operate any business in conjunction with any other business owned,
leased or operated by the corporation; to carry on in furtherance of these
purposes any activity advantageous to the business of corporation. It is the
intention that the
NOTE: If provisions for which the space provided under Articles 2, 4, 5 and 6 is
not sufficient, additions should be set out on continuation sheets to be
numbered 2A, 2B etc. Indicate under each Article where the provision is set
<PAGE> 2
out. Continuation sheets shall be 8 1/2" x 11" paper and must have a left hand
margin 1 inch wide for binding. Only one side should be used.
obligations and powers specified in the charter shall in no way be restricted by
reference to or inference from the terms of any particular clause herein
contained. To have and to exercise, without limitation, all of the powers
granted by Massachusetts law to business corporations, including those powers
set forth in Section 9 of the General Laws, Chapter 156B, and in any amendment
thereof or addition thereto.
3. The total number of shares and the par value, if any, of each class of stock
which the corporation is authorized is as follows:
<TABLE>
<CAPTION>
---------------------------------------------------------------------
CLASS OF
STOCK WITHOUT PAR VALUE WITH PAR VALUE
-------------------------------------------------------
PAR
NUMBER OF SHARES NUMBER OF SHARES VALUE AMOUNT
---------------------------------------------------------------------
<S> <C> <C>
Preferred $
---------------------------------------------------------------------
---------------------------------------------------------------------
Common 12,500
---------------------------------------------------------------------
</TABLE>
*4. If more than one class is authorized, a description of each of the different
classes of stock with, if any, the preferences, voting powers, qualifications,
special or relative rights or privileges as to each class thereof and any series
now established:
None
*5. The restrictions, if any, imposed by the Articles of Organization upon the
transfer of shares of stock of any class are as follows: Any stockholder,
including the heirs, executors or administrators of a deceased stockholder,
desiring to sell or transfer such stock owned by him or them, shall first offer
it to the corporation through the Board of Directors, in the manner following:
He shall notify the directors of his desire to sell or transfer by notice in
writing, which notice shall contain the price at which he is willing to sell or
transfer and the name of one arbitrator. The directors shall within 30 days
thereafter either accept the offer, or by notice to him in writing name a second
arbitrator, and these two shall name a third. It shall then be the duty of the
arbitrators to ascertain the value of the stock and if any arbitrator shall
neglect or refuse to appear at any meeting appointed by the arbitrators, a
majority may act in the absence of such arbitrator. After the acceptance of the
offer, or the report of the arbitrators as to the value of the stock, the
directors shall have 30 days within which to purchase the same at such
valuation, but if at the expiration of 30 days, the corporation shall not have
exercised the right so to purchase, the owner of the stock shall be at liberty
to dispose of the same in any manner he may see fit. No shares of stock shall be
sold or transferred on the books of the corporation until these provisions have
been complied with, but the Board of Directors may in any particular instance
waive the requirement.
*6. Other Lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution, or for
limiting, defining, or regulating the powers of the corporation, or of its
directors or stockholders, or of any class of stockholders:
-2-
<PAGE> 3
None
If there are no provisions state "None".
-3-
<PAGE> 4
7. By-laws of the corporation have been duly adopted and the initial directors,
president, treasurer, and clerk, whose names are set out below, have been duly
elected.
8. The effective date of organization of the corporation shall be the date of
filing with the Secretary of the Commonwealth or if later date is desired,
specify date, (not more than 30 days after date of filing.)
9. The following information shall not for any purpose be treated as a permanent
part of the Articles of Organization of the corporation.
a. The post office address of the initial principal office of the
corporation in Massachusetts is:
210 Lincoln Street, Boston 02111
b. The name, residence and post office address of each of the initial
directors and following officers of the corporation are as follows:
NAME RESIDENCE POST OFFICE ADDRESS
President: EDWARD P. SETTINO, Jr. Off Plain Street, Marshfield,
Mass.
- --------------------------------------------------------------------------------
Treasurer: GEORGE SHAPIRO 151 Tremont Street, Boston
- --------------------------------------------------------------------------------
Clerk: JEAN M. BLOOMBERG 50 Barney Hill Road, Wayland
- --------------------------------------------------------------------------------
Directors: EDWARD P. SETTINO, Jr. Off Plain Street, Marshfield
GEORGE SHAPIRO 151 Tremont Street, Boston
JEAN M. BLOOMBERG 50 Barney Hill Road, Wayland
c. The date initially adopted on which the corporation's fiscal year ends is:
December 31
d. The date initially fixed in the by-laws for the annual meeting of
stockholders of the corporation is:
2nd Monday in March
e. The name and business address of the resident agent, if any, of the
corporation is:
IN WITNESS WHEREOF and under the penalties of perjury the above-named
INCORPORATOR(S) sign(s) these Articles of Organization this 3rd day of January
1977.
--------------------------------
--------------------------------
--------------------------------
-4-
<PAGE> 5
The signature of each incorporator which is not a natural person must be by an
individual who shall show the capacity in which he acts and by signing shall
represent under the penalties of perjury that he is duly authorized on its
behalf to sign these Articles of Organization.
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF ORGANIZATION
GENERAL LAWS, CHAPTER 156B, SECTION 12
======================================
I hereby certify that, upon an examination of the
within-written articles of organization, duly submitted to
me, it appears that the provisions of the General Laws
relative to the organization of corporations have been
complied with, and I hereby approve said articles; and the
filing fee in the amount of $125.00 having been paid, said
articles are deemed to have been filed with me this 19th day
of January 1977
Effective date
/s/ Paul Guzzi
PAUL GUZZI
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT
TO:
GARGILL & SASSOON, Esqs.
85 Devonshire Street
Boston; 742-3540
FILING FEE: 1/20 of 1% of the total amount of the authorized
capital stock with par value, and one cent a share for
all authorized shares without par value, but not less
than $125. General Laws, Chapter 156B. Shares of stock
with a par value of less than one dollar shall be
deemed to have par value of one dollar per share.
Copy Mailed
FEB 7 19977
-5-
<PAGE> 1
BY-LAWS OF
METROPOLITAN PARKING SYSTEM, INC.
ARTICLE I
Section 1. The corporation shall be known by the name of Metropolitan Parking
System, Inc.
Section 2. The principal office of the corporation shall be located at 210
Lincoln Street, Boston.
Section 3. The corporation shall have a corporate seal which shall be circular
in form and shall contain the name of the corporation, the year of its
incorporation and the word "Massachusetts".
ARTICLE II
The corporation shall have all the powers and enjoy all the privileges granted
by the laws of Massachusetts to corporations organized under General Laws.
ARTICLE III
OFFICERS AND DIRECTORS
Section 1. The officers of the corporation shall be president, treasurer, clerk
and Board of not less than three directors, all of whom, excepting the
president, shall be chosen by ballot annually at the first meeting of the
corporation and at each annual meeting thereafter. The president shall be chosen
by and from the Board of Directors at the first meeting of the Board after the
annual stockholders' meeting. All officers shall hold office for one year and
until their successors are chosen and qualified. It shall not be necessary for
any director or other officer to be a holder of stock in the corporation. Two or
more offices may be held by one person. In case of the temporary absence or
disability of any one officer, the Board of Directors may appoint a person to
perform the duties of such officer during such absence or disability. In case a
vacancy shall occur, except in the case of the office of president, it may be
filled at any special meeting of the stockholders, and until so filled the Board
of Directors may appoint a person to perform the duties of said office; except
that in the event of a vacancy in the Board of Directors for any reason, that
vacancy shall be filled by a vote of a majority of stockholders; in case a
vacancy shall occur in the office of president, it may be filled by the Board of
Directors.
Section 2. The Board of Directors, subject always to the provisions of law, the
Articles of Organization and these By-laws as from time to time amended, and to
any action at any time taken by such stockholders as then have the right to
vote, shall have the entire charge, control and management of the corporation,
its property and business and may exercise all or any of its powers. Among other
things, the Board of Directors may, subject as aforesaid (1) appoint and, at its
discretion, remove or suspend such subordinate officers, agents and employees as
it from time
<PAGE> 2
to time thinks fit and determine their duties and fix, from time to time as it
sees fit, change their compensation; (2) fix and from time to time as it sees
fit, change all salaries; (3) appoint any officer permanently or temporarily as
it sees fit, to have the powers and perform the duties of any other officer; (4)
to delegate any of the powers of the Board to any committee, officer or agent;
(5) appoint any person to be agents of the corporation (with power to
subdelegate) and upon such terms as it sees fit; (6) appoint any person or
persons to accept and hold in trust for the corporation any property belonging
to the corporation or in which it is interested and cause to be done such things
as it may determine the amounts to be distributed as dividends.
The directors shall be elected by the stockholders at their annual
meeting, and any director may be removed by the stockholders at any special
meeting called for that purpose. Upon the removal of any director the
stockholders may elect a successor to fill the vacancy caused thereby, and such
successor shall hold office for the unexpired term of the director whose place
shall be vacant, and until his successor shall have been duly elected and
qualified.
Section 3. The president when present shall preside at all meetings of the
stockholders and of the directors. It shall be his duty to see that all orders
and resolutions of the Board are carried into effect. The president, together
with the treasurer, shall sign certificates of stock to be issued by the
corporation. The president, as soon as reasonably possible after the close of
each fiscal year, shall submit to the Board of Directors a report of the
operations of the corporation for such year and a statement of its affairs, and
shall from time to time report to the Board all matters within his knowledge
which the interests of the corporation may require to be brought to its notice.
The president shall perform such duties additional to the foregoing as the
directors may designate.
Section 4. The treasurer shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name of and to the credit of the corporation
in such depositories as may be designated by the Board of Directors. He shall
disburse the funds of the corporation as may be ordered by the Board, taking
proper vouchers for such disbursements. He shall promptly render to the
president and to the Board of Directors such statements of his transactions and
accounts as the president and Board respectively may from time to time require.
He shall give bond in such amount, with such security and in such form as the
Board of Directors shall determine. Certificates of stock signed by the
president shall also be signed by the treasurer. The treasurer shall perform
such duties additional to the foregoing as the directors may designate.
Section 5. The clerk may be sworn to the faithful discharge of his duties. It
shall be his duty to record in books kept for the purpose all votes and
proceedings of the stockholders at their meetings and of the directors at their
meetings. Unless the Board of Directors shall appoint a transfer agent and/or
registrar or other officer or officers for the purpose, the clerk shall be
charged with the duty of keeping, or causing to be kept, accurate records of all
stock outstanding, stock certificates issued and stock transfers; and subject to
other or different rules as may be adopted from time to time by the Board of
Directors, such records may be kept solely in the stock certificate books. The
clerk shall perform such duties additional to the foregoing as the directors may
designate. The clerk shall be a resident of Massachusetts.
-2-
<PAGE> 3
ARTICLE IV
MEETINGS
Section 1. Immediately after each annual meeting of stockholders, and at the
place thereof, if a majority of the directors elected at the meeting were
present thereat, there shall be a meeting of the directors without notice; but
if a majority of the directors chosen at any annual meeting of the stockholders
were not present at such meeting, a meeting of the directors may be called in
the manner hereinafter provided with respect to the call of meeting of
directors. Meetings of the Board of Directors shall be held as often as needed,
and may be called by the president, treasurer or any director, and notice in
writing by the clerk, mailed postage prepaid, forty-eight hours at least before
the meeting, addressed to each director at his usual place of business or abode,
or delivered to him in hand, shall be sufficient notice of the meeting. If the
clerk, when requested, refuses for more than twenty-four hours to call such
meeting, the president, treasurer or director may in the manner required give
notice of such meeting in the name of the clerk. In the event that the office of
clerk is vacant or the clerk is absent from the Commonwealth or is
incapacitated, a meeting of the directors may be called by any director in his
own name, by giving notice thereof in the manner required when notice is given
by the clerk. Notice of any meeting may be dispensed with if each director by a
writing filed with the records of the meeting waives such notice. At any meeting
of the directors a majority of the directors then in office shall constitute a
quorum for the transaction of business; provided always that any number of
directors (whether one or more and whether or not constituting a quorum) present
at any meeting or at any adjourned meeting may make any reasonable adjournment
thereof. At any meeting of the directors at which a quorum is present, the
action of the directors on any matter brought before the meeting shall be
decided by the vote of a majority of those present and voting, unless a
different vote is required by law, the Articles of Organization, or these
by-laws. Any action by the directors may be taken without a meeting if a written
consent thereto is signed by all the directors and filed with the records of the
directors' meetings. Such consent shall be treated as a vote of the directors
for all purposes.
Section 2. Except as otherwise provided in Section 1 of this Article, all
meetings of the Board of Directors shall be held at the office of the
corporation at 210 Lincoln Street, Boston, Massachusetts or at such other place,
wherever situated, as the directors may by majority vote have designated as a
place for directors' meetings.
Section 3. Regular meetings of the directors may be held at such times and
places as shall from time to time be fixed by resolution of the board and no
notice need be given of regular meetings held at times and places so fixed,
provided, however, that any resolution relating to the holding of regular
meetings shall remain in force only until the next annual meeting of
stockholders, or the special meeting held in lieu thereof, and that if at any
meeting of directors at which a resolution is adopted fixing the times or place
or places for any regular meetings any director is absent no meeting shall be
held pursuant to such resolution until either each such absent director has in
writing or by telegram approved the resolution or seven days have elapsed after
copy of the resolution certified by the clerk has been mailed, postage prepaid,
addressed to each such absent director at his last known home or business
address.
-3-
<PAGE> 4
Section 4. Special meetings of the directors may be called by the president or
by the treasurer or by any two directors and shall be held at the place
designated in the call thereof.
Section 5. The annual meeting of the stockholders of the corporation shall be
held at the office of the corporation in Massachusetts, or at such other place
in Massachusetts as the Board of Directors may fix on the second Monday in March
to elect officers, hear reports of the officers and transact other business.
Special meetings of the stockholders may be called by the president or by a
majority of the directors, and shall be called by the clerk, or in the case of
the death, absence, incapacity or refusal of the clerk, by any other officer,
upon written application of one or more stockholders who are entitled to vote
and who hold at least one-tenth part in interest of the capital stock entitled
to vote at a meeting, stating the time, place and purpose of the meeting. All
special meetings of the stockholders shall be held at the office of the
corporation at 210 Lincoln St., Boston, or at such other place in Massachusetts
as may be designated by the Board of Directors. At any meeting of the
stockholders a quorum for the transaction of business shall consist of a
majority of the shares of the corporation then outstanding and entitled to vote,
provided that less than such quorum shall have the power to adjourn the meeting
from time to time. Notice of all meetings of the stockholders shall be given as
follows, to wit: A written notice stating the place, day and hour thereof, shall
be given by the clerk at least ten days before the meeting, to each stockholder
entitled to vote thereat and to each stockholder who, under the Articles of
Organization or any amendment thereof, or under the by-laws, is entitled to such
notice, by leaving such notice with him or at his residence or usual place of
business, or by mailing it postage prepaid, and addressed to such stockholder at
his address as it appears upon the books of the corporation. No notice need be
given to any stockholder if a written waiver of notice, executed before or after
the meeting by the stockholder or his attorney thereunto authorized, is filed
with the records of the meeting.
ARTICLE V
CAPITAL STOCK
Section 1. The capital stock of the corporation shall be as set forth in the
Articles of Organization.
Section 2. All certificates of shares of capital stock shall be signed by the
president and treasurer, shall bear the seal of the corporation, shall be
numbered progressively, shall set forth the name of the respective stockholders,
and shall consistently, with these provisions and the requirements of law, be in
such form as the Board of Directors may determine.
Section 3. Shares of capital stock in the corporation shall be transferable only
on the books of the corporation by the holder thereof in person or by attorney
duly authorized in writing and upon surrender and cancellation of the
certificates therefor fully endorsed.
Section 4. The corporation shall be entitled to treat the holder of record of
any share or shares of stock as the holder in fact thereof and shall not be
bound to recognize any equitable or
-4-
<PAGE> 5
other claim to or interest in such share or shares on the part of any other
person except as may be otherwise expressly provided by law.
Section 5. Upon evidence satisfactory to the Board of Directors that a
certificate of stock has been lost or destroyed, and upon receiving indemnity
satisfactory to the Board of Directors against loss to the corporation, said
Board of Directors may authorize the issue of a new certificate in place
thereof.
Section 6. Any stockholder, including the heirs, assigns, executors or
administrators of a deceased stockholder, desiring to sell or transfer such
stock owned by him or them, shall first offer it to the corporation through the
Board of Directors in the manner following:
He shall notify the directors of his desire to sell or transfer by
notice in writing, which notice shall contain the price at which he is willing
to sell or transfer and the name of one arbitrator. The directors shall within
thirty days thereafter either accept the offer, or by notice to him in writing
name a second arbitrator, and these two shall name a third. It shall then be the
duty of the arbitrators to ascertain the value of the stock, and if any
arbitrator shall neglect or refuse to appear at any meeting appointed by the
arbitrators, a majority may act in the absence of such arbitrator.
After the acceptance of the offer, or the report of the arbitrators
as to the value of the stock, the directors shall have thirty days within which
to purchase the same at such valuation, but if at the expiration of thirty days
the corporation shall not have exercised the right so to purchase the owner of
the stock shall be at liberty to dispose of the same in any manner he may see
fit.
No shares of stock shall be sold or transferred on the books of the
corporation until these provisions have been complied with, but the Board of
Directors may in any particular instance waive the requirement.
ARTICLE VI
STOCK IN OTHER CORPORATIONS
The Board of Directors may appoint any person to act as proxy or attorney in
fact of this corporation at any meeting of the stockholders or election of
directors of any corporation, stock in which shall be held by this corporation.
ARTICLE VII
INSPECTION OF BOOKS
Books, accounts and records of the corporation shall be open to inspection by
any member of the Board of Directors at all times during the usual hours of
business. The directors shall from time to time determine whether and to what
extent, at what times and places, and under what conditions and regulations the
accounts and books of the corporation, or any of them, shall be
-5-
<PAGE> 6
open to inspection of the stockholders; and no stockholder shall have the right
of inspection of any account or book or document of the corporation except as
conferred by law or authorized by the directors or by resolution of the
stockholders at the time entitled to vote.
ARTICLE VIII
CHECKS, NOTES, DRAFTS AND OTHER INSTRUMENTS
Checks, notes, drafts and other instruments for the payment of money drawn or
endorsed in the name of the corporation may be signed by any officer or person
authorized by the Board of Directors to sign the same. No officer or person
shall sign such instrument as aforesaid unless authorized by said Board to do
so.
ARTICLE IX
SEAL
The treasurer shall have custody of the seal and may affix it (as may any other
officer if authorized by the directors) to any instrument requiring the
corporate seal.
ARTICLE X
VOTING
At a meeting of the corporation, no stock owned by the corporation shall be
voted on; a "quorum" shall consist of owners of more than one-half of all stock
issued and outstanding, each owner being entitled to vote for each share owned
by him, and to vote in person, or by representative or proxy given to the clerk,
signed by the owner and bearing date not more than six months before the
meeting, and no such proxy shall be valid after the final adjournment of such
meeting; and a "majority" shall consist of owners of more than one-half of the
stock represented and voted on.
ARTICLE XI
FISCAL YEAR
The fiscal year of the corporation shall end December 31.
ARTICLE XII
AMENDMENTS
These by-laws may be amended, repealed or altered at any annual or special
meeting of the stockholders by the affirmative vote of two-thirds of the capital
stock outstanding and entitled to
-6-
<PAGE> 7
vote. In the notice of such meeting it shall be stated that the amendment,
repeal or alteration of the by-laws may be acted upon.
-7-
<PAGE> 1
THE COMMONWEALTH OF MASSACHUSETTS
William Francis Galvin FEDERAL IDENTIFICATION
Secretary of the Commonwealth NO. 04-3223993
----------
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02103
ARTICLES OF AMENDMENT
General Laws, Chapter 156B, Section 72
We, Edward P. Settino, Jr. And , President, and
Andrew R. Bulens Clerk of
METROPOLITAN MARINA MANAGEMENT, INC.
- ----------------------------------------------------------------------
(EXACT Name of Corporation)
Located at: 84 Seattle Street, Allston, MA 02134
----------------------------------------------------------
(MASSACHUSETTS Address of Corporation)
do hereby certify that these ARTICLES OF AMENDMENT affecting Articles NUMBERED:
ARTICLE I AND ARTICLE II
- ----------------------------------------------------------------------
(Number those articles 1, 2, 3, 4, 5 and/or 6 being amended hereby)
of the Articles of Organization were duly adopted at a meeting held on March 20,
--------
1996, by vote of:
--
100 shares of Common out of 100 shares outstanding,
- ------------- ----------------- -----------
type, class &
series (if any)
shares of out of shares outstanding, and
- ------------- ----------------- --------
type, class &
series (if any)
shares of out of shares outstanding,
- ------------- ----------------- -----------
type, class &
series (if any)
CROSS OUT being all of each type, class or series outstanding and
INAPPLICABLE entitled to vote thereon:
CLAUSE
VOTED To change the name of this corporation to read as follows:
"EVENTS PARKING CO., INC."
VOTED By adding at the beginning of the first sentence of ARTICLE II
the following: "To own, maintain and operate a parking
facility; to operate and manage parking facilities owned by
others; to operate and manage parking facilities from time to
time at public events.
(1) For amendments adopted pursuant to Chapter 156B, Section
70.
(2) For amendments adopted pursuant to Chapter 156B, Section
71
Note: If the space provided under any Amendment or item on
this form is insufficient, additions shall be set forth on
separate 81/2 x 11 sheets of paper leaving a left-hand margin
of at least 1 inch for binding. Additions to more than one
Amendment may be continued on a single sheet so long as each
Amendment requiring each such addition is clearly indicated.
<PAGE> 2
The foregoing amendment will become effective when these articles of amendment
are filed in accordance with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote adopting the amendment, a
later effective date not more than thirty days after such filing, in which event
the amendment will become effective on such later date.
EFFECTIVE DATE:
-------------------------------------
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed
our names this 20th day of March, in the year 1996.
/s/ Edward P. Settino, Jr. President
- ----------------------------------------------------------------
Edward P. Settino, Jr. President
/s/ Andrew R. Bulens Clerk
- ----------------------------------------------------------------
Andrew R. Bulens, Clerk
-2-
<PAGE> 3
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
GENERAL LAWS, CHAPTER 156B SECTION 72
==========================================
I hereby approve the within articles of amendment and, the
filing fee in the amount of $100 having been paid, said articles are
deemed to have been filed with me this 29th day of MARCH 1996.
/s/ William Francis Galvin
Secretary of the Commonwealth
-----------------------------------------
A TRUE COPY ATTEST
/S/ William Francis Galvin
WILLIAM FRANCIS GALVIN
SECRETARY OF THE COMMONWEALTH
DATE 8/27/98 CLERK
---------- ----------
-----------------------------------------
TO BE FILLED IN BY COPORATION
PHOTOCOPY OF ARTICLES OF AMENDMENT TO BE SENT
TO: Gary Banks, Esquire
-----------------------------------------------------
10 Winthrop Square - 2nd Floor
-----------------------------------------------------
Boston, MA 02110
-----------------------------------------------------
Telephone: (617) 350-3050
--------------------------------------------
-3-
<PAGE> 4
The Commonwealth of Massachusetts
Office of the Secretary of State
Michael J. Connolly, Secretary
One Ashburton Place, Boston, Massachusetts 02108-1512
ARTICLES OF ORGANIZATION
(Under G.L. Ch. 156B)
ARTICLE I
The name of the corporation is:
METROPOLITAN MARINA MANAGEMNT, INC.
ARTICLE II
The purpose of the corporation is to engage in the following
business activities:
To build, maintain, and/or operate marinas; To build, maintain and/or
operate any buildings and any other facilities in connection with the operation
of marinas; To provide fuel for use by any commercial or pleasure boats of any
kind or description; To provide for the hauling, storage, repair and maintenance
of any boat of any type or description; To deal in, sell, operate and let for
hire boats of any kind or description ; To deal in, sell operate and let for
hire boats of any kind or description; To purchase, sell, acquire, hold, dispose
of, encumber or deal in all kinds of personal property; To purchase, or lease,
sell, mortgage, or otherwise acquire, hold and dispose of any buildings or real
estate, or interests therein in connection with the conduct of the business; To
own, lease or operate any business in conjunction with any other business owned,
leased or operated by the corporation; To carry on in furtherance of these
purposes any activity advantageous to the business of the corporation; To apply
for, obtain and hold any and all licenses or permits needed to conduct any
activity or action which this corporation is authorized to conduct; To enter
into licensing, franchising, or marketing agreements with respect to any trade
names, patents, copyrights or other items of protectable intellectual property;
To prepare and serve food for on premises or off premises consumption; To
exercise all powers permitted to be exercised by a corporation in Section 9 of
Chapter 156B of the Massachusetts General Laws; To carry on any business
permitted by the laws of the Commonwealth of Massachusetts to a corporation
organized under Chapter 156B.
In furtherance and not in limitation of the foregoing purposes and powers
to do so, to have all powers necessary, convenient or advisable to accomplish
one or more of the purposes of this corporation, or which are calculated
directly or indirectly to promote or enhance the value of its property, which
may or hereafter be lawful for the corporation to do or exercise under and in
pursuance of the laws of the Commonwealth of Massachusetts.
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<PAGE> 5
ARTICLE III
The types and classes of stock and the total number of shares and par
value, if any, of each type and class of stock which the corporation is
authorized to issue is as follows:
=================================== ========================================
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- ----------------------------------- ----------------------------------------
TYPE NO. OF SHARES TYPE NO. OF SHARES PAR VALUE
- ----------------------------------- ----------------------------------------
COMMON 200,000 COMMON
- ----------------------------------- ----------------------------------------
PREFERRED PREFERRED
=================================== ========================================
ARTICLE IV
If more than one class of stock is authorized, state a distinguishing
designation for each class. Prior to the issuance of any shares of a class, if
shares of another class are outstanding, the corporation must provide a
description of the preferences, voting powers, qualifications, and special or
relative rights or privileges of that class and of each other class of which
shares are outstanding and of each series then established within any class.
ARTICLE V
The restrictions, if any, imposed by the Articles of Organization upon the
transfer of shares of stock of any class are:
See Continuation Sheet 5A attached hereto and made a part hereof.
ARTICLE VI
Other lawful provisions, if any, for the conduct and regulation of the business
and affairs of the corporation, for it voluntary dissolution, or for limiting,
defining, or regulating the powers of the corporation, or of its directors or
stockholders, or of any class of stockholders: (If there are no provisions state
"None".)
See Continuation Sheet 6A attached hereto and made a part hereof.
Note: The preceding six (6) articles are considered to be permanent and may ONLY
be changed by filing appropriate Articles of Amendment.
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<PAGE> 6
Metropolitan Marina Management, Inc.
---------------------
Continuation Sheet 6A
(Item 6 continued)
The By-Laws may provide that the directors may make, amend or repeal the By-Laws
in part or in whole to the extent permitted by law.
The corporation may be a partner in any business enterprise which it would
itself have the power to direct.
A director of the corporation shall not be personally liable to the corporation
for monetary damages for breach of fiduciary duty as a director. Such liability
is hereby eliminated, not withstanding any provision of law imposing such
liability; provided, however, that this provision shall not eliminate or limit
the liability of a director (i) for any breach of the director's duty of loyalty
to the corporation or its stockholders, (ii) for acts or omissions not in good
faith which involved intentional misconduct or a knowing violation of law, (iii)
under Sections 61 or 62 of Chapter 156B of the Massachusetts General Laws or
(iv) from any transaction from which the director derived an improper personal
benefit, it being the intention of this provision to limit the liability of a
director to the maximum extent allowed by law. If the Business Corporation Law
hereafter is amended to authorize the further elimination of, or limitation on,
the liability of directors, then the liability of a director of the corporation,
in addition to the limitation of personal liability provided herein, shall be
limited to the fullest extent permitted by such amendment or amendments. Any
repeal or modification of this provision by the stockholders of the corporation
shall be prospective only, and shall not adversely affect any limitation on the
personal liability of a director of a corporation existing at the time of such
repeal or modification. The benefits of this provision shall be cumulative and
not in limitation of any other provision of law, including but not limited to
any provision affording the benefit of indemnification to directors of the
corporation.
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<PAGE> 7
Metropolitan Marina Management
---------------------
Continuation Sheet 5A
(Item 5 continued)
Any stockholder, including the heirs, executors or the administrators of a
deceased stockholder, desiring to sell or transfer such stock owned by him or
them, shall first offer it to the corporation through the Board of Directors, in
the manner following: He shall notify the directors of his desire to sell or
transfer by notice in writing, which notice shall contain the price at which he
is willing to sell or transfer and the name of one arbitrator. The directors
shall within thirty days thereafter either accept the offer, or by notice to him
in writing name a second arbitrator, and these two shall name a third. It shall
then be the duty of the arbitrators to ascertain the value of the stock, and if
any arbitrator shall neglect or refuse to appear at any meeting appointed by the
arbitrators, a majority may act in the absence of such arbitrator. After the
acceptance of the offer, or the report of the arbitrators as to the value of the
stock, the directors shall have 30 days within which to purchase the same at
such valuation, but if at the expiration of 30 days, the corporation shall not
have exercised the right so to purchase, the owner of the stock shall be at
liberty to dispose of the same in any manner he may see fit. No shares of stock
shall be sold or transferred on the books of the corporation until these
provisions have been complied with, but the Board of Directors may in any
particular instance waive the requirement.
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<PAGE> 8
ARTICLE VII
The effective date of organization of the corporation shall be the date approved
and filed by the Secretary of the Commonwealth. If a later EFFECTIVE DATE is
desired, specify such date which shall not be more than thirty days after the
date of filing.
The information contained in ARTICLE VIII is NOT a PERMANENT part of the
Articles of Organization and may be changed ONLY by filing the appropriate form
provided therefor.
ARTICLE VIII
a. The street address of the corporation IN MASSACHUSETTS is: (post office
boxes are not acceptable)
20 Linden Street, Boston, MA 02134
b. The name, residence and post office address (if different) of the
directors and officers of the corporation are:
NAME RESIDENCE POST OFFICE ADDRESS
President: Edward P. Settino, Jr. 67 Shadow Lake Road Salem, NH 03079
Treasurer: Edward P. Settino, Jr. " " " "
Clerk: Andrew R. Bulens 326 High Street Abington, MA 02351
Directors: Edward P. Settino, Jr. 67 Shadow Lake Road Salem, NH 03079
c. The fiscal year (i.e., tax year) of the corporation shall end on the last
day of the month of:
December
d. The name and BUSINESS address of the RESIDENT AGENT of the corporation, if
any, is: NA
ARTICLE IX
By-laws of the corporation have been duly adopted and the president, treasurer,
clerk and directors whose names are set forth above, have been duly elected.
IN WITNESS WHEREOF and under the pains and penalties of perjury, I/WE, whose
signature(s) appear below as incorporator(s) and whose names and business or
residential address(es) ARE CLEARLY TYPED OR PRINTED beneath each signature do
hereby associate with the intention of forming this corporation under the
provisions of General Laws Chapter 156B and do hereby sign these Articles of
Organization as incorporator(s) this
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<PAGE> 9
7th day of March 1994.
/s/ Edward P. Settino, Jr.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Note: If an existing corporation is acting as incorporator, type in the exact
name of the corporation, the state or other jurisdiction where it was
incorporated, the name of the person signing on behalf of said corporation
and the title he/she holds or other authority by which such action is
taken.
-9-
<PAGE> 10
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF ORGANIZATION
GENERAL LAWS, CHAPTER 156B, SECTION 12
=============================================
I hereby certify that, upon examination of these articles
of organization, duly submitted to me, it appears that the
provisions of the General Laws relative to the organization of
corporations have been complied with, and I hereby approve said
articles, and the filing fee in the amount of $200 having been
paid, said articles are deemed to have been filed with me this
8th day of March 1994.
/s/ Michael J. Connolly
MICHAEL J. CONNOLLY
Secretary of State
-----------------------------------------
A TRUE COPY ATTEST
/S/ William Francis Galvin
WILLIAM FRANCIS GALVIN
SECRETARY OF THE COMMONWEALTH
DATE 3/31/98 CLERK
----------- -----------
-----------------------------------------
PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT TO:
WILLIAM T. CORBETT, ESQ.
---------------------------------------------------
41 Temple Street
---------------------------------------------------
Boston, MA 02114
---------------------------------------------------
Telephone: (617) 573-8189
---------------------------------------
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<PAGE> 1
Exhibit 3.14
METROPOLITAN MARINA MANAGEMENT, INC.
BYLAWS
ARTICLE I
STOCKHOLDERS
1. PLACE OF MEETINGS. All meetings of the stockholders shall be held
either at the principal office of the corporation or at such other place in the
United States as is determined by the Board of Directors and stated in the
notice.
2. ANNUAL MEETINGS. The annual meeting of the stockholders entitled to
vote shall be held at ten (10) o'clock in the forenoon (or at such other time as
is determined by the Board of Directors and stated in the notice) on the first
Monday of May after the end of each fiscal year, if such day is not a legal
holiday, and if a legal holiday, then on the next succeeding day that is not a
Saturday, Sunday or legal holiday. Purposes for which an annual meeting is to be
held, additional to those prescribed by law, by the Articles of Organization and
by the Bylaws, may be specified by the President, the Treasurer or the Board of
Directors, or upon written application delivered to the Clerk not less than
twenty (20) days before the date of the meeting, by one or more stockholders who
are entitled to vote and who hold at least one-tenth part in interest of the
capital stock entitled to vote at the meeting.
If such annual meeting is not held on the date fixed, or by
adjournment therefrom, a special meeting of the stockholders shall be held in
place thereof, and any business transacted or elections held at such special
meeting shall have the same force and effect as if transacted or held at the
annual meeting. Any such special meeting shall be called as provided in Section
3 of this Article I.
3. SPECIAL MEETINGS. Special meetings of the stockholders entitled to vote
may be called by the President, the Treasurer or the Directors, and shall be
called by the Clerk, or in case of the death, absence, incapacity or refusal of
the Clerk, by any other officer upon written application of one or more
stockholders who are entitled to vote and who hold at least one-tenth part in
interest of the capital stock entitled to vote at the meetings. The call for the
meeting shall state the day, hour, place and purposes of the meeting.
4. NOTICE OF MEETINGS. A written notice of every meeting of stockholders,
stating the place, date and hour thereof, and the purposes for which the meeting
is called, shall be given by the Clerk or other person calling the meeting, at
least seven (7) days before the meeting, to each stockholder entitled to vote
thereat and to each stockholder who, under the Articles of Organization or
Bylaws, is entitled to such notice, by leaving such notice with him, or at his
usual place of business or residence, or by mailing it postage prepaid and
addressed to him at his address as it appears upon the books of the corporation.
Whenever notice of a meeting of the stockholders is required to be given to any
stockholder, a written waiver thereof, executed before or after the meeting by
such stockholder or his attorney thereunto authorized and filed with the records
of the meeting, shall be deemed equivalent to such notice.
<PAGE> 2
Every stockholder who is present at a meeting (whether in person or
by proxy) shall be deemed to have waived notice thereof; provided, however, that
in the absence of his waiver in writing, a stockholder may expressly reserve his
objection to the transaction of any business as to which requisite notice was
not given to him and on which he does not vote.
5. QUORUM OF STOCKOLDERS. The holders of a majority in interest of all
stock issued, outstanding and entitled to vote at a meeting shall constitute a
quorum; except that, if two or more classes of stock are outstanding and
entitled to vote as separate classes, then in the case of each such class, a
quorum shall consist of the holders of a majority in interest of the stock of
that class issued, outstanding and entitled to vote.
6. ADJOURNMENTS. Any meeting of the stockholders may be adjourned to any
other time and to any other place by the stockholders present or represented at
the meeting, although less than a quorum, or by any officer entitled to preside
or to act as clerk of such meeting if no stockholder is present. It shall not be
necessary to notify any stockholder of any adjournment. Any business which could
have been transacted at any meeting of the stockholders as originally called may
be transacted at any adjournment thereof.
7. VOTES AND PROXIES. At all meetings of the stockholders, each
stockholder shall have one vote for each share of stock having voting power
registered in such stockholder's name, and a proportionate vote for a fractional
share, unless otherwise provided by the Articles of Organization or in the
Bylaws. Scrip shall not carry any right to vote unless otherwise provided
therein; but if scrip provides for the right to vote, such voting shall be on
the same basis as fractional shares. Absent stockholders may vote by proxy. No
proxy which is dated more than six months before the meeting named therein shall
be accepted, and no proxy shall be valid after the final adjournment of such
meeting. Proxies need not be sealed or attested. A proxy with respect to stock
held in the name of two or more persons shall be valid if executed by one of
them unless at or prior to exercise of the proxy the corporation receives a
specific written notice to the contrary from any one of them. A proxy purporting
to be executed by or on behalf of a stockholder shall be deemed valid unless
challenged at or prior to its exercise.
8. ACTION AT MEETING. When a quorum is present, the holders of a majority
of the stock present or represented and voting on a matter (or if there are two
or more classes of stock entitled to vote as separate classes, then in the case
of each such class, the holders of a majority of the stock of that class present
or represent and voting on a matter), except where a larger vote is required by
law, the Articles of Organization or these Bylaws, shall decide any matter to be
voted on by the stockholders. Any election by stockholders shall be determined
by a plurality of the votes cast by the stockholders entitled to vote at the
election. No ballot shall be required for such election unless requested by a
stockholder present or represented at the meeting and entitled to vote in the
election. The corporation shall not directly or indirectly vote any share of its
stock.
9. ACTION WITHOUT MEETING. Any action required or permitted to be taken at
any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the rec-
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<PAGE> 3
ords of the meetings of stockholders. Such consents shall be treated for all
purposes as a vote at a meeting.
ARTICLE II
OFFICERS AND DIRECTORS
1. ELECTIONS. The corporation shall have a Board of Directors consisting
of such number as may be fixed by the stockholders, a President, a Treasurer and
a Clerk. At each annual meeting, the stockholders shall fix the number of
Directors to be elected, and shall elect the Board of Directors. At any meeting,
the stockholders may increase or decrease the number of Directors within the
limits above specified. The Board of Directors shall elect the President,
Treasurer and Clerk. The Board of Directors may, from time to time, elect or
appoint such other officers as it may determine, including a Chairman of the
Board, one or more Vice-Presidents, one or more Assistant Treasurers, one or
more Assistant Clerks and a Secretary. No officer or director need be a
stockholder. No officer need be a director. Two or more offices may be held by
any person.
If required by vote of the Board of Directors, an officer shall give
bond to the corporation for the faithful performance of his duties, in such form
and amount and with such sureties as the Board of Directors may determine. The
premiums for such bonds shall be paid by the corporation.
2. TENURE. Each Director shall hold office until the next annual meeting
of the stockholders and until his successor is elected and qualified or until he
sooner dies, resigns, is removed or becomes disqualified. Each officer shall
hold office until the first meeting of the Board of Directors following the next
annual meeting of the stockholders and until his successor is elected or
appointed and qualified, or until he dies, resigns, is removed or becomes
disqualified. Any Director or officer may resign by giving written notice of his
resignation to the Chairman of the Board, President, Clerk or Secretary, or to
the Board of Directors at a meeting of the Board, and such resignation shall
become effective at the time specified therein. Any Director may at any time be
removed with or without cause by the affirmative vote of the holders of a
majority in interest of the capital stock issued and outstanding and entitled to
vote; provided that Directors of a class elected by a particular class of
stockholders may be removed only by the affirmative vote of the holders of a
majority in interest of the stock of such class. Any officer may at any time be
removed with or without cause by vote of the Board of Directors. A Director or
officer may be removed for cause only after reasonable notice and an opportunity
to be heard before the body proposing to remove him.
3. VACANCIES. Any vacancy in the office of Director may be filled by the
stockholders at a meeting called for the purpose. Pending action by the
stockholders, a vacancy in the office of Director may be filled by vote of the
Board of Directors or by appointment by all of the Directors if less than a
quorum shall remain in office. Any vacancy in any other office held by any
person shall be filled by vote of the Board of Directors or by appointment by
all of the Directors if less than a quorum shall remain in office. During the
absence or inability to act of any officer, the Board of Directors may by vote
appoint a person to perform the duties of such officer.
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<PAGE> 4
ARTICLE III
BOARD OF DIRECTORS
1. POWERS. The Board of Directors may exercise all the powers of the
corporation except such as are required by law or by the Articles of
Organization or Bylaws to be otherwise exercised, and shall have the general
direction, control and management of the property and business of the
corporation. All property of the corporation, which shall be in the custody of
the Board of Directors, shall be subject at all times to inspection by the
President and the Treasurer or either of them. Unless otherwise provided by law,
the Board of Directors shall have power to purchase and to lease, pledge,
mortgage and sell such property (including the stock of this corporation) and to
make such contracts and agreements as they deem advantageous, to fix the price
to be paid for or in connection with any property or rights purchased, sold, or
otherwise dealt with by the corporation, to borrow money, issue bonds, notes and
other obligations of the corporation, and to secure payment thereof by the
mortgage or pledge of all or any part of the property of the corporation. The
Board of Directors may determine the compensation of Directors and the
compensation and duties, in addition to those prescribed by the Bylaws, of all
officers, agents and employees of the corporation.
2. MEETINGS. Meetings of the Directors need not be held in the state of
incorporation.
(a) Regular Meetings. Regular meetings of the Board of Directors may
be held without call or notice at such places and at such times as the Directors
may from time to time determine, provided that any Director who is absent when
such determination is made shall be given notice of the determination. A regular
meeting of the Board of Directors may be held without a call or notice at the
same place as the annual meeting of the stockholders, or the special meeting
held in lieu thereof, following such meeting of stockholders.
(b) Special Meeting. Special meetings of the Board of Directors may
be called by the Chairman of the Board, the President, a Vice-President, the
Treasurer or any two or more Directors. Notice of the time and place of all
special meetings shall be given by the Clerk, Secretary or the officer or
Directors calling the meeting. Notice may be given orally, by telephone,
telegraph or in writing; and notice shall be sufficient if given in time to
enable the Director to attend, or in any case if sent by nail or telegraph at
least three days before the meeting, addressed to a Director's usual or last
known place of business or residence. No notice of any meeting of the Board of
Directors need be given to any Director if such Director, by a writing filed
with the records of the meeting (and whether executed before or after such
meeting), waives such notice, or if such Director attends the meeting without
protesting prior thereto or at its commencement the lack of notice to him.
3. QUORUM OF AND ACTION BY DIRECTORS. At any meeting of the Board of
Directors a majority of the number of Directors then constituting a full Board
shall constitute a quorum, but a lesser number may adjourn any meeting from time
to time without further notice. Unless otherwise provided by law or by the
Articles of Organization or by the Bylaws, business may be transacted by vote of
a majority of the Directors then present at any meeting at which there is a
quorum. Unless otherwise provided by law or by the Articles of Organization or
by the
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<PAGE> 5
Bylaws, any action required or permitted to be taken at any meeting of the
Directors may be taken without a meeting if all the Directors consent to the
action in writing and the written consents are filed with the records of the
meetings of Directors. Such consents shall be treated for all purposes as a vote
at a meeting.
4. COMMITTEES OF DIRECTORS. The Board of Directors may, by vote of a
majority of the number of Directors then constituting a full Board, elect from
its membership an Executive Committee and such other committees as it may
determine and delegate to any such committee or committees some or all of its
powers except those which, by law, the Articles of Organization or these Bylaws,
it is prohibited from delegating. Except as the Directors may otherwise
determine, any such committee may make rules for the conduct of its business,
but unless otherwise provided by the Directors or in such rules, its business
shall be conducted as nearly as may be in the manner as is provided by these
Bylaws for the Directors.
ARTICLE IV
EXECUTIVE OFFICES
1. CHAIRMAN OF THE BOARD. The Chairman of the Board, if any, shall preside
at all meetings of the Board of Directors, and shall have such authority and
perform such duties as the Board of Directors may from time to time determine.
2. PRESIDENT AND VICE-PRESIDENTS. Except for meetings at which the
Chairman of the Board, if any, presides in accordance with Section 1 of this
Article IV, the President shall, if present, preside at all meetings of
stockholders and of the Board of Directors. He shall, subject to the control and
direction of the Board of Directors, have general supervision and control over
the business of the corporation, except as otherwise provided by the Bylaws; and
he shall have and perform such other powers and duties as may be prescribed by
the Bylaws or from time to time be determined by the Board of Directors. The
Vice-Presidents, in the order of their election, or in such other order as the
Board of Directors may determine by specific vote or by title, shall have and
perform the powers and duties of the President (or such of them as the Board of
Directors may determine) whenever the President is absent or unable to act. The
Vice-Presidents shall also have such other powers and duties as may from time to
time be determined by the Board of Directors.
3. TREASURER AND ASSISTANT TREASURERS. The Treasurer shall, subject to the
control and direction of the Board of Directors, have and perform such powers
and duties as may be prescribed in the Bylaws or from time to time be determined
by the Board of Directors. He shall have custody of the stock and transfer books
of the corporation, unless and until a transfer agent is appointed, and shall
keep accurate books of account of all the transactions of the corporation. All
property of the corporation in his custody shall be subject at all times to the
inspection and control of the Board of Directors. Unless otherwise voted by the
Board of Directors, each Assistant Treasurer shall have and perform the powers
and duties of the Treasurer whenever the Treasurer is absent or unable to act,
and may at any time exercise such of the powers of the Treasurer, and such other
powers and duties, as may from time to time be determined by the Board of
Directors.
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<PAGE> 6
4. CLERK AND ASSISTANT CLERKS. The Clerk shall be a resident of
Massachusetts unless the corporation has a resident agent appointed for the
purpose of service of process. He shall have and perform the powers and duties
prescribed in the Bylaws, and such other powers and duties as may from time to
time be determined by the Board of Directors. He shall attend all meetings of
the stockholders and shall record upon the record book of the proceedings at
such meetings. He shall have custody of the record books of the corporation. Any
Assistant Clerk shall have such powers as the Directors may from time to time
designate. In the absence of the Clerk from any meeting of stockholders, an
Assistant Clerk, if one be elected, otherwise a Temporary Clerk designated by
the person presiding at the meeting, shall perform the duties of the Clerk.
5. SECRETARY. The Board of Directors may elect a Secretary, but if no
Secretary is elected, the Clerk (or, in the absence of the Clerk, any Assistant
Clerk) shall be the Secretary. The Secretary shall attend all meetings of the
Directors and shall record all votes of the Board of Directors and minutes of
the proceedings at such meetings. He shall notify the Directors of their
meetings, and shall have and perform such other powers and duties as may from
time to time be determined by the Board of Directors. If a Secretary is elected
but is absent from any such meeting, the Clerk (or any Assistant Clerk) may
perform the duties of the Secretary; otherwise, a Temporary Secretary may be
appointed by the meeting.
ARTICLE V
CAPITAL STOCK
1. CERTIFICATES OF STOCK. Each stockholder shall be entitled to a
certificate of the capital stock of the corporation owned by him. All
certificates for shares of stock of the corporation shall state the number and
class of shares evidenced thereby (and designate the series, if any), shall be
signed by the President or a Vice-President and either the Treasurer or an
Assistant Treasurer, may (but need not) bear the seal of the corporation and
shall contain such further statements as shall be required by law. The Board of
Directors may determine the form of certificates of stock except insofar as
prescribed by law or by the Bylaws, and may provide for the use of facsimile
signatures thereon to the extent permitted by law. If the corporation is
authorized to issue more than one class or series of stock, every stock
certificate issued while it is so authorized shall be set forth upon the face or
back thereof either:
(a) the full text of the preferences, voting powers, qualifications
and special and relative rights of the shares of each class and series, if any,
authorized to be issued as set forth in the Articles of Organization; or
(b) a statement of the existence of such preferences, powers,
qualifications and rights, and a statement that the corporation will furnish a
copy thereof to the holder of such certificate upon written request and without
charge.
2. TRANSFERS. The transfer of all shares of stock in the corporation shall
be subject to the restrictions, if any, imposed by the Articles of Organization,
the Bylaws or any agreement to which the corporation is a party. Every
certificate for shares which are subject to any such restrictions on transfer
shall have the restrictions noted conspicuously on the certificate and
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<PAGE> 7
shall also set forth upon the face or back thereof either the full text of the
restriction or a statement of the existence of such restriction and a statement
that the corporation will furnish a copy thereof to the holder of such
certificate upon written request and without charge. Subject to any such
restrictions, title to a certificate of stock and to the shares represented
thereby shall be transferable on the books of the corporation (except when
closed as provided by the Bylaws) upon surrender of the certificates therefor
duly endorsed, or accompanied by a separate document containing an assignment of
the certificate or a power of attorney to sell, assign or transfer the same, or
the shares represented thereby, signed by the person appearing by the
certificate to be the owner of the shares represented thereby, with all such
endorsements or signatures verified if required by the corporation; but the
person registered on the books of the corporation as the owner of the shares
shall have the exclusive right to receive dividends thereon and to vote thereon
as such owner, shall be held liable for such calls and assessments as may
lawfully be made thereon, and except only as may be required by law, may in all
respects be treated by the corporation as the exclusive owner thereof. It shall
be the duty of each stockholder to notify the corporation of his post office
address.
3. FIXING RECORD DATE. The Board of Directors may fix in advance a time of
not more than sixty (60) days preceding the date of any meeting of stockholders
or the date for payment of any dividend or the making of any distribution to
stockholders or the last day on which the consent or dissent of stockholders may
be effectively expressed for any purpose, as the record date for determining the
stockholders having the right to notice of and to vote at such meeting and any
adjournment thereof, or the right to receive such dividend or distribution, or
the right to give such consent or dissent, and in such case, only stockholders
of record on such record date shall have such right, notwithstanding any
transfer of stock on the books of the corporation after the record date; or
without fixing such record date the Board of Directors may, for any such
purposes, close the transfer books for all or any part of such sixty-day period.
If no record date is fixed and the transfer books are not closed:
(a) the record date for determining stockholders having the right to
notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given.
(b) the record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the Board of
Directors acts with respect thereto.
4. LOST CERTIFICATES. In case any certificate of stock of the corporation
shall be lost or destroyed, a new certificate may be issued in place thereof on
reasonable evidence of such loss or destruction, and upon the giving of such
indemnity as the Board of Directors may require for the protection of the
corporation or any transfer agent or registrar. In case any certificate shall be
mutilated, a new certificate may be issued in place thereof upon such terms as
the Board of Directors may prescribe.
5. ISSUE OF STOCK. Unless otherwise voted by the incorporators or
stockholders, the whole or any part of any unissued balance of the authorized
capital stock of the corporation or the whole or any part of any capital stock
of the corporation held in its treasury may be issued or
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<PAGE> 8
disposed of by vote of the Board of Directors in such manner, for such
consideration and on such terms as the Board of Directors may determine.
6. DIVIDENDS. Subject to any applicable provisions of the Articles of
Organization and pursuant to law, dividends upon the capital stock of the
corporation may be declared by the Board of Directors at any regular or special
meeting. Dividends may be paid in cash, in property or in shares of the capital
stock. Before payment of any dividend, there may be set aside out of any funds
of the corporation available for dividends such sum or sums as the Board of
Directors may from time to time, in the absolute discretion of the Board, think
proper as a reserve fund to meet contingencies, for equalizing dividends, for
repairing or maintaining any property of the corporation, for working capital or
for such other purposes as the Board of Directors shall think conducive to the
interests of the corporation.
ARTICLE VI
MISCELLANEOUS PROVISIONS
1. FISCAL YEAR. The fiscal year of the corporation shall end on the last
day of December.
2. SEAL. The seal of the corporation shall bear its name, the word
"Massachusetts" and the year of its incorporation; and may bear such other
device or inscription as the Board of Directors may determine.
3. EXECUTION OF INSTRUMENTS. All deeds, leases, transfers, contracts,
bonds, notes, checks, drafts and other obligations for payment of money made,
accepted or endorsed by the corporation shall be executed on behalf of the
corporation by such person, or persons, as may be authorized from time to time
by vote of the Board of Directors.
4. CONTRIBUTIONS. The Board of Directors shall have authority to make
donations from the funds of the corporation, in such amounts as the Board of
Directors may determine to be reasonable and irrespective of corporate benefit,
for the public welfare or for community fund, hospital, charitable, religious,
educational, scientific, civic or similar purposes, and in time of war or other
natural emergency in aid thereof.
5. EVIDENCE OF AUTHORITY. A certificate by the Clerk, an Assistant Clerk
or the Secretary, or a Temporary Clerk or Temporary Secretary, as to any action
taken by the stockholders, Board of Directors, any Committee of the Board of
Directors or any officer or representative of the corporation shall, as to all
persons who rely thereon in good faith, be conclusive evidence of such action.
The exercise of any power which, by law or under these Bylaws or under any vote
of the stockholders or of the Board of Directors, may be exercised in case of
absence or any other contingency, shall bind the corporation in favor of anyone
relying thereon in good faith, whether or not the absence or contingency
existed.
6. INDEMNIFICATION OF OFFICERS AND DIRECTORS. The corporation shall
indemnify and hold harmless each person, now or hereafter an officer or Director
of the corporation, from and against any and all claims and liabilities to which
he may be or become subject by
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reason of his being or having been an officer or a Director of the corporation
or by reason of his alleged acts or omissions as an officer or Director of the
corporation, and shall indemnify and reimburse each such officer and Director
against and for any and all legal and other expenses reasonably incurred by him
in connection with any such claims and liabilities, actual or threatened,
whether or not at or prior to the time when so indemnified, held harmless and
reimbursed he has ceased to be an officer or a Director of the corporation,
except with respect to any matter as to which such officer or Director shall
have been adjudicated in any proceeding not to have acted in good faith in the
reasonable belief that his action was in the best interest of the corporation;
provided, however, that prior to such final adjudication the corporation may
compromise and settle any such claims and liabilities and pay such expenses, if
such settlement or payment or both appears, in the judgment of a majority of
those members of the Board of Directors who are not involved in such matters, to
be for the best interest of the corporation as evidenced by a resolution to that
effect adopted after receipt by the corporation of a written opinion of counsel
for the corporation, that, based on the facts available to such counsel, such
officer or Director has not been guilty of acting in a manner that would
prohibit indemnification.
Such indemnification may include payment by the corporation of
expenses incurred in defending a civil or criminal action or proceeding in
advance of the final disposition of such action or proceeding, upon receipt of
an undertaking by the person indemnified to repay such payment if he shall be
adjudicated to be not entitled to indemnification under this section.
The corporation shall similarly indemnify and hold harmless persons
who serve at its request as directors or officers of another organization in
which the corporation owns shares or of which it is a creditor.
The right of indemnification herein provided shall be in addition to
and not exclusive of any other rights to which any officer or Director of the
corporation, or any such persons who serve at its request as aforesaid, may
otherwise be lawfully entitled. As used in this Section 6, the terms "officer"
and "Director" include their respective heirs, executors and administrators.
7. DEFINITIONS. All references in the Bylaws to the following terms shall
have the following meanings unless specifically otherwise provided:
Bylaws -- These Bylaws, as altered or amended from time to time.
Articles of Organization -- The Articles of Organization as amended
from time to time.
Number of Directors then Constituting a Full Board -- The number of
Directors last fixed by the incorporators or stockholders pursuant
to Section 1 of Article II of the Bylaws.
Annual Meeting of Stockholders -- Either the annual meeting of the
stockholders held on the date fixed therefor, or if it is not held
on such fixed date, a special meeting held in place thereof.
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In addition, whenever the masculine gender is used, it shall include
the feminine and the neuter wherever appropriate.
ARTICLE VII
AMENDMENTS
These Bylaws may be altered, amended or repealed, in whole or in
part, at any annual or special meeting by vote of the holders of a majority in
interest of all stock issued and outstanding and entitled to vote. No change in
the date of the annual meeting may be made within sixty (60) days before the
date fixed in these Bylaws for such meeting. The nature or substance of the
proposed alterations, amendment or repeal shall be stated in the notice of the
meeting.
A true copy.
ATTEST:
Dated: March 9, 1994 /s/Andrew R. Bulens
-----------------------------------
Andrew R. Bulens, Clerk
(Corporate Seal)
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<PAGE> 1
AGREEMENT OF LIMITED PARTNERSHIP
OF
STANDARD PARKING, L.P.
THIS AGREEMENT OF LIMITED PARTNERSHIP is entered into as of January 1,
1994, by and among STANDARD PARKING CORPORATION, an Illinois corporation
("SPC"), as General Partner, and SP ASSOCIATES, an Illinois general partnership
("Associates"), as Limited Partner.
In consideration of the mutual covenants set forth in this Agreement, the
parties hereto hereby agree to form a limited partnership under the Delaware
Revised Uniform Limited Partnership Act upon the following terms and conditions:
ARTICLE I
Definitions
When used in this Agreement, the following terms have the following
meanings:
Section 1.1. Accountants. "Accountants" means Altschuler, Melvoin &
Glasser or such other firm of independent certified public accountants as shall
be engaged from time to time by the General Partner for the Partnership.
Section 1.2. Act. "Act" means the Delaware Revised Uniform Limited
Partnership Act, as amended from time to time.
Section 1.3. Affiliate. "Affiliate" means with respect to a
specified Person (a) any Person that directly or indirectly through one or more
intermediaries controls, alone or through an affiliated group, is controlled by,
or is under common control with such Person, (b) any Person that is an officer,
director, partner, or trustee of, or serves in a similar capacity with respect
to, such Person or of which such Person is an officer, director, partner, or
trustee, or with respect to which such Person serves in a similar capacity, (c)
any Person that, directly or indirectly, is the beneficial owner of 10% or more
of any class of equity securities of, or otherwise has a substantial beneficial
interest in, the specified Person or of which the specified Person is directly
or indirectly the owner of 10% or more of any class of equity securities or in
which the specified Person has a substantial beneficial interest, or (d) any
spouse, child, or parent of the specified Person. Notwithstanding the foregoing,
a Limited Partner shall not be deemed to be an Affiliate of the Partnership
solely as a result of being a Limited Partner.
<PAGE> 2
Section 1.4. Agreement. "Agreement" means this Agreement of Limited
Partnership, as amended or otherwise modified from time to time.
Section 1.5. Assignee. "Assignee" means a person to whom an Interest
has been assigned in accordance with the provisions of this Agreement but who
has not been admitted as a Substitute Partner.
Section 1.6. Associates' Representative. "Associates'
Representative" shall have the meaning set forth in Section 8.5.
Section 1.7. Bankruptcy. "Bankruptcy" means, with respect to a
Person: (i) the commencement against such Person of proceedings for any relief
under any bankruptcy or insolvency law, or any law relating to the relief of
debtors, readjustment of indebtedness, reorganization, arrangement, composition,
or extension of debts, provided such proceedings shall not have been dismissed,
nullified, stayed, or otherwise rendered ineffective (but only so long as such
stay shall continue in force) within 90 days after the commencement of such
proceedings; (ii) the commencement by such Person of proceedings for any relief
under any bankruptcy or insolvency law, or any law relating to the relief of
debtors, readjustment of indebtedness, reorganization, arrangement, composition,
or extension of debts; (iii) a decree or order of a court having jurisdiction in
the premises for the appointment of a receiver, liquidator, or trustee or
assignee in bankruptcy or insolvency of such Person or of a substantial part of
such Person's property, or for the winding up or liquidation of its affairs,
which decree or order remains in force undischarged and unstayed for a period of
90 days; or (iv) a general assignment by such Person for the benefit of
creditors or the admission by such Person in writing of its inability to pay its
debts generally as they become due.
Section 1.8. Capital Account. "Capital Account" means, with respect
to a Partner, the sum of the Partner's Class A Capital Account, Class B Capital
Account, Class C Capital Account, and Class D Capital Account.
Section 1.9. Capital Contribution. "Capital Contribution" means,
with respect to any Partner, the amount of cash and the initial Gross Asset
Value of property other than cash (less any indebtedness assumed by the
Partnership in connection with such Capital Contribution, or to which such
contributed property is subject) which has been contributed to the Partnership
by such Partner (or, in the case of an Assignee or Substitute Partner, by any
prior holder of the Interest held by such Assignee or Substitute Partner).
Section 1.10. Capitalized Lease. "Capitalized Lease" means any lease
which is or should be capitalized on the balance sheet of the lessee in
accordance with GAAP.
Section 1.11. Capital Transaction. "Capital Transaction" means (a) a
sale, exchange, or other disposition of all or substantially all of the
Partnership Property for
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value (including an involuntary conversion by condemnation, casualty, or
otherwise), (b) the incurrence by the Partnership of indebtedness for borrowed
money or (c) the refinancing of any existing or replacement indebtedness for
borrowed money, or any part thereof.
Section 1.12. Capital Transaction Proceeds. "Capital Transaction
Proceeds" means any and all cash proceeds received by the Partnership from a
Capital Transaction, reduced by (i) expenses incurred by the Partnership in
connection with such Capital Transaction, (ii) liabilities of the Partnership
which are repaid out of the proceeds from such Capital Transaction, (iii) such
reserves as the General Partner may reasonably determine for contingent
liabilities, and (iv) amounts applied for other Partnership purposes in
accordance with this Agreement.
Section 1.13. Certificate. "Certificate" means the Certificate of
Limited Partnership filed on behalf of the Partnership in the State of Delaware,
as amended from time to time.
Section 1.14. Class A Capital Account. "Class A Capital Account"
means the Capital Account maintained under Section 3.4 with respect to a Class A
Interest.
Section 1.15. Class A Cumulative Unpaid Preference. "Class A
Cumulative Unpaid Preference" shall have the meaning set forth in Section
3.3(b).
Section 1.16. Class A Partner. "Class A Partner" means the holder of
a Class A Interest in its capacity as such.
Section 1.17. Class A Preferred Return. "Class A Preferred Return"
shall have the meaning set forth in Section 3.3(b).
Section 1.18. Class A Unrecovered Capital. "Class A Unrecovered
Capital" means, with respect to any Class A Partner as of any date, the initial
Class A Unrecovered Capital, as set forth in Section 3.3(b), reduced by the
amount of any distributions received by such Class A Partner under Section
5.2(a) as of such date.
Section 1.19. Class B Capital Account. "Class B Capital Account"
means the Capital Account maintained under Section 3.4 with respect to a Class B
Interest.
Section 1.20. Class B Cumulative Unpald Preference. "Class B
Cumulative Unpaid Preference" shall have the meaning set forth in Section
3.3(c).
Section 1.21. Class B Partner. "Class B Partner" means the holder of
a Class B Interest in its capacity as such.
Section 1.22. Class B Preferred Return. "Class B Preferred Return"
shall have the meaning set forth in Section 3.3(c).
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Section 1.23. Class B Unrecovered Capital. "Class B Unrecovered
Capital" means, with respect to any Class B Partner as of any date, the initial
Class B Unrecovered Capital, as set forth in Section 3.3(c), and decreased by
the amount of any distributions received under Section 5.2(b) as of such date.
Section 1.24. Class C Capital Account. "Class C Capital Account"
means the Capital Account maintained under Section 3.4 with respect to a Class C
Interest.
Section 1.25. Class C Cumulative Unpaid Preference. "Class C
Cumulative Unpaid Preference" shall have the meaning set forth in Section
3.3(d).
Section 1.26. Class C Partner. "Class C Partner means the holder of
a Class C Interest in its capacity as such.
Section 1.27. Class C Preferred Return. "Class C Preferred Return"
shall have the meaning set forth in Section 3.3(d).
Section 1.28. Class C Unrecovered Capital. "Class C Unrecovered
Capital" means, with respect to any Class C Partner as of any date, the initial
Class C Unrecovered Capital, as set forth in Section 3.3(d), decreased by the
amount of any distributions received under Section 5.2(c) as of such date.
Section 1.29. Class D Capital Account. "Class D Capital Account"
means the Capital Account maintained under Section 3.4 with respect to a Class D
Interest.
Section 1.30. Class D Partner. "Class D Partner" means the holder of
a Class D Interest in its capacity as such.
Section 1.31. Code. "Code" means the Internal Revenue Code of 1986,
as amended from time to time, or any successor thereto.
Section 1.32. Contingent Liability. "Contingent Liability" means any
agreement, undertaking, or arrangement by which any Person guarantees, endorses
or otherwise becomes or is contingently liable upon (by direct or indirect
agreement, contingent or otherwise, to provide funds for payment, to supply
funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor
against loss) the indebtedness, obligation or any other liability of any other
Person (other than by endorsements of instruments in the course of collection),
or guarantees the payment of dividends or other distributions upon the shares of
any other Person. The amount of any Person's obligation under any Contingent
Liability shall (subject to any limitation set forth therein) be deemed to be
the outstanding principal amount (or maximum principal amount, if larger) of the
debt, obligation or other liability guaranteed thereby.
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<PAGE> 5
Section 1.33. CPI. "CPI" means the Consumer Price Index for All
Urban Consumers (All Items and Commodity Groups - Chicago Area Only). If the CPI
shall become unavailable to the public because publication is discontinued or
otherwise, the General Partner shall substitute therefore a comparable index
based upon changes in the cost of living or purchasing power of the consumer
dollar published by any other governmental agency.
Section 1.34. Depreciation. "Depreciation" means, for each fiscal
year, an amount equal to the depreciation, amortization, or other cost recovery
deduction allowable with respect to an asset for such fiscal year, except that
if the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such fiscal year, Depreciation shall be
an amount which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization, or other cost recovery deduction
for such fiscal year bears to such beginning adjusted tax basis; provided,
however, that if the adjusted basis for federal income tax purposes of an asset
at the beginning of such fiscal year is zero, Depreciation shall be determined
with reference to such beginning Gross Asset Value using any reasonable method
selected by the General Partner.
Section 1.35. Disability. "Disability" means, with respect to any
Person on any date, (i) a state or condition of incapacity or, through illness,
age or similar cause, an inability to give reasoned consideration to business or
financial matters, from which state or condition such Person is not expected to
recover for a period of not less than 12 months, as certified to the Partnership
by a physician reasonably acceptable to SPC and Associates, or (ii) a failure by
such person to work on a full business time basis for a period of 12 consecutive
months by reason of incapacity, illness, age, or similar cause.
Section 1.36. Distributable Cash. "Distributable Cash" means, with
respect to any fiscal period taken into account under this Agreement: (i) all
cash received by the Partnership from all sources during the period (excluding
Capital Contributions and Capital Transaction Proceeds); minus (ii) all
expenditures paid by the Partnership during the period, including (but not
limited to) repayment of principal on Partnership loans; minus (iii) such
additions to the Partnership's reserves as the General Partner may reasonably
deem necessary for anticipated working capital and capital investment
requirements of the Partnership; plus (iv) such additional cash (not theretofore
taken into account) as the General Partner may reasonably determine to be
available for distribution to the Partners, including amounts released from
reserves. Notwithstanding anything to the contrary herein, the General Partner
may not make any additions to the Partnership's reserves as of the close of any
fiscal quarter if the effect of such additions is to cause (i) the current
assets of the Partnership as of the end of such fiscal quarter (determined in
accordance with GAAP, but reduced by the amount required to be distributed under
Section 5.1 after the close of such period, taking into account such addition to
reserves) to exceed the current payables of the Partnership as of the end of
such fiscal quarter (determined in accordance with GAAP) by more than
$1,200,000. The limitation set forth in the preceding sentence (i) shall be
adjusted as of January 1 of each fiscal year (commencing January 1, 1995) by the
percentage by which the CPI reported as of the end of the
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immediately preceding fiscal year of the Partnership shall have increased from
the CPI reported as of the end of the second preceding fiscal year of the
Partnership, and (ii) may be increased further as of any time with the written
consent of Associates (which consent shall not be unreasonably withheld) if the
General Partner determines that the Partnership requires additional reserves for
working capital, capital expenditures, or expansion of the Partnership's
business. For purposes of the foregoing, the Partnership's current assets and
current liabilities as of the end of any fiscal quarter shall be (i) as
reasonably determined by the General Partner in good faith, in the case of any
fiscal quarter other than the fourth quarter and (ii) as determined by the
Accountants, in the case of the fourth quarter.
Section 1.37. Effective Date. "Effective Date" means January 1,
1994.
Section 1.38. Event of Withdrawal. "Event of Withdrawal" means with
respect to the General Partner, the cessation of its status as a General Partner
as a result of death, dissolution, Bankruptcy, incapacity, complete withdrawal,
or any other reason, other than the dissolution of the Partnership.
Section 1.39. GAAP. "GAAP" means generally accepted accounting
principles in the United States of America as in effect from time to time,
consistently applied.
Section 1.40. Garage Management Business. "Garage Management
Business" means (i) the ownership. management, leasing, or operation of
automobile garages or other parking facilities, (ii) the development or
exploitation of' or any investment in, any technology used or useful in the
Garage Management Business (including without limitation any technology in which
AVID has an interest), and (iii) the provision of parking consulting or other
parking-related services to any Person engaged in the Garage Management
Business.
Section 1.41. General Partner. "General Partner" means, as of any
particular time, any Person who has been admitted to the Partnership as, and
continues to be, a general partner of the Partnership as of such time.
Section 1.42. Gross Asset Value. "Gross Asset Value" means, with
respect to any asset, the asset's adjusted basis for federal income tax
purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by
a Partner to the Partnership shall be the gross fair market value of such
asset, as determined in accordance with this Agreement;
(b) The Gross Asset Values of all Partnership Property shall
be adjusted to equal the respective gross fair market values of such
property, as determined by the General Partner, as of the following times:
(i) the acquisition of an additional Interest by any new or existing
Partner in exchange for more than a de minimis Capital Contribution: (ii)
the distribution by the Partnership to a Partner of more than a de mini-
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mis amount of Partnership Property as consideration for an Interest; and
(iii) the liquidation of the Partnership within the meaning ofss.
1.704-1(b)(2)(ii)(g) of the Regulations: provided, however, that
adjustments pursuant to clauses (i) and (i) above shall be made only if
the General Partner reasonably determines that such adjustments are
necessary or appropriate to reflect the relative economic interests of the
Partners in the Partnership;
(c) The Gross Asset Value of any Partnership Property
distributed to any Partner shall be adjusted to equal the gross fair
market value of such property on the date of distribution as determined by
the distributee and the General Partner; provided that, if the distributee
is a General Partner, the determination of the fair market value of the
distributed asset shall require the consent of all the Limited Partners;
and
(d) The Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted basis
of such assets pursuant to section 734(b) or section 743(b) of the Code,
but only to the extent that such adjustments are taken into account in
determining Capital Accounts pursuant toss. 1.704-1(b)(2)(iv)(m) of the
Regulations; provided, however, that Gross Asset Values shall not be
adjusted pursuant to this subsection (d) to the extent the General Partner
determines that an adjustment pursuant to subsection (b) hereof is
necessary or appropriate in connection with a transaction that would
otherwise result in an adjustment pursuant to this subsection (d).
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
paragraph (a), (b), or (d) hereof, such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such asset for
purposes of computing Net Profits and Net Losses.
Section 1.43. Indebtedness. "Indebtedness" means, with respect to
any Person (without duplication): (i) any obligation of such Person for borrowed
money, including, without limitation, (A) any obligation of such Person
evidenced by bonds, debentures, notes or other similar debt instruments, and (B)
any obligation for borrowed money which is non-recourse to the credit of such
Person but which is secured by a Lien on any asset of such Person; (ii) any
obligation of such Person on account of deposits or advances other than in the
ordinary course of business; (iii) any obligation of such Person for the
deferred purchase price of any property or services, except Trade Accounts
Payable; (iv) any obligation of such Person as lessee under a Capitalized Lease;
(v) any Indebtedness of another Person secured by a Lien on any asset of such
first Person, whether or not such Indebtedness is assumed by such first Person;
and (vi) any Contingent Liability of such Person in respect of any of the
foregoing. For all purposes of this Agreement, the Indebtedness of any Person
shall include
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the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer.
Section 1.44. Interest. "Interest" means the entire ownership
interest of a Partner in the Partnership at any particular time, including the
right of such Partner to any and all benefits to which a Partner may be entitled
under this Agreement and the Act, together with the obligations of such Partner
to comply with all the terms and provisions of this Agreement with which such
Partner is required to comply. Reference to a Limited Partnership or General
Partnership Interest means the Interest of a Limited Partner or General Partner,
as such. Reference to a Class A, Class B, Class C, or Class D Interest means an
Interest issued pursuant to Section 3.1(c)(i), 3.1(c)(ii), 3.2(b), or
3.1(c)(iii), respectively.
Section 1.45. Investment. "Investment" means any investment, made in
cash or by delivery of any kind of property or asset, in any Person, whether by
acquisition of shares of stock or similar interest, Indebtedness, or other
obligation or security, or by loan, advance, or capital contribution, or
otherwise.
Section 1.46. Legal Counsel. "Legal Counsel" means such legal
counsel as shall be engaged from time to time by the General Partner for the
Partnership.
Section 1.47. Lien. "Lien" means any mortgage, pledge,
hypothecation, judgment lien or similar legal process, title retention lien, or
other lien or security interest, including, without limitation, the interest of
a vendor under any conditional sale or other title retention agreement and the
interest of a lessor under any Capitalized Lease.
Section 1.48. Limited Partners. "Limited Partners" means, as of any
date, any or all of the Persons who have been admitted as, and continue to be,
limited partners of the Partnership as of such date. As of the date of this
Agreement, Associates, in its capacity as the holder of the Class C Interest,
and SPC, in its capacity as the holder of the Class A Interest, are the sole
Limited Partners of the Partnership.
Section 1.49. Liquidation Preference. "Liquidation Preference"
means, (i) with respect to the Class A Partner as of any date, the sum of the
Class A Unrecovered Capital, the Class A Cumulative Unpaid Preference, plus the
accrued but unpaid Class A Preferred Return for the fiscal year as of such date,
(ii) with respect to the Class B Partner as of any date, the sum of the Class B
Unrecovered Capital, the Class B Cumulative Unpaid Preference, plus the accrued
but unpaid Class B Preferred Return for the fiscal year as of such date, or
(iii) with respect to the Class C Partner as of any date, the sum of the Class C
Unrecovered Capital, the Class C Cumulative Unpaid Preference, plus the accrued
but unpaid Class C Preferred Return for the fiscal year as of such date.
Section 1.50. Material Adverse Effect. "Material Adverse Effect"
means a material adverse effect on:
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(i) the consolidated business, assets, financial condition or
operations of the Partnership, or SPC and Standard Auto Park, Inc. taken
as a whole, as the context requires; or
(ii) the ability of Standard Auto Park, Inc. or SPC to perform
any of its material obligations under this Agreement or under the Nominee
Agreement, the Management Agreement, or the Related Agreements (as such
terms are defined in the Partnership Formation Agreement).
Section 1.51. Net Profit; Net Loss. "Net Profit" or "Net Loss"
means, for each period taken into account under Article IV, an amount equal to
the Partnership's taxable income or taxable loss for such period, determined in
accordance with federal income tax principles, with the following adjustments:
(a) There shall be added to such taxable income or taxable
loss an amount equal to any income received by the Partnership during such
period which is wholly exempt from federal income tax (e.g., interest
income which is exempt from federal income tax under section 103 of the
Code);
(b) Any expenditures of the Partnership described in section
705(a)(2)(B) of the Code or treated as section 705(a)(2)(B) expenditures
pursuant to ss. 1.704-1(b)(2)(iv)(i) of the Regulations, and not otherwise
taken into account in computing Net Profits or Net Losses, shall be
subtracted from such taxable income or loss;
(c) In the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to Section 1.42(b) or (c) of this Agreement,
the amount of such adjustment shall be taken into account as gain or loss
from the disposition of such asset for purposes of computing Net Profits
or Net Losses;
(d) Gain or loss resulting from any disposition of Partnership
Property with respect to which gain or loss is recognized for federal
income tax purposes shall be computed by reference to the Gross Asset
Value of the Partnership Property disposed of, notwithstanding that the
adjusted tax basis of such Partnership Property differs from its Gross
Asset Value;
(e) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or
loss, there shall be taken into account Depreciation for such fiscal year
or other period; and
(f) To the extent an adjustment to the adjusted tax basis of
any Partnership asset pursuant to section 734(b) or section 743(b) of the
Code is required pursuant toss. 1.704-l(b)(2)(iv)(m)(4) of the Regulations
to be taken into account in
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determining Capital Accounts as a result of a distribution other than in
liquidation of a Partner's Interest, the amount of such adjustment shall
be treated as an item of gain (if the adjustment increases the basis of
the asset) or loss (if the adjustment decreases the basis of the asset)
from the disposition of the asset and shall be taken into account for
purposes of computing Net Profits or Net Losses.
Section 1.52. Partner. "Partner" means as of any particular time any
Person who is at such time a General Partner or a Limited Partner.
Section 1.53. Partnership. "Partnership" means the limited
partnership formed pursuant to the Certificate and this Agreement.
Section 1.54. Partnership Formation Agreement. "Partnership
Formation Agreement" means that Partnership Formation Agreement by and between
Associates and SPC relating to the Partnership, including all Exhibits thereto.
Section 1.55. Partnership Property. "Partnership Property" means any
or all property, real or personal, tangible or intangible, owned of record or
beneficially by the Partnership.
Section 1.56. Permitted Lien. "Permitted Lien" means any of the
following:
(a) Liens for current Taxes not delinquent or Taxes
being contested in good faith and by appropriate proceedings and as to
which such reserves or other appropriate provisions as may be required by
GAAP are being maintained;
(b) carriers', warehousemen's, mechanics',
materialmen's, repairmen's, and other like statutory Liens arising in the
ordinary course of business securing obligations which are not overdue for
a period of more than 90 days or which are being contested in good faith
and by appropriate proceedings and as to which such reserves or other
appropriate provisions as may be required by GAAP are being maintained;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations and other obligations of a like
nature incurred in the ordinary course of business; and
(e) Liens relating to Indebtedness assumed by the
Partnership in accordance with the Partnership Formation Agreement.
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Section 1.57. Person. "Person" means any natural person,
corporation, firm, limited liability company, joint venture, partnership, trust,
unincorporated organization, government, or any department or agency of
government.
Section 1.58. Regulations. "Regulations" means the regulations of
the United States Treasury Department with respect to a section of the Code,
whether in proposed, temporary, or final form, as from time to time amended, or
any successor thereto.
Section 1.59. SP Parking Associates. "SP Parking Associates" means
SP Parking Associates, an Illinois general partnership and an Affiliate of
Associates.
Section 1.60. SP Parking Option Agreement. "SP Parking Option
Agreement" means that Option Agreement between SP Parking Associates and SPC
dated as of January 1,1994.
Section 1.61. Standard Auto Park, Inc. "Standard Auto Park, Inc."
means Standard Auto Park, Inc., an Illinois corporation and an Affiliate of SPC.
Section 1.62. Standard Parking Corporation MW. "Standard Parking
Corporation MW" means Standard Parking Corporation MW, an Illinois corporation
and an Affiliate of SPC.
Section 1.63. Standard/Tremont. "Standard/Tremont" means
Standard/Tremont Parking Corporation, an Illinois corporation and an Affiliate
of SPC.
Section 1.64. Standard/Wabash. "Standard/Wabash" means
Standard/Wabash Parking Corporation, an Illinois corporation and an Affiliate of
SPC.
Section 1.65. Substitute Partner. "Substitute Partner" means a
Person to whom an Interest has been assigned and who has been admitted to the
Partnership as a General Partner ("Substitute General Partner") or Limited
Partner ("Substitute Limited Partner") in accordance with this Agreement.
Section 1.66. Taxes. "Taxes" with respect to any Person means taxes,
assessments or other governmental charges or levies imposed upon such Person,
his or its income or any of his or its properties, franchises or assets.
Section 1.67. Trade Accounts Payable. "Trade Accounts Payable" of
any Person means accounts payable (including, without limitation, professional
fees, utility bills and other like expenses) of such Person with a maturity of
not greater than 90 days incurred in the ordinary course of such Person's
business.
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ARTICLE II
Organization
Section 2.1. Formation of Partnership. The parties hereby agree to form a
limited partnership pursuant to the Act and the terms of this Agreement. Subject
to Section 7.11, SPC is the General Partner and Associates is the Limited
Partner of the Partnership. The General Partner shall promptly prepare and
arrange for the execution. filing, and recording in the appropriate public
offices of a Certificate and shall do all other things required to perfect the
formation of the Partnership as a limited partnership and to authorize the
conduct of its business in all jurisdictions where the Partnership intends to
conduct business.
Section 2.2. Name. The business of the Partnership shall be
conducted under the name "Standard Parking, L.P.," or under such other name as
the General Partner may determine; provided, however, that no such name may
contain the name of, or any trade name or trademark used by, a Limited Partner
(other than SPC) or any Affiliate of a Limited Partner (other than SPC) or any
name similar thereto.
Section 2.3. Registered Office; Principal Place of Business. The
name of the Partnership's registered agent for service of process in the State
of Delaware is The Prentice-Hall Corporation System, Inc., and the address of
the Partnership's registered office in the State of Delaware is 32 Loockerman
Square, Suite L-100, in the City of Dover, County of Kent, Delaware 19901. The
Partnership's principal place of business is 55 E. Monroe Street, Suite 3440,
Chicago, Illinois 60603. The General Partner may from time to time, upon written
notice to all the Partners, change the registered agent or registered office,
change the location of the Partnership's principal place of business, or
establish additional places of business at such locations as the General Partner
from time to time may determine.
Section 2.4. Purposes and Powers. The purposes of the Partnership
are to invest in, acquire, own, operate, and sell or otherwise dispose of the
Garage Management Business, for profit. Subject to the terms and conditions of
this Agreement, the Partnership is authorized to enter into, make, and perform
all contracts (including, but not limited to, garage leases and management
agreements), and other undertakings, and engage in all other activities and
transactions, as the General Partner may deem necessary, advisable, or
convenient for carrying out the purposes of the Partnership.
Section 2.5. Title to Partnership Property. Title to Partnership
Property may be held in the name of the Partnership or a nominee of the
Partnership (which nominee may include SPC).
Section 2.6. Term. This Agreement shall be effective and the
Partnership shall commence its existence as a limited partnership upon the
Effective Date. Unless sooner
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dissolved under Section 9.1, the Partnership shall continue in existence until
December 31, 2043.
ARTICLE III
Capital
Section 3.1. Capital Contributions of SPC.
(a) Pursuant to the Partnership Formation Agreement, as of the
Effective Date, SPC shall contribute to the capital of the Partnership its
entire right, title, and interest in and to the SPC Transferred Assets (as
defined in the Partnership Formation Agreement), and the Partnership shall
assume the Assumed SPC Liabilities (as defined in the Partnership Formation
Agreement).
(b) In addition, pursuant to the Partnership Formation Agreement, as
of the Effective Date SPC shall enter into a Nominee Agreement substantially in
the form attached as an Exhibit to the Partnership Formation Agreement pursuant
to which it shall agree to hold certain contracts described in said Nominee
Agreement as nominee in trust for the sole benefit of the Partnership.
(c) In consideration for the aforementioned Capital Contributions,
SPC shall receive and have (i) as a Limited Partner, 100% of the Class A
Interests, (ii) as the General Partner, 100% of the Class B Interests, and (iii)
as the General Partner, 100% of the Class D Interests.
(d) SPC agrees that it will, at any time and from time to time after
the Effective Date, upon the reasonable request of Associates, perform, execute,
acknowledge, and deliver all such further acts, deeds, assignments, transfers,
conveyances, and assurances as Associates may reasonably deem necessary to
confirm the Partnership's title to and interest in, or to enable the Partnership
to deal with and dispose of, any of the Partnership Properties described in
Section 3.1(a) and (b).
(e) SPC shall not be required to make any additional Capital
Contributions to the Partnership.
(f) The Partners acknowledge and agree that the aggregate Gross
Asset Value of the assets contributed by SPC to the Partnership is the sum of
(i) the book value of the SPC Transferred Assets (as defined in the Partnership
Formation Agreement) as of the Effective Date (taking into account the
adjustments required to be made after the Effective Date under Section
1.2(b)(xiii) of the Partnership Formation Agreement), plus (ii) $6,600,000. The
General Partner, in its reasonable discretion, shall determine the manner in
which such Gross Asset Value is allocated among the properties so contributed.
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Section 3.2. Capital Contributions of Associates.
(a) Pursuant to the Partnership Formation Agreement, on or before
the Effective Date Associates shall have made a Capital Contribution to the
Partnership in the amount of One Million Dollars ($1,000,000).
(b) In consideration for the aforementioned Capital Contribution,
Associates shall receive and have, as a Limited Partner, 100% of the Class C
Interests.
(c) Associates shall not have any personal liability to contribute
money to, or in respect of, the liabilities or obligations of the Partnership,
nor shall Associates be personally liable for any obligations of the
Partnership, except as otherwise provided in this Section 3.2 or in the Act.
Associates shall not be required to make any additional Capital Contributions to
the Partnership other than as set forth in Section 3.2(a) of this Agreement.
Section 3.3. Partnership, Interests.
(a) The Partnership Interests shall be divided into Class A, Class
B, Class C, and Class D Interests having the rights provided in this Section
3.3.
(b) The Class A Interest shall have an initial Class A Capital
Account and an initial Class A Unrecovered Capital in the amount of $5,600,000.
The Class A Interest shall accrue a Class A Preferred Return on a daily basis in
an amount equal to $1,380.82 per day, payable out of distributions by the
Partnership in accordance with the provisions of Section 5.1(b) and 5.2(d)(ii)
of this Agreement. To the extent that the Class A Preferred Return for any
fiscal year is not paid within 90 days after the end of such year, the amount so
unpaid shall be added to the Class A Cumulative Unpaid Preference as of the
first day of the succeeding fiscal year. The Class A Cumulative Unpaid
Preference shall initially be zero and shall be reduced by distributions
received by the Class A Partner under Section 5.1(a) and Section 5.2(d)(i) of
this Agreement, but shall not be increased by any interest factor. The holder of
the Class A Interest shall be entitled to the allocations of income, gain, loss,
and deduction provided by Article IV.
(c) The Class B Interest shall have an initial Class B Capital
Account and an initial Class B Unrecovered Capital in the amount of the sum of
(i) $1,000,000, plus (ii) the excess of the book value of the SPC Transferred
Assets (as defined in the Partnership Formation Agreement) over the book value
of the liabilities included in the Assumed SPC Liabilities (as defined in the
Partnership Formation Agreement) as of the Effective Date (taking into account
the adjustments required to be made after the Effective Date under Section
1.2(b)(xiii) of the Partnership Formation Agreement); provided, however, that
the initial Class B Capital Account and initial Class B Unrecovered Capital
shall not exceed $2,250,000. The Class B Interest shall accrue a Class B
Preferred Return on a daily basis in an amount equal to $1,808.22 per day,
payable out of distributions by the Partnership in ac-
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<PAGE> 15
cordance with the provisions of Section 5.1(d) and 5.2(e)(i). To the extent that
the Class B Preferred Return for any fiscal year is not paid within 90 days
after the end of such year, the amount so unpaid shall be added to the Class B
Cumulative Unpaid Preference as of the first day of the succeeding fiscal year.
The Class B Cumulative Unpaid Preference shall initially be zero and be reduced
by distributions received by the Class B Partner under Section 5.1(c) or Section
5.2(e)(i) of this Agreement, but shall not be increased by any interest factor.
The holder of the Class B Interest shall be entitled to the allocations of
income, gain, loss, and deduction provided by Article IV.
(d) The Class C Interest shall have an initial Class C Capital
Account and an initial Class C Unrecovered Capital in an amount equal to
$1,000,000. The Class C Interest shall accrue a Class C Preferred Return on a
daily basis in an amount equal to $427.40 per day, payable out of distributions
by the Partnership in accordance with the provisions of Section 5.1(b) and
5.2(d) of this Agreement. To the extent that the Class C Preferred Return for
any fiscal year is not paid within 90 days after the end of such year, the
amount so unpaid shall be added to the Class C Cumulative Unpaid Preference as
of the first day of the succeeding fiscal year. The Class C Cumulative Unpaid
Preference shall initially be zero and shall be: (i) increased as of the last
day of any fiscal year of the Partnership by an amount equal to the sum of the
products of .115911% times the outstanding balance of the Class C Cumulative
Unpaid Preference on each day during such fiscal year; and (ii) reduced, as of
the date of any distributions received by the Class C Partner under Section
5.1(a) and Section 5.2(d)(i) of this Agreement during the fiscal year, by the
amount of such distributions. The holder of the Class C Interest shall be
entitled to the distributions described in Article V of this Agreement and the
allocations of income, gain, loss, and deduction provided by Article IV.
(e) The Class D Interest shall have an initial Class D Capital
Account in the amount of zero. The holder of the Class D Interest shall be
entitled to the distributions described in Article V and the allocations of
income, gain, loss, and deduction provided by Article IV.
Section 3.4. Capital Accounts.
(a) Separate Capital Accounts shall be maintained with respect to
the Class A, Class B, Class C, and Class D Interests of each Partner. As of any
date, the Capital Account of a Partner with respect to any class of Interests
shall equal: (i) the initial Capital Account with respect to such Interest, as
set forth in Section 3.1 or 3.2; increased by (ii) any additional Capital
Contributions of such Partner with respect to such Interest after the date of
this Agreement; increased by (iii) the cumulative amount of the Net Profits and
other items of income of the Partnership allocated to such Partner with respect
to such Interest under Article IV as of such date; decreased by (iv) the
cumulative amount of Net Losses and other items of loss or deduction allocated
to such Partner with respect to such Interest under Article IV as of such date;
and further decreased by (v) the amount of any cash and the
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Gross Asset Value of any Partnership Property distributed to such Partner with
respect to such Interest (net of any liability assumed by the Partner or to
which the distributed property is subject). If property other than cash is
distributed to one or more Partners, the value of such property shall be
restated on the books of the Partnership at its Gross Asset Value immediately
prior to such distribution and the Capital Account of each Partner shall be
restated to reflect such adjustment, determined as if the Partnership had sold
such asset for its Gross Asset Value and the resulting gain or loss had been
charged or credited to the Partners' Capital Accounts as provided in this
Agreement. Following such adjustment to the Partnership's books, the Capital
Accounts of the Partners receiving the distributions shall be adjusted to
reflect the amount of the distribution.
(b) Upon a transfer of any Interest in accordance with the terms of
this Agreement, the transferee shall succeed to the Capital Account of the
transferor in respect of the Interest acquired.
(c) In the event the Gross Asset Value of the Partnership's assets
is adjusted as provided in Section 1.42, the Capital Accounts of all Partners
shall be adjusted simultaneously to reflect the aggregate net adjustment to the
Gross Asset Value of the Partnership's assets, which shall be determined as if
the Partnership recognized Net Profit or Net Loss equal to the amount of such
aggregate net adjustment, and such Net Profit or Net Loss were allocated among
the Partners and debited or credited to their respective Capital Accounts in
accordance with this Agreement.
Section 3.5. Withdrawals; Interest. Except as expressly provided
herein, no Partner may withdraw from the Partnership or receive the return of,
or interest on, its Capital Contribution, Capital Account, or other amounts.
ARTICLE IV
Allocations
Section 4.1. Annual Allocations. As of the end of each fiscal year of the
Partnership the Net Loss or Net Profit for the year shall be determined and
allocated among the Partners in accordance with this Article IV.
Section 4.2. Allocation of Net Profit. The Net Profit for any fiscal
period shall be allocated as follows:
(i) First, 100% of such Net Profit shall be allocated to those
Partners, if any, whose Class A, Class B, Class C, or Class D Capital
Account has a negative balance, to the extent of (and in proportion to)
the amounts required to eliminate such negative Capital Account balances;
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(ii) Second, the remaining Net Profit, if any, shall be
allocated to the Class A Partner, to the extent of the amount required to
increase its Class A Capital Account balance to an amount equal to its
Class A Unrecovered Capital;
(iii) Third, the remaining Net Profit, if any, shall be
allocated to the Class B Partner, to the extent of the amount required to
increase its Class B Capital Account balance to an amount equal to its
Class B Unrecovered Capital;
(iv) Fourth, the remaining Net Profit, if any, shall be
allocated to the Class C Partner, to the extent of the amount required to
increase its Class C Capital Account balance to an amount equal to its
Class C Unrecovered Capital;
(v) Fifth, the remaining Net Profit, if any, shall be
allocated to the Class A Partner and the Class C Partner, to the extent of
(and in proportion to) the amount required (i) to increase the Class A
Capital Account balance to an amount equal to the Liquidation Preference
with respect to the Class A Interest as of such date and (ii) to increase
the Class C Capital Account balance to an amount equal to the Liquidation
Preference with respect to the Class C Interest as of such date;
(vi) Sixth, the remaining Net Profit, if any, shall be
allocated to the Class B Partner, to the extent of the amount required to
increase its Class B Capital Account balance to an amount equal to the
Liquidation Preference with respect to the Class B Interest as of such
date; and
(vii) Seventh, the remaining Net Profit, if any, shall be
allocated 50% to the Class C Partner and 50% to the Class D Partner.
Section 4.3. Allocation of Net Loss. The Net Loss for any period
shall be allocated among the Partners as follows:
(a) First, such Net Loss shall be allocated to the Class C
Partner and the Class D Partner, to the extent of (and in proportion to)
the amounts required to (i) reduce the Class D Capital Account balance to
zero and (ii) reduce the Class C Capital Account to an amount equal to its
Class C Liquidation Preference;
(b) Second, the remaining Net Loss, if any, shall be allocated
100% to the Class B Partner, until its Class B Capital Account has been
reduced to an amount equal to its Class B Unrecovered Capital;
(c) Third, the remaining Net Loss, if any, shall be allocated
to the Class A Partner and the Class C Partner, to the extent of (and in
proportion to) the amount required to (i) reduce the Class A Capital
Account to an amount equal to its Class A Unrecovered Capital and (ii)
reduce the Class C Capital Account to an amount equal to the Class C
Unrecovered Capital;
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(d) Fourth, the remaining Net Loss, if any, shall be allocated
100% to the Class C Partner, until the Class C Capital Account has been
reduced to zero;
(e) Fifth, the remaining Net Loss, if any, shall be allocated
100% to the Class B Partner, until the Class B Capital Account has been
reduced to zero;
(f) Sixth, the remaining Net Loss, if any, shall be allocated
100% to the Class A Partner, until the Class A Capital Account has been
reduced to zero; and
(g) Seventh, the remaining Net Loss, if any, shall be
allocated 50% to the Class C Partner and 50% to the Class D Partner.
Section 4.4. Compliance with Section 704(b) of the Code. The
allocations set forth in this Article IV are intended to allocate Net Profits
and Net Losses to the Partners in compliance with the requirements of section
704(b) of the Code and the Treasury Regulations promulgated thereunder. To this
end, solely for purposes of Section 4.2 and 4.3, the Capital Account with
respect to each Class of Interest shall be debited by the items described in
ss.ss. 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6) of the Regulations promulgated under section 704(b) of
the Code. If the General Partner reasonably determines that the allocation of
Net Profits or Net Losses pursuant to the provisions of this Article IV does not
satisfy the requirements of section 704(b) of the Code or the Treasury
Regulations thereunder (including the minimum gain chargeback requirement of ss.
1.704-2 of the Treasury Regulations and the qualified income offset requirement
of ss. 1.704-1(b)(2)(d) of the Treasury Regulations), then notwithstanding
anything to the contrary contained in this Agreement, Net Profits and Net Losses
shall be allocated in such manner as the General Partner shall reasonably
determine to be required by section 704(b) of the Code and the Treasury
Regulations promulgated thereunder; provided, however, that any such change in
the allocation of Net Profits or Net Losses (or any item included therein) may
not change the manner in which distributions are required to be made under this
Agreement.
Section 4.5. Allocations Pursuant to Section 704(c) of the Code. In
accordance with section 704(c) of the Code and the Regulations thereunder,
income, gain, loss, and deduction with respect to any property contributed to
the capital of the Partnership shall, solely for tax purposes, be allocated
among the Partners so as to take account of any variation between the adjusted
basis of such property to the Partnership for federal income tax purposes and
its initial Gross Asset Value. In the event the Gross Asset Value of any
Partnership asset is adjusted pursuant to Section 1.42, subsequent allocations
of income, gain, loss, and deduction with respect to such asset shall take
account of any variation between the adjusted basis of such asset for federal
income tax purposes and its Gross Asset Value in the same manner as under
section 704(c) of the Code and the Regulations thereunder. Any elections or
other decisions relating to such allocations shall be made by the General
Partner in any manner that reasonably reflects the purpose and intention of this
Agreement. Allocations
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pursuant to this Section 4.5 are solely for purposes of federal, state, and
local taxes and shall not affect, or in any way be taken into account in
computing, any Partner's Capital Account or share of Net Profits, Net Losses,
other items, or distributions pursuant to any provision of this Agreement.
Section 4.6. Changes in Partners' Interests. If during any fiscal
period of the Partnership there is a change in any Partner's Interest as a
result of the admission of one or more Partners, the withdrawal of a Partner; or
a transfer of a Partner's Interest that does not result in the termination of
the Partnership for federal income tax purposes, the Net Profit, Net Loss or any
other item allocable to the Partners under this Article IV for the period shall
be allocated among the Partners so as to reflect their varying interests in the
Partnership during the period. In the event that the change in the interests of
the Partners results from the admission or withdrawal of a Partner, the
allocation of Net Profit, Net Loss, or any other item allocable among the
Partners under this Article IV shall be made on the basis of an interim closing
of the Partnership's books as of each date on which a Partner is admitted to or
withdraws from the Partnership. In the event that the change in the Interests of
the Partners results from a transfer of all or any portion of an Interest by a
Partner, the Net Profit, Net Loss, or any other items allocable among the
Partners under this Article IV shall be determined on a daily, monthly, or other
basis, as determined by the General Partner using any permissible method under
section 706 of the Code and the Treasury Regulations promulgated thereunder.
Section 4.7. Special Allocations Relating to Partnership-Level
Taxes. Notwithstanding anything to the contrary herein, in the event that any
state, local or other income tax imposed on the Partnership as an entity (such
as the Illinois Personal Property Tax Replacement Income Tax) is reduced by
reason of the holding of an Interest by any Partner, no part of the expense of
the Partnership for such tax shall be allocated to such Partner.
ARTICLE V
Distributions
Section 5.1. Distributions of Distributable Cash. Within 30 days after the end
of each fiscal quarter (60 days in the case of the final quarter of any fiscal
year), the General Partner shall cause the Partnership to distribute the amount
of the Partnership's Distributable Cash for the portion of the fiscal year
ending on the last day of such fiscal quarter (to the extent such Distributable
Cash has not previously been distributed). Such distributions shall be made in
the following order of priority:
(a) First, such Distributable Cash, if any, shall be
distributed to the Class A Partner and the Class C Partner, to the extent
of and in proportion to the amount required to reduce the Class A
Cumulative Unpaid Preference and the Class C Cumulative Unpaid Preference
to zero;
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(b) Second, the remaining Distributable Cash, if any, shall be
distributed to the Class A Partner and the Class C Partner, until (i) the
Class A Partner has received aggregate distributions under this subsection
(b) and Section 5.2(d)(ii) for the year equal to the Class A Preferred
Return which has accrued for the portion of the fiscal year ending on the
last day of the fiscal quarter, and (ii) the Class C Partner has received
aggregate distributions under this subsection (b) and Section 5.2(d) (ii)
for the year equal to the Class C Preferred Return which has accrued for
the portion of the fiscal year ending on the last day of the fiscal
quarter, in proportion to the amounts described in (i) and (ii);
(c) Third, the remaining Distributable Cash, if any, shall be
distributed to the Class B Partner until the Class B Cumulative Unpaid
Preference of such Partner has been reduced to zero; and
(d) Fourth, the remaining Distributable Cash, if any, shall be
distributed to the Class B Partner, until the Class B Partner has received
aggregate distributions under this subsection (d) and Section 5.2(e)(ii)
for the year equal to the Class B Preferred Return which has accrued for
the portion of the fiscal year ending on the last day of the fiscal
quarter;
(e) [Fifth, the General Partner shall cause any remaining
Distributable Cash to be distributed 50% to the Class C Partner and 50% to
the Class D Partner; provided, however, that the General Partner may, for
purposes of determining the amount to be distributed under this subsection
(e) with respect to the first three fiscal quarters of any fiscal year,
establish a reasonable reserve for future distributions required under
subsections (a) through (d) of this Section 5.1 for such fiscal year, but
only if the General Partner reasonably believes that there will not be
enough Distributable Cash in future quarters of such fiscal year to make
future distributions of the amounts required to be distributed under
paragraphs (a) through (d) of this Section 5.1 for the year.
Section 5.2. Distributions of Capital Transaction Proceeds. As soon
as reasonably practicable after the completion of a Capital Transaction, the
General Partner shall cause the Partnership to distribute the Partnership's
Capital Transaction Proceeds attributable to such Capital Transaction. Such
Capital Transaction Proceeds shall be distributed in the following order of
priority:
(a) First, such Capital Transaction Proceeds, if any, shall be
distributed 100% to the Class A Partner until its Class A Unrecovered
Capital has been reduced to zero;
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(b) Second, the remaining Capital Transaction Proceeds, if
any, shall be distributed 100% to the Class B Partner until its Class B
Unrecovered Capital has been reduced to zero;
(c) Third, the remaining Capital Transaction Proceeds, if any,
shall be distributed 100% to the Class C Partner until its Class C
Unrecovered Capital has been reduced to zero;
(d) Fourth, the remaining Capital Transaction Proceeds, if
any, shall be distributed to the Class A Partner and the Class C Partner
(i) to the extent of (and in proportion to) the amount required to reduce
the Class A Cumulative Unpaid Preference and the Class C Cumulative Unpaid
Preference to zero, and (ii) then, to the extent of (and in proportion to)
the amount of any unpaid Class A Preferred Return and unpaid Class C
Preferred Return which has accrued as of the date of the distribution;
(e) Fifth, the remaining Capital Transaction Proceeds, if any,
shall be distributed to the Class B Partner (i) in the amount required to
reduce the Class B Cumulative Unpaid Preference to zero, and (ii) then in
the amount of any unpaid Class B Preferred Return which has accrued as of
the date of the distribution; and
(f) Sixth, the remaining Capital Transaction Proceeds, if any,
shall be distributed 50% to the Class C Partner and 50% to the Class D
Partner.
Section 5.3. Treatment of Taxes Withheld; Distributions With Respect
to Certain State and Local Taxes. All amounts withheld or paid by the
Partnership pursuant to the Code or any provision of any state or local tax law
with respect to any payment, distribution, or allocation to the Partners shall
be treated as amounts distributed to such Partners pursuant to this Article V
and shall be debited to their respective Capital Accounts accordingly.
Notwithstanding anything to the contrary herein, in the event that any state,
local or other income tax imposed on the Partnership as an entity (such as the
Illinois Personal Property Tax Replacement Income Tax) for any fiscal year is
reduced by reason of the holding of an Interest by any Partner, an amount equal
to the reduction attributable to such Partner shall be distributed to such
Partner within 60 days after the end of the fiscal year.
Section 5.4. Distributions of Certain Proceeds. The parties agree
that notwithstanding any provision of this Agreement, proceeds from a loan or
refinancing of existing indebtedness or from a sale of a material portion of the
Garage Management Business (other than a Capital Transaction) may not be
distributed to the Partners under Section 5.2 or any other provision of this
Agreement, until the Partners have agreed on appropriate adjustments to
distributions, including distributions in respect of the respective Class A,
Class B, and Class C Preferred Returns.
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ARTICLE VI
Fiscal Matters
Section 6.1. Records and Accounting.
(a) The General Partner shall keep a list of the names and addresses
of the Limited Partners and complete and accurate records and books of account
of the business of the Partnership at the Partnership's principal office. Each
Partner or its duly authorized representative shall have the right to inspect
the books and records of the Partnership (including, without limitation,
management agreements, leases, and other agreements, budgets (in the aggregate
and property-by-property), computer data, insurance contracts, employment
agreements, union contracts, nonaggregate financial data, and all other
information reasonably necessary to keep each Partner reasonably informed of the
Partnership's business) upon reasonable notice at all reasonable times during
normal business hours and to meet with the President and, with the consent of
SPC (which consent will not be unreasonably withheld). key executive officers of
SPC regarding the same. Associates hereby agrees that any such inspection or
meeting on its behalf will be made by one or more Associates' Representative or
by a person or persons selected by any Associates' Representative and reasonably
approved by the General Partner. In addition to the foregoing, SPC shall make
available to Associates' Representatives such non-aggregate and
property-by-property financial information and records regarding garages and
other parking facilities which are permitted to be managed, leased, or operated
by SPC or its Affiliates under Section 7.3(b) or Section 7.3(c) as Associates
shall reasonably request.
(b) The General Partner shall maintain the Partnership's books (i)
in accordance with the provisions of this Agreement and (ii) on the basis of a
calendar year (unless the Partnership is required under the Code to maintain a
different fiscal year).
Section 6.2. Financial Reports.
(a) Within 45 days after the end of each fiscal quarter (other than
the last quarter of the fiscal year), the General Partner shall cause to be
delivered to each Partner consolidated financial statements containing (i) an
unaudited balance sheet as of the end of the quarter and (ii) unaudited
statements of earnings and cash flow of the Partnership for the fiscal quarter
and for the period commencing at the end of the previous fiscal year and ending
with the end of such fiscal quarter, all of which shall be prepared in
accordance with GAAP (subject to year-end adjustments and the absence of
footnotes).
(b) Within 90 days after the close of the Partnership's fiscal year,
the General Partner will cause to be delivered to each Partner consolidated and
consolidating financial statements containing an unaudited balance sheet as of
the end of such fiscal year and unaudited statements of earnings and cash flow
for such fiscal year, all of which shall be
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prepared in accordance with GAAP. If any Limited Partner delivers to the General
Partner a written request for audited financial statements with respect to any
fiscal year on or before the 60th day before the end of such fiscal year, the
General Partner shall, at the Partnership's expense, cause audited statements
for such fiscal year to be prepared by the Accountants and delivered to the
Limited Partners not later than 90 days after the end of such fiscal year.
(c) The General Partner shall cause financial reports required to be
delivered hereunder to be in such form as is reasonably acceptable to Associates
and SPC.
Section 6.3. Tax Returns.
(a) The General Partner shall cause federal, state, and local income
tax returns for the Partnership to be prepared and timely filed with the
appropriate authorities as soon as reasonably practicable after the close of the
Partnership's taxable year. The General Partner may make such tax elections in
its sole discretion regarding depreciation methods and recovery periods, basis
adjustments, and any other federal, state, or local income tax election,
including, without limitation, the election referred to in section 754 of the
Code; provided, however, that if Associates requests in writing delivered to the
Partnership that the Partnership make an election under section 754 of the Code,
the General Partner shall cause the Partnership to make said election; and
provided further that any Partner who transfers all or any part of its Interest
shall bear all expenses arising as a result of the Partnership's election under
section 754 of the Code as it relates to the Interest so transferred. Each
Partner will, upon request, supply the information necessary to properly give
effect to such election.
(b) As soon as practicable after the close of each taxable year but
in no event later than ten (10) days after the filing of the Partnership's
federal income tax return, the General Partner shall cause to be delivered to
each Person who was a Partner during the fiscal year such tax information and
schedules as shall be necessary for the preparation by such Person of its income
tax returns, and such other tax returns and information as may be required in
various jurisdictions in which the Partnership is formed or qualified by the
nature of the Partnership's business.
Section 6.4. Partnership Funds. Pending use in the business of the
Partnership or distribution to the Partners, Partnership funds shall be
deposited in such bank account or accounts, or invested in such interest-bearing
taxable or nontaxable investments as the General Partner in its sole discretion
determines. Partnership funds shall not be commingled with funds of any other
person. Withdrawals from Partnership accounts or investments shall be made upon
such signatures as the General Partner may designate.
Section 6.5. Insurance. The Partnership shall maintain insurance on
the Partnership Properties and with respect to the Garage Management Business of
such types used in such activity as is consistent with insurance customarily
maintained by companies similarly situated. Any insurance maintained by the
Partnership with respect to Partnership
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Properties and with respect to the Garage Management Business shall name
Associates (and SP Parking Associates, if it exercises its rights under the SP
Parking Option Agreement) as an additional insured (and shall identify its
status as a limited partner of the Partnership) and shall provide at least 30
days prior notice of change (other than an increase in coverage), cancellation,
or non-renewal to Associates (and, if applicable, to SP Parking Associates).
ARTICLE VII
Rights, Powers, and Duties
of the General Partner
Section 7.1. Management Authority.
(a) Except as provided in Section 7.2, the General Partner shall
have (i) the exclusive right and authority to manage and control the business of
the Partnership and (ii) the authority and power on behalf and in the name of
the Partnership to perform all acts and enter into and perform all contracts and
other undertakings which it may deem necessary, advisable, or incidental to the
purposes of the Partnership set forth in Section 2.4. All decisions made for or
on behalf of the Partnership by the General Partner in accordance with this
Agreement shall be binding upon the Partnership.
(b) No Person dealing with the General Partner shall be required to
determine its authority to take any action on behalf of the Partnership or any
facts or circumstances bearing upon the existence of such authority. Any Person
dealing with the Partnership or the General Partner may rely upon a certificate
signed by the General Partner, thereunto duly authorized, as to (i) the identity
of the General Partner or any Limited Partner; (ii) the existence or
non-existence of any fact or facts which constitute a condition precedent to
acts by the General Partner or in any other manner germane to the affairs of the
Partnership or (iii) the identity of Persons who are authorized to execute and
deliver any instrument or document of or on behalf of the Partnership.
Section 7.2. Certain Limitations on the General Partner's Authority.
(a) Notwithstanding anything to the contrary in this Agreement, the
General Partner may not take (or cause the Partnership to take) any of the
following actions without the written consent of all the Limited Partners:
(i) Borrow any money or incur any Indebtedness (other than
Trade Accounts Payables or Indebtedness incurred in connection with
Permitted Liens) in excess of $250,000 in any fiscal year of the
Partnership;
(ii) Enter into or permit to exist any arrangements for the
leasing by the Partnership, as lessee, of any real or personal property
(or any interest therein) un-
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der any lease which (A) has a term in excess of 10 years or (B) provides
for base rent in excess of $500,000 per year;
(iii) Enter into any agreement (including any management
agreement, but excluding any lease), if such agreement (A) has a term in
excess of 10 years or (B) obligates the Partnership to pay more than
$400,000 per year to or for the benefit of the other party to such
agreement (or any Affiliate thereof);
(iv) Sell, transfer, convey, lease, or otherwise dispose of,
or grant options, warrants, or other rights with respect to, Partnership
Property (other than sales or other dispositions of obsolete assets or
assets being replaced in the ordinary course of business), except to the
extent that such sale, transfer, conveyance, or lease does not cause the
aggregate sale prices of all such transactions during the year to exceed
$150,000;
(v) Purchase or otherwise acquire (including, without
limitation, acquisition by way of Capitalized Lease), or commit to
purchase or otherwise acquire, any fixed asset if, after giving effect to
such purchase or other acquisition, the aggregate cost of all fixed assets
purchased or otherwise acquired by the Partnership exceeds $350,000 per
year; make loans in excess of $350,000 in any year to secure Garage
Management Business; or make any other loan for Partnership purposes in
excess of $50,000 per year;
(vi) Issue any Interests or other equity securities in the
Partnership after the Effective Date;
(vii) Take any action which would make it impossible to carry
on the business of the Partnership;
(viii) Take any action that would subject any Limited Partner
to liability as a general partner in any jurisdiction;
(ix) Confess a judgment against the Partnership;
(x) Possess Partnership Property, or assign its rights in
specific Partnership Property, for other than a purpose of the
Partnership;
(xi) Take any action in contravention of this Agreement or the
Act;
(xii) Settle any claim or related group of claims (A) if made
against the Partnership, for an amount requiring the Partnership to pay
$250,000 or more in excess of insurance proceeds available to the
Partnership to satisfy such claim or claims or (B) if made by the
Partnership, if such claim or claims are for an amount of $250,000 or
more; or
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(xiii) File a voluntary petition of bankruptcy, make an
assignment for the benefit of creditors, admit in writing the inability to
pay debts as they mature, or otherwise invoke general laws for the
protection for debtors.
All dollar figures set forth in this subsection (a) shall be increased as of
January 1 of each fiscal year (commencing January 1, 1995) by the percentage by
which the CPI reported as of the end of the immediately preceding fiscal year of
the Partnership shall have increased from the CPI reported as of the end of the
second preceding fiscal year of the Partnership.
(b) If the General Partner proposes to cause the Partnership to take
any of the actions described in paragraphs (i) through (vi) or (xii) of
subsection (a) hereof, it shall deliver written notice of such proposed action
(with reasonable details of the terms and conditions) to the Limited Partners
not later than 30 days prior to taking such action; provided, however, that if
circumstances not within the control of the General Partner prevents the General
Partner from providing 30 days' advance notice, then the General Partner shall
provide such advance written notice as is reasonably practicable under the
circumstances (but not less than 24 hours). If any Limited Partner fails to
object in writing to such action within 30 days after delivery of said notice by
the General Partner (or prior to the date on which such action is proposed to be
taken if fewer than 30 days' notice is provided in accordance with the previous
sentence), such Limited Partner shall be conclusively deemed to have granted its
consent to such proposed action.
(c) The Partners hereby expressly authorize the Partnership to enter
into a management agreement with Standard Auto Park, Inc. substantially in the
form prescribed by the Partnership Formation Agreement which may not be amended
without the consent of Associates.
Section 7.3. Certain Rights and Obligations of SPC and Affiliates.
(a) Except as expressly permitted by this Agreement or approved by
all the Limited Partners, during the term of this Agreement, SPC shall not,
except through the Partnership, (i) own, lease, manage, or operate, or permit
any of its Affiliates (including Myron C. Warshauer) to own, lease, manage, or
operate, any parking garage or other parking facility, (ii) invest in, own, or
otherwise participate in, or permit any of its Affiliates (including Myron C.
Warshauer) to invest in, own, or otherwise participate in, the development or
exploitation of any technology used or useful in the Garage Management Business
(including without limitation any technology in which AVID has an interest), or
(iii) otherwise engage in, invest in, or consult with respect to, or permit any
of its Affiliates (including Myron C. Warshauer) to engage in, invest in, or
consult with respect to, the Garage Management Business.
(b) Notwithstanding the provisions of subsection (a), Myron C.
Warshauer, SPC, Standard Parking Corporation MW, or any other Affiliate of SPC
owned 100%
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by Myron C. Warshauer may lease, operate, or manage (and receive all income,
profits, management fees, and other compensation of every kind and description
from such lease, operation, or management of) the Excluded Garages (as defined
below), but only so long as such garages or parking facilities constitute
Excluded Garages. Notwithstanding the foregoing, SPC may not lease, operate, or
manage (or receive any income, profits, management fees, or other compensation
of any kind or description from such lease, operation, or management of) any of
the Excluded Garages described in clause (y) below. If at any time Associates
delivers written notice to SPC to the effect that a garage or parking facility
that previously was an Excluded Garage is no longer defined as such, SPC shall
use reasonable best efforts to arrange for the Partnership to acquire the right
to manage, operate, or lease (and receive all income, profits, management fees,
and other compensation of every kind and description from such lease, operation,
or management of) such garage or parking facility as soon as practicable
thereafter. For purposes of this Agreement, the term "Excluded Garage" means any
garage or other parking facility with respect to which neither the Partnership
nor Standard Auto Park, Inc. could own, operate, manage, or lease without
causing Associates or any of its Affiliates (x) to be in breach of any contracts
to which they are parties or of any fiduciary or statutory obligations or (y) to
be a party in interest (within the meaning of ERISA) to such arrangement which
would be inconsistent with the fiduciary or statutory obligations of such
Affiliates. As of the date of this Agreement, the garages or other parking
facilities that currently constitute Excluded Garages are listed on Exhibit A.
(c) Subject to Section 7.5 and notwithstanding the provisions of
subsection (a):
(i) SPC or any of its Affiliates may continue to own, directly
or indirectly through a partnership or other entity, an interest in all of
the parking facilities listed in Exhibit B;
(ii) The Partnership, rather than SPC, shall manage the
parking facilities listed in paragraphs A and B of Exhibit B;
(iii) The management of the parking facilities listed in
paragraph C of Exhibit B shall be provided by Standard/Tremont (in the
case of the Theatre District Self Park), and by Standard/Wabash (in the
case of the Adams Wabash Self Park);
(iv) All compensation (whether in the form of management fees
or otherwise) payable by reason of the management of the parking
facilities listed in paragraph A of Exhibit B shall be paid to the
Partnership;
(v) The Partnership shall not receive any compensation of any
kind by reason of the management of the parking facility listed in
paragraph B of Exhibit B
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so long as Myron C. Warshauer or any of his Affiliates owns an interest in
such facility; and
(vi) All compensation (whether in the form of management fees
or otherwise) payable by reason of the management of the parking
facilities listed in paragraph C of Exhibit B shall be paid solely to
Standard/Tremont (in the case of the Theatre District Self Park) or
Standard/Wabash (in the case of the Adams Wabash Self Park), it being
acknowledged that the Partnership has no right to participate in such
compensation to any extent whatsoever.
(d) Nothing herein shall be construed as prohibiting SPC or any
Affiliate thereof from: (i) making any Investments or conducting any business
(other than a business or Investment which SPC or such Affiliate is prohibited
from conducting under subsection (a) hereof); (ii) making any Investment in
publicly-trade debt or equity securities of any issuer which is directly or
indirectly (through its Affiliates) engaged in the Garage Management Business,
so long as the aggregate amount of such securities held by SPC and its
Affiliates does not exceed 5% of the outstanding securities of the same class of
securities of the issuer and neither SPC nor any of its Affiliates is otherwise
in control of such issuer; or (iii) transacting business with anyone transacting
business with the Partnership; provided, however, that SPC shall not make or
permit to exist any Investment in any Person, except for (x) stocks, bonds, and
other Investments that put at risk not more than the principal amount of such
Investment and (y) other Investments outstanding on the Effective Date and
listed on Exhibit D. Notwithstanding anything else which is or might be implied
to the contrary, there shall be no such limitation on cash or Investments that
are replacements for SPC's interest in Sidcor (as defined in the Partnership
Formation Agreement), provided that, in connection herewith, SPC may not (A)
become a general partner or joint venturer (other than with respect to Sidcor),
(B) make any Investment that puts at risk more than the principal amount of such
Investment, nor (C) make any Investment which would reasonably be expected to
have a Material Adverse Effect. If the activities or Investments conducted or
held by SPC (other than activities conducted by SPC on behalf of the Partnership
in its capacity as General Partner) result in claims against the Partnership or
Associates or its Affiliates, SPC shall indemnify and hold harmless each such
Person for the amount of damage, loss, or expense suffered by such Person as a
result of such claims; and provided further that, to the extent that assets of
SPC (other than its Interest in the Partnership) are insufficient to pay the
indemnification required by this subsection (d), such indemnification shall be
payable solely out of distributions received by SPC from the Partnership or
proceeds received by SPC from any disposition of any portion of its Class B
Interest or Class D Interest; provided, however, that neither Associates nor any
of its Affiliates may initiate any action for purposes of seeking the
disposition of all or any portion of SPC's Interests in satisfaction of any
claim for indemnification hereunder. The right of Associates or any Affiliate
thereof to receive indemnification hereunder shall be such Person's sole
recourse, and in lieu of any and all other rights or remedies, for any damage,
loss, or expense suffered by such Person as a result of activities permitted by
this Agreement to be conducted by SPC outside of the Partnership.
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Section 7.4. Employees; Compensation; Life Insurance.
(a) The General Partner is authorized to offer employment to the
employees of SPC who are involved in the Garage Management Business. The wages,
salaries, and benefits of such employees shall be determined by the General
Partner. No employee, other than as listed on Exhibit C, shall have any
participation in the revenues or profits of the Partnership, and the Partnership
has not entered into, and may not enter into, any oral or written agreement with
any employee which confers on such employee any right to participate in the
capital or appreciation in the value of the Partnership.
(b) The Partnership is hereby authorized to enter into oral or
written employment agreements with Myron C. Warshauer (the "President") and
Sidney Warshauer (the "Chairman"), pursuant to which such individuals shall have
such duties as the General Partner may determine. Such employment agreements
shall provide that (i) Myron C. Warshauer shall devote his full business time
and attention to the business and affairs of the Partnership until at least age
65 (provided that if he retires prior to age 65, the sole remedies shall be that
Associates may become General Partner under Section 7.11 of this Agreement, and
the employment agreements of the President and Chairman shall be terminated, as
hereinafter provided); and (ii) Sidney Warshauer shall devote such time and
attention to Partnership matters as the General Partner determines in its sole
and absolute discretion to be necessary to the management of the Partnership's
business and affairs. Notwithstanding the foregoing, nothing herein shall be
construed to prevent Myron or Sidney Warshauer from devoting time and attention
to charitable and civic activities, personal investment activities, or the
management of garages and other parking facilities which Myron or Sidney
Warshauer or their respective Affiliates are permitted to manage or lease under
the terms of this Agreement. The Partnership shall pay the Chairman and
President salaries in the aggregate amount of $575,000 per annum, which shall be
increased as of January 1 of each year (commencing January 1, 1995) by the
percentage by which the CPI reported as of the end of the immediately preceding
fiscal year of the Partnership shall have increased from the CPI reported as of
the end of the second preceding fiscal year of the Partnership. Such salaries
shall be allocated between such Chairman and President as SPC shall determine in
its sole and absolute discretion. In addition, the Partnership shall provide
such benefits and perquisites to such executive officials as were provided to
the executive officials by SPC prior to the Effective Date and such other
benefits and perquisites as are reasonable and appropriate under the
circumstances. Notwithstanding anything to the contrary in this Agreement, the
obligation of the Partnership to pay the above-mentioned salaries and provide
for the above-mentioned benefits and perquisites shall: (x) survive the death of
either of the Chairman or the President, in which case the salary of the
deceased Chairman or President, as the case may be, shall be payable to the
survivor; (y) survive the Disability of either or both of the Chairman or
President, in which case the salaries shall continue to be paid as provided
hereunder; and (z) terminate upon (I) the death of both the Chairman and the
President, (II) the retirement of the President prior to age 65, or (III) the
death of the Chairman and the Disability or retirement of the President. If at
any time Associates becomes the General
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Partner of the Partnership pursuant to Section 7.11 of this Agreement, it shall
neither (A) terminate the employment agreement of the President or Chairman nor
(B) require Sidney Warshauer to devote more time and attention to the
Partnership's business and affairs in any fiscal year than was required by SPC
in any prior fiscal year.
(c) Except as otherwise provided in this Agreement, without the
advance written consent of all the Limited Partners, no Partner or any Affiliate
thereof may receive, directly or indirectly, any remuneration, compensation, or
benefit from the Partnership for the performance of services to the Partnership
or otherwise; provided, however, that nothing in this Agreement shall be
construed to prevent the Partnership from hiring Myron C. Warshauer's
descendants as employees on an arms-length basis under terms no less favorable
to the Partnership than would be available to a disinterested third party under
similar circumstances; and provided further, that if at any time Associates
becomes the General Partner of the Partnership pursuant to Section 7.11 of this
Agreement, nothing in this Agreement shall be construed to prevent the
Partnership from entering into transactions with Affiliates of JMB Realty
Corporation on an arms-length basis under terms no less favorable to the
Partnership than would be available to a disinterested third party under similar
circumstances.
(d) The Partnership shall, at its expense, procure and maintain term
insurance policies on the life of Myron C. Warshauer in the following amounts
and on the following terms:
(i) A $2 million policy, which shall be acquired and owned by
the Myron C. Warshauer Irrevocable Trust dated November 15, 1993, and held
under a split-dollar arrangement, pursuant to which the Partnership shall
be entitled to a return (out of any proceeds) of the lesser of the amount
of premiums which it pays and the cash value of the policy. The
Partnership shall enter into an irrevocable death benefit agreement with
Myron C. Warshauer (under terms substantially the same as the death
benefit agreement now in existence between Myron C. Warshauer and SPC),
pursuant to which the Partnership shall pay its share of any death benefit
under said life insurance policy (grossed up by the amount of any Taxes
payable by the Trust as a result of the receipt of said payment) to the
aforementioned Trust;
(ii) Various policies aggregating $2 million, which shall be
owned by the Partnership and which shall name as beneficiaries certain
executives who are parties to agreements to acquire portions of the
Interests of SPC as permitted under Section 7.10.
(iii) A $2 million policy, which shall be owned by the
Partnership and which shall name Associates as beneficiary.
In addition, the Partnership shall, at its expense, maintain the insurance
policies which are transferred to the Partnership by SPC pursuant to the
Partnership Formation Agreement.
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Section 7.5. Expenses. The Partnership shall be responsible for
paying all of its own expenses, including, but not limited to, wages, salaries,
and benefits of its employees (other than the Chairman or President, except to
the extent permitted by Section 7.4(b)), rent for office space, onsite managers,
utilities, telephone, supplies, legal and accounting expenses, and travel and
entertainment. The Partnership (i) shall not pay or bear any of the property
level expenses (including rent for such properties) incurred in connection with
the garages and other parking facilities permitted to be owned, leased, managed,
or operated by SPC or its Affiliates under Section 7.3(b) or Section 7.3(c) of
this Agreement, (ii) shall permit SPC, Standard Parking Corporation MW, or any
of their Affiliates to use Partnership personnel or facilities in connection
with the management, lease, or operation of garage or parking facilities which
SPC, Standard Parking Corporation MW, or any of their Affiliates is permitted to
manage, lease, or operate under Section 7.3(b), without reimbursement for
overhead expenses attributable thereto, and (iii) shall be entitled to
reimbursement for overhead expenses which are attributable to garage or parking
facilities entitled to be owned, managed, leased, or operated by SPC or its
Affiliates under Section 7.3(c) in accordance with arrangements in effect prior
to the Effective Date, as evidenced by the financial statements of SPC for the
period ended December 31,1992.
Section 7.6. Tax Matters Partner.
(a) The General Partner is hereby appointed the "Tax Matters
Partner" of the Partnership for all purposes pursuant to sections 6221-6231 of
the Code. As Tax Matters Partner, the General Partner will (i) furnish to each
Partner or Assignee affected by an audit of the Partnership income tax returns a
copy of each notice or other communication received from the Internal Revenue
Service or applicable state authority, (ii) keep each such Partner and Assignee
informed of any administrative or judicial proceeding, as required by section
6623(g) of the Code, (iii) allow each such Partner and Assignee an opportunity
to participate in all such administrative and judicial proceedings, and (iv)
take any action necessary to cause each Partner to be entitled to all notices
specified in section 6223(a) of the Code;
(b) The Tax Matters Partner has the authority to do all or any of
the following:
(i) File a petition as contemplated in section 6226(a) or 6228
of the Code;
(ii) Intervene in any action as contemplated in section
6226(b) of the Code;
(iii) File any request contemplated in section 6227(b) of the
Code; and
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(iv) With the consent of all the Limited Partners, enter into
an agreement extending the period of limitations as contemplated in
section 6229(b)(1)(B) of the Code.
The Tax Matters Partner may not litigate any federal income tax controversy in a
forum other than the U.S. Tax Court without obtaining the consent of all the
Limited Partners.
(c) The Partnership is not obligated to pay any fees or other
compensation to the Tax Matters Partner in its capacity as such. However, the
Partnership will reimburse the Tax Matters Partner for any and all out-of-pocket
costs and expenses (including attorneys' and other professional fees) reasonably
incurred by it in its capacity as Tax Matters Partner. Each Partner who elects
to participate in Partnership administrative tax proceedings will be responsible
for its own expenses incurred in connection with such participation. In
addition, the cost of any adjustments to a Partner and the cost of any resulting
audits or adjustments of a Partner's tax return will be borne solely by the
affected Partner. The Tax Matters Partner shall be entitled to rely on the
advice of Legal Counsel as to the nature and scope of its responsibilities and
authority as Tax Matters Partner, and any act or omission of the Tax Matters
Partner pursuant to such advice shall in no event subject the Tax Matters
Partner to liability to the Partnership or any Limited Partner.
Section 7.7. Limitation on Liability of General Partner For Certain
Acts or Omissions. Neither the General Partner, any Affiliate of the General
Partner, nor any officer, director, employee, or agent of the General Partner
shall be subject to any liability for damages or losses to the Partnership or to
any Partner on account of the act or omission of the General Partner, the
Affiliate, officer, director, employee or agent thereof, so long as such act or
omission was not done fraudulently or in bad faith or as a result of willful and
wanton misconduct or gross negligence.
Section 7.8. Indemnification. To the maximum extent permitted by
law, the Partnership will indemnify any Person, including the General Partner or
any officer, director, agent, employee, Affiliate, or stockholder thereof, who
was or is a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (including any action by or in the right of the
Partnership) by reason of any acts, omissions, or alleged acts or omissions by
such Person on behalf of the Partnership, against expenses for which such Person
has not otherwise been reimbursed (including attorneys' fees, judgments, fines,
and amounts paid in settlement) actually and reasonably incurred in connection
with such action, suit, or proceeding, so long as such act or omission was not
done fraudulently or in bad faith or as a result of willful and wanton
misconduct or gross negligence or, with respect to any criminal action or
proceeding, such Person had no reasonable cause to believe his conduct was
unlawful. Expenses, including reasonable attorneys' fees, incurred by such
Person asserting a right to indemnification hereunder in defending any such
civil, criminal, administrative or investigative action, suit or proceeding may,
in the reasonable discretion of the General Partner, be
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paid by the Partnership in advance of the final disposition of such action, suit
or proceeding upon receipt of a written undertaking by or on behalf of such
Person to repay such amount to the extent it shall ultimately be determined that
such Person is not entitled to indemnification under this Section 7.8. The
General Partner and any Affiliate, officer, director, stockholder, employee, or
agent thereof shall be entitled to rely on the advice of counsel, public
accountants, or other independent experts and any act or omission of the General
Partner and any Affiliate, officer, director, stockholder, employee, or agent
thereof pursuant to such advice shall in no event subject such Person to
liability to the Partnership or any Limited Partner. The satisfaction of any
indemnification shall be from and limited to Partnership assets, and no Partner
shall have any personal liability on account thereof.
Section 7.9. Event of Withdrawal of the General Partner.
(a) Except as provided in Section 7.11, if, upon an Event of
Withdrawal with respect to a General Partner, such General Partner is the sole
General Partner of the Partnership, then the Partnership shall dissolve
immediately, unless all the Limited Partners elect in writing within 90 days
after such Event of Withdrawal to admit a successor General Partner, whose
admission shall be effective as of the date the prior General Partner ceased
being a General Partner of the Partnership. The Event of Withdrawal of the
General Partner shall not affect any rights or obligations of such General
Partner which matured prior to such Event of Withdrawal or the value, if any, of
its Interest at the time of such event.
(b) Upon an Event of Withdrawal of a General Partner and the
continuation of the business of the Partnership by a successor General Partner
pursuant to subsection (a), the successor General Partner shall have the
authority to make such amendments to this Agreement or the Certificate, and
shall cause to be executed and filed for recordation such amendments or other
documents or instruments, as in any such case are necessary or appropriate to
reflect the Event of Withdrawal with respect to the former General Partner and
the appointment of the successor General Partner. Consent to such amendments
shall be deemed to have been given by each Limited Partner by execution of this
Agreement.
Section 7.10. Restrictions on Withdrawal of General Partner or
Transfer of General Partner's Interest. Except in the case of (i) an assignment
of the Class A Interest pursuant to the SP Parking Option Agreement, (ii) an
assignment of the Class C Interest by Associates pursuant to Section 8.6 at such
time as Associates is the General Partner pursuant to Section 7.11, (iii) an
assignment of any portion of SPC's Class B Interest or Class D Interest pursuant
to an agreement between SPC and an employee, or (iv) an assignment of any
portion of SPC's Class B Interest or Class D Interest to any descendant or other
relative of Myron C. Warshauer, the General Partner may not voluntarily withdraw
from the Partnership or sell, transfer, assign, or grant a security or other
interest in, all or any part of its Interest (including its Interest as Limited
Partner), without the consent of all the Limited Partners. The parties hereto
agree that in the event that any Person acquires any portion of SPC's Interest
under the circumstances described in clause (iii) or (iv) of this Section
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7.10, such Person shall be admitted to the Partnership as a Limited Partner
without the consent of any other Partner; provided that any Person who acquires
any portion of SPC's Interest under the circumstances described in clause (iii)
or (iv) shall not be entitled to vote on or consent to any matter requiring the
vote or consent of Limited Partners under any provision of this Agreement
(including without limitation Section 7.2, but excluding Section 10.2 to the
extent any amendment referred to therein would (x) affect such Person's right to
receive distributions or share in Net Profits or Net Losses under this Agreement
or (b) subject such Person to personal liability for the debts, obligations, and
liabilities of the Partnership), and any such provision of this Agreement shall
be applied by disregarding the Interests acquired by such Persons under clause
(iii) or (iv).
Section 7.11. Death, Disability or Termination of Employment of
Myron C. Warshauer; Removal of the General Partner.
(a) In the event of (w) the death or Disability of Myron C.
Warshauer, (x) the retirement by Myron C. Warshauer from full business time
employment with the Partnership within the meaning of Section 7.4(b), (y) a
Change of Control (within the meaning of subsection (d)) with respect to SPC or
(z) the commencement of voluntary dissolution proceedings by SPC, Associates may
elect, within 60 days after the occurrence of such event, to invoke the
provisions of this Section 7.11 by delivery of written notice to SPC to such
effect. In the event of the removal of SPC pursuant to Section 7.12, the
provisions of this Section 7.11 shall automatically apply. In any case where
this Section 7.11 applies:
(i) Effective as of the date on which such notice is delivered
to SPC (or the date on which the General Partner is removed), (A) SPC
shall be deemed to withdraw from the Partnership as General Partner and be
admitted to the Partnership as Limited Partner with respect to its Class B
Interest and Class D Interest, (B) Associates shall be deemed to withdraw
from the Partnership as Limited Partner and be admitted to the Partnership
as General Partner with respect to its Class C Interest, (C) SPC's
authority to manage the Partnership's business and affairs shall
terminate, (D) Associates shall continue the business of the Partnership
as the substitute General Partner and shall have all the rights and
obligations to manage the Partnership as are provided under this
Agreement, and (E) all references in this Agreement to "General Partner"
shall be deemed to refer to Associates, rather than SPC.
(ii) Notwithstanding the election under this subsection (a),
all rights of SPC, Associates, and SP Parking Associates (if it is
admitted to the Partnership as a Limited Partner), as holders of the Class
A, Class B, Class C, or Class D Interests, to distributions under Article
V and allocations under Article IV shall remain in full force and effect.
(b) Upon the admission of Associates to the Partnership as a General
Partner pursuant to this Section 7.11, it shall make and file such amendments to
the Certificate,
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and shall cause to be executed and filed for recordation such other amendments,
documents, or instruments as are necessary or appropriate, to reflect the
withdrawal of SPC as General Partner and the admission of Associates as
substitute General Partner. Consent to such amendments shall be deemed to have
been given by each Limited Partner by execution of this Agreement.
(c) If, during any period in which Associates is the General Partner, (i)
the Partnership receives a bona fide written offer (the "Purchase Offer") to
purchase all or substantially all of the Partnership's business for a purchase
price payable in cash at closing equal to or greater than ten (10) times the
average of the Partnership's Distributable Cash for each of the two calendar
years immediately preceding the calendar year in which such Purchase Offer is
received, SPC (or any Person designated by SPC in writing) shall have the right,
exercisable in writing (the "SPC Purchase Notice") on or prior to the 45th day
after the receipt by SPC of written notice from Associates containing a copy of
the Purchase Offer, to purchase the entire Interest of Associates and of SP
Parking Associates, if it is then a Partner, for a purchase price equal to the
Fair Market Value of such Interest. (Each of Associates and SP Parking
Associates is hereinafter referred to as a "Selling Partner.") For purposes of
this subsection (c), the Fair Market Value of the Interest of a Selling Partner
shall be the amount that would be distributable to such Selling Partner under
Section 5.2 of this Agreement, if the Partnership had (A) accepted the
aforementioned written offer and sold all its assets and business for the
purchase price set forth therein, and (B) distributed the proceeds of such sale,
after payment of all expenses of the sale and Partnership liabilities, in
accordance with this Agreement. If SPC exercises its right to purchase (or to
cause its designee to purchase) the Interests of the Selling Partners, the
closing of each such purchase shall occur at such time, date, and place as SPC
and the Selling Partners shall agree, but in any event not later than 60 days
after the delivery of the SPC Purchase Notice by SPC to the Selling Partners. At
the closing, SPC (or its designee) shall pay the purchase price in immediately
available funds, and each Selling Partner shall deliver to SPC (or its designee)
an instrument or instruments in form and substance reasonably satisfactory to
SPC (or such designee), assigning the entire Interest of such Selling Partner to
SPC (or such designee), free and clear of all liens and encumbrances. If SPC
does not exercise its right to acquire the Interest of Associates and SP Parking
Associates under this subsection (c) within the 45-day period prescribed above,
Associates may proceed to accept the Purchase Offer on the terms set forth
therein without the consent of SPC; provided, however, that if the terms of the
Purchase Offer are thereafter amended or modified in any material manner, or if
the transaction contemplated by the Purchase Offer is not closed in accordance
with the terms specified therein within 180 days after the expiration of the
45-day period for delivery of the SPC Purchase Notice, the Purchase Offer shall
be deemed to be a new Purchase Offer and the provisions of this subsection (c)
shall thereupon apply as if such new Purchase Offer were received by Associates
upon the expiration of said 180-day period or the date on which the original
Purchase Offer is so amended and modified.
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(d) For purposes of this Section 7.11, a Change of Control shall be
deemed to occur with respect to SPC if (and only if): (a) any Person(s) other
than Myron C. Warshauer and his Affiliates and relatives (the "Current
Stockholder Group") acquire the right, by virtue of their ownership of voting
securities of SPC or otherwise, to elect or designate a majority of the members
of the Board of Directors of SPC; or (b) the stockholders of SPC approve an
agreement to merge or consolidate with another corporation, unless following the
consummation of such merger or consolidation the Current Stockholder Group,
singly or jointly, shall continue to have the right, by virtue of its ownership
of voting securities or otherwise, to elect or designate a majority of the
members of the Board of Directors of the surviving corporation.
Section 7.12. Removal of General Partner. SPC may be removed as the
General Partner by the vote of all the Limited Partners, if the Partnership
fails to earn a profit (determined in accordance with GAAP) for any two
consecutive calendar years ("Loss Years"). Any action of the Limited Partners to
remove the General Partner pursuant to this Section 7.12 shall not be effective
unless: (i) Written notice of the meeting at which a vote to remove the General
Partner will be taken is delivered to all the Partners (including the General
Partner) not later than 30 days prior to the commencement of the aforementioned
meeting and 120 days after the close of the second Loss Year; (ii) the General
Partner is given an opportunity at the meeting of the Partners to defend its
performance as General Partner; and (iii) at the meeting all the Limited
Partners vote to remove the General Partner. In the event the Limited Partners
vote to remove the General Partner in accordance with this Section 7.12, such
removal shall be effective as of the date on which such vote is taken, and the
provisions of Section 7.11 shall govern with respect to admission of Associates
as substitute General Partner and the continuation of the Partnership's
business.
ARTICLE VIII
Limited Partners
Section 8.1. Rights And Obligations Of Limited Partners And Assignees.
(a) A Limited Partner, as such, shall not be personally liable for
any of the debts, liabilities, contracts, or any other obligations of the
Partnership. Notwithstanding the foregoing, in accordance with Section 17-608 of
the Act, but not otherwise, a Limited Partner may under certain circumstances be
required to return to the Partnership, for the benefit of Partnership creditors,
amounts previously distributed to such Limited Partner as a return of capital.
(b) The General Partner shall not have any personal liability for
the repayment of the Capital Contribution of any Limited Partner.
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(c) No Limited Partner may participate in the control of the
business of the Partnership, transact any business for the Partnership, or have
any authority to sign for or bind the Partnership. The foregoing does not limit
the right of any Limited Partner to consent to major business decisions as set
forth in this Agreement.
Section 8.2. Assignments By Limited Partners And Assignees.
(a) Subject to any restrictions on transferability created by
operation of law or contained elsewhere in this Agreement, a Limited Partner may
not assign (which term shall include, for purposes of this Article VIII, a sale,
gift, pledge, hypothecation, or other disposition or transfer), all or part of
its Interest unless all the following conditions are satisfied:
(i) The assignee consents in writing in form reasonably
satisfactory to the General Partner to be bound by the terms of this
Agreement:
(ii) Such assignment is made in form reasonably satisfactory
to the General Partner;
(iii) Except in the case of an assignment described in clause
(i), (ii), (iii), or (iv) of Section 7.10 (with respect to which the
consent of the General Partner shall not be required), the General Partner
has consented in writing to such assignment, which consent may be withheld
in the sole and absolute discretion of the General Partner;
(iv) The assignor agrees to pay all the costs reasonably
incurred by the Partnership in connection with such assignment; and
(v) The assignor, Assignee, and (if deemed necessary by the
General Partner) all other Partners have executed all such certificates
and other documents and performed all such acts as the General Partner
reasonably deems necessary or appropriate to effect a valid transfer and
to preserve the rights, status, and existence of the Partnership.
(b) Notwithstanding subsection (a), no assignment of the Interest of
a Limited Partner will be permitted if such assignment would (i) jeopardize the
status of the Partnership as a partnership for federal income tax purposes, as
reasonably determined by the General Partner following consultation with Legal
Counsel, (ii) cause a termination of the Partnership for purposes of the
then-applicable provisions of the Code, as reasonably determined by the General
Partner following consultation with Legal Counsel, (iii) violate or cause the
Partnership to violate any applicable law or governmental rule or regulation,
including without limitation any applicable federal or state securities law, or
(iv) cause the
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Partnership to be deemed to be an "Investment Company" for purposes of the
Investment Company Act of 1940, as amended.
(c) If Limited Partner assigns its entire interest in the
Partnership, such Partner shall, upon the effective date of such assignment,
cease to be a Limited Partner for all purposes but shall not be relieved of any
obligations it may have had under this Agreement before the date of such
assignment. Unless otherwise consented to by the General Partner, the effective
date of an assignment under this Section 8.2 shall be the first day of the first
full calendar month following receipt by the General Partner of written notice
of assignment and fulfillment of all conditions precedent to such assignment
provided for in this Agreement.
(d) Unless and until an Assignee of an Interest in the Partnership
becomes a Substitute Limited Partner, such Assignee shall not be entitled to
exercise any of the rights provided to a limited partner under the law of the
State of Delaware or any other jurisdiction purporting by statute to grant
express rights to a limited partner of a limited partnership, except that such
Assignee shall be entitled to allocations under Article IV attributable to any
Interest in the Partnership acquired by reason of an assignment in accordance
with Section 4.6, and any distributions made with respect thereto under Article
V arising after the effective date of the assignment. An Assignee shall have the
right to become a Substitute Limited Partner only upon the satisfaction of the
following conditions:
(i) If deemed necessary by the General Partner an amended
Certificate has been duly executed and filed in the appropriate public
offices;
(ii) The conditions of Section 8.2(a) have been satisfied;
(iii) Except in the case of an assignment described in clause
(i) or (ii) of Section 7.10, the General Partner has consented in writing
to such substitution, which consent may be withheld in the sole and
absolute discretion of the General Partner; and
(iv) The assignor and Assignee execute and acknowledge such
other instruments, in form and substance satisfactory to the General
Partner, as the General Partner may deem necessary or desirable to effect
such substitution.
(e) By executing this Agreement, each Limited Partner shall be
deemed to have consented to any assignment consented to by the General Partner
and to the admission of an assignee as a Substitute Limited Partner permitted by
the General Partner. Each Limited Partner agrees, upon request of the General
Partner, to execute such certificates or other documents and perform such acts
as the General Partner deems appropriate to preserve the status of the
Partnership as a limited partnership after the completion of any assignment of
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an Interest in the Partnership pursuant to the terms of this Agreement under the
laws of the jurisdiction in which the Partnership is doing business.
(f) Any purported assignment of an Interest of a Limited Partner in
violation of the provisions of this Agreement is void.
Section 8.3. Death, Bankruptcy, or Incapacity of Limited Partner. In
the event an individual Limited Partner or Assignee dies or is adjudged
incompetent, or in the event of the Bankruptcy of a Limited Partner or Assignee,
the Partnership shall not dissolve, and the duly appointed and qualified legal
representative of such Limited Partner or Assignee shall succeed to the interest
of such Limited Partner or Assignee upon furnishing to the General Partner
satisfactory evidence of such representative's appointment and authority. Such
legal representative (i) shall have only the status of an Assignee (except that
the Executor or Administrator of the estate of a deceased Limited Partner shall
have all the rights of a Limited Partner for the purpose of settling his estate
or administering his property), and (ii) may assign the interest of such Limited
Partner or Assignee only as permitted by Section 8.2 and the Act. The provisions
of clause (ii) shall apply to any assignment or distribution by any legal
representative to the beneficiaries under the will of, or the heirs at law of,
any deceased Limited Partner or Assignee. Section 8.4. Certain Rights and
Obligations of Associates.
(a) Excluding garages presently owned or managed by Affiliates of
Associates and renewals or modifications of such arrangements, Associates shall
use reasonable good faith efforts to present to the Partnership any opportunity
to manage or lease any garage or other parking facility or otherwise engage in
the Garage Management Business (except with respect to Excluded Garages, as
defined in Section 7.3(b)) of which Associates, SP Managers, L.P. (a Delaware
limited partnership and the managing partner of Associates), any partner of SP
Managers, L.P., or any Affiliate of any partner of SP Managers, L.P. becomes
aware. Notwithstanding the foregoing, Associates shall have no duty to present
any opportunity to manage or lease any Excluded Garage to SPC or to assist SPC
in capturing any such opportunity with respect to any Excluded Garage.
(b) During the term of this Agreement and for a period of three
years thereafter, Associates agrees that neither it nor any of its Affiliates
will engage in the Garage Management Business in North America or Europe;
provided. however, that, subject to subsection (a), nothing herein shall
preclude Associates or its Affiliates from: (i) owning, directly or indirectly
through a partnership or other entity, garages or other parking facilities; (ii)
engaging in the Garage Management Business with respect to garages or other
parking facilities owned by Affiliates of Associates; (iii) engaging in the
Garage Management Business with respect to any garage or other parking facility
owned by any Person for whom Associates or any of its Affiliates serves in the
capacity of an investment advisor; (iv) engaging
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in any business other than the Garage Management Business; or (v) transacting
business with anyone transacting business with the Partnership.
(c) Associates hereby: (i) represents that under the partnership
agreement of Associates and the partnership agreement or other governing
document of SP Managers, L.P., neither a partnership interest in Associates, nor
any partnership interest in SP Managers, L.P., may be transferred without the
consent of Standard Managers, Inc. (except for transfers to any Affiliate,
relative, or trust for the benefit of a relative of the holder of such
interest); (ii) agrees that neither the partnership agreement of Associates nor
the partnership agreement of SP Managers, L.P. will be amended or modified to
permit a partnership interest in Associates or in SP Managers, L.P. to be
transferred without the consent of Standard Managers, Inc. (except for transfers
to any Affiliate, relative, or trust for the benefit of a relative of the holder
of such interest); and (iii) agrees that throughout the term of this Agreement,
Standard Managers, Inc. will be under the control of one or more Associates'
Representatives (or their respective Affiliates or descendants).
Section 8.5. Associates' Representative. The parties hereto agree
that any and all consents and other documents required to be executed by
Associates (or by SP Parking Associates, if and when it is admitted to the
Partnership as a Limited Partner), and any and all notices and disclosures
required to be made to Associates (or to SP Parking Associates), shall be signed
by, or made or delivered to, an Associates' Representative. Judd D. Malkin, Neil
Bluhm, David Richter, Steve Malkin, Barry Malkin, and Andrew Bluhm are each
hereby designated as an Associates' Representative; provided, however, that an
Associates' Representative may at any time designate any other Person, with the
consent of the General Partner (which consent cannot be unreasonably withheld),
as substitute Associates' Representative by written notice to the General
Partner.
Section 8.6. Certain Provisions Regarding the C Interest. SPC shall
have the right, at its option, to purchase (or to cause any other Person to
purchase) the entire Class C Interest held by any Class C Partner for a purchase
price equal to the greater of the Class C Unrecovered Capital or the balance in
the Class C Capital Account of such Class C Partner as of the last of the day of
the month in which the notice described below is delivered to the Class C
Partner, adjusted to eliminate any increase or decrease in such Capital Account
as is attributable to an adjustment of Gross Asset Value under section 1.42(b),
(c), or (d). Such option may be exercised, by delivery to the Class C Partner of
a written notice of exercise, at any time during the 60-day period commencing
180 days after the expiration of the Exercise Period (as defined in the SP
Parking Option Agreement), but only if SP Parking Associates fails to exercise
its option under the SP Parking Option Agreement to acquire the Class A
Interest. The closing of the purchase of the Class C Interest pursuant to the
option granted by this Section 8.6 shall occur at such time, date, and place as
SPC and the Class C Partner shall agree, but in any event not later than 45 days
after the delivery of notice of exercise by SPC. At the closing, SPC shall pay
the purchase price in immediately available funds, and the Class C Partner shall
deliver to SPC an instrument or instruments in form and sub-
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stance reasonably satisfactory to SPC, assigning the Class C Interest to SPC,
free and clear of all liens and encumbrances.
ARTICLE IX
Dissolution and
Termination
Section 9.1. Dissolution Of Partnership. The Partnership will dissolve and its
assets and business will be wound up upon the first to occur of the following
events:
(a) Expiration of the term of the Partnership;
(b) Written election of all the Partners to dissolve the
Partnership;
(c) The occurrence of an event which makes it unlawful for the
Partnership business to be continued under the Act or otherwise;
(d) The passage of 90 days after an Event of Withdrawal of the
last remaining General Partner (except under the circumstances described
in Section 7.11), unless all the Limited Partners vote to elect a new
General Partner to carry on the business of the Partnership as a successor
General Partner in accordance with Section 7.9(a); or
(e) Any other event which, under the Act, requires the
dissolution of the Partnership and the winding up of its business and
affairs.
Dissolution of the Partnership shall be effective on the date on which the event
occurs giving rise to the dissolution, but the Partnership shall not terminate
until the Certificate shall have been canceled and the assets of the Partnership
have been distributed as provided in Sections 9.2 and 9.3. Notwithstanding the
dissolution of the Partnership, prior to the termination of the Partnership, as
aforesaid, the business of the Partnership and the affairs of the Partners as
such shall continue to be governed by this Agreement.
Section 9.2. Liquidation and Distribution. Following the occurrence
of an event described in Section 9.1, the General Partner (or in the event the
dissolution is caused by an Event of Withdrawal of the last remaining General
Partner, a Person selected by Associates) will act as liquidating trustee. Such
liquidating trustee will wind up the affairs of the Partnership in the following
manner:
(a) The liquidating trustee shall use its best efforts to sell
all of the Partnership's assets in an orderly manner (so as to avoid the
loss normally associated with forced sales).
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(b) The liquidating trustee shall apply and distribute the
proceeds of all such sales, together with other funds which the
liquidating trustee was unable to dispose of in accordance with paragraph
(i), in the following order of priority: (A) First, to the payment of all
debts and liabilities of the Partnership (including debts and liabilities
owed to Partners); (B) Second, to the establishment of any reserves
reasonably necessary to provide for any contingent Partnership liabilities
and obligations (such reserves to be paid over to a bank or trust company,
as escrowee, to be held by such escrowee for the purpose of disbursing
such reserves in payment of any such contingent liability or obligation
and to pay over the balance thereafter remaining for distribution in the
manner set forth in clause (C) hereof); and (C) Third, as provided in
Section 5.2.
Section 9.3. Termination. Each of the Partners will be furnished
with a statement prepared by the Accountants, which will set forth the assets
and liabilities of the Partnership as of the date of the final distribution of
Partnership assets under Section 9.2 and the Net Profits or Net Losses and other
items allocable under Article IV of this Agreement for the fiscal period ending
on such date. Upon compliance with the distribution plan set forth in Section
9.2, the Limited Partners will cease to be such, and the General Partner or the
liquidating trustee will cause the Certificate to be canceled, whereupon the
Partnership will terminate.
ARTICLE X
Miscellaneous
Section 10.1. Further Assurances. Each Limited Partner hereby agrees that,
promptly upon the request of the General Partner, it will do, execute,
acknowledge, deliver, record, file, and register any and all such further acts,
agreements, notices, certificates, assurances, and other instruments as the
General Partner may reasonably require from time to time in order to carry out
more effectively the purposes of this Agreement.
Section 10.2 Amendments.
(a) This Agreement may be amended from time to time by the General
Partner, without the consent of any of the Limited Partners, (i) to add to the
representations, duties, or obligations of the General Partner or surrender any
right or power granted to the General Partner herein if such surrender would be
for the benefit of the Limited Partners; (ii) to delete or add any provision of
this Agreement required to be so deleted or added by a federal agency or by a
state "Blue Sky" commissioner or similar such official, which addition or
deletion is deemed by such agency commissioner, or official to be for the
benefit or protection of the Limited Partners; (iii) to take such actions as may
be necessary (if any) to avoid a Plan Asset Transparency or to avoid the
Partnership's engaging in a prohibited transaction as defined in section 4975(c)
of the Code with the General Partner or its Affiliates; (iv) to
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amend or add to the allocation provisions of Article IV to the extent necessary
on the advice of Legal Counsel to give effect to such allocations as originally
contemplated upon execution of this Agreement if amended final regulations under
section 704 to the Code are adopted by the Treasury Department; (v) on the
advice of Legal Counsel, to prevent the Partnership from being deemed an
"Investment Company" for purposes of the Investment Company Act of 1940, as
amended; and (vi) to amend any other provision of this Agreement as the General
Partner may be authorized by this Agreement; provided, however, that no
amendment shall be adopted pursuant to this Section 10.2(a) unless the adoption
thereof (1) is for the benefit of or not adverse to the interest of any Limited
Partner; (2) except as provided in clause (iii) or (iv), does not affect the
interests of any Partner in distributions of Distributable Cash or Capital
Transaction Proceeds or allocations of Net Profit or Net Loss and (3) does not
adversely affect the limited liability of the Limited Partners or the status of
the Partnership as a partnership for federal income tax purposes.
(b) In addition to the amendments otherwise authorized herein,
amendments may be made to this Agreement from time to time by the General
Partner with the written consent of all the Limited Partners.
(c) In making any amendments, there shall be prepared and filed for
recordation by the General Partner such documents and certificates as shall be
required to be prepared and filed under the Act and under the laws of the other
jurisdictions under the laws of which the Partnership is then formed or
otherwise required to make such filing. The General Partner shall give written
notice to all Partners promptly after any amendment has become effective.
Section 10.3 Notices And Addresses. All notices required to be given
under this Agreement shall be in writing and may be delivered by certified or
registered mail, postage prepaid, by hand, by facsimile, or by any nationally
recognized private courier. Such notices shall be mailed or delivered to the
Partners at the addresses set forth after the signature of such Partners or such
other address as a Partner may notify the other Partners of in writing. Any
notices to be sent to the Partnership shall be delivered to the principal place
of business of the Partnership or at such other address as the General Partner
may specify in a notice sent to all of the Partners. Notices shall be effective
(i) if mailed, on the date three days after the date of mailing, (ii) if hand
delivered or delivered by private courier, on the date of delivery, or (iii) if
transmitted by facsimile, on the date of transmission.
Section 10.4. Governing Law. The validity and effectiveness of this
Agreement shall be governed by and construed and enforced in accordance with the
internal laws of the State of Delaware, without giving effect to the provisions,
policies or principles of any state law relating to choice or conflict of laws.
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Section 10.5. Successors And Assigns. This Agreement shall be
binding upon and inure to the benefit of the Partners, Assignees, and their
respective legal representatives and successors.
Section 10.6 .Counterparts. This Agreement may be executed in
multiple counterparts. each of which may bear the signatures of less than all
the parties, but all of which together shall constitute one instrument.
Section 10.7. Entire Agreement; Severability. This Agreement,
together with the Partnership Formation Agreement, the Exhibits hereto and
thereto, and the Related Agreements (as defined in the Partnership Formation
Agreement), constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof, and no party hereto shall be bound by any
communications between them on the subject matter of this Agreement unless in
writing and bearing a date contemporaneous with or subsequent to the date of
this Agreement. Any prior written agreements shall, upon the execution of this
Agreement, be null and void. The parties agree that if any term or provision of
this Agreement contravenes or is invalid under any federal, state or local law,
court decision, rule, ordinance or regulation, this Agreement shall, as to the
jurisdiction under which such legal authority is promulgated or rendered, be
construed as if it did not contain the offending term or provision, and the
remaining provisions of this Agreement shall not be affected thereby; provided,
however, that if the removal of such offending term or provision materially
alters the burdens or benefits of any of the parties under this Agreement, the
parties agree to negotiate in good faith such modifications to this Agreement as
are appropriate to insure the burdens and benefits of each party under such
modified Agreement are reasonably comparable to the burdens and benefits
originally contemplated and expected.
Section 10.8. Captions. The captions are inserted for convenience of
reference only and shall not affect the construction of this Agreement.
Section 10.9. Statutory References. Each reference in this Agreement
to a particular statute or regulation, or a provision thereof, shall be deemed
to refer to such statute or regulation, or provision thereof, or to any similar
or superseding statute or regulation, or provision thereof, as is from time to
time in effect.
Section 10.10. Partition Action. Each party hereto irrevocably
waives any right which it may have to maintain an action for partition with
respect to property of the Partnership.
Section 10.11. Confidentiality. Each Partner hereby agrees that it
(i) will not use Confidential Information other than for a Partnership purpose
(provided that nothing herein shall prevent SPC or any of its Affiliates from
using Confidential Information for the purpose of conducting the activities
which they are permitted to conduct under Section 7.3(b) or Section 7.3(c)), and
(ii) it will use its reasonable best efforts to hold Confidential Informa-
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tion (as defined below) confidential, but will in any event hold such
Confidential Information no less confidentially than is customary for it in
handling confidential information of this nature. Each Partner further agrees
not to disclose any Confidential Information (and Associates agrees that none of
the Associates' Representatives will disclose any Confidential Information)
except as required or requested pursuant to applicable law; provided that a
Partner may make disclosure (i) of summary aggregate financial information
regarding the Partnership to its partners or other owners and to any Affiliates
or assignees or transferees of partnership interests in such Partner and (ii) to
any of its outside auditors and counsel if they agree to be bound by this
Section. For this purpose the term "Confidential Information" means: (u) the
identity of any Limited Partner; (v) the identity of any client or landlord of
the Partnership, SPC, or any Affiliate of SPC; (w) the fees payable to or for
the benefit of the Partnership, the expiration date, or any other term of any
lease, management agreement, operating agreement, or other agreement with
respect to the lease, management, or operation of any parking facility; (x) the
profitability of any contract or group of contracts or any financial information
of the Partnership; (y) any trade secret; and (z) any other information
concerning the Partnership's business; provided, however, that the term
"Confidential Information" shall not include information which (A) is or becomes
generally available to the public other than, with respect to a Partner, as a
result of a disclosure by such Partner which is not legally compelled to be
disclosed in any judicial or administrative proceeding, or (B) otherwise becomes
available to a Partner on a non-confidential basis.
Section 10.12. Waiver. The waiver by any party hereto of the breach
of any term, covenant, agreement or condition herein contained shall to be
deemed a waiver of any subsequent breach of the same or any other term,
covenant, agreement or condition herein, nor shall any custom, practice or
course of dealings arising among the parties hereto in the administration hereof
be construed as a waiver or diminution of the right of any party hereto to
insist upon the strict performance by any other party hereto of the terms,
covenants, agreements and conditions herein contained.
Section 10.13. Securities Law Provisions. The Interests have not
been registered under the Federal or state securities laws of any state and,
therefore, may not be resold unless appropriate Federal and state securities
laws, as well as the provisions of Article VIII hereof, have been complied with.
Section 10.14. Consents and Approval. Whenever under this Agreement
the consent or approval of any Partner is required or permitted, such consent
must be evidenced by a written consent signed by such Partner.
Section 10.15. Remedies Not Exclusive. Unless otherwise provided in
this Agreement, any remedy contained in this Agreement for breaches of
obligations hereunder shall not be deemed to be exclusive and shall not impair
the right of any party to exercise any other right or remedy, whether for
damages, injunction or otherwise.
-45-
<PAGE> 46
Section 10.16. Identification. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural, and pronouns stated in either the masculine or the
neuter gender shall include the masculine, feminine and neuter.
Section 10.17. Litigation. The General Partner shall prosecute and
defend such actions at law or in equity as may be reasonably necessary, in the
judgment of the General Partner, to enforce or protect the interest of the
Partnership. The Partnership and the General Partner shall respond to any final
decree, judgment or decision of any court, board or authority having
jurisdiction in judgment, decree or decision, first out of any insurance
proceeds available therefor, next out of assets of the Partnership and finally
out of the assets of the General Partner.
Section 10.18. No Presumption Against Drafter. The parties hereto
have jointly participated in the negotiation and drafting of this Agreement. In
the event of an ambiguity or if a question of intent or interpretation arises,
this Agreement shall be construed as if drafted jointly by all of the parties
hereto and no presumptions or burdens of proof shall arise favoring any party by
virtue of the authorship of any of the provisions of this Agreement.
-46-
<PAGE> 47
IN WITNESS WHEREOF, the undersigned have executed this Agreement of
Limited Partnership as of the date first above written.
GENERAL PARTNER
STANDARD PARKING CORPORATION,
an Illinois corporation
55 E. Monroe Street
Suite 3440
Chicago, Illinois 60603
By /s/ Myron C. Warshauer
-----------------------------------------
Myron C. Warshauer, President
LIMITED PARTNERS
SP ASSOCIATES,
an Illinois general partnership
900 N. Michigan Avenue
Suite 1900
Chicago, Illinois 60611
By SP Managers, L.P., a Delaware
limited partnership, its managing
partner
By Standard Managers, Inc., a Delaware
corporation, its general partner
By /s/ David S. Richter
------------------------------------------
David S Richter, its Vice President
STANDARD PARKING CORPORATION,
an Illinois corporation
55 E. Monroe Street
Suite 3440
Chicago, Illinois 60603
By /s/ Myron C. Warshauer
------------------------------------------
Myron C. Warshauer, President
-47-
<PAGE> 48
EXHIBIT A
Excluded Garages
A. The following garages are Excluded Garages under clause (y) of
Section 7.3(b) and may not be managed by SPC.
1. 4041 Central, Phoenix, Arizona
2. Shell Building, San Francisco, California
3. Century Park Plaza, Los Angeles, California
4. 1200 New Hampshire, Washington, D.C.
5. 1250 Connecticut, Washington, D.C.
6. INB Bank Building, Indianapolis, Indiana
7. First National Tower, Louisville, Kentucky
B. The following garage is an Excluded Garage under clause (x) of
Section 7.3(b) and may be managed by SPC.
1. Water Tower Place, Chicago, Illinois
<PAGE> 49
EXHIBIT B
Schedule of Owned Garage
A. Garages Owned by SPC or an Affiliate for which management is to be
provided by (and management fees paid to) the Partnership:
All garages owned by SIDCOR/SW Partners:
Hollywood Towers
260 East Chestnut
Imperial Towers
2 East Oak
Franklin Lake Self Park
Franklin Van Buren Self Park
203 North LaSalle Street Self Park
B. Garages Owned by SPC or an Affiliate for which management is to be
provided by the Partnership but for which no management fee is
payable:
Clark-Fullerton
C. Garages Owned by SPC or an Affiliate for which management is to be
provided by (and management fees paid to) an Affiliate of SPC:
Theatre District Self Park (management fees to be paid to
Standard/Tremont)
Adams Wabash Self Park (management fees to be paid to
Standard/Wabash)
<PAGE> 50
EXHIBIT C
Schedule of Employees and Affiliates
With Rights to Participate in
Revenues or Profits of the Partnership
1. Agreement dated as of June 19, 1979, between Allan R. Lombardo and
Standard Parking Corporation.
2. Agreement dated as of July 23, 1981, between J. Norman Thorson and
Standard Parking Corporation, as amended on February 21, 1990.
3. Agreement dated as of June 7, 1991, between Robert B. Anthonyson and
SPC, as modified by memorandum dated September 15, 1993 from Robert
B. Anthonyson to Myron C. Warshauer.
4. Agreement dated as of April 1, 1992 between George C. Hester and
SPC.
5. Agreement, dated as of September 29, 1982, among (a) on the one
hand, SPC, and (b) on the other hand, Warshauer Management
Corporation, an Illinois corporation, Tremont Auto Park, Inc., an
Illinois corporation, Auditorium Garage, Inc., an Illinois
corporation, Stanley Warshauer, individually and as Trustee under
the Will of Benjamin Warshauer, Deceased, Steven A. Warshauer, and
Janet Warshauer, as amended on or before the date hereof.
6. Agreement dated as of May 21, 1990 among Michael K. Wolf and
Metropolitan Parking Station, Inc., Standard Auto Park, Inc.,
Standard Parking Corporation, Standard Parking Corporation of
California, Standard Parking Service, Inc., Standard/Tremont Parking
Corporation, Standard/Wabash Parking Corporation, Standard Parking.
Inc. MA and such other entities (whether then in existence or
thereafter created) that directly or indirectly, through one or more
intermediaries, control or are controlled by, or are under common
control with, Standard Parking Corporation.
7. The transfer to one or more of Allan Lombardo, Michael E. Swartz, J.
Norman Thorson, Steven A. Warshauer, James A. Wilhelm, and Michael
K. Wolf of a portion of Standard Parking Corporation's Class B
and/or Class D interest in Standard Parking, L.P. for an aggregate
purchase price not to exceed $2,000,000.
<PAGE> 51
EXHIBIT D
Schedule of Investments
1. Interest of SPC as General Partner of SW Partners, an Illinois
limited partnership, which limited partnership is general partner in
SIDCOR/SW Partners, an Illinois general partnership.
2. Interest of SPC in Franklin Garage Limited Partnership.
<PAGE> 52
ASSIGNMENT OF CLASS D INTEREST
IN STANDARD PARKING, L.P.,
A DELAWARE LIMITED PARTNERSHIP
1. The undersigned hereby irrevocably assigns forty percent (40%) of its
Class D Interest in STANDARD PARKING, L.P., a Delaware limited partnership
("Partnership"), as follows:
Transferor Interest Transferred Transferee
- ---------- -------------------- ----------
STANDARD PARKING DOSHER PARTNERS, L.P.,
CORPORATION, an 40% of its Class D a Delaware limited
Illinois corporation Interest partnership
not as assignee, but as substitute holder of such Class D Interest under the
Partnership agreement.
2. The undersigned hereby irrevocably constitutes and appoints MICHAEL K.
WOLF to be the attorney of the undersigned to transfer such interest on the
books of the Partnership. This Assignment shall be effective as of the date
hereof.
Dated: May 5, 1997
Standard Parking Corporation, an
Illinois corporation
--------------------------------------------
By: Myron C. Warshauer
Its: President
<PAGE> 53
ACCEPTANCE
The undersigned hereby accepts the Assignment hereinabove described and
agrees to be bound by the terms of the STANDARD PARKING, L.P., Agreement of
Limited Partnership.
Dated: May 5, 1997
Dosher Partners, L.P., a Delaware
limited partnership
--------------------------------------------
By: Myron C. Warshauer, President of
Standard Parking Corporation, the
General Partner of Dosher Partners, L.P.
CONSENT
The undersigned hereby consent to the Assignment hereinabove described and
agree to admit DOSHER PARTNERS, L.P., as substitute holder of such Class D
Interest in STANDARD PARKING, L.P., a Delaware limited partnership.
Dated: May 5, 1997
STANDARD PARKING CORPORATION, General
Partner
--------------------------------------------
By: Myron C. Warshauer
Its: President
SP ASSOCIATES, Limited Partner
--------------------------------------------
By:
Its:
<PAGE> 1
Form BCA-10.30
(Rev. Jan. 1991) ARTICLES OF AMENDMENT File # D 5116--186--6
==========================================================================
George H. Ryan FILED
Secretary of State DEC 28 1993
Department of Business GEORGE H. RYAN SUBMIT IN DUPLICATE
Services SECRETARY OF STATE
Springfield, IL 62756
Telephone (217) 782-6961
========================= ========================
Remit payment in check This space for use by
or money order, payable Secretary of State
to "Secretary of State."
Date 2/28/93
Franchise Tax $
Filing Fee $25.00
Penalty $
Approved:
==========================================================================
1. CORPORATE NAME: Standard Parking Corporation
------------------------------------------------------------
(Note 1)
2. MANNER OF ADOPTION:
The following amendment of the Articles of Incorporation was adopted on
November 30, 1993 in the manner indicated below. ("X" one box only)
|_| By a majority of the incorporators, provided no directors were named in
the articles of incorporation and no directors have been elected; or by a
majority of the board of directors, in accordance with Section 10.10, the
corporation having issued no shares as of the time of adoption of this
amendment;
(Note 2)
|_| By a majority of the board of directors, in accordance with Section 10.15,
shares having been issued by shareholder action not being required for the
adoption of this amendment;
(Note 3)
|_| By the shareholders, in accordance with Section 10.20, a resolution of the
board of directors having been duly adopted and submitted to the
shareholders. At a meeting of shareholders, not less than the minimum
number of votes required by statue and by the articles of incorporation
were voted in favor of the amendment;
(Note 4)
|_| By the shareholders, in accordance with Sections 10.20 and 7.10, a
resolution of the board of directors having been duly adopted and
submitted to the shareholders. A consent in writing has been signed by
shareholders having not less than the minimum number of votes required by
statute and by the articles of incorporation. Shareholders who have not
consented in writing have been given notice in accordance with Section
7.10;
(Note 4)
|_| By the shareholders, in accordance with Sections 10.20 and 7.10, a
resolution of the board of directors having been duly adopted and
submitted to the shareholders. A consent in writing has been signed by all
of the shareholders entitled to vote on this amendment.
(Note 4)
(INSERT AMENDMENT)
(Any article being amended is required to be set forth in its entirety.)
(Suggested language for an amendment to change the corporate name is RESOLVED,
that the Articles of Incorporation be amended to read as follows:)
- ------------------------------------------------------------------------------
(NEW NAME)
PAID
DEC 29 1993
All changes other than name, include on page 2
(over)
<PAGE> 2
Resolution
RESOLVED, that the Articles of Incorporation be amended to read as follows:
"Article 3. Purpose or purposes for which the corporation is organized:
To transact any or all lawful activities and businesses which are authorized
by the Illinois Business Corporation Act of 1983, as amended, and to purchase
or to otherwise acquire, hold use, own mortgage, sell, convey, lease or
otherwise dispose of and deal in real and personal property of every class
and description or any interest therein.
<PAGE> 3
3. The manner in which any exchange, reclassification or cancellation of
issued shares, or a reduction of the number of authorized shares of any
class below the number of issued shares of that class, provided for or
effected by this amendment, is as follows: (If not applicable, insert "No
change")
No change
4. (a) The manner in which said amendment effects a change in the amount of
paid-in capital (Paid-in capital replaces the terms Stated Capital and
Paid-in Surplus and is equal to the total of these accounts) is as
follows: (If not applicable, insert "No change")
No change
(b) The amount of paid-in capital (Paid-in Capital replaces the terms
Stated Capital and Paid-in Surplus and is equal to the total of these
accounts as changed by this amendment is as follows: (If not applicable,
insert "No change")
No change
Before Amendment After Amendment
Paid-in Capital $ $
------------- -------------
(Complete either Item 5 or 6 below)
5. The undersigned corporation has caused this statement to be signed by its
duly authorized officers, each of whom affirms, under penalties of
perjury, that the facts stated herein are true.
Dated December 10, 1993 Standard Parking Corporation
-------------------------------- ----------------------------------
(Exact Name of Corporation)
attested by /s/ Michael K. Wolf by /s/ Myron C. Warshauer
-------------------------- --------------------------------
(Signature of Secretary or (Signature of President or Vice
Assistant Secretary) President)
Michael K. Wolf, Secretary Myron C. Warshauer, President
-------------------------- -------------------------------
(Type or Print Name and Title) (Type or Print Name and Title)
6. If amendment is authorized by the incorporators, the incorporators must
sign below.
OR
If amendment is authorized by the directors and there are no officers,
then a majority of the directors or such directors as may be designated by
the board, must sign below.
The undersigned affirms, under the penalties of perjury, that the facts
stated herein are true.
Dated
------------------------------
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
<PAGE> 1
AMENDED AND RESTATED
BY-LAWS
OF
STANDARD PARKNG CORPORATION
ARTICLE I
OFFICES
The corporation shall continuously maintain in the State of Illinois
a registered office and a registered agent whose office is identical with such
registered office, and may have other offices within or without the state.
ARTICLE II
SHAREHOLDERS
SECTION 1. ANNUAL MEETING. An annual meeting of the shareholders shall be held
on the second Wednesday in January of each year for the purpose of electing
directors and for the transaction of such other business as may come before the
meeting. If the day fixed for the annual meeting shall be a legal holiday, such
meeting shall be held on the next succeeding business day.
SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders
may be called either by the president, by the board of directors or by the
holders of not less than one-fifth of all the outstanding shares of the
corporation entitled to vote, for the purpose or purposes stated in the call of
the meeting.
SECTION 3. PLACE OF MEETING. The board of directors may designate
any place, as the place of meeting for any annual meeting or for any special
meeting called by the board of directors. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall be held at the
principal office of the corporation.
SECTION 4. NOTICE OF MEETINGS. Written notice stating the place,
date, and hour of the meeting, and in the case of a special meeting, the purpose
or purposes for which the meeting is called, shall be delivered not less than
ten nor more than sixty days before the date of the meeting, or in the case of a
merger consolidation, share exchange, dissolution or sale, lease or exchange of
assets not less than twenty nor more than sixty days before the date of the
meeting, either personally or by mail, by or at the direction of the president,
or the secretary, or the officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
addressed to the shareholder at his address as it appears on the records of the
corporation, with postage thereon prepaid. When a meeting is adjourned to
another time or
<PAGE> 2
place, notice need not be given of the adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken.
SECTION 5. FIXING OF RECORD DATE. For the purpose of determining the
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or to receive payment of any dividend, or other distribution
or allotment of any rights, or to exercise any rights in respect of any change,
conversion or exchange of shares or for the purpose of any other lawful action,
the board of directors of the corporation may fix in advance a record date which
shall not be more than sixty days and, for a meeting of shareholders, not less
than ten days, or in the case of a merger, consolidation, share exchange,
dissolution or sale, lease or exchange of assets, not less than twenty days,
before the date of such meeting. If no record date is fixed, the record date for
the determination of shareholders entitled to notice of or to vote at a meeting
of shareholders shall be the date on which notice of the meeting is mailed, and
the record date for the determination of shareholders for any other purpose
shall be the date on which the board of directors adopts the resolution relating
thereto. A determination of shareholders of record entitled to notice of or to
vote at a meeting of shareholders shall apply to any adjournment of the meeting.
SECTION 6. VOTING LISTS. The officer or agent having charge of the
transfer books for shares of the corporation shall make, within twenty days
after the record date for a meeting of shareholders or at least ten days before
each meeting of shareholders, a complete list of the shareholders entitled to
vote at such meeting, arranged in alphabetical order, showing the address of and
the number of shares registered in the name of the shareholder, which list, for
a period of ten days prior to such meeting, shall be kept on file at the
registered office of the corporation and shall be open to inspection by any
shareholder for any purpose germane to the meeting, at any time during usual
business hours. Such list shall also be produced and kept open at the time and
place of the meeting and may be inspected by any shareholder during the whole
time of the meeting. The original share ledger or transfer book, or a duplicate
thereof kept in this State, shall be prima facie evidence as to who are the
shareholders entitled to examine such list or share ledger or transfer book or
to vote at any meeting of shareholders.
SECTION 7. QUORUM. The holders of a majority of the outstanding
shares of the corporation entitled to vote on a matter present in person or
represented by proxy shall constitute a quorum at any meeting of shareholders;
provided that if less than a majority of the outstanding shares are represented
at said meeting, a majority of the shares so represented may adjourn the meeting
at any time without further notice. If a quorum is present, the affirmative vote
of the majority of the shares represented at the meeting shall be the act of the
shareholders, unless the vote of a greater number or voting by classes is
required by the Business Corporation Act of 1983 ("Business Corporation Act"),
the Articles of Incorporation or these by-laws. At any adjourned meeting at
which a quorum shall be present, any business may be transacted which might have
been transacted at the original meeting. Withdrawal of shareholders from any
meeting shall not cause failure of a duly constituted quorum at that meeting.
SECTION 8. PROXIES. Each shareholder entitled to vote at a meeting
of shareholders or to express consent or dissent to corporate action in writing
without a meeting
-2-
<PAGE> 3
may authorize another person or persons to act for him by proxy, but no such
proxy shall be valid after eleven months from the date of its execution, unless
otherwise provided in the proxy.
No proxy shall be solicited by means of any communication containing
a statement which, at the time and in the light of the circumstances under which
it is made, is false or misleading with respect to any material fact or which
omits to state any material fact necessary in order that the statements made not
be false or misleading.
SECTION 9. VOTING OF SHARES. Each outstanding share, of each class
of shares entitled to vote on a matter, shall be entitled to one vote upon each
matter submitted to a vote at a meeting of shareholders, and in all elections
for directors, every shareholder shall have the right to vote the number of
shares owned by such shareholder for as many persons as there are directors to
be elected, or to cumulate such votes and give one candidate as many votes as
shall equal the number of directors multiplied by the number of such shares or
to distribute such cumulative votes in any proportion among any number of
candidates.
SECTION 10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares of a
corporation held by the corporation in a fiduciary capacity may be voted and
shall be counted in determining the total number of outstanding shares entitled
to vote at any given time.
Shares registered in the name of another corporation, domestic or
foreign, may be voted by any officer agent, proxy or other legal representative
authorized to vote such shares under the law of incorporation of such
corporation. A corporation may treat the president or other person holding the
position of chief executive officer of such other corporation as authorized to
vote such shares, together with any other person indicated and any other holder
of an office indicated by the corporation shareholder to the corporation as a
person or an office authorized to vote such shares. Such persons and offices
indicated shall be registered by the corporation on the transfer books for
shares and included in any voting list.
Shares registered in the name of a deceased person, a minor ward or
a person under legal disability may be voted by his or her administrator,
executor, or court appointed guardian, either in person or by proxy without a
transfer of such shares into the name of such administrator, executor, or court
appointed guardian. Shares registered in the name of a trustee may be voted by
him or her, either in person or by proxy.
Shares registered in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his or her name if authority so
to do is contained in an appropriate order of the court by which such receiver
was appointed.
A shareholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred into the name of the pledgee,
and thereafter the pledgee shall be entitled to vote the shares so transferred.
Any number of shareholders may create a voting trust for the purpose
of conferring upon a trustee or trustees the right to vote or otherwise
represent their share, for a period not to exceed ten years, by entering into a
written voting trust agreement specifying the
-3-
<PAGE> 4
terms and conditions of the voting trust, and by transferring their shares to
such trustee or trustees for the purpose of the agreement. Any such trust
agreement shall not become effective until a counterpart of the agreement is
deposited with the corporation at its registered office. The counterpart of the
voting trust agreement so deposited with the corporation shall be subject to the
same right of examination by a shareholder of the corporation, in person or by
agent or attorney, as are the books and records of the corporation, and shall be
subject to examination by any holder of a beneficial interest in the voting
trust, either in person or by agent or attorney, at any reasonable time for any
proper purpose.
Shares of its own stock belonging to this corporation shall not be
voted, directly or indirectly, at any meeting and shall not be counted in
determining the total number of outstanding shares at any given time.
SECTION 11. INSPECTORS. At any meeting of shareholders, the
presiding officer may, or upon the request of any shareholder shall, appoint one
or more persons as inspectors for such meeting.
Such inspectors shall ascertain and report the number of shares
represented at the meeting, based upon their determination of the validity and
effect of proxies; count all votes and report the results; and do such other
acts as are proper to conduct the election and voting with impartiality and
fairness to all the shareholders.
Each report of an inspector shall be in writing and signed by him or
by a majority of them if there be more than one inspector acting at such
meeting. If there is more than one inspector, the report of a majority shall be
the report of the inspectors. The report of the inspector or inspectors on the
number of shares represented at the meeting and the results of the voting shall
be prima facie evidence thereof.
SECTION 12. INFORMAL ACTION BY SHAREHOLDERS. Unless otherwise
provided in the Articles of Incorporation, any action required to be taken at
any annual or special meeting of the shareholders of the corporation, or any
other action which may be taken at a meeting of the shareholders, may be taken
without a meeting and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed (a) if 5 days prior notice of the proposed
action is given in writing to all of the shareholders entitled to vote with
respect to the subject matter thereof, by the holders of outstanding shares
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voting or (b) by all of the shareholders entitled to
vote with respect to the subject matter thereof.
Prompt notice of the taking of the corporation action without a
meeting by less than unanimous written consent shall be given in writing to
those shareholders who have not consented in writing. In the event that the
action which is consented to is such as would have required the filing of a
certificate under any Section of the Business Corporation Act if such action had
been voted on by the shareholders at a meeting thereof, the certificate filed
under such Section shall state, in lieu of any statement required by such
Section concerning any vote of shareholders, that written consent has been given
in accordance with the provisions of Section
-4-
<PAGE> 5
7.10 of the Business Corporation Act and that written notice has been given as
provided in such Section.
SECTION 13. VOTING BY BALLOT. Voting on any question or in any
election may be by voice unless the presiding officer shall order or any
shareholder shall demand the voting be by ballot.
ARTICLE III
DIRECTORS
SECTION 1. GENERAL POWERS. The business of the corporation shall be managed by
or under the direction of its board of directors.
SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of
directors of the corporation shall be three (3). Each director shall hold office
until the next annual meeting of shareholders or until his successor shall have
been elected and qualified. Directors need not be residents of Illinois or
shareholders of the corporation. The number of directors may be increased or
decreased from time to time by the amendment of this section; but no decrease
shall have the effect of shortening the term of any incumbent director.
SECTION 3. REGULAR MEETINGS. A regular meeting of the board of
directors shall be held immediately after the annual meeting of shareholders.
The board of directors may provide, by resolution, time and place for the
holding of additional regular meetings without other notice than such
resolution.
SECTION 4. SPECIAL MEETINGS. Special meetings of the board of
directors may be called by or at the request of the president or any director.
The person or persons authorized to call special meetings of the board of
directors may fix any place as the place for holding any special meeting of the
board of directors called by them.
SECTION 5. NOTICE. Notice of any special meeting shall be given at
least three (3) days previous thereto by written notice to each director at his
business address. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail so addressed, with postage thereon prepaid.
If notice be given by telegram, such notice shall be deemed to be delivered when
the telegram is delivered to the telegram company. The attendance of a director
at any meeting shall constitute a waiver of notice of such meeting, except where
a director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the board of directors need be specified in the
notice or waiver of notice of such meeting.
SECTION 6. QUORUM. A majority of the number of directors fixed by
these by-laws shall constitute a quorum for transaction of business at any
meeting of the board of directors, provided that if less than a majority of such
number of directors are present at said meeting, a majority of the directors
present may adjourn the meeting at any time without further notice.
-5-
<PAGE> 6
SECTION 7. MANNER OF ACTING. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the board of directors, unless the act of a greater number is required by
statute, these by-laws, or the Articles of Incorporation.
SECTION 8. VACANCIES. Any vacancy occurring in the board of
directors and any directorship to be filled by reason of an increase in the
number of directors, shall be filled by election at an annual meeting or at a
special meeting of shareholders called for that purpose.
SECTION 9. ACTION WITHOUT A MEETING. Unless specifically prohibited
by the Articles of Incorporation, any action required to be taken at a meeting
of the board of directors, or any other action which may be taken at a meeting
of the board of directors, or of any committee thereof may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all the directors entitled to vote with respect to the subject matter
thereof, or by all the members of such committee, as the case may be. Any such
consent signed by all the directors or all the members of the committee shall
have the same effect as a unanimous vote, and may be stated as such in any
document filed with the Secretary of State or with anyone else.
SECTION 10. COMPENSATION. The board of directors, by the affirmative
vote of a majority of directors then in office, and irrespective of any personal
interest of any of its members, shall have authority to establish reasonable
compensation of all directors for services to the corporation as directors,
officers, or otherwise. By resolution of the board of directors the directors
may be paid their expenses, if any, of attendance at each meeting of the board.
No such payment shall preclude any director from serving the corporation in any
other capacity and receiving compensation therefor.
SECTION 11. PRESUMPTION OF ASSENT. A director of the corporation who
is present at a meeting of the board of directors at which action on any
corporate matter is taken shall be conclusively presumed to have assented to the
action taken unless his dissent shall be entered in the minutes of the meeting
or unless he shall file his written dissent to such action with the person
acting as the secretary of the meeting before the adjournment thereof or shall
forward such dissent by registered mail to the secretary of the corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a director who voted in favor of such action.
SECTION 12. COMMITTEES. The board of directors by resolution adopted
by a majority of the number of directors fixed by the by-laws or otherwise may
create one or more committees and appoint members of the board to serve on the
committee or committees. Each committee shall have two or more members, who
serve at the pleasure of the board.
Unless the appointment by the board of directors requires a greater
number, a majority of any committee shall constitute a quorum and a majority of
a quorum is necessary for committee action. A committee may act by unanimous
consent in writing without a meeting and, subject to the provisions of the
by-laws or action by the board of directors, the committee by majority vote of
its members shall determine the time and place of meetings and the notice
required therefor.
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<PAGE> 7
To the extent specified by the board of directors or in the Articles
of Incorporation, each committee may exercise the authority of the board of
directors, provided, however, a committee may not:
(a) authorize distributions;
(b) approve or recommend to shareholders any act required to be
approved by shareholders;
(c) fill vacancies on the board or on any of its committees;
(d) elect or remove officers or fix the compensation of any member
of the committee;
(e) adopt, amend or repeal the by-laws;
(f) approve a plan of merger not requiring shareholder approval;
(g) authorize or approve reacquisition of shares, except according
to a general formula or method prescribed by the Board;
(h) authorize or approve the issuance or sale, or contract for
sale, of shares or determine the designation and relative
rights, preferences, and limitations of a series of shares,
except that the board may direct a committee to fix the
specific terms of the issuance or sale or contract for sale or
the number of shares to be allocated to particular employees
under an employee benefit plan; or
(i) amend, alter, repeal, or take action inconsistent with any
resolution or action of the board of directors when the
resolution or action of the board of directors provides by its
terms that it shall not be amended, altered or repealed by
action of a committee.
SECTION 13. RESIGNATION AND REMOVAL OF DIRECTORS. A director may
resign at any time upon written notice to the board of directors. One or more of
the directors may be removed, with or without cause, at a meeting of
shareholders by the affirmative vote of the holders of a majority of the
outstanding shares then entitled to vote at an election of directors, except as
follows:
(a) No director shall be removed at a meeting of shareholders unless
the notice of such meeting shall state that a purpose of the meeting is to vote
upon the removal of one or more directors named in the notice. Only the named
director or directors may be removed at such meeting.
(b) If less than the entire board is to be removed, no director may
be removed, with or without cause, if the votes cast against his removal would
be sufficient to elect him if then cumulatively voted at an election of the
entire board of directors.
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<PAGE> 8
SECTION 14. TELEPHONIC MEETINGS. The board of directors or any
committee of the board of directors may participate in and act at any meeting of
such board or committee through the use of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in such meeting shall constitute
attendance and presence in person at the meeting of the person or persons so
participating.
ARTICLE IV
OFFICERS
SECTION 1. NUMBER. The officers of the corporation shall be a chairman of the
board of directors, a president, one or more vice-presidents, a treasurer, a
secretary, and such other officers as may be elected or appointed by the board
of directors. Any two or more offices may be held by the same person.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the
corporation shall be elected annually by the board of directors at the meeting
of the board of directors held after each annual meeting of shareholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as may be convenient. Vacancies may be filled or new
offices created and filled at any meeting of the board of directors. Each
officer shall hold office until his successor shall have been duly elected and
shall have qualified or until his death or until he shall resign or shall have
been removed in the manner hereinafter provided. Election of an officer shall
not of itself create contract rights.
SECTION 3. REMOVAL. Any officer elected or appointed by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
SECTION 4. CHAIRMAN OF THE BOARD. The chairman of the board shall
preside over all executive committee meetings of the executive committee of the
corporation, and shall preside at all meetings of the shareholders and of the
board of directors.
He may sign, in lieu of the president, certificates for shares of
the corporation, deeds, mortgages, bonds, contracts or other instruments, which
the board of directors have authorized to be executed, except in cases where the
signing and execution thereof shall be expressly delegated by the board of
directors or these by-laws to some other officer or agent of the corporation or
in cases where the signing and execution thereof is required by law to be
performed by some other officer or agent of the corporation.
SECTION 5. PRESIDENT. The president shall be the principal executive
officer of the corporation. Subject to the direction and control of the board of
directors, he shall be in charge of the business of the corporation; he shall
see that the resolutions and directions of the board of directors are carried
into effect except in those instances in which that responsibility is
specifically assigned to some other person by the board of directors; and, in
general, he shall discharge all duties incident to the office of president and
such other duties as may be prescribed
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<PAGE> 9
by the board of directors from time to time. He shall preside at all meetings of
the shareholders and of the board of directors. Except in those instances in
which the authority to execute is expressly delegated to another officer or
agent of the corporation or a different mode of execution is expressly
prescribed by the board of directors or these by-laws, he may execute for the
corporation certificates for its shares, and any contracts, deeds, mortgages,
bonds, or other instruments which the board of directors has authorized to be
executed, and he may accomplish such execution either under or without the seal
of the corporation and either individually or with the secretary, any assistant
secretary, or any other officer thereunto authorized by the board of directors,
according to the requirements of the form of the instrument. He may vote all
securities which the corporation is entitled to vote except as and to the extent
such authority shall be vested in a different officer or agent of the
corporation by the board of directors.
SECTION 6. THE VICE-PRESIDENTS. The vice-president (or in the event
there be more than one vice-president, each of the vice presidents) shall assist
the president in the discharge of his duties as the president may direct and
shall perform such other duties as from time to time may be assigned to him by
the president or by the board of directors. In the absence of the president or
in the event of his inability or refusal to act, the vice-president (or in the
event there be more than one vice-president, the vice-presidents in the order
designated by the board of directors, or by the president if the board of
directors has not made such a designation, or in the absence of any designation,
then in the order of seniority of tenure as vice-president) shall perform the
duties of the president, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the president. Except in those instances in
which the authority to execute is expressly delegated to another officer or
agent of the corporation or a different mode of execution is expressly
prescribed by the board of directors or these by-laws, the vice-president (or
each of them if there are more than one) may execute for the corporation
certificates for its shares and any contracts, deeds, mortgages, bonds or other
instruments which the board of directors has authorized to be executed, and he
may accomplish such execution either under or without the seal of the
corporation and either individually or with the secretary, any assistant
secretary, or any other officer thereunto authorized by the board of directors,
according to the requirements on the form of the instrument.
SECTION 7. THE TREASURER. The treasurer shall be the principal
accounting and financial officer of the corporation. He shall: (a) have charge
of and be responsible for the maintenance of adequate books of account for the
corporation; (b) have charge and custody of all funds and securities of the
corporation, and be responsible therefor and for the receipt and disbursement
thereof; and (c) perform all the duties incident to the office of treasurer and
such other duties as from time to time may be assigned to him by the president
or by the board of directors.
SECTION 8. THE SECRETARY. The secretary shall: (a) record the
minutes of the shareholders' and the board of directors' meetings in one or more
books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these by-laws or as required by law; (c) be
custodian of the corporate records and of the seal of the corporation; (d) keep
a register of the post-office address of each shareholder which shall be
furnished to the secretary by such shareholder; (e) sign with the president, or
a vice-president, or any other officer thereunto authorized by the board of
directors, certificates for shares of the corporation, the issue
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<PAGE> 10
of which shall have been authorized by the board of directors, and any
contracts, deeds, mortgages, bonds, or other instruments which the board of
directors has authorized to be executed, according to the requirements of the
form of the instrument, except when a different mode of execution is expressly
prescribed by the board of directors or these by-laws; (f) have general charge
of the stock transfer books of the corporation; (g) perform all duties incident
to the office of secretary and such other duties as from time to time may be
assigned to him by the president or by the board of directors.
SECTION 9. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The
assistant treasurers and assistant secretaries shall perform such duties as
shall be assigned to them by the treasurer or the secretary, respectively, or by
the president or the board of directors. The assistant secretary may sign with
the president, or a vice-president, or any other officer thereunto authorized by
the board of directors, certificates for shares of the corporation, the issue of
which shall have been authorized by the board of directors, and any contracts,
deeds, mortgages, bonds, or other instruments which the board of directors has
authorized to be executed, according to the requirements of the form of the
instrument, except when a different mode of execution is expressly prescribed by
the board of directors or these by-laws.
SECTION 10. SALARIES. The salaries of the officers shall be fixed
from time to time by the board of directors and no officer shall be prevented
from receiving such salary by reason of the fact that he is also a director of
the corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. The board of directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the corporation, and such authority
may be general or confined to specific instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the board of directors. Such authority may be
general or confined to specific instances.
SECTION 3. CHECKS, DRAFTS ETC. All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation, shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
determined by resolution of the board of directors.
SECTION 4. DEPOSITS. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositaries as the board of directors
may select.
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<PAGE> 11
ARTICLE VI
CERTIFICATES FOR
SHARES AND THEIR TRANSFER
SECTION 1. CERTIFICATES FOR SHARES. The issued shares of the corporation shall
be represented by certificates or shall be uncertificated shares. Certificates
representing shares of the corporation shall be signed by the president or a
vice-president or by such officer as shall be designated by resolution of the
board of directors and by the secretary or an assistant secretary, and may be
sealed with the seal or a facsimile of the seal of the corporation. If both of
the signatures of the officers be by facsimile, the certificate shall be
manually signed by or on behalf of a duly authorized transfer agent or clerk.
Each certificate representing shares shall be consecutively numbered or
otherwise identified, and shall also state the name of the person to whom
issued, the number and class of shares (with designation of series, if any), the
date of issue, that the corporation is organized under Illinois law, and the par
value or a statement that the shares are without par value. If the corporation
is authorized and does issue shares of more than one class or of series within a
class, the certificate shall also contain such information or statement as may
be required by law.
No certificate shall be issued for any shares until such shares are
fully paid.
The name and address of each shareholder, the number and class of
shares held and the date on which the certificates for the shares were issued
shall be entered on the books of the corporation. The person in whose name
shares stand on the books of the corporation shall be deemed the owner thereof
for all purposes as regards the corporation.
SECTION 2. LOST CERTIFICATES. If a certificate representing shares
allegedly has been lost or destroyed the board of directors may in its
discretion, except as may be required by law, direct that a new certificate be
issued upon such indemnification and other reasonable requirements as it may
impose.
SECTION 3. TRANSFERS OF SHARES. Transfers of shares of the
corporation shall be recorded on the books of the corporation and, except in the
case of a lost or destroyed certificate, shall be made on surrender for
cancellation of the certificate for such shares. A certificate presented for
transfer must be duly endorsed and proper guaranty of signature and other
appropriate assurances that the endorsement is effective may be required.
Unless otherwise provided by the Articles of Incorporation, or by
these by-laws, the board of directors may provide by resolution that some or all
of any or all classes and series of its shares shall be uncertificated shares,
provided that such resolution shall not apply to shares represented by a
certificate until such certificate is surrendered to the corporation. Within a
reasonable time after the issuance or transfer of uncertificated shares, the
corporation shall send to the registered owner thereof a written notice
containing the information required to be set forth or stated on certificates.
Except as otherwise expressly provided by law, the rights and obligations of the
holders of uncertificated shares and rights and obligations of the holders of
certificates representing shares of the same class and series shall be
identical.
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<PAGE> 12
ARTICLE VII
FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of
the board of directors.
ARTICLE VIII
DISTRIBUTIONS
The board of directors may authorize, and the corporation may make,
distributions to its shareholders, subject to any restriction in the Articles of
Incorporation and subject also to the limitations following:
No distribution may be made if, after giving it effect:
(a) The corporation would be insolvent; or
(b) The net assets of the corporation would be less than zero or
less than the maximum amount payable at the time of
distribution to shareholders having preferential rights in
liquidation if the corporation were then to be liquidated.
The board of directors may base a determination that a distribution
may be made either on financial statements prepared on the basis of accounting
practices and principles that are reasonable in the circumstances or on a fair
valuation or other method that is reasonable in the circumstances.
The effect of a distribution shall be measured as of the earlier of:
(a) the date of its authorization if payment occurs within 120
days after the date of authorization or the date of payment if
payment occurs more than 120 days after the date of
authorization; or
(b) In the case of distribution by purchase, redemption, or other
acquisition of the corporation's shares, the earlier of (i)
the date money or other property is transferred or debt
incurred by the corporation of (ii) the date shareholders
cease to be shareholders.
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<PAGE> 13
ARTICLE IX
SEAL
The corporate seal shall have inscribed thereon the name of the
corporation and the words "Corporate Seal, Illinois." The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any manner
reproduced.
ARTICLE X
WAIVER OF NOTICE
Whenever any notice is required to be given under the provisions of
these by-laws or under the provisions of the articles of incorporation or under
the provisions of The Business Corporation Act, a waiver thereof in writing,
signed by the person or person entitled to such notice, whether before or after
the time stated therein, shall be deemed equivalent to the giving of such
notice.
ARTICLE XI
AMENDMENTS
The by-laws of the corporation may be amended, altered, or repealed
by the shareholders or the board of directors, but no by-law adopted by the
shareholders may be altered, amended, or repealed by the board of directors.
ARTICLE XII
INDEMNIFICATION OF OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS
(a) The corporation shall and does hereby indemnify any person who
was or is a party, or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation) by reason of the fact that he or she is or was a director, officer,
employee or agent of the corporation, or who is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, if such person acted in good faith and in a
manner he or she reasonably believed to be in, or not opposed to the best
interest of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he or she reasonably
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<PAGE> 14
believed to be in or not opposed to the best interests of the corporation or,
with respect to any criminal action or proceeding, that the person had
reasonable cause to believe that his or her conduct was unlawful.
(b) The corporation shall and does hereby indemnify any person who
was or is a party, or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that such person is or was
a director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection with the defense or settlement of such action or suit,
if such person acted in good faith and in a manner he or she reasonably believed
to be in, or not opposed to the best interests of the corporation, provided that
no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his or her duty to the corporation, unless, and
only to the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability, but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as the court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful, on the merits or otherwise, in the defense of
any action, suit or proceeding referred to in subsections (a) and (b), or in
defense of any claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) (unless
ordered by a court) shall be made by the corporation only as authorized in the
specific case, upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he or she has
met the applicable standard of conduct set forth in subsections (a) or (b). Such
determination shall be made (1) by the board of directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceedings, or (2) if such a quorum is not obtainable, or even if obtainable,
if a quorum of disinterested direct so directs, by independent legal counsel in
a written opinion, or (3) by the shareholders.
(e) Expenses incurred in defending a civil or criminal action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding, as authorized by the board of directors in
the specific case, upon receipt of an undertaking by or on behalf of the
director, officer, employee or agent to repay such amount, unless it shall
ultimately be determined that he or she is entitled to be indemnified by the
corporation as authorized in this Article.
(f) The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any by-law, agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in his or
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<PAGE> 15
her official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent, and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(g) A corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
corporation, or who is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of his
or her status as such, whether or not the corporation would have the power to
indemnify such person against such liability under the provisions of this
Article.
(h) If a corporation has paid indemnity or has advanced expenses to
a director, officer, employee or agent, the corporation shall report the
indemnification or advance in writing to the shareholders with or before the
notice of the next shareholders meeting.
(i) For purposes of this Article, references to "the corporation"
shall include, in addition to the surviving corporation, any merging corporation
(including any corporation having merged with a merging corporation) absorbed in
a merger which, if its separate existence had continued, would have had the
power and authority to indemnify its directors, officers, and employees or
agents, so that any person who was a director, officer, employee or agent of
such merging corporation, or was serving at the request of such merging
corporation as a director, officer, employee or agent or another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under the provisions of this Article with respect to the surviving
corporation as such person would have with respect to such merging corporation
if its separate existence had continued.
(j) For purposes of this Article, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries. A person who acted in good faith and in a manner he or she
reasonably believed to be in the best interests of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interest of the corporation" as referred to in
this Article.
ARTICLE XIII
FUTURE AMENDMENTS TO
BUSINESS CORPORATION ACT
In the event the Business Corporation Act is amended after the
adoption of these by-laws in a manner which makes these by-laws conflict with
the Business Corporation Act, these by-laws shall be deemed to be amended to
comport with such conflicting provisions of the amended Business Corporation
Act.
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<PAGE> 16
UNANIMOUS WRITTEN CONSENT
OF THE SOLE DIRECTOR AND
SHAREHOLDER OF
STANDARD PARKING CORPORATION
The undersigned, being the sole Director and Shareholder of Standard
Parking Corporation, an Illinois corporation, hereby consents in writing to the
adoption of the following resolutions:
RESOLVED, that Myron Warshauer be and hereby is elected as
sole director of the Corporation, to hold such position until his
successor has been duly elected and qualified;
FURTHER RESOLVED, that any and all acts previously taken by
the directors of the Corporation since the date of the last annual
meeting to the date hereof are in all respects expressly ratified
and confirmed as the acts and deeds of the Corporation;
FURTHER RESOLVED, that the form, terms and provisions of the
Agreement to Terminate the Stock Purchase Agreement dated November
20, 1990 by and among Sidney Warshauer as Trustee of the Sidney
Warshauer Trust dated November 1, 1979, Myron Warshauer and the
Corporation, a copy of which is attached hereto as Exhibit A,
terminating that certain Stock Purchase Agreement dated December 5,
1979 and as amended in that certain First Amendment to Stock
Purchase Agreement dated July 1, 1986 and in that certain Second
Amendment to Stock Purchase Agreement dated October 10, 1986, be and
hereby is approved;
FURTHER RESOLVED, that the form, terms and provisions of the
Stock Assignment dated November 20, 1990 by Sidney Warshauer as
Trustee of the Sidney Warshauer Trust dated November 1, 1979,
transferring to Myron Warshauer its two (2) shares of common stock
of the Corporation, a copy of which is attached hereto as Exhibit B,
be and hereby is approved;
FURTHER RESOLVED, that Article III, Section 2 of the By-Laws
of the Corporation is amended to read as follows:
"SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of
directors of the corporation shall be one (1). The directors
shall hold office until the next annual meeting of
shareholders or until his successor shall have been elected
and qualified. The director need not be a resident of Illinois
or shareholder of the Corporation. The number of directors may
be increased from time to time by the amendment of this
Section."
<PAGE> 17
FURTHER RESOLVED, that Article IV, Section 4 of the By-Laws of
the Corporation is amended to read as follows:
"SECTION 4. CHAIRMAN OF THE BOARD. The chairman of the board
may sign, in lieu of the president, certificates for shares of
the corporation, deeds, mortgages, bonds, contracts or other
instruments, which the board of directors have authorized to
be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the board of directors
of these By-Laws to some other officer or agent of the
corporation or in cases where the signing and execution
thereof is required by law to be performed by some other
officer or agent of the corporation."
FURTHER RESOLVED, that the appropriate officers of the
Corporation be and hereby are authorized and directed to take such
actions as may be necessary or appropriate to implement the
foregoing resolutions.
Dated: November 20, 1990
/s/ Myron Warshauer
--------------------------------------
Myron Warshauer,
Director and Shareholder
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<PAGE> 1
ARTICLES OF
Form BCA-2.10 INCORPORATION
==========================================================================
(Rev. Jan. 1991)
George H. Ryan
Secretary of State [STAMP] SUBMIT IN DUPLICATE!
Department of Business
Services
Springfield, IL 62756
Telephone (217) 782-6961
========================= ========================
Payment must be made by APR 12 1993 This space for use by
certified check, Secretary of State
cashier's check, GEORGE H. RYAN
Illinois attorney's SECRETARY OF STATE Date 4-12-98
check, Illinois C.P.A's
check or money order, Franchise Tax $25
payable to "Secretary Filing Fee $75
of State." ---
Approved: 100
==========================================================================
1. CORPORATE NAME: Standard Parking Corporation MW
-----------------------------------------------------------
(The corporate name must contain the word "corporation", "company,"
"incorporated," "limited" or an abbreviation thereof.)
2. Initial Registered Agent: Michael K. Wolf
-------------------------------------------------
First Name Middle Initial Last Name
Initial Registered office: 555 E. Monroe Street, Ste. 3440
------------------------------------------------
Number Street Suite #
Chicago, Illinois 60603
------------------------------------------------
City Zip Code County
- --------------------------------------------------------------------------------
3. Purpose or purposes for which the corporation is organized:
(if not sufficient space to cover this point, add one or more sheets of
this size.)
To transact any or all lawful activities and businesses which are
authorized by the Illinois Business Corporation Act of 1983, as amended,
and to purchase or otherwise acquire, hold, use, own, mortgage, sell,
convey, lease or otherwise dispose of and deal in real and personal
property of every class and description or any interest therein.
- --------------------------------------------------------------------------------
<PAGE> 2
4. Paragraph 1: Authorized Shares, Issued Shares and Consideration Received:
Number of Number of Consideration
Per Value Shares Shares proposed to be Received
Class per Share Authorized to be Issued Therefor
---------------------------------------------------------------------
Common No Par 100,000 100 $1,000
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
TOTAL $1,000
Paragraph 2: The preferences, qualifications; limitations and special or
relative rights in respect of the shares of each class are:
(if not sufficient space to cover this point, add one or more sheets of this
size.)
(over)
<PAGE> 3
5. OPTIONAL: (a) Number of directors constituting the initial board of
directors of the corporation:____________________.
(b) Names and addresses of the persons who are to serve as
directors until the first annual meeting of shareholders or
until their successors be elected and qualify:
Name Residential Address
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
- --------------------------------------------------------------------------------
6. OPTIONAL: (a) It is estimated that the value of all
property to be owned by the corporation
for the following year wherever located
will be: $ __________________
(b) It is estimated that the value of the
property to be located within the State
of Illinois during the following year
will be: $ __________________
(c) it is estimated that the gross amount of
business which will be transacted by the
corporation during the following year
will be: $ __________________
(d) it is estimated that the gross amount
of business in the State of Illinois
during the following year will be: $ __________________
- --------------------------------------------------------------------------------
7. OPTIONAL: OTHER PROVISIONS
Attach a separate sheet of this size for any other provision to
be included in the Articles of Incorporation, e.g., authorizing
preemptive rights, denying cumulative voting, regulating internal
affairs, voting majority requirements, fixing a duration other
than perpetual, etc.
- --------------------------------------------------------------------------------
<PAGE> 4
8. NAME(S) & ADDRESS(ES) OF INCORPORATOR(S)
The undersigned incorporator(s) hereby declare(s), under penalty of
perjury, that the statements made in the foregoing Articles of Incorporation are
true.
Dated April 9, 1993
Signature and Name Address
1. /s/ Dianne M. Chiappetti 1. 30 South Wacker Drive, 29th Floor
-------------------------------- ---------------------------------
Signature Street
Dianne M. Chiappetti Chicago, Illinois 60606-7434
-------------------------------- ---------------------------------
(Type or Print Name) City/Town State Zip Code
2. 2.
-------------------------------- ---------------------------------
Signature Street
-------------------------------- ---------------------------------
(Type or Print Name) City/Town State Zip Code
3. 3.
-------------------------------- ---------------------------------
Signature Street
-------------------------------- ---------------------------------
(Type or Print Name) City/Town State Zip Code
(Signatures must be in ink on original document. Carbon copy, xerox or rubber
stamp signatures may only be used on conformed copies.)
NOTE: If a corporation acts as incorporator, the name of the corporation and the
state of incorporation shall be shown and the execution shall be by its
President or Vice-President and verified by him, and attested by its Secretary
or an Assistant Secretary.
- --------------------------------------------------------------------------------
FEE SCHEDULE
o The initial franchise tax is assessed at the rate of 15/100 of 1 percent
($1.50 per $1,000) on the paid-in capital represented in this state, with
a minimum of $25 and a maximum of $1,000,000.
o The filing fee is $75.
o The minimum total due (franchise tax + filing fee) is $100.
(Applies when the Consideration to be Received is as set forth in Item 4
does not exceed $16,667)
o The Department of Business Services in Springfield will provide assistance
in calculating the total fees if necessary.
Illinois Secretary of State Springfield, IL 62756
Department of Business Services Telephone (217) 782-6961
<PAGE> 5
File # D5726-252-4
- ---------------------------
Form BCA-5.10
NFP-105.10
(Rev. Jan. 1995)
- ---------------------------
George H. Ryan
Secretary of State
Department of Business
Services Springfield, IL 62756
Telephone (217) 782-3647
- ---------------------------
STATEMENT OF
CHANGE
OF REGISTERED AGENT
AND/OR REGISTERED
OFFICE
- ---------------------------
[STAMPED]
PAID
MAR 28 1996
FILED
MAR 28 1996
GEORGE H. RYAN
SECRETARY OF STATE
- ---------------------------
SUBMIT IN DUPLICATE
- ---------------------------
This space for use by
Secretary of State
Date 3/28/96
Filing Fee $5
Approved:
- ---------------------------
Remit payment in check or
money order, payable to
"Secretary of State."
- ---------------------------
1. CORPORATE NAME: Standard Parking Corporation MW
-----------------------------------------------------------
2. STATE OF COUNTRY OF INCORPORATION: Illinois
----------------------------------------
3. Name and address of the registered agent and registered office as they
appear on the records of the office of the Secretary of State (before
change):
Registered Agent Michael K. Wolf
--------------------------------------------------
First Name Middle Name Last Name
Registered Office 55 E. Monroe St., Suite 3440
--------------------------------------------------
Number Street Suite No. (A P.O. Box alone is
not acceptable)
Chicago 60603 Cook
--------------------------------------------------
City Zip Code County
4. Name and address of the registered agent and registered office shall be
(after all changes herein reported):
Registered Agent Michael K. Wolf
--------------------------------------------------
First Name Middle Name Last Name
Registered Office 200 E. Randolph Dr., Suite 4800
--------------------------------------------------
Number Street Suite No. (A P.O. Box alone is
not acceptable)
Chicago 60601 Cook
--------------------------------------------------
City Zip Code County
5. The address of the registered office and the address of the business
office of the registered agent, as changed, will be identical.
<PAGE> 6
6. The above change was authorized by: ("X" one box only)
a. |_| By resolution duly adopted by the board of directors. (Note 5)
b. |X| By action of the registered agent. (Note 6)
NOTE: When the registered agent changes, the signatures of both president and
secretary are required.
7. (If authorized by the board of directors, sign here. See Note 5).
The undersigned corporation has caused this statement to be signed by its
duly authorized officers, each of whom affirms, under penalty of perjury, that
the facts stated herein are true.
Dated 19
---------------- -- ---------------------------------------------------
(Exact Name of Corporation)
attested by by
---------------------------- ------------------------------------
(Signature of Secretary or (Signature of Vice President)
Assistant Secretary)
---------------------------- ------------------------------------
(Type or Print Name and Title) (Type or Print Name and Title)
(If change of registered office by registered agent, sign here. See Note 6)
The undersigned, under penalties of perjury, affirms that the facts stated
herein are true.
Dated February 29 1996 /s/ Michael K. Wolf
---------------- ---- --------------------------------------------
(Signature of Registered Agent of Record)
NOTES
1. The registered office may, but need not be the same as the principal
office of the corporation. However, the registered office and the office
address of the registered agent must be the same.
2. The registered office must include a street or road address: a post office
box number alone is not acceptable.
3. A corporation cannot act as its own registered agent.
4. If the registered office is changed from one county to another, then the
corporation must file with the recorder of deeds of the new county a
certified copy of the articles of incorporation and a certified copy of
the statement of change of registered office. Such certified copies may be
obtained ONLY from the Secretary of State.
5. Any change of registered agent must be by resolution adopted by the board
of directors. This statement must then be signed by the president (or
vice-president) and by the secretary (or an assistant secretary).
6. The registered agent may report a change of the registered office of the
corporation for which he or she is registered agent. When the registered
agent reports such a change, this statement must be signed by the
registered agent.
<PAGE> 1
By-Laws
of
Standard Parking Corporation MW
(an Illinois Corporation)
Adopted
April 12, 1993
This Document Prepared By:
Sachnoff & Weaver, Ltd.
30 South Wacker Drive
Suite 2900
Chicago, Illinois 60606
(312) 207-1000
<PAGE> 2
TABLE OF CONTENTS
-----------------
Page
----
Article 1 - CORPORATE OFFICES.................................................1
Section 1.1 Principal Corporate Office.....................................1
Section 1.2 Registered Office in Illinois..................................1
Article 2 - SHAREHOLDERS......................................................1
Section 2.1 Annual Meeting.................................................1
Section 2.2 Special Meetings...............................................1
Section 2.3 Place of Meeting...............................................1
Section 2.4 Notice of Meeting..............................................2
Section 2.5 Meeting of all Shareholders....................................2
Section 2.6 Fixing of Record Date..........................................2
Section 2.7 Voting Lists...................................................2
Section 2.8 Quorum of Shareholders.........................................3
Section 2.9 Proxies........................................................3
Section 2.10 Voting of Shares..............................................3
Section 2.11 Voting of Shares by Certain Holders...........................3
Section 2.12 Voting by Ballot; Inspectors..................................4
Section 2.13 Informal Action by Shareholders...............................4
Article 3 - DIRECTORS.........................................................5
Section 3.1 General Powers.................................................5
Section 3.2 Number, Tenure and Qualification...............................5
Section 3.3 Regular Meetings...............................................5
Section 3.4 Special Meetings...............................................5
Section 3.5 Notice.........................................................5
Section 3.6 Quorum.........................................................6
Section 3.7 Manner of Action...............................................6
Section 3.8 Vacancies......................................................6
Section 3.9 Removal of Directors...........................................6
Section 3.10 Compensation..................................................6
Section 3.11 Presumption of Assent.........................................7
Section 3.12 Informal Action by Directors..................................7
Section 3.13 Participation by Conference Telephone.........................7
Section 3.14 Committees....................................................7
Section 3.15 Director Conflict of Interest.................................8
Article 4 - OFFICERS..........................................................9
Section 4.1 Number.........................................................9
Section 4.2 Election and Term of Office....................................9
-i-
<PAGE> 3
Page
----
Section 4.3 Removal........................................................9
Section 4.4 Vacancies......................................................9
Section 4.5 The President..................................................9
Section 4.6 The Vice-Presidents...........................................10
Section 4.7 The Secretary.................................................10
Section 4.8 The Treasurer.................................................10
Section 4.9 Assistant Secretaries and Assistant Treasurers................10
Section 4.10 Salaries......................................................11
Article 5 - INDEMNIFICATION OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS; INSURANCE..................................11
Section 5.1 Actions other than Actions by or in the Right of the
Corporation...................................................11
Section 5.2 Actions by or in the Right of the Corporation.................11
Section 5.3 Indemnification in Event of Successful Defense................12
Section 5.4 Procedures for Indemnification................................12
Section 5.5 Indemnity Insurance...........................................13
Article 6 - CONTRACTS, LOANS, CHECKS AND DEPOSITS............................13
Section 6.1 Contracts.....................................................13
Section 6.2 Loans.........................................................14
Section 6.3 Pledges of Property and Assets................................14
Section 6.4 Checks, Drafts, Etc...........................................14
Section 6.5 Deposits......................................................14
Article 7 - SHARES AND THEIR TRANSFER........................................14
Section 7.1 Consideration for Shares......................................14
Section 7.2 Payment for Shares............................................14
Section 7.3 Shares Represented by Certificates............................15
Section 7.4 Uncertificated Shares.........................................16
Article 8 - FISCAL YEAR......................................................16
Article 9 - DIVIDENDS........................................................16
Article 10 - SEAL............................................................16
Article 11 - WAIVER OF NOTICE................................................16
Article 12 - AMENDMENTS TO THE BY-LAWS.......................................17
Article 13 - STATUTORY REFERENCES............................................17
-ii-
<PAGE> 4
Standard Parking Corporation MW
Article 1
CORPORATE OFFICES
Section 1.1 Principal Corporate Office. The principal corporate office of
Standard Parking Corporation MW in Illinois shall be located in the City of
Chicago, County of Cook, or at such other place as the Board of Directors may
determine by resolution from time to time. The Corporation may have such other
offices, either within or without the State of Illinois, as the Board of
Directors may designate or the Corporation's business may require from time to
time. [BCA ss. 3.10(j))]
Section 1.2 Registered Office in Illinois. The Registered Office of the
Corporation required by the Illinois Business Corporation Act of 1983 ("BCA") to
be maintained in the State of Illinois may be, but need not be, the same as the
principal corporate office or its principal place of business in the State of
Illinois, but shall in any event be identical with the business office of the
Corporation's Registered Agent in Illinois. [BCA ss.5.05] The address of the
Registered Office in Illinois may be changed from time to time by the Board of
Directors or by such Registered Agent. [BCA ss.ss. 5.10, 5.20]
Article 2
SHAREHOLDERS
Section 2.1 Annual Meeting. Except as the Board of Directors of the Corporation
may otherwise provide by resolution duly adopted pursuant to the authority
granted hereby, the Annual Meeting of Shareholders of the Corporation shall be
held each year on the second Tuesday in April (beginning with the year 1994),
commencing at the hour of 10:00A.M., for the purpose of electing Directors and
for the transaction of such other business as may properly come before the
Meeting. If the day fixed for the Annual Meeting shall be a legal holiday, such
Meeting shall be held on the next succeeding business day. [BCA ss. 7.05]
Section 2.2 Special Meetings. Special Meetings of the Shareholders may be
called by the President, by the Board of Directors, or by the holders of not
less than one-fifth of all the outstanding shares of the Corporation entitled to
vote on the matter for which the Special Meeting is called. [BCA ss. 7.05]
Section 2.3 Place of Meeting. The Board of Directors may by resolution
designate any place, either within or without the State of Illinois, as the
place of meeting for any Annual Meeting of Shareholders or for any Special
Meeting called by the Board of Directors or by the President, and may designate
any place within the State of Illinois for any Special Meeting called by
Shareholders. A waiver of notice signed by all Shareholders may designate any
place, either within or without the State of Illinois, as the place for the
holding of any Meeting. If no designation of a meeting place is made, or if a
Special Meeting be otherwise called, the place of meeting shall be the
Registered Office of the Corporation in the State of Illinois, except as
otherwise provided in Section 2.5 of these By-Laws. [BCA ss. 7.05]
Section 2.4 Notice of Meeting. Written notice stating the place, day and
hour of the Meeting, and, in the case of a Special Meeting, the purpose or
purposes for which the Meeting is
<PAGE> 5
Standard Parking Corporation MW
called, shall be delivered not less than ten (10) nor more than sixty (60) days
before the date of the Meeting, or, in the case of a merger, consolidation,
share exchange, dissolution, or sale, lease or exchange of assets requiring
Shareholder approval, not less than twenty (20) nor more than sixty (60) days
before the date of the Meeting, either personally or by mail, by or at the
direction of the President, or the Secretary, or the Officer or persons calling
the meeting, to each Shareholder of record entitled to vote at such Meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail, addressed to the Shareholder at his or her address as it appears on
the records of the Corporation, with postage thereon prepaid. [BCA ss. 7.15]
Section 2.5 Meeting of all Shareholders. If all of the Shareholders shall
meet at any time and place, either within or without the State of Illinois, and
consent to the holding of a Meeting at such time and place, such Meeting shall
be valid without call or notice, and at such Meeting any corporate action may be
taken. [BCA ss. 7.20]
Section 2.6 Fixing of Record Date. For the purpose of determining
Shareholders entitled to notice of or to vote at any Meeting of Shareholders, or
Shareholders entitled to receive payment of any dividend or distribution, or in
order to make a determination of Shareholders for any other proper purpose, the
Board of Directors of the Corporation may fix in advance a date as the record
date for any such determination of Shareholders, such date in any case to be not
more than sixty (60) days immediately preceding the date of the Meeting, payment
or other transaction, and, for a Meeting of Shareholders, not less than ten (10)
days, or in the case of a merger, consolidation, share exchange, dissolution, or
sale, lease or exchange of assets requiring Shareholder approval, not less than
twenty (20) days, immediately preceding such Meeting. If no record date is fixed
for the determination of Shareholders entitled to notice of or to vote at a
Meeting of Shareholders, or Shareholders entitled to receive payment of a
dividend or other distribution, the date on which notice of the Meeting is
mailed or the date on which the resolution of the Board of Directors declaring
such dividend or distribution is adopted, as the case may be, shall be the
record date for such determination of Shareholders. When a determination of
Shareholders entitled to vote at any Meeting of Shareholders has been made as
provided in this Section 2.6, such determination shall apply to any adjournment
thereof. [BCA ss. 7.25]
Section 2.7 Voting Lists. The Officer or agent having charge of the
transfer books and records for shares of the Corporation shall make, within
twenty (20) days after the record date for a Meeting of Shareholders or ten (10)
days before such Meeting, whichever is earlier, a complete list of the
Shareholders entitled to vote at such Meeting, arranged in alphabetical order,
with the address of and the number of shares held by each, which list, for a
period of ten (10) days prior to such Meeting, shall be kept on file at the
Registered Office of the Corporation and shall be subject to inspection by any
Shareholder, and to copying at the Shareholder's expense, at any time during
usual business hours. Such list shall also be produced and kept open at the time
and place of the Meeting and shall be subject to the inspection of any
Shareholder during the whole time of the Meeting. The original share ledger or
transfer book, or a duplicate thereof kept in Illinois, shall be prima facie
evidence as to who are the Shareholders entitled to examine such list or share
ledger or transfer book, or to vote at any Meeting of Shareholders. Failure to
comply with the requirements of this Section 2.7 shall not affect the validity
of any action taken at such
-2-
<PAGE> 6
Standard Parking Corporation MW
Meeting. An Officer or agent having charge of the transfer books or records who
shall fail to prepare the list of Shareholders, or keep the same on file for a
period of ten (10) days, or produce and keep the same open for inspection at the
Meeting, as provided in this Section 2.7, shall be liable to any Shareholder
suffering damage on account of such failure, to the extent of such damage as
provided by law. [BCA ss. 7.30]
Section 2.8 Quorum of Shareholders. A majority of the outstanding shares
of the Corporation entitled to vote on a matter, represented in person or by
proxy, shall constitute a quorum for consideration of such matter at a meeting
of Shareholders. If a quorum is present, the affirmative vote of the majority of
the shares represented at the Meeting and entitled to vote on a matter shall be
the act of the Shareholders, unless the vote of a greater number or voting by
classes is required by the Illinois Business Corporation Act of 1983, by the
Corporation's Articles of Incorporation, or by these By-Laws. [BCA ss. 7.60]
Section 2.9 Proxies. A Shareholder may appoint a proxy to vote or
otherwise act for him or her by signing an appointment form and delivering it to
the person so appointed. No proxy shall be valid after the expiration of eleven
(11) months from the date thereof unless otherwise provided in the proxy. Every
proxy continues in full force and effect until revoked by the person executing
it prior to the vote pursuant thereto, except as otherwise provided in this
Section 2.9 and in Section 7.50 of the Illinois Business Corporation Act of
1983. Such revocation may be effected by a writing delivered to the Corporation
stating that the proxy is revoked or by a subsequent proxy executed by, or by
attendance at the Meeting and voting in person by, the person executing the
proxy. The dates contained on the forms of proxy presumptively determine the
order of execution, regardless of any postmark dates on envelopes in which they
are mailed. An appointment of a proxy is revocable by the Shareholder unless the
appointment form conspicuously states that it is irrevocable and the appointment
is coupled with an interest in the shares or in the Corporation generally.
Unless the appointment of a proxy contains an express limitation on the proxy's
authority, the Corporation may accept the proxy's vote or other action as that
of the Shareholder making the appointment. [BCA ss. 7.50]
Section 2.10 Voting of Shares. Each outstanding share of the Corporation
shall be entitled to one vote in each matter submitted to a vote by the
Shareholders, except as the Illinois Business Corporation Act of 1983 and the
Corporation's Articles of Incorporation may otherwise limit or deny voting
rights or provide special voting rights as to any class or classes or series of
shares. [BCA ss. 7.40]
Section 2.11 Voting of Shares by Certain Holders. Shares of its own stock
belonging to this Corporation shall not be voted, directly or indirectly, at any
Meeting and shall not be counted in determining the total of outstanding shares
at any given time, but shares of the Corporation held by the Corporation in a
fiduciary capacity may be voted and shall be counted in determining the total
number of outstanding shares entitled to vote at any given time.
Shares registered in the name of another corporation, domestic or foreign,
may be voted by any Officer, agent, proxy or other legal representative
authorized to vote such shares under the law of incorporation of such
corporation. The Corporation may treat the president or other person holding the
position of chief executive officer of such other corporation as authorized to
-3-
<PAGE> 7
Standard Parking Corporation MW
vote such shares, together with any other person indicated and any other holder
of an office indicated by the corporate Shareholder to the Corporation as a
person or office authorized to vote such shares. Such persons and offices
indicated shall be registered by the Corporation on the transfer books for
shares and included in any voting list prepared in accordance with Section 2.7
of these By-Laws.
Shares registered in the name of a deceased person, a minor ward or a
person under legal disability may be voted by his or her administrator, executor
or court appointed guardian, either in person or by proxy without a transfer of
such shares into the name of such administrator, executor or court appointed
guardian. Shares registered in the name of a trustee may be voted by him or her,
either in person or by proxy.
Shares registered in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his or her name if authority so to do
is contained in an appropriate order of the court by which such receiver was
appointed.
A Shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred. [BCA
ss. 7.45]
Section 2.12 Voting by Ballot; Inspectors. Voting by Shareholders on any
matter or in any election may be viva voce unless the Chairman of the Meeting
shall order, or any Shareholder entitled to vote thereon shall demand, that
voting be by ballot.
At any Meeting of Shareholders, the Chairman of the Meeting may, or upon
the request of any Shareholder shall, appoint one or more persons as inspectors
for such Meeting. Such inspectors shall ascertain and report the number of
shares represented at the Meeting, based upon their determination of the
validity and effect of proxies; count all votes and report the results; and do
such other acts as are proper to conduct the election and voting with
impartiality and fairness to all the Shareholders. Each report of an inspector
shall be in writing and signed by him or her or by a majority of them if there
be more than one inspector acting at such Meeting. If there is more than one
inspector, the report of a majority shall be the report of the inspectors. The
report of the inspector or inspectors on the number of shares represented at the
Meeting and the results of the voting shall be prima facie evidence thereof.
[BCA ss. 7.35]
Section 2.13 Informal Action by Shareholders. Any action required to be
taken at any Annual or Special Meeting of Shareholders of the Corporation, or
any other action which may be taken at a Meeting of the Shareholders, may be
taken without a Meeting and without a vote, if a consent in writing, setting
forth the action so taken, shall be signed (i) by the holders of outstanding
shares having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voting or (ii) by all of the Shareholders entitled
to vote with respect to the subject matter thereof. If such consent is signed by
less than all of the Shareholders entitled to vote, then such consent shall
become effective only if, at least five (5) days prior to the execution of the
consent, a notice of the proposed action is delivered in writing to all of the
Shareholders entitled
-4-
<PAGE> 8
Standard Parking Corporation MW
to vote with respect to the subject matter thereof and, after the effective date
of the consent, prompt notice of the taking of the action without a meeting by
less than unanimous written consent shall be delivered in writing to those
Shareholders who have not consented in writing. [BCA ss. 7.10]
Article 3
DIRECTORS
Section 3.1 General Powers. The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors. [BCA ss. 8.05]
Section 3.2 Number, Tenure and Qualification. The number of Directors of
the Corporation shall be one (1). Each Director shall serve until the next
Annual Meeting of Shareholders or until his or her successor shall have been
elected and qualified. Directors need not be residents of Illinois or
Shareholders of the Corporation.
A Director may resign at any time by giving written notice to the Board of
Directors, its Chairman, or to the President or Secretary of the Corporation. A
resignation is effective when the notice is given unless the notice specifies a
future date. The pending vacancy may be filled before the effective date, but
the successor shall not take office until the effective date. [BCA ss.ss. 8.01,
8.10]
Section 3.3 Regular Meetings. A Regular Meeting of the Board of Directors
shall be held without other notice than this By-Law, immediately after, and at
the same place as, the Annual Meeting of Shareholders. The Board of Directors
may provide, by resolution, the time and place, either within or without the
State of Illinois, for the holding of additional Regular Meetings without other
notice than such resolution. [BCA ss.ss. 8.20, 8.25]
Section 3.4 Special Meetings. Special Meetings of the Board of Directors
may be called by or at the request of the President or any two Directors. The
person or persons authorized to call Special Meetings of the Board of Directors
may fix any place, either within or without the State of Illinois, as the place
for holding any Special Meeting of the Board of Directors called by them. [BCA
ss.ss. 8.20, 8.25]
Section 3.5 Notice. Notice of any Special Meeting shall be given at least
three days previous thereto by written notice delivered personally or by
telegram or mailgram to each Director at his or her business address, or given
at least five (5) days previous thereto if mailed. If mailed, such notice shall
be deemed to be delivered on the second day following the date on which it was
deposited in the United States mail so addressed, with proper postage thereon
prepaid. If notice be given by telegram or mailgram, such notice shall be deemed
to be delivered when the telegram or mailgram is delivered to the telegraph
company. Any Director may waive notice of any Meeting by executing a written
waiver of notice. The attendance of a Director at any Meeting shall constitute a
waiver of notice of such Meeting, except where a Director attends a Meeting for
the express purpose of objecting to the transaction of any business because the
Meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any Regular or Special Meeting of the Board
of Directors need be specified in the
-5-
<PAGE> 9
Standard Parking Corporation MW
notice or waiver of notice of such Meeting. [BCA ss. 8.25]
Section 3.6 Quorum. A majority of the number of Directors fixed by these
By-Laws shall constitute a quorum for transaction of business at any Meeting of
the Board of Directors, provided, that if less than a majority of such number of
Directors is present at said Meeting, a majority of the Directors present may
adjourn the Meeting from time to time without further notice. [BCA ss. 8.15(a)]
Section 3.7 Manner of Action. The act of the majority of Directors present
at a Meeting at which a quorum is present shall be the act of the Board of
Directors. [BCA ss. 8.15(c)]
Section 3.8 Vacancies. Any vacancy occurring in the Board of Directors and
any directorship to be filled by reason of an increase in the number of
Directors may be filled by election at an Annual Meeting or at a Special Meeting
of Shareholders called for that purpose. In the absence of a Special Meeting of
Shareholders, the Board of Directors may fill the vacancy, except as otherwise
specified in the Articles of Incorporation. A Director elected by the
Shareholders to fill a vacancy shall hold office for the balance of the term for
which he or she was elected. A Director appointed to fill a vacancy shall serve
until the next Meeting of Shareholders at which Directors are to be elected.
[BCA ss. 8.30]
Section 3.9 Removal of Directors. One or more of the Directors may be
removed, with or without cause, at a Meeting of Shareholders by the affirmative
vote of the holders of a majority of the outstanding shares then entitled to
vote at an election of Directors, except that:
(a) No Director shall be removed at a Meeting of Shareholders unless the
notice of such Meeting shall state that a purpose of the Meeting is to vote upon
the removal of one or more Directors named in the notice. Only the named
Director or Directors may be removed at such Meeting.
Section 3.10 Compensation. Except as otherwise provided in any written
agreement and except as otherwise set forth below, the Board of Directors, by
the affirmative vote of a majority of Directors then in office, and irrespective
of any personal interest of any of its members, shall have authority to
establish reasonable compensation of all Directors for services to the
Corporation as Directors, Officers or otherwise. [BCA ss. 8.05(b)] By
resolution of the Board of Directors, the Directors may be paid their expenses,
if any, of attendance at each Meeting of the Board of Directors. In the event
the Internal Revenue Service shall determine any such compensation paid to a
Director to be unreasonable or excessive, such Director must repay to the
Corporation the excess over what is determined to be reasonable compensation,
with interest on such excess at the rate of nine percent (9%) per annum, within
ninety (90) days after notice from the Corporation.
Section 3.11 Presumption of Assent. A Director of the Corporation who is
present at a Meeting of the Board of Directors at which action on any corporate
matter is taken shall be conclusively presumed to have assented to the action
taken unless his or her dissent shall be entered in the minutes of the Meeting
or unless he or she shall file his or her written dissent to
-6-
<PAGE> 10
Standard Parking Corporation MW
such action with the person acting as the Secretary of the Meeting before the
adjournment thereof or shall forward such dissent by registered or certified
mail to the Secretary of the Corporation immediately after the adjournment of
the Meeting. Such right to dissent shall not apply to a Director who voted in
favor of such action. [BCA ss. 8.65(b)]
Section 3.12 Informal Action by Directors. Unless specifically prohibited
by the Articles of Incorporation or by these By-Laws, any action required to be
taken at a Meeting of the Board of Directors, or any other action which may be
taken at a Meeting of the Board of Directors or of a committee thereof, may be
taken without a Meeting if a consent in writing, setting forth the action so
taken, is signed by all the Directors entitled to vote with respect to the
subject matter thereof, or by all the members of such Committee, as the case may
be. The consent shall be evidenced by one or more written approvals, each of
which sets forth the action taken and bears the signature of one or more
Directors. All the approvals evidencing the consent shall be delivered to the
Secretary to be filed in the corporate records. The action taken shall be
effective when all the Directors have approved the consent unless the consent
specifies a different effective date. Any such consent signed by all the
Directors or all the members of a Committee shall have the same effect as a
unanimous vote. [BCA ss. 8.45]
Section 3.13 Participation by Conference Telephone. Members of the Board
of Directors or of any Committee of the Board of Directors may participate in
and act at any Meeting of the Board of Directors or any Committee through the
use of a conference telephone or other communications equipment by means of
which all persons participating in the Meeting can hear each other
Participation in such Meeting shall constitute attendance and presence in person
at the Meeting of the person or persons so participating. [BCA ss. 8.15(d)]
Section 3.14 Committees. A majority of the Directors may create one or
more Committees and appoint members of the Board of Directors to serve on such
Committee or Committees. Each Committee shall have two or more members, who
serve at the pleasure of the Board of Directors.
Unless the appointment by the Board of Directors requires a greater
number, a majority of any Committee shall constitute a quorum and a majority of
a quorum is necessary for Committee action. A Committee may act by unanimous
consent in writing without a meeting and, subject to the provisions of these
By-Laws or action by the Board of Directors, such Committee, by majority vote of
its members, shall determine the time and place of meetings and the notice
required therefor.
To the extent specified by the Board of Directors, each Committee may
exercise the authority of the Board of Directors under Section 3.1 of these
By-Laws; provided, however, that a Committee may not:
(a) authorize distributions;
(b) approve or recommend to Shareholders any act which is required to be
approved by Shareholders;
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(c) fill vacancies on the Board of Directors or on any of its Committees;
(d) elect or remove Officers or fix the compensation of any member of the
Committee;
(e) adopt, amend or repeal these By-Laws;
(f) approve a plan of merger not requiring Shareholder approval;
(g) authorize or approve reacquisition of shares, except according to a
general formula or method prescribed by the Board of Directors;
(h) authorize or approve the issuance or sale, or contract for sale, of
shares or determine the designation and relative rights, preferences and
limitations of a series of shares, except that the Board of Directors may direct
a Committee to fix the specific terms of the issuance or sale or contract for
sale or the number of shares to be allocated to particular employees under an
employee benefit plan; or
(i) amend, alter, repeal or take action inconsistent with any resolution
or action of the Board of Directors when the resolution or action of the Board
of Directors provides by its terms that it shall not be amended, altered or
repealed by action of a Committee. [BCA ss. 8.40]
Section 3.15 Director Conflict of Interest. If a transaction is fair to
the Corporation at the time it is authorized, approved or ratified, the fact
that a Director of the Corporation is directly or indirectly a party to the
transaction is not grounds for invalidating the transaction.
In a proceeding contesting the validity of a transaction described in the
preceding paragraph, the person asserting validity has the burden of proving
fairness unless:
(1) the material facts of the transaction and the Director's interest or
relationship were disclosed or known to the Board of Directors or a Committee of
the Board of Directors and the Board of Directors or Committee authorized,
approved or ratified the transaction by the affirmative votes of a majority of
disinterested Directors, even though the disinterested Directors be less than a
quorum; or
(2) the material facts of the transaction and the Director's interest or
relationship were disclosed or known to the Shareholders entitled to vote and
they authorized, approved or ratified the transaction without counting the vote
of any Shareholder who was an interested Director.
The presence of the Director, who is directly or indirectly a party to the
transaction described in the first paragraph of this section, or a Director who
is otherwise not disinterested, may be counted in determining whether a quorum
is present but may not be counted when the Board of Directors or a Committee of
the Board of Directors takes action on the transaction.
A Director is "indirectly" a party to a transaction if the other party to
the transaction is an entity in which the Director has a material financial
interest or of which the Director is an Officer, Director or General Partner.
[BCA ss. 8.60]
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Article 4
OFFICERS
Section 4.1 Number. The Officers of the Corporation shall be a President, one or
more Vice Presidents (the number thereof to be determined by the Board of
Directors), a Secretary, and a Treasurer, and such Assistant Secretaries,
Assistant Treasurers or other officers as may be elected or appointed by the
Board of Directors. Any two or more offices may be held by the same person. All
Officers and agents of the Corporation shall have such express authority and
perform such duties in the management of the property and affairs of the
Corporation as may be provided herein, or as may be determined by resolution of
the Board of Directors not inconsistent with these By-Laws, and such implied
authority as is recognized by the common law from time to time. [BCA ss. 8.50]
Section 4.2 Election and Term of Office. The Officers of the Corporation
shall be elected by the Board of Directors at-the first Meeting of the Board of
Directors and thereafter at each Annual Meeting of the Board of Directors. The
Board of Directors may create and fill new offices at Annual or Special
Meetings. If the election of Officers shall not be held at such Meeting, such
election shall be held as soon thereafter as is convenient. Each Officer shall
hold office until his or her successor shall have been duly elected and shall
have qualified or until his or her death or until he or she shall resign or
shall have been removed in the manner hereinafter provided. Election or
appointment of an Officer or agent shall not of itself create contract rights.
[BCA ss. 8.50]
Section 4.3 Removal. Any Officer or agent elected or appointed by the
Board of Directors may be removed by the Board of Directors whenever in its
judgment the best interests of the Corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. [BCA ss. 8.55]
Section 4.4 Vacancies. A vacancy in any Office because of death,
resignation, removal, disqualification, or otherwise, or because of the creation
of an office, may be filled by the Board of Directors for the unexpired portion
of the term.
Section 4.5 The President. The President shall be the principal executive
Officer of the Corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the business and
affairs of the Corporation. He or she shall preside at all Meetings of the
Shareholders and of the Board of Directors. He or she may sign, with the
Secretary or any other Officer of the Corporation thereunto authorized by the
Board of Directors, certificates for shares of the Corporation, any deeds,
mortgages, bonds, contracts or other instruments which the Board of Directors
has authorized to be executed on behalf of the Corporation, except in cases
where the signing and execution thereof shall be expressly delegated by the
Board of Directors or by these By-Laws to some other Officer or agent of the
Corporation or to the President alone, or shall be required by law to be
otherwise signed or executed; and in general shall perform all duties incident
to the Office of President and such other duties as may be prescribed by the
Board of Directors from time to time. [BCA ss. 8.50]
Section 4.6 The Vice-Presidents. In the absence of the President or in the
event of his
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or her inability or refusal to act, the Vice-President (or in the event there be
more than one Vice President, the Vice-Presidents in the order designated, or in
the absence of any designation, then in the order of their election) shall
perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President. Any
Vice-President may sign, with the Secretary or an Assistant Secretary,
certificates for shares of the Corporation, and shall perform such other duties
as from time to time may be assigned to him or her by the President or by the
Board of Directors. [BCA ss. 8.50]
Section 4.7 The Secretary. The Secretary shall: (a) keep, or supervise and
be responsible for the keeping of, the minutes and records of all Meetings and
official actions of the Shareholders and of the Board of Directors, and any
Committees of the Board of Directors in one or more books provided for that
purpose; (b) see that all notices of such Meetings are duly given or waivers of
notice obtained in accordance with the provisions of these By-Laws or as
required by law; (c) be custodian of the corporate records and of the seal of
the Corporation and see that the seal of the Corporation is affixed to all
certificates for shares prior to the issuance thereof and to all documents, the
execution of which on behalf of the Corporation under its seal is duly
authorized in accordance with the provisions of these By-Laws; (d) keep a
register of the post office address of each Shareholder which shall be furnished
to the Secretary by such Shareholder; (e) sign with the President, or a Vice
President, certificates for shares of the Corporation, the issuance of which
shall have been authorized by resolution of the Board of Directors; (f) have
general charge of the stock transfer books and records of the Corporation; (g)
have the authority to certify the By-Laws, resolutions of the Board of Directors
and Committees thereof, and other documents of the Corporation as true and
correct copies thereof; and (h) in general perform all duties incident to the
Office of Secretary and such other duties as from time to time may be assigned
to him or her by the President or by the Board of Directors. [BCA ss. 8.50]
Section 4.8 The Treasurer. If required by the Board of Directors, the
Treasurer shall give a bond for the faithful discharge of his or her duties in
sum and with such surety or sureties as the Board of Directors shall determine.
He or she shall: (a) have charge and custody of and be responsible for all funds
and securities of the Corporation; receive and give receipts for moneys due and
payable to the Corporation from any source whatsoever, and deposit all such
moneys in the name of the Corporation in such banks, trust companies or other
depositaries as shall be selected in accordance with the provisions of Article 6
of these By-Laws; and (b) in general perform all the duties incident to the
Office of Treasurer and such other duties as from time to time may be assigned
to him or her by the President or by the Board of Directors. [BCA ss. 8.50]
Section 4.9 Assistant Secretaries and Assistant Treasurers. The Assistant
Secretaries as thereunto authorized by the Board of Directors may sign with the
President or a Vice-President certificates for shares of the Corporation, the
issuance of which shall have been authorized by a resolution of the Board of
Directors. The Assistant Treasurers shall respectively, if required by the Board
of Directors, give bonds for the faithful discharge of their duties in such sums
and with such sureties as the Board of Directors shall determine. The Assistant
Secretaries and Assistant Treasurers, in general, shall perform such duties and
exercise such authority as shall be assigned or granted to them by the Secretary
or the Treasurer, respectively, or by the President or the Board of Directors.
[BCA ss. 8.50]
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Section 4.10 Salaries. Except as otherwise provided in any written
employment agreement duly executed on behalf of the Corporation and except as
otherwise set forth below1 the compensation (including salaries and benefits) of
the Officers shall be fixed from time to time by resolution of the Board of
Directors and no Officer shall be prevented from receiving such salary by reason
of the fact that he or she is also a Director of the Corporation. [BCA ss. 8.50]
In the event the Internal Revenue Service shall determine any such compensation
(including any fringe benefit) paid to an Officer to be unreasonable or
excessive, such Officer must repay to the Corporation the excess over what is
determined to be reasonable compensation, with interest on such excess at the
rate of nine percent (9%) per annum, within ninety (90) days after notice from
the Corporation.
Article 5
INDEMNIFICATION OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS; INSURANCE
Section 5.1 Actions other than Actions by or in the Right of the Corporation.
The Corporation shall indemnify any of its Directors or Officers and may
indemnify any of its employees and agents who was or is a party, or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that he or she or it is or was a Director, Officer, employee or agent of
the Corporation, or who is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding, if
such person acted in good faith and in a manner he or she or it reasonably
believed to be in, or not opposed to, the best interests of the Corporation and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his or her or its conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faiith and in a manner which he or she or it
reasonably believed to be in, or not opposed to, the best interests of the
Corporation or, with respect to any criminal action or proceeding, that the
person had reasonable cause to believe that his or her or its conduct was
unlawful. [BCA ss. 8.75(a)]
Section 5.2 Actions by or in the Right of the Corporation. The Corporation
may indemnify any person who was or is a party, or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
such person is or was a Director, Officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit, if such person acted in good faith and in a manner he or
she reasonably believed to be in, or not opposed to, the best interests of the
Corporation, provided that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or
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Standard Parking Corporation MW
misconduct in the performance of his or her duty to the Corporation, unless, and
only to the extent that, the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability,
but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses as the court shall deem
proper. [BCA ss. 8.75(b)]
Section 5.3 Indemnification in Event of Successful Defense. To the extent
that a Director, Officer, employee or agent of the Corporation has been
successful, on the merits or otherwise, in the defense of any action, suit or
proceeding referred to in Sections 5.1 or 5.2, or in defense of any claim, issue
or matter therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith. [BCA ss. 8.75(c)]
Section 5.4 Procedures for Indemnification. Any indemnification under
Sections 5.1 and 5.2 (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case, upon a determination that
indemnification of the Director, Officer, employee or agent is proper in the
circumstances because he or she or it has met the applicable standard of conduct
set forth in said Sections. Such determination shall be made (a) by the Board of
Directors by a majority vote of a quorum consisting of Directors who were not
parties to such action, suit or proceeding, or (b) if such a quorum is not
obtainable, or even if obtainable, if a quorum of disinterested Directors so
directs, by independent legal counsel in a written opinion, or (c) by the
Shareholders. [BCA ss. 8.75(d)]
Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final disposition of
such action, suit or proceeding, as authorized by the Board of Directors in the
specific case, upon receipt of a written undertaking by or on behalf of the
Director, Officer, employee or agent to repay such amount unless it shall
ultimately be determined that he or she or it is entitled to be indemnified by
the Corporation as authorized in this Article 5. [BCA ss. 8.75(e)]
The indemnification provided by this Article 5 shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any By-Law, agreement, vote of Shareholders or disinterested
Directors, or otherwise, both as to action in his or her or its official
capacity and as to action in another capacity while holding such Office, and
shall continue as to a person who has ceased to be a Director, Officer, employee
or agent, and shall inure to the benefit of the heirs, executors and
administrators of such a person. [BCA ss. 8.75(f)]
If the Corporation has paid indemnity or has advanced expenses to a
Director, Officer, employee or agent, the Corporation shall report the
indemnification or advance in writing to the Shareholders with or before the
notice of the next Shareholders' Meeting. [BCA ss. 8.75(h)]
For purposes of this Article 5, references to the "Corporation" shall
include, in addition to the surviving corporation, any merging corporation
(including any corporation having merged with a merging corporation) absorbed in
a merger which, if its separate existence had continued, would have had the
power and authority to indemnify its Directors, Officers, and employees or
agents, so that any person who was a director, officer, employee or agent of
such merging
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corporation, or was serving at the request of such merging corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under the
provisions of this Article 5 with respect to the surviving corporation as such
person would have with respect to such merging corporation if its separate
existence had continued. [BCA ss. 8.75(i)]
For purposes of this Article 5, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a Director, Officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such Director, Officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries. A person who acted in good faith and in a manner he or she or it
reasonably believed to be in the best interests of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interest of the Corporation" as referred to in
this Article 5. [BCA ss. 8.75(j)]
Section 5.5 Indemnity Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a Director, Officer, employee or
agent of the Corporation, or who is or was serving at the request of the
Corporation as a Director, Officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any liability
asserted against such person and incurred by such person in any such capacity,
or arising out of his or her status as such, whether or not the Corporation
would have the power to indemnify such person against such liability under the
provisions of this Article 5 or under the provisions of ss. 8.75 of the Illinois
Business Corporation Act of 1983. [BCA ss. 8.75(g)]
Article 6
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 6.1 Contracts. The Board of Directors may expressly authorize any
Officer or Officers and agent or agents of the Corporation to enter into any
contract or execute and deliver any instrument in the name and on behalf of the
Corporation, and such authority may be general or confined to specific
instances. [BCA ss. 8.50]
Section 6.2 Loans. All loans contracted on behalf of the Corporation and
all evidence of indebtedness issued in the Corporation's name shall be
authorized by resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
Section 6.3 Pledges of Property and Assets. The pledge of all, or
substantially all, the property and assets of the Corporation in the usual and
regular course of business may be authorized by the Board of Directors upon such
terms and conditions as the Board of Directors deems necessary or desirable,
without authorization or consent of the Shareholders of the Corporation. [BCA
ss. 11.55]
Section 6.4 Checks, Drafts, Etc. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Corporation, shall be
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signed by such Officer or Officers, agent or agents of the Corporation and in
such manner as shall from time to time be determined by resolution of the Board
of Directors.
Section 6.5 Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies, or other depositarian as the Board of Directors may
select.
Article 7
SHARES AND THEIR TRANSFER
Section 7.1 Consideration for Shares. Shares may be issued for such
consideration as shall be authorized from time to time by the Board of Directors
through action which establishes a price in cash or other consideration, or
both, or a minimum price or a general formula or method by which the price can
be determined. Upon authorization by the Board of Directors, the Corporation may
issue its own shares in exchange for or in conversion of its outstanding shares,
or may distribute its own shares pro rata to its Shareholders or the
Shareholders of one or more classes or series to effectuate dividends or splits,
and any such transactions shall not require consideration; provided, that no
such issuance of shares of any class or series shall be made to the holders of
shares of any other class or series unless it is either expressly provided for
in the Articles of Incorporation or authorized by an affirmative vote of the
holders of at least a majority of the outstanding shares of the class or series
in which the distribution is to be made. [BCA ss. 6.25]
Section 7.2 Payment for Shares. The consideration for the issuance of
shares shall be paid, in whole or in part, in money, in other property, tangible
or intangible, or in labor or services actually performed for the Corporation,
as determined by the Board of Directors. When payment of the consideration for
which shares are to be issued shall have been received by the Corporation, such
shares shall be deemed to be fully paid and non-assessable. In the absence of
actual fraud in the transaction, and subject to the provisions of the Business
Corporation Act of 1983, the judgment of the Board of Directors or the
Shareholders, as the case may be, as to the value of the consideration received
for shares shall be conclusive. [BCA ss. 6.30]
Section 7.3 Shares Represented by Certificates. Except as otherwise
provided pursuant to this Article 7, the issued shares of the Corporation shall
be represented by certificates. Certificates shall be signed by the appropriate
corporate Officers and may be sealed with the seal, or a facsimile of the seal,
of the Corporation. In case the seal of the Corporation is changed after the
certificate is sealed with the seal or a facsimile of the seal of the
Corporation, but before it is issued, the certificate may be issued by the
Corporation with the same effect as if the seal had not been changed. If a
certificate is countersigned by a transfer agent or registrar, other than the
Corporation itself or its employee, any other signatures or countersignatures on
the certificate may be facsimiles. In case any Officer of the Corporation, or
any officer or employee of the transfer agent or registrar who has signed, or
whose facsimile signature has been placed upon, such certificate ceases to be an
Officer of the Corporation, or an officer or employee of the transfer agent or
registrar, before such certificate is issued, the certificate may be issued by
the Corporation with the same effect as if the Officer of the Corporation, or
the officer or employee of the transfer agent or registrar, had not ceased to be
such at the date of its issue.
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Every certificate representing shares issued by the Corporation at a time
when the Corporation is authorized to issue shares of more than one class shall
set forth upon the face or back of the certificate a full summary or statement
of all of the designations, preferences, qualifications, limitations,
restrictions and special or relative rights of the shares of each class
authorized to be issued, and, if the Corporation is authorized to issue any
preferred or special class in series, the variations in the relative rights and
preferences between the shares of each such series so far as the same have been
fixed and determined, and the authority of the Board of Directors to fix and
determine the relative rights and preferences of subsequent series. Such
statement may be omitted from the certificate if it shall be set forth upon the
face or back of the certificate that such statement, in full, will be furnished
by the Corporation to any Shareholder upon request and without charge.
Each certificate representing shares shall also state:
(a) That the Corporation is organized under the laws of Illinois;
(b) The name of the person to whom issued; and
(c) The number and class of shares, and the designation of the series, if
any, which such certificate represents.
No certificate shall be issued for any share until such share is fully
paid. [BCA ss. 6.35]
Section 7.4 Uncertificated Shares. The Board of Directors of the
Corporation may provide by resolution that some or all of any or all classes and
series of its shares shall be uncertificated shares, provided that such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Within a reasonable time after
the issuance or transfer of uncertificated shares, the Corporation shall send to
the registered owner thereof a written notice containing the information
required to be set forth or stated on certificates pursuant to this Article 7.
Except as otherwise expressly provided by law, the rights and obligations of the
holders of uncertificated shares and the rights and obligations of holders of
certificates representing shares of the same class and series shall be
identical. [BCA ss. 6.35)]
Article 8
FISCAL YEAR
Except as the Board of Directors of the Corporation may otherwise provide
by resolution duly adopted pursuant to the authority granted hereby, the fiscal
year of the Corporation shall begin on the first day of January in each year and
end on the last day of December in each year.
Article 9
DIVIDENDS
The Board of Directors may from time to time declare or effect, and the
Corporation may pay or make dividends on its outstanding shares or other
distributions to Shareholders, including without limitation purchases of shares
of the Corporation, subject in each case to any and all
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terms, conditions, preferences and restrictions provided by law, by the Articles
of Incorporation and by any binding contract or instrument duly executed on
behalf of the Corporation. [BCA ss.ss. 9.05, 9.10]
Article 10
SEAL
The Board of Directors may provide a corporate seal which shall be in the
form of a circle and shall have inscribed thereon the name of the Corporation
and the words "Corporate Seal, Illinois." [BCA ss. 3.10]
Article 11
WAIVER OF NOTICE
Whenever any notice whatever is required to be given to any Shareholder or
Director of the Corporation under the provisions of these By-Laws or under the
provisions of the Articles of Incorporation or under the Illinois Business
Corporation Act of 1983, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice. Attendance at
any Meeting shall constitute waiver of notice thereof unless the person at the
Meeting objects to the holding of the Meeting because proper notice was not
given. [BCA ss. 7.20]
Article 12
AMENDMENTS TO THE BY-LAWS
The By-Laws of the Corporation may be made, altered, amended or repealed
by the Shareholders or the Board of Directors of the Corporation, but, if such
By-Law expressly so provides, no By-Law adopted by the Shareholders may be
altered, amended or repealed by the Board of Directors. These By-Laws may be
altered or amended to contain any provisions for the regulation and management
of the affairs of the Corporation not inconsistent with law or with the Articles
of Incorporation. [BCA ss. 2.25]
Article 13
STATUTORY REFERENCES
The statutory references in these By-Laws to the "Business Corporation Act
of 1983" refer, except where the context otherwise requires, to the Illinois
Business Corporation Act of 1983, as amended from time to time. The citations to
sections of the BCA appearing in brackets throughout the text of these By-Laws
are for convenience of reference only, are not made a part hereof, shall not be
construed as incorporating the referenced provisions of the law into these
By-Laws, and shall not be deemed in any way to alter, affect or qualify the
meaning or effect of these By-Laws as written and adopted.
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Form BCA-2.10 ARTICLES OF INCORPORATION
- --------------------------------------------------------------------------------
(Rev Jan 1991)
George H. Ryan
Secretary of State
Department of Business Services
Springfield, IL 62756
Telephone (217) 782-6961
- --------------------------------
Payment must be made by
certified check, cashier's
check, Illinois attorney's
check Illinois C.P.A's
check or money order,
payable to "Secretary of
State."
- --------------------------------
FILED
APR 12 1993
GEORGE H. RYAN
SECRETARY OF STATE
- --------------------------------
Submit in Duplicate
- --------------------------------
This space for use by
Secretary of State
Date 4-12-93
Franchise Tax $25
Filing Fee $75
---
100
Approved:
- --------------------------------
1. CORPORATE NAME: Standard Parking Corporation IL
-------------------------------------------------------------
-----------------------------------------------------------------------------
(The corporate name must contain the word "corporation", "company,"
incorporated," "limited" or an abbreviation thereof)
- --------------------------------------------------------------------------------
2. Initial Registered Agent: Michael K. Wolf
--------------------------------------------------
First Name Middle Initial Last Name
Initial Registered Office: 55 E. Monroe Street, Ste, 3440
--------------------------------------------------
Number Street Suite #
Chicago, Illinois 60603 Cook
--------------------------------------------------
City Zip Code County
- --------------------------------------------------------------------------------
3. Purpose or purposes for which the corporation is organized:
(If not sufficient space to cover this point, add one or more sheets of this
size.)
To transact any or all lawful activities and businesses which are authorized
by the Illinois Business Corporation Act of 1983 as amended, and to purchase
or otherwise acquire, hold, use, own, mortgage, sell, convey, lease or
otherwise dispose of and deal in real and personal property of every class
and description or any interest therein.
- --------------------------------------------------------------------------------
4. Paragraph 1: Authorized Shares, Issued Shares and Consideration Received:
Consideration
Number of Shares to be
Per Value Number of Shares Proposed to be Received
Class per Share Authorized Issued Therefor
- --------------------------------------------------------------------------------
Common No Par 100,000 100 $1,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total $1,000
Paragraph 2: The preferences, qualifications, limitations, restrictions and
special or relative rights in respect of the shares of each class are:
(If not sufficient space to cover this point add one or more sheets of this
size.)
EXPEDITED
PAID APR 12 1993
APR 12 1993 SECRETARY OF STATE
(over)
<PAGE> 2
5. OPTIONAL: (a) Number of directors constituting the initial board of
directors of the corporation:____________________.
(b) Names and addresses of the persons who are to serve as
directors until the first annual meeting of shareholders or
until their successors be elected and qualify:
Name Residential Address
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. OPTIONAL: (a) It is estimated that the value of all
property to be owned by the corporation
for the following year wherever located
will be: $________________
(b) It is estimated that the value of the
property to be located within the State
of Illinois during the following year will
be: $________________
(c) It is estimated that the gross amount of
business which will be transacted by the
corporation during the following year will
be: $________________
(d) It is estimated that the gross amount of
business which will be transacted from
places of business in the State of Illinois
during the following year will be: $________________
- --------------------------------------------------------------------------------
7. OPTIONAL: OTHER PROVISIONS
Attach a separate sheet of this size for any other provision to be
included in the Articles of Incorporation, e.g., authorizing
preemptive rights, denying cumulative voting, regulating internal
affairs, voting majority requirements, fixing and duration other
than perpetual, etc.
- --------------------------------------------------------------------------------
8. NAME(S) & ADDRESS(ES) OF INCORPORATOR(S)
The undersigned incorporator(s) hereby declare(s), under penalties of
perjury, that the statements made in the foregoing Articles of Incorporation are
true.
Dated April 9, 1993
Signature and Name Address
1. 1. 30 South Wacker Drive, 29th Floor
--------------------------------- -----------------------------------
Signature Street
Dianne M. Chiappetti Chicago, Illinois 60606-7484
--------------------------------- -----------------------------------
(Type or Print Name) City/Town State Zip Code
2. 2.
--------------------------------- -----------------------------------
Signature Street
--------------------------------- -----------------------------------
(Type or Print Name) City/Town State Zip Code
3. 3.
--------------------------------- -----------------------------------
Signature Street
--------------------------------- -----------------------------------
(Type or Print Name) City/Town State Zip Code
(Signatures must be in ink on original document. Carbon copy, xerox or rubber
stamp signatures may only be used on conformed copies.)
NOTE: If a corporation acts as incorporator, the name of the corporation and the
state of incorporation shall be shown and the execution shall be by its
President or Vice-President and verified by him, and attested by its Secretary
or an Assistant Secretary.
- --------------------------------------------------------------------------------
<PAGE> 3
FEE SCHEDULE
o The initial franchise tax is assessed at the rate of 15/100 of 1 percent
($1.50 per $1,000) on the paid-in capital represented in this state, with
a minimum of $25 and a maximum of $1,000,000.
o The filing fee is $75
o The minimum total due (franchise tax + filing fee) is $100
(Applies when the Consideration to be Received as set forth in item 4 does
not exceed $16,667)
o The Department of Business Services in Springfield will provide assistance
in calculating the total fees if necessary.
Illinois Secretary of State Springfield, IL 62756
Department of Business Services Telephone (217) 782-6961
<PAGE> 4
File # D5726-251-6
- ---------------------------
Form BCA-5.10
NFP-105.10
(Rev. Jan. 1995)
- ---------------------------
George H. Ryan
Secretary of State
Department of Business
Services
Springfield, IL 62756
Telephone (217) 782-3647 Submit in Duplicate
- --------------------------------------------------------------------------------
STATEMENT OF CHANGE OF FILED This space for use by
REGISTERED AGENT AND/OR MAR 23 1996 Secretary of State
REGISTERED OFFICE GEORGE H. RYAN
SECRETARY OF STATE Date
PAID
MAR 25 1996 Franchise Tax $5
Approved:
--------------------------
Remit payment in check or
money order, payable to
"Secretary of State."
- --------------------------------------------------------------------------------
1. CORPORATE NAME: Standard Parking Corporation IL
-------------------------------------------------------------
2. STATE OR COUNTRY OF INCORPORATION: Illinois
-------------------------------------------
- --------------------------------------------------------------------------------
3. Name and address of the registered agent and registered office as they appear
on the records of the office of the Secretary of State (before change):
Registered Agent: Michael K. Wolf
-----------------------------------------------------
First Name Middle Initial Last Name
Registered Office: 55 E. Monroe Street, Ste, 3440
-----------------------------------------------------
Number Street Suite # (A P.O. Box alone is
not acceptable)
Chicago 60603 Cook
-----------------------------------------------------
City Zip Code County
4. Name and address of the registered agent and registered office shall be
(after all changes herein reported):
Registered Agent: Michael K. Wolf
-----------------------------------------------------
First Name Middle Initial Last Name
Registered Office: 200 E. Randolph Dr., Suite 4800
-----------------------------------------------------
Number Street Suite # (A P.O. Box alone is
not acceptable)
Chicago 60601 Cook
-----------------------------------------------------
City Zip Code County
<PAGE> 5
File Number 5726-251-6
------------
STATE OF ILLINOIS
OFFICE OF THE SECRETARY OF STATE
Whereas, ARTICLES OF INCORPORATION OF STANDARD PARKING CORPORATION IL
INCORPORATED UNDER THE LAWS OF THE STATE OF ILLINOIS HAVE BEEN FILED IN THE
OFFICE OF THE SECRETARY OF STATE AS PROVIDED BY THE BUSINESS CORPORATION ACT OF
ILLINOIS, IN FORCE JULY 1, A.D. 1984.
Now Therefore, I, George H. Ryan, Secretary of State of the State of Illinois,
by virtue of the powers vested in me by law, do hereby issue this certificate
and attach hereto a copy of the Application of the aforesaid corporation.
In Testimony Whereof, I hereto set my hand and cause to be affixed the Great
Seal of the State of Illinois, at the City of Springfield, this
12TH day of APRIL A.D. 1993 and of the Independence of the
United States the two hundred and 17TH.
/s/ George H. Ryan
--------------------------------
Secretary of State
<PAGE> 6
5. The address of the registered office and the address of the business office
of the registered agent, as changed, will be identical.
6. The above change was authorized by: ("X" one box only)
a. |_| By resolution duly adopted by the board of directors. (Note 5)
b. |X| By action of the registered agent. (Note 6)
NOTE: When the registered agent changes, the signatures of both president and
secretary are required.
7. (If authorized by the board of directors, sign here. See Note 5)
The undersigned corporation has caused this statement to be signed by its
duly authorized officers, each of whom affirms, under penalties of perjury, that
the facts stated herein are true.
Dated 19,
----------------------- ------ --------------------------------------
(Exact Name of Corporation)
attested by by
----------------------- ------------------------------------
(Signature of Secretary of Assistant (Signature of Vice President)
Secretary)
----------------------- ------------------------------------
(Type of print Name and Title) (Type or Print Name and Title)
(If the change of registered office by registered agent, sign here. See Note 6)
The undersigned, under penalties of perjury, affirms that the facts stated
herein are true.
Dated 19, 96
------------------------ ----- ---------------------------------------
(Signature of Registered Agent of
Record)
NOTES
1. The registered office may, but need not be the same as the principal office
of the corporation. However, the registered office and the office address of
the registered agent must be the same.
2. The registered office must include a street or road address; a post office
box number alone is not acceptable.
3. A corporation cannot act as its own registered agent.
4. If the registered office is changed from one county to another, then the
corporation must file with the recorder of deeds of the new county a
certified copy of the articles of incorporation and a certified copy of the
statement of change of registered office. Such certified copies may be
obtained ONLY from the Secretary of State.
5. Any change of registered agent must be by resolution adopted by the board of
directors. This statement must then be signed by the president (or
vice-president) and by the secretary (or an assistant secretary).
6. The registered agent may report a change of the registered office of the
corporation for which he or she is registered agent. When the agent reports
such a change, this statement must be signed by the registered agent.
<PAGE> 7
IN WITNESS WHEREOF, the undersigned corporation has caused these Articles
of Amendment to be executed in its name by its ____________ President, and its
corporate seal to be hereto affixed, attested by its _____________ Secretary,
this _______ day of ___________, 1970.
STANDARD AUTO PARK, INC.
-----------------------------------
(Exact Corporate Name)
Place
(CORPORATE SEAL) By /s/
Here --------------------------------
Its President
ATTEST:
/s/
- -------------------------------------
Its Secretary
STATE OF ILLINOIS )
): ss
COUNTY OF COOK )
I, Lawrence Kasakoff, a Notary Public, do hereby certify that on the 18th
day of December 1970, SIDNEY WARSHAUER personally appeared before me and, being
first duly sworn by me, acknowledged that he signed the foregoing document in
the capacity therein set forth and declared that the statements therein
contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and Seal the day and year
before written.
Place /s/ L. Kasakoff
(CORPORATE SEAL) -----------------------------------
Here Notary Public
<PAGE> 1
By-Laws
of
Standard Parking Corporation IL
(an Illinois Corporation)
Adopted
April 12, 1993
This Document Prepared By:
Sachnoff & Weaver, Ltd.
30 South Wacker Drive
Suite 2900
Chicago, Illinois 60606
(312) 207-1000
<PAGE> 2
TABLE OF CONTENTS
-----------------
Article 1 - CORPORATE OFFICES................................................1
Section 1.1 The Principal Corporate Office.............................1
Section 1.2 Registered Office In Illinois..............................1
Article 2 - SHAREHOLDERS.....................................................1
Section 2.1 Annual Meeting.............................................1
Section 2.2 Special Meetings...........................................1
Section 2.3 Place of Meeting...........................................1
Section 2.4 Notice of Meeting..........................................2
Section 2.5 Meeting Of All Shareholders................................2
Section 2.6 Fixing of Record Date......................................2
Section 2.7 Voting Lists...............................................2
Section 2.8 Quorum of Shareholders.....................................3
Section 2.9 Proxies....................................................3
Section 2.10 Voting of Shares..........................................3
Section 2.11 Voting of Shares by Certain Holders......................3
Section 2.12 Voting by Ballot; Inspectors..............................4
Section 2.13 Informal Action by Shareholders...........................4
Article 3 - DIRECTORS........................................................5
Section 3.1 General Powers.............................................5
Section 3.2 Number, Tenure and Qualification...........................5
Section 3.3 Regular Meetings...........................................5
Section 3.4 Special Meetings...........................................5
Section 3.5 Notice.....................................................5
Section 3.6 Quorum.....................................................6
Section 3.7 Manner Of Action...........................................6
Section 3.8 Vacancies..................................................6
Section 3.9 Removal Of Directors.......................................6
Section 3.10 Compensation..............................................6
Section 3.11 Presumption Of Assent.....................................7
Section 3.12 Informal Action By Directors..............................7
Section 3.13 Participation By Conference Telephone.....................7
Section 3.14 Committees................................................7
Section 3.15 Director Conflict of Interest.............................8
Article 4 - OFFICERS.........................................................9
Section 4.1 Number.....................................................9
Section 4.2 Election and Term of Office................................9
Section 4.3 Removal....................................................9
Section 4.4 Vacancies.................................................10
Section 4.5 The President.............................................10
Section 4.6 The Vice-Presidents.......................................10
Section 4.7 The Secretary.............................................10
<PAGE> 3
Section 4.8 The Treasurer.............................................11
Section 4.9 Assistant Secretaries and Assistant Treasurers............11
Section 4.10 Salaries.................................................11
Article 5 - INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS;
INSURANCE.......................................................11
Section 5.1 Actions Other Than Actions By or in the Right of the
Corporation...............................................11
Section 5.2 Actions By or in the Right of the Corporation.............12
Section 5.3 Indemnification in Event of Successful Defense............12
Section 5.4 Procedures for Indemnification............................12
Section 5.5 Indemnity Insurance.......................................14
Article 6 - CONTRACTS, LOANS, CHECKS AND DEPOSITS...........................14
Section 6.1 Contracts.................................................14
Section 6.2 Loans.....................................................14
Section 6.3 Pledges of Property and Assets............................14
Section 6.4 Checks, Drafts, Etc.......................................14
Section 6.5 Deposits..................................................14
Article 7 - SHARES AND THEIR TRANSFER.......................................14
Section 7.1 Consideration for Shares..................................14
Section 7.2 Payment for Shares........................................15
Section 7.3 Shares Represented by Certificates........................15
Section 7.4 Uncertificated Shares.....................................16
Article 8 - FISCAL YEAR.....................................................16
Article 9 - DIVIDENDS.......................................................16
Article 10 - SEAL...........................................................16
Article 11 - WAIVER OF NOTICE...............................................17
Article 12 - AMENDMENTS TO THE BY-LAWS......................................17
Article 13 - STATUTORY REFERENCES...........................................17
<PAGE> 4
Standard Parking Corporation IL
Article 1
CORPORATE OFFICES
Section 1.1 The Principal Corporate Office. The principal corporate office of
Standard Parking Corporation IL in Illinois shall be located in the City of
Chicago, County of Cook, or at such other place as the Board of Directors may
determine by resolution from time to time. The Corporation may have such other
offices, either within or without the State of Illinois, as the Board of
Directors may designate or the Corporation's business may require from time to
time. [BCA ss.3.10(j)]
Section 1.2 Registered Office In Illinois. The Registered Office of the
Corporation required by the Illinois Business Corporation Act of 1983 ("BCA") to
be maintained in the State of Illinois may be, but need not be, the same as the
principal corporate office or its principal place of business in the State of
Illinois, but shall in any event be identical with the business office of the
Corporation's Registered Agent in Illinois. [BCA ss.5.05] The address of the
Registered Office in Illinois may be changed from time to time by the Board of
Directors or by such Registered Agent. [BCA ss.ss.5.10, 5.20]
Article 2
SHAREHOLDERS
Section 2.1 Annual Meeting. Except as the Board of Directors of the Corporation
may otherwise provide by resolution duly adopted pursuant to the authority
granted hereby, the Annual Meeting of Shareholders of the Corporation shall be
held each year on the second Tuesday in April (beginning with the year 1994),
commencing at the hour of 10:00 A.M., for the purpose of electing Directors and
for the transaction of such other business as may properly come before the
Meeting. If the day fixed for the Annual Meeting shall be a legal holiday, such
Meeting shall be held on the next succeeding business day. [BCA ss.7.05]
Section 2.2 Special Meetings. Special Meetings of the Shareholders may be
called by the President, by the Board of Directors, or by the holders of not
less than one-fifth of all the outstanding shares of the Corporation entitled to
vote on the matter for which the Special Meeting is called. [BCA ss.7.05]
Section 2.3 Place of Meeting. The Board of Directors may by resolution
designate any place, either within or without the State of Illinois, as the
place of meeting for any Annual Meeting of Shareholders or for any Special
Meeting called by the Board of Directors or by the President, and may designate
any place within the State of Illinois for any Special Meeting called by
Shareholders. A waiver of notice signed by all Shareholders may designate any
place, either within or without the State of Illinois, as the place for the
holding of any Meeting. If no designation of a meeting place is made, or if a
Special Meeting be otherwise called, the place of meeting shall be the
Registered Office of the Corporation in the State of Illinois, except as
otherwise provided in Section 2.5 of these By-Laws. [BCA ss.7.05]
<PAGE> 5
Standard Parking Corporation IL
Section 2.4 Notice of Meeting. Written notice stating the place, day and
hour of the Meeting, and, in the case of a Special Meeting, the purpose or
purposes for which the Meeting is called, shall be delivered not less than ten
(10) nor more than sixty (60) days before the date of the Meeting, or, in the
case of a merger, consolidation, share exchange, dissolution, or sale, lease or
exchange of assets requiring Shareholder approval, not less than twenty (20) nor
more than sixty (60) days before the date of the Meeting, either personally or
by mail, by or at the direction of the President, or the Secretary, or the
Officer or persons calling the meeting, to each Shareholder of record entitled
to vote at such meeting. If mailed, such notice shall be deemed to be delivered
when deposited in the United States mail, addressed to the Shareholder at his or
her address as it appears on the records of the Corporation, with postage
thereon prepaid. [BCA ss.7.15]
Section 2.5 Meeting Of All Shareholders. If all of the Shareholders shall
meet at any time and place, either within or without the State of Illinois, and
consent to the holding of a Meeting at such time and place, such Meeting shall
be valid without call or notice, and at such Meeting any corporate action may be
taken. [BCA ss.7.20]
Section 2.6 Fixing of Record Date. For the purpose of determining
Shareholders entitled to notice of or to vote at any Meeting of Shareholders, or
Shareholders entitled to receive payment of any dividend or distribution, or in
order to make a determination of Shareholders for any other proper purpose, the
Board of Directors of the Corporation may fix in advance a date as the record
date for any such determination of Shareholders, such date in any case to be not
more than sixty (60) days immediately preceding the date of the Meeting, payment
or other transaction, and, for a Meeting of Shareholders, not less than ten (10)
days, or in the case of a merger, consolidation, share exchange, dissolution, or
sale, lease or exchange of assets requiring Shareholder approval, not less than
twenty (20) days, immediately preceding such Meeting. If no record date is fixed
for the determination of Shareholders entitled to notice of or to vote at a
Meeting of Shareholders, or Shareholders entitled to receive payment of a
dividend or other distribution, the date on which notice of the Meeting is
mailed or the date on which the resolution of the Board of Directors declaring
such dividend or distribution is adopted, as the case may be, shall be the
record date for such determination of Shareholders. When a determination of
Shareholders entitled to vote at any Meeting of Shareholders has been made as
provided in this Section 2.6, such determination shall apply to any adjournment
thereof. [BCA ss.7.25]
Section 2.7 Voting Lists. The Officer or agent having charge of the
transfer books and records for shares of the Corporation shall make, within
twenty (20) days after the record date for a Meeting of Shareholders or ten (10)
days before such Meeting, whichever is earlier, a complete list of the
Shareholders entitled to vote at such Meeting, arranged in alphabetical order,
with the address of and the number of shares held by each, which list, for a
period of ten (10) days prior to such Meeting, shall be kept on file at the
Registered Office of the Corporation and shall be subject to inspection by any
Shareholder, and to copying at the Shareholder's expense, at any time during
usual business hours. Such list shall also be produced and kept open at the time
and place of the Meeting and shall be subject to the inspection of any
Shareholder during the whole time of the Meeting. The original share ledger or
transfer book, or a duplicate thereof kept in Illinois, shall be prima facie
evidence as to who are the Shareholders entitled to examine such list
-2-
<PAGE> 6
Standard Parking Corporation IL
or share ledger or transfer book, or to vote at any Meeting of the Shareholders.
Failure to comply with the requirements of this Section 2.7 shall not affect the
validity of any action taken at such Meeting. An Officer or agent having charge
of the transfer books or records who shall fail to prepare the list of
Shareholders, or keep the same on file for a period of ten (10) days, or produce
and keep the same open for inspection at the Meeting, as provided in this
Section 2.7, shall be liable to any Shareholder suffering damage on account of
such failure, to the extent of such damage as provided by law. [BCA ss.7.30]
Section 2.8 Quorum of Shareholders. A majority of the outstanding shares
of the Corporation entitled to vote on a matter, represented in person or by
proxy, shall constitute a quorum for consideration of such matter at a meeting
of Shareholders. If a quorum is present, the affirmative vote of the majority of
the shares represented at the Meeting and entitled to vote on a matter shall be
the act of the Shareholders, unless the vote of a greater number or voting by
classes is required by the Illinois Business Corporation Act of 1983, by the
Corporation's Articles of Incorporation, or by these By-Laws. [BCA ss.7.60]
Section 2.9 Proxies. A Shareholder may appoint a proxy to vote or
otherwise act for him or her by signing an appointment form and delivering it to
the person so appointed. No proxy shall be valid after the expiration of eleven
(11) months from the date thereof unless otherwise provided in the proxy. Every
proxy continues in full force and effect until revoked by the person executing
it prior to the vote pursuant thereto, except as otherwise provided in this
Section 2.9 and in Section 7.50 of the Illinois Business Corporation Act of
1983. Such revocation may be effected by a writing delivered to the Corporation
stating that the proxy is revoked or by a subsequent proxy executed by, or by
attendance at the Meeting and voting in person by, the person executing the
proxy. The dates contained on the forms of proxy presumptively determine the
order of execution, regardless of any postmark dates on envelopes in which they
are mailed. An appointment of a proxy is revocable by the Shareholder unless the
appointment form conspicuously states that it is irrevocable and the appointment
is coupled with an interest in the shares or in the Corporation generally.
Unless the appointment of a proxy contains an express limitation on the proxy's
authority, the Corporation may accept the proxy's vote or other action as that
of the Shareholder making the appointment. [BCA ss.7.50]
Section 2.10 Voting of Shares. Each outstanding share of the Corporation
shall be entitled to one vote in each matter submitted to a vote by the
Shareholders, except as the Illinois Business Corporation Act of 1983 and the
Corporation's Articles of Incorporation may otherwise limit or deny voting
rights or provide special voting rights as to any class or classes or series of
shares. [BCA ss.7.40]
Section 2.11 Voting of Shares by Certain Holders. Shares of its own stock
belonging to this Corporation shall not be voted, directly or indirectly, at any
Meeting and shall not be counted in determining the total of outstanding shares
at any given time, but shares of the Corporation held by the Corporation in a
fiduciary capacity may be voted and shall be counted in determining the total
number of outstanding shares entitled to vote at any given time.
Shares registered in the name of another corporation, domestic or foreign,
may be voted by any Officer, agent, proxy or other legal representative
authorized to vote such shares under the
-3-
<PAGE> 7
Standard Parking Corporation IL
law of incorporation of such corporation. The Corporation may treat the
president or other person holding the position of chief executive officer of
such other corporation as authorized to vote such shares, together with any
other person indicated and any other holder of an office indicated by the
corporate Shareholder to the Corporation as a person or office authorized to
vote such shares. Such persons and offices indicated shall be registered by the
Corporation on the transfer books for shares and included in any voting list
prepared in accordance with Section 2.7 of these By-Laws.
Shares registered in the name of a deceased person, a minor ward or a
person under legal disability may be voted by his or her administrator, executor
or court appointed guardian, either in person or by proxy without a transfer of
such shares into the name of such administrator, executor or court appointed
guardian. Shares registered in the name of a trustee may be voted by him or her,
either in person or by proxy.
Shares registered in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his or her name if authority so to do
is contained in an appropriate order of the court by which such receiver was
appointed.
A Shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred. [BCA
ss.7.45]
Section 2.12 Voting by Ballot; Inspectors. Voting by Shareholders on any
matter or in any election may be viva voce unless the Chairman of the Meeting
shall order, or any Shareholder entitled to vote thereon shall demand, that
voting be by ballot.
At any Meeting of Shareholders, the Chairman of the Meeting may, or upon
the request of any Shareholder shall, appoint one or more persons as inspectors
for such Meeting. Such inspectors shall ascertain and report the number of
shares represented at the Meeting, based upon their determination of the
validity and effect of proxies; count all votes and report the results; and do
such other acts as are proper to conduct the election and voting with
impartiality and fairness to all the Shareholders. Each report of an inspector
shall be in writing and signed by him or her or by a majority of them if there
be more than one inspector acting at such Meeting. If there be more than one
inspector, the report of a majority shall be the report of the inspectors. The
report of the inspector or inspectors on the number of shares represented at the
Meeting and the results of the voting shall be prima facie evidence thereof.
[BCA ss.7.35]
Section 2.13 Informal Action by Shareholders. Any action required to be
taken at any Annual or Special Meeting of Shareholders of the Corporation, or
any other action which may be taken at a Meeting of the Shareholders, may be
taken without a meeting and without a vote, if a consent in writing, setting
forth the action so taken, shall be signed (i) by the holders of outstanding
shares having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voting or (ii) by all of the Shareholders entitled
to vote with respect to the subject matter thereof. If such consent is signed by
less than all of the Shareholders entitled to vote, then
-4-
<PAGE> 8
Standard Parking Corporation IL
such consent shall become effective only if, at least five (5) days prior to the
execution of the consent, a notice of the proposed action is delivered in
writing to all of the Shareholders entitled to vote with respect to the subject
matter thereof and, after the effective date of the consent, prompt notice of
the taking of the action without a meeting by less than unanimous written
consent shall be delivered in writing to those Shareholders who have not
consented in writing. [BCHA ss.7.10]
Article 3
DIRECTORS
Section 3.1 General Powers. The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors. [BCA ss.8.05]
Section 3.2 Number, Tenure and Qualification. The number of Directors of
the Corporation shall be one (1). Each Director shall serve until the next
Annual Meeting of Shareholders or until his or her successor shall have been
elected and qualified. Directors need not be residents of Illinois or
Shareholders of the Corporation.
A Director may resign at any time by giving written notice to the Board of
Directors, its Chairman, or to the President or Secretary of the Corporation. A
resignation is effective when the notice is given unless the notice specifies a
future date. The pending vacancy may be filled before the effective date, but
the successor shall not take office until the effective date. [BCA ss.ss.8.01,
8.10]
Section 3.3 Regular Meetings. A Regular Meeting of the Board of Directors
shall be held without other notice than this By-Law, immediately after, and at
the same place as, the Annual Meeting of Shareholders. The Board of Directors
may provide, by resolution, the time and place, either within or without the
State of Illinois, for the holding of additional Regular Meetings without other
notice than such resolution. [BCA ss.ss.8.20, 8.25]
Section 3.4 Special Meetings. Special Meetings of the Board of Directors
may be called by or at the request of the President or any two Directors. The
person or persons authorized to call Special Meetings of the Board of Directors
may fix any place, either within or without the State of Illinois, as the place
for holding any Special Meeting of the Board of Directors called by them. [BCA
ss.ss.8.20, 8.25]
Section 3.5 Notice. Notice of any Special Meeting shall be given at least
three days previous thereto by written notice delivered personally or by
telegram or mailgram to each Director at his or her business address, or given
at least five (5) days previous thereto if mailed. If mailed, such notice shall
be deemed to be delivered on the second day following the date on which it was
deposited in the United States mail so addressed, with proper postage thereon
prepaid. If notice be given by telegram or mailgram, such notice shall be deemed
to be delivered when the telegram or mailgram is delivered to the telegraph
company. Any Director may waive notice of any Meeting by executing a written
waiver of notice. The attendance of a Director at any Meeting shall constitute a
waiver of notice of such Meeting, except where a Director attends
-5-
<PAGE> 9
Standard Parking Corporation IL
a Meeting for the express purpose of objecting to the transaction of any
business because the Meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any Regular or Special Meeting
of the Board of Directors need be specified in the notice or waiver of notice of
such Meeting. [BCA ss.8.25]
Section 3.6 Quorum. A majority of the number of Directors fixed by these
By-Laws shall constitute a quorum for transaction of business at any Meeting of
the Board of Directors, provided, that if less than a majority of such number of
Directors is present at said Meeting, a majority of the Directors present may
adjourn the Meeting from time to time without further notice. [BCA ss.8.15(c)]
Section 3.7 Manner Of Action. The act of the majority of Directors present
at a Meeting at which a quorum is present shall be the act of the Board of
Directors. [BCA ss.8.15(c)]
Section 3.8 Vacancies. Any vacancy occurring in the Board of Directors and
any directorship to be filled by reason of an increase in the number of
Directors may be filled by election at an Annual Meeting or at a Special Meeting
of Shareholders called for that purpose. In the absence of a Special Meeting of
Shareholders, the Board of Directors may fill the vacancy, except as otherwise
specified in the Articles of Incorporation. A Director elected by the
Shareholders to fill a vacancy shall hold office for the balance of the term for
which he or she was elected. A Director appointed to fill a vacancy shall serve
until the next Meeting of Shareholders at which Directors are to be elected.
[BCA ss.8.30]
Section 3.9 Removal Of Directors. One or more of the Directors may be
removed, with or without cause, at a Meeting of Shareholders by the affirmative
vote of the holders of a majority of the outstanding shares then entitled to
vote at an election of Directors, except that:
(a) No Director shall be removed at a Meeting of Shareholders unless the
notice of such Meeting shall state that a purpose of the Meeting is to vote upon
the removal of one or more Directors named in the notice. Only the named
Director or Directors may be removed at such Meeting.
Section 3.10 Compensation. Except as otherwise provided in any written
agreement and except as otherwise set forth below, the Board of Directors, by
the affirmative vote of a majority of Directors then in office, and irrespective
of any personal interest of any of its members, shall have authority to
establish reasonable compensation of all Directors for services to the
Corporation as Directors, Officers or otherwise. [BCA ss.8.05(b)] By resolution
of the Board of Directors, the Directors may be paid their expenses, if any, of
attendance at each Meeting of the Board of Directors. In the event the Internal
Revenue Service shall determine any such compensation paid to a Director to be
unreasonable or excessive, such Director must repay to the Corporation the
excess over what is determined to be reasonable compensation, with interest on
such excess at the rate of nine percent (9%) per annum, within ninety (90) days
after notice from the Corporation.
Section 3.11 Presumption of Assent. A Director of the Corporation who is
present at a Meeting of the Board of Directors at which action on any corporate
matter is taken shall be
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conclusively presumed to have assented to the action taken unless his or her
dissent shall be entered in the minutes of the Meeting or unless he or she shall
file his or her written dissent to such action with the person acting as the
Secretary of the Meeting before the adjournment thereof or shall forward such
dissent by registered or certified mail to the Secretary of the Corporation
immediately after the adjournment of the Meeting. Such right to dissent shall
not apply to a Director who voted in favor of such action. [BCA ss.8.65(b)]
Section 3.12 Informal Action By Directors. Unless specifically prohibited
by the Articles of Incorporation or by these By-Laws, any action required to be
taken at a Meeting of the Board of Directors, or any other action which may be
taken at a Meeting of the Board of Directors or of a Committee thereof, may be
taken without a Meeting if a consent in writing, setting forth the action so
taken, is signed by all the Directors entitled to vote with respect to the
subject matter thereof, or by all the members of such Committee, as the case may
be. The consent shall be evidenced by one or more written approvals, each of
which sets forth the action taken and bears the signature of one or more
Directors. All the approvals evidencing the consent shall be delivered to the
Secretary to be filed in the corporate records. The action taken shall be
effective when all the Directors have approved the consent unless the consent
specifies a different effective date. Any such consent signed by all the
Directors or all the members of a Committee shall have the same effect as a
unanimous vote. [BCA ss.8.45]
Section 3.13 Participation By Conference Telephone. Members of the Board
of Directors or of any Committee of the Board of Directors may participate in
and act at any Meeting of the Board of Directors or any Committee through the
use of a conference telephone or other communications equipment by means of
which all persons participating in the Meeting can hear each other.
Participation in such Meeting shall constitute attendance and presence in person
at the Meeting of the person or persons so participating. [BCA ss.8.15(d)]
Section 3.14 Committees. A majority of the Directors may create one or
more Committees and appoint members of the Board of Directors to serve on such
Committee or Committees. Each Committee shall have two or more members, who
serve at the pleasure of the Board of Directors.
Unless the appointment by the Board of Directors requires a greater
number, a majority of any Committee shall constitute a quorum and a majority of
a quorum is necessary for Committee action. A Committee may act by unanimous
consent in writing without a meeting and, subject to the provisions of these
By-Laws or action by the Board of Directors, such Committee, by majority vote of
its members, shall determine the time and place of meetings and the notice
required therefor.
To the extent specified by the Board of Directors, each Committee may
exercise the authority of the Board of Directors under Section 3.1 of these
By-Laws; provided, however, that a Committee may not:
(a) authorize distributions;
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(b) approve or recommend to Shareholders any act which is required to be
approved by Shareholders;
(c) fill vacancies on the Board of Directors or on any of its Committees;
(d) elect or remove Officers or fix the compensation of any member of the
Committee;
(e) adopt, amend or repeal these By-Laws;
(f) approve a plan of merger not requiring Shareholder approval;
(g) authorize or approve reacquisition of shares, except according to a
general formula or method prescribed by the Board of Directors;
(h) authorize or approve the issuance or sale, or contract for sale, of
shares or determine the designation and relative rights, preferences and
limitations of a series of shares, except that the Board of Directors may direct
a Committee to fix the specific terms of the issuance or sale or contract for
sale or the number of shares to be allocated to particular employees under an
employee benefit plan; or
(i) amend, alter, repeal or take action inconsistent with any resolution
or action of the Board of Directors when the resolution or action of the Board
of Directors provides by its terms that it shall not be amended, altered or
repealed by action of a Committee. [BCA ss.8.40]
Section 3.15 Director Conflict of Interest. If a transaction is fair to
the Corporation at the time it is authorized, approved or ratified, the fact
that a Director of the Corporation is directly or indirectly a party to the
transaction is not grounds for invalidating the transaction.
In a proceeding contesting the validity of a transaction described in the
preceding paragraph, the person asserting validity has the burden of proving
fairness unless:
(1) the material facts of the transaction and the Director's interest or
relationship were disclosed or known to the Board of Directors or a Committee of
the Board of Directors and the Board of Directors or Committee authorized,
approved or ratified the transaction by the affirmative votes of a majority of
disinterested Directors, even though the disinterested Directors be less than a
quorum; or
(2) the material facts of the transaction and the Director's interest or
relationship were disclosed or known to the Shareholders entitled to vote and
they authorized, approved or ratified the transaction without counting the vote
of any Shareholder who was an interested Director.
The presence of the Director, who is directly or indirectly a party to the
transaction described in the first paragraph of this section, or a Director who
is otherwise not disinterested, may be counted in determining whether a quorum
is present but may not be counted when the Board of Directors or a Committee of
the Board of Directors takes action on the transaction.
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A Director is "indirectly" a party to a transaction if the other party to
the transaction is an entity in which the Director has a material financial
interest or of which the Director is an Officer, Director of General Partner.
[BCA ss.8.60]
Article 4
OFFICERS
Section 4.1 Number. The Officers of the Corporation shall be a President, one or
more Vice Presidents (the number thereof to be determined by the Board of
Directors), a Secretary, and a Treasurer, and such Assistant Secretaries,
Assistant Treasurers or other officers as may be elected or appointed by the
Board of Directors. Any two or more offices may be held by the same person. All
Officers and agents of the Corporation shall have such express authority and
perform such duties in the management of the property and affairs of the
Corporation as may be provided herein, or as may be determined by resolution of
the Board of Directors not inconsistent with these By-Laws, and such implied
authority as is recognized by the common law from time to time. [BCA ss.8.50]
Section 4.2 Election and Term of Office. The Officers of the Corporation
shall be elected by the Board of Directors at the first Annual Meeting of the
Board of Directors and thereafter at each Annual Meeting of the Board of
Directors. The Board of Directors may create and fill new offices at Annual or
Special Meetings. If the election of Officers shall not be held at such Meeting,
such election shall be held as soon thereafter as is convenient. Each Officer
shall hold office until his or her successor shall have been duly elected and
shall have qualified or until his or her death or until he or she shall resign
or shall have been removed in the manner hereinafter provided. Election or
appointment of an Officer or agent shall not of itself create contract rights.
[BCA ss.8.50]
Section 4.3 Removal. Any Officer or agent elected or appointed by the
Board of Directors may be removed by the Board of Directors whenever in its
judgment the best interests of the Corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. [BCA ss.8.55]
Section 4.4 Vacancies. A vacancy in any Office because of death,
resignation, removal, disqualification, or otherwise, or because of the creation
of an office, may be filled by the Board of Directors for the unexpired portion
of the term.
Section 4.5 The President. The President shall be the principal executive
Officer of the Corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the business and
affairs of the Corporation. He or she shall preside at all Meetings of the
Shareholders and of the Board of Directors. He or she may sign, with the
Secretary or any other Officer of the Corporation thereunto authorized by the
Board of Directors, certificates for shares of the Corporation, any deeds,
mortgages, bonds, contracts or other instruments which the Board of Directors
has authorized to be executed on behalf of the Corporation, except in cases
where the signing and execution thereof shall be expressly delegated by the
Board of Directors or by these By-Laws to some other Officer or agent of the
Corporation or to the President alone, or
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shall be required by law to be otherwise signed or executed; and in general
shall perform all duties incident to the Office of President and such other
duties as may be prescribed by the Board of Directors from time to time. [BCA
ss.8.50]
Section 4.6 The Vice-Presidents. In the absence of the President or in the
event of his or her inability or refusal to act, the Vice-President (or in the
event there be more than one Vice President, the Vice-Presidents in the order
designated, or in the absence of any designation, then in the order of their
election) shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. Any Vice-President may sign, with the Secretary or an Assistant
Secretary, certificates for shares of the Corporation, and shall perform such
other duties as from time to time may be assigned to him or her by the President
or by the Board of Directors. [BCA ss.8.50]
Section 4.7 The Secretary. The Secretary shall: (a) keep, or supervise and
be responsible for the keeping of, the minutes and records of all Meetings and
official actions of the Shareholders and of the Board of Directors, and any
Committees of the Board of Directors in one or more books provided for that
purpose; (b) see that all notices of such Meetings are duly given or waivers of
notice obtained in accordance with the provisions of these By-Laws or as
required by law; (c) be custodian of the corporate records and of the seal of
the Corporation and see that the seal of the Corporation is affixed to all
certificates for shares prior to the issuance thereof and to all documents, the
execution of which on behalf of the Corporation under its seal is duly
authorized in accordance with the provisions of these By-Laws; (d) keep a
register of the post office address of each Shareholder which shall be furnished
to the Secretary by such Shareholder; (e) sign with the President, or a Vice
President, certificates for shares of the Corporation, the issuance of which
shall have been authorized by resolution of the Board of Directors; (f) have
general charge of the stock transfer books and records of the Corporation; (g)
have the authority to certify the By-Laws, resolutions of the Board of Directors
and Committees thereof, and other documents of the Corporation as true and
correct copies thereof; and (h) in general perform all duties incident to the
Office of Secretary and such other duties as from time to time may be assigned
to him or her by the President or by the Board of Directors. [BCA ss.8.50]
Section 4.8 The Treasurer. If required by the Board of Directors, the
Treasurer shall give a bond for the faithful discharge of his or her duties in
sum and with such surety or sureties as the Board of Directors shall determine.
He or she shall: (a) have charge and custody of and be responsible for all funds
and securities of the Corporation; receive and give receipts for moneys due and
payable to the Corporation from any source whatsoever, and deposit all such
moneys in the name of the Corporation in such banks, trust companies or other
depositaries as shall be selected in accordance with the provisions of Article 6
of these By-Laws; and (b) in general perform all the duties incident to the
Office of Treasurer and such other duties as from time to time may be assigned
to him or her by the President or by the Board of Directors. [BCA ss.8.50]
Section 4.9 Assistant Secretaries and Assistant Treasurers. The Assistant
Secretaries as thereunto authorized by the Board of Directors may sign with the
President or a Vice-President certificates for shares of the Corporation, the
issuance of which shall have been authorized by a
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resolution of the Board of Directors. The Assistant Treasurers shall
respectively, if required by the Board of Directors, give bonds for the faithful
discharge of their duties in such sums and with such sureties as the Board of
Directors shall determine. The Assistant Secretaries and Assistant Treasurers,
in general, shall perform such duties and exercise such authority as shall be
assigned or granted to them by the Secretary or the Treasurer, respectively, or
by the President or the Board of Directors. [BCA ss.8.50]
Section 4.10 Salaries. Except as otherwise provided in any written
employment agreement duly executed on behalf of the Corporation and except as
otherwise set forth below, the compensation (including salaries and benefits) of
the Officers shall be fixed from time to time by resolution of the Board of
Directors and no Officer shall be prevented from receiving such salary by reason
of the fact that he or she is also a Director of the Corporation. [BCA ss.8.50]
In the event the Internal Revenue Service shall determine any such compensation
(including any fringe benefit) paid to an Officer to be unreasonable or
excessive, such Officer must repay to the Corporation the excess over what is
determined to be reasonable compensation, with interest on such excess at the
rate of nine percent (9%) per annum, within ninety (90) days after notice from
the Corporation.
Article 5
INDEMNIFICATION OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS; INSURANCE
Section 5.1 Actions Other Than Actions By or in the Right of the Corporation.
The Corporation shall indemnify any of its Directors or Officers and may
indemnify any of its employees and agents who was or is a party, or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that he or she or it is or was a Director, Officer, employee or agent of
the Corporation, or who is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding, if
such person acted in good faith and in a manner he or she or it reasonably
believed to be in, or not opposed to, the best interests of the Corporation and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his or her or its conduct was unlawful. The termination of any action,
suite or proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which he or she or it
reasonably believed to be in, or not opposed to, the best interests of the
Corporation or, with respect to any criminal action or proceeding, that the
person had reasonable cause to believe that his or her or its conduct was
unlawful. [BCA ss.8.75 (a)]
Section 5.2 Actions By or in the Right of the Corporation. The Corporation
may indemnify any person who was or is a party, or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
such person is or was a Director, Officer,
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employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees) actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit, if such person
acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the Corporation, provided that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his or her duty to the Corporation, unless, and
only to the extent that, the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability,
but in view of all the circumstances of the cause, such person is fairly and
reasonably entitled to indemnity for such expenses as the court shall deem
proper. [BCA ss.8.75(b)]
Section 5.3 Indemnification in Event of Successful Defense. To the extent
that a Director, Officer, employee or agent of the Corporation has been
successful, on the merits or otherwise, in the defense of any action, suit or
proceeding referred to in Sections 5.1 or 5.2, or in defense of any claim, issue
or matter therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith. [BCA ss.8.75(c)]
Section 5.4 Procedures for Indemnification. Any indemnification under
Sections 5.1 and 5.2 (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case, upon a determination that
indemnification of the Director, Officer, employee or agent is proper in the
circumstances because he or she or it has met the applicable standard of conduct
set forth in said Sections. Such determination shall be made (a) by the Board of
Directors by a majority vote of a quorum consisting of Directors who were not
parties to such action, suit or proceeding, or (b) if such a quorum is not
obtainable, or even if obtainable, if a quorum of disinterested Directors so
directs, by independent legal counsel in a written opinion, or (c) by the
Shareholders. [BCA ss.8.75(d)]
Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final disposition of
such action, suit or proceeding, as authorized by the Board of Directors in the
specific case, upon receipt of a written undertaking by or on behalf of the
Director, Officer, employee or agent to repay such amount unless it shall
ultimately be determined that he or she or it is entitled to be indemnified by
the Corporation as authorized in this Article 5. [BCA ss.8.75(e)]
The indemnification provided by this Article 5 shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any By-Law, agreement, vote of Shareholders or disinterested
Directors, or otherwise, both as to action in his or her or its official
capacity and as to action in another capacity while holding such Office, and
shall continue as to a person who has ceased to be a Director, Officer, employee
or agent, and shall inure to the benefit of the heirs, executors and
administrators of such a person. [BCA ss.8.75(f)]
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If the Corporation has paid indemnity or has advanced expenses to a
Director, Officer, employee or agent, the Corporation shall report the
indemnification or advance in writing to the Shareholders with or before the
notice of the next Shareholders' Meeting. [BCA ss.8.75(h)]
For purposes of this Article 5, references to the "Corporation" shall
include, in addition to the surviving corporation, any merging corporation
(including any corporation having merged with a merging corporation) absorbed in
a merger which, if its separate existence had continued, would have had the
power and authority to indemnify its Directors, Officers, and employees or
agents, so that any person who was a director, officer, employee or agent of
such merging corporation, or was serving at the request of such merging
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under the provisions of this Article 5 with respect to the surviving
corporation as such person would have with respect to such merging corporation
if its separate existence had continued. [BCA ss.8.75(i)]
For purposes of this Article 5, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a Director, Officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such Director, Officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries. A person who acted in good faith and in a manner he or she or it
reasonably believed to be in the best interests of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interest of the Corporation" as referred to in
this Article 5. [BCA ss.8.75(j)]
Section 5.5 Indemnity Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a Director, Officer, employee or
agent of the Corporation, or who is or was serving at the request of the
Corporation as a Director, Officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any liability
asserted against such person and incurred by such person in any such capacity,
or arising out of his or her status as such, whether or not the Corporation
would have the power to indemnify such person against such liability under the
provisions of this Article 5 or under the provisions of ss.8.75 of the Illinois
Business Corporation Act of 1983. [BCA ss.8.75
(g)]
Article 6
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 6.1 Contracts. The Board of Directors may expressly authorize any
Officer or Officers and agent or agents of the Corporation to enter into any
contract or execute and deliver any instrument in the name and on behalf of the
Corporation, and such authority may be general or confined to specific
instances. [BCA ss.8.50]
Section 6.2 Loans. All loans contracted on behalf of the Corporation and
all evidence of indebtedness issued in the Corporation's name shall be
authorized by resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
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Section 6.3 Pledges of Property and Assets. The pledge of all, or
substantially all, the property and assets of the Corporation in the usual and
regular course of business may be authorized by the Board of Directors upon such
terms and conditions as the Board of Directors deems necessary or desirable,
without authorization or consent of the Shareholders of the Corporation. [BCA
ss.11.55]
Section 6.4 Checks, Drafts, Etc. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Corporation, shall be signed by such Officer or Officers, agent or
agents of the Corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
Section 6.5 Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies, or other depositaries as the Board of Directors may
select.
Article 7
SHARES AND THEIR TRANSFER
Section 7.1 Consideration for Shares. Shares may be issued for such
consideration as shall be authorized from time to time by the Board of Directors
through action which establishes a price in cash or other consideration, or
both, or a minimum price or a general formula or method by which the price can
be determined. Upon authorization by the Board of Directors, the Corporation may
issue its own shares in exchange for or in conversion of its outstanding shares,
or may distribute its own shares pro rata to its Shareholders or the
Shareholders of one or more classes or series to effectuate dividends or splits,
and any such transactions shall not require consideration; provided, that no
such issuance of shares of any class or series shall be made to the holders of
shares of any other class or series unless it is either expressly provided for
in the Articles of Incorporation or authorized by an affirmative vote of the
holders of at least a majority of the outstanding shares of the class or series
in which the distribution is to be made. [BCA ss.6.25]
Section 7.2 Payment for Shares. The consideration for the issuance of
shares shall be paid, in whole or in part, in money, in other property, tangible
or intangible, or in labor or services actually performed for the Corporation,
as determined by the Board of Directors. When payment of the consideration for
which shares are to be issued shall have been received by the Corporation, such
shares shall be deemed to be fully paid and non-assessable. In the absence of
actual fraud in the transaction, and subject to the provisions of the Business
Corporation Act of 1983, the judgment of the Board of Directors or the
Shareholders, as the case may be, as to the value of the consideration received
for shares shall be conclusive. [BCA ss.6.30]
Section 7.3 Shares Represented by Certificates. Except as otherwise
provided pursuant to this Article 7, the issued shares of the Corporation shall
be represented by certificates. Certificates shall be signed by the appropriate
corporate Officers and may be sealed with the seal, or a facsimile of the seal,
of the Corporation. In case the seal of the Corporation is changed after the
certificate is sealed with the seal or a facsimile of the seal of the
Corporation, but before it is issued, the certificate may be issued by the
Corporation with the same effect as if the seal had not been changed. If a
certificate is countersigned by a transfer agent or registrar, other than the
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Corporation itself or its employee, any other signatures or countersignatures on
the certificate may be facsimiles. In case any Officer of the Corporation, or
any officer or employee of the transfer agent or registrar who has signed, or
whose facsimile signature has been placed upon, such certificate ceases to be an
Officer of the Corporation, or an officer or employee of the transfer agent or
registrar, before such certificate is issued, the certificate may be issued by
the Corporation with the same effect as if the Officer of the Corporation, or
the officer or employee of the transfer agent or registrar, had not ceased to be
such at the date of its issue.
Every certificate representing shares issued by the Corporation at a time
when the Corporation is authorized to issue shares of more than one class shall
set forth upon the face or back of the certificate a full summary or statement
of all of the designations, preferences, qualifications, limitations,
restrictions and special or relative rights of the shares of each class
authorized to be issued, and, if the Corporation is authorized to issue any
preferred or special class in series, the variations in the relative rights and
preferences between the shares of each such series so far as the same have been
fixed and determined, and the authority of the Board of Directors to fix and
determine the relative rights and preferences of subsequent series. Such
statement may be omitted from the certificate if it shall be set forth upon the
face or back of the certificate that such statement, in full, will be furnished
by the Corporation to any Shareholder upon request and without charge.
Each certificate representing shares shall also state:
(a) That the Corporation is organized under the laws of Illinois;
(b) The name of the person to whom issued; and
(c) The number and class of shares, and the designation of the series, if
any, which such certificate represents;
No certificate shall be issued for any share until such share is fully
paid. [BCA ss.6.35]
Section 7.4 Uncertificated Shares. The Board of Directors of the
Corporation may provide by resolution that some or all of any or all classes and
series of its shares shall be uncertificated shares, provided that such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Within a reasonable time after
the issuance or transfer of uncertificated shares, the Corporation shall send to
the registered owner thereof a written notice containing the information
required to be set forth or stated on certificates pursuant to this Article 7.
Except as otherwise expressly provided by law, the rights and obligations of
holders of uncertificated shares and the rights and obligations of holders of
certificates representing shares of the same class and series shall be
identical. [BCA ss.6.35]
Article 8
FISCAL YEAR
Except as the Board of Directors of the Corporation may otherwise provide
by resolution duly adopted pursuant to the authority granted hereby, the fiscal
year of the Corporation shall begin on the first day of January in each year and
end on the last day of December in each year.
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Article 9
DIVIDENDS
The Board of Directors may from time to time declare or effect, and the
Corporation may pay or make dividends on its outstanding shares or other
distributions to Shareholders, including without limitation purchases of shares
of the Corporation, subject in each case to any and all terms, conditions,
preferences and restrictions provided by law, by the Articles of Incorporation
and by any binding contract or instrument duly executed on behalf of the
Corporation. [BCA ss.ss.9.05, 9.10]
Article 10
SEAL
The Board of Directors may provide a corporate seal which shall be in the
form of a circle and shall have inscribed thereon the name of the Corporation
and the words "Corporate Seal, Illinois." [BCA ss.3.10]
Article 11
WAIVER OF NOTICE
Whenever any notice whatever is required to be given to any Shareholder or
Director of the Corporation under the provisions of these By-Laws or under the
provisions of the Articles of Incorporation or under the Illinois Business
Corporation Act of 1983, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice. Attendance at
any Meeting shall constitute waiver of notice thereof unless the person at the
Meeting objects to the holding of the Meeting because proper notice was not
given. [BCA ss.7.20]
Article 12
AMENDMENTS TO THE BY-LAWS
The By-Laws of the Corporation may be made, altered, amended or repealed
by the Shareholders or the Board of Directors of the Corporation, but, if such
By-Law expressly so provides, no By-Law adopted by the Shareholders may be
altered, amended or repealed by the Board of Directors. These By-Laws may be
altered or amended to contain any provisions for the regulation and management
of the affairs of the Corporation not inconsistent with law or with the Articles
of Incorporation. [BCA ss.2.25]
Article 13
STATUTORY REFERENCES
The statutory references in these By-Laws to the "Business Corporation Act
of 1983" refer, except where the context otherwise requires, to the Illinois
Business Corporation Act of 1983, as amended from time to time. The citations to
sections of the BCA appearing in brackets throughout the text of these By-Laws
are for convenience of reference only, are not made a part hereof, shall not be
construed as incorporating the referenced provisions of the law into these
By-
-16-
<PAGE> 20
Standard Parking Corporation IL
Laws, and shall not be deemed in any way to alter, affect or qualify the
meaning or effect of these By-Laws as written and adopted.
-17-
<PAGE> 1
Form BCA-55
Box 4024 File 769-6
----- ------
================================================================================
ARTICLES OF AMENDMENT
to the
ARTICLES OF INCORPORATION
of
STANDARD AUTO PARK, INC.
-----------------------------------
FILE IN DUPLICATE
Filing Fee $25.00
Filing Fee for Re-Stated Articles $100.00
================================================================================
<PAGE> 2
EXPEDITED
SECRETARY OF STATE
MAR 18
EXP. FEES 25.00
------
COPY CERT. 10.00
------
[SEAL]
STATE OF ILLINOIS
Office of the Secretary of State
I hereby certify that this is a true and
correct copy, consisting of five pages,
as taken from the original on file in this
office.
/s/ George H. Ryan
GEORGE H. RYAN
SECRETARY OF STATE
DATED: March 18, 1998
---------------
BY: /s/ Julie Jaeger
-----------------
<PAGE> 3
FORM B
BEFORE ATTEMPTING TO EXECUTE THESE BLANKS BE SURE TO READ
CAREFULLY THE INSTRUCTIONS ON THE BACK THEREOF.
(THESE ARTICLES MUST BE FILED IN DUPLICATE)
------------------------------
(Do not write in this Space)
STATE OF ILLINOIS, ) Date Paid 9-14-60
) ss. Initial License Fee $.50
COOK COUNTY ) Franchise Tax $8.34
Filing Fee $20.00
To CHARLES F. CARPENTIER, Secretary of State: Clerk [illegible]
------------------------------
We the undersigned,
<TABLE>
<CAPTION>
============================================================================
Name Number Street Address City State
============================================================================
<S> <C> <C> <C> <C>
Lawrence Kasakoff 110 South Dearborn, Chicago, Illinois
- ----------------------------------------------------------------------------
Norman L. Silverman 110 South Dearborn, Chicago, Illinois
- ----------------------------------------------------------------------------
Muriel Stineberg 110 South Dearborn, Chicago, Illinois
- ----------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
</TABLE>
being natural persons of the age of twenty-one years or more and subscribers to
the shares of the corporation to be organized pursuant hereto, for the purpose
of forming a corporation under "The Business Corporation Act" of the State of
Illinois, do hereby adopt the following Articles of Incorporation:
ARTICLE ONE
The name of the corporation is: STANDARD AUTO PARK, INC.
ARTICLE TWO
The address of its initial registered office in the State of Illinois is: 110 S.
Dearborn St. Street, in the City of Chicago ( 3 ) County of Cook and the name
(Zone)
of its initial Registered Agent at said address is: Lawrence Kasakoff
----------------------------
<PAGE> 4
ARTICLE THREE
The duration of the corporation is: Perpetual
ARTICLE FOUR
The purpose or purposes for which the corporation is organized are:
to operate a parking lot, parking facility, or public or private garage
ARTICLE FIVE
PARAGRAPH 1. The aggregate number of shares which the corporation is authorized
to issue is 1000, divided into one class. The designation of each class, the
number of shares of each class, and the par value, if any, of the shares of each
class, or a statement that the shares of any class are without par value, are as
follows:
<TABLE>
<CAPTION>
Par value per share or
Series Number of statement that shares
Class (If Any) Shares are without par value
<S> <C> <C>
Common 1000 $10.00 par value
</TABLE>
PARAGRAPH 2. The preferences, qualifications, limitations, restrictions and the
special or relative rights in respect of the shares of each class are:
NONE
ARTICLE SIX
The class and number of shares which the corporation proposes to issue
without further report to the Secretary of State, and the consideration
(expressed in dollars) to be received by the corporation therefor, are:
<TABLE>
<CAPTION>
Total consideration to
Class of shares Number of shares be received therefor:
<S> <C> <C>
Common 100 $ 1,000
$
$
$
$
-2-
<PAGE> 5
ARTICLE SEVEN
The corporation will not commence business until at least one thousand
dollars has been received as consideration for the issuance of shares.
ARTICLE EIGHT
The number of directors to be elected at the first meeting of the
shareholders is: three
ARTICLE NINE
PARAGRAPH 1: It is estimated that the value of all property to be owned by the
corporation for the following year wherever located will be $ 1000
PARAGRAPH 2: It is estimated that the value of the property to be located within
the State of Illinois during the following year will be $ 1000
PARAGRAPH 3: It is estimated that the gross amount of business which will be
transacted by the corporation during the following year will be $ 125,000
PARAGRAPH 4: It is estimated that the gross amount of business which will be
transacted at or from places of business in the State of Illinois during the
following year will be $ 125,000
___________________________________ )
___________________________________ )
___________________________________ )
___________________________________ ) Incorporators
___________________________________ )
___________________________________ )
___________________________________ )
OATH AND ACKNOWLEDGMENT
STATE OF ILLINOIS )
)
Cook County )
- ------------
I, ________________, a Notary Public, do hereby certify that on the 12th
day of September 1960, Lawrence Kasakoff, Norman L. Silverman and Muriel
Stineberg
(Names of Incorporators)
-3-
<PAGE> 6
personally appeared before me and being first duly sworn by me acknowledged they
signed the foregoing document in the respective capacities therein set forth and
declared that the statements therein contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
above written.
Place
(NOTARIAL SEAL)
Here ------------------------------
Notary Public
-4-
<PAGE> 7
FORM B
================================================================================
ARTICLES OF INCORPORATION
STANDARD AUTO PARK, INC.
- --------------------------------------------------------------------------------
================================================================================
The following fees are required to be paid at the time of issuing certificate of
incorporation: Filing fee, $20.00; Initial license fee of 50c per $1,000.00 or
1/20 of 1% of the amount of stated capital and paid-in surplus the corporation
proposes to issue without further report (Article Six); Franchise tax of 1/20 of
1% of the issued, as above noted. However, the minimum annual franchise tax is
$10.00 and varies monthly on $20,000 or less, as follows: January, $15;
February, $14.17; March, $13.34; April, $12.50; May, $11.67; June, $10.84; July,
$10.00; Aug., $9.17; Sept., $8.34; Oct., $7.50; Nov., $6.67; Dec., $5.84; (See
Sec. 133, BCA).
In excess of $20,000 the franchise tax per $1,000.00 is as follows: Jan., $0.75;
Feb., .7084; March, .6667; April, .625; May, .5834; June, .5417; July, .50;
Aug., .4584; Sept., .4167; Oct., .375; Nov., .3334; Dec., .2917.
All shares issued in excess of the amount mentioned in Article Six of this
application must be reported within 60 days from date of issuance thereof, and
franchise tax and license fee paid thereon; otherwise, the corporation is
subject to a penalty of 1% for each month on the amount until reported and
subject to a fine not to exceed $500.00.
The same fees are required for a subsequent issue of shares except the filing
fee is $1.00 instead of $20.00.
================================================================================
-5-
<PAGE> 8
FORM BCA-55
----------------------------
(Do not write in this
space)
Date Paid 12-28-70
License Fee $
Franchise Tax $
Filing Fee $25.00
Clerk [illegible]
----------------------------
(File in Duplicate)
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
STANDARD AUTO PARK, INC.
-------------------------
(Exact Corporate Name)
To JOHN W. LEWIS
Secretary of State
Springfield, Illinois
The undersigned corporation, for the purpose of amending its Articles of
Incorporation and pursuant to the provisions of Section 55 of "The Business
Corporation Act" of the State of Illinois, hereby executes the following
Articles of Amendment:
ARTICLE FIRST: The name of the corporation is:
STANDARD AUTO PARK, INC.
ARTICLE SECOND: The following amendment or amendments were adopted in the
manner prescribed by "The Business Corporation Act" of the State of Illinois:
-6-
<PAGE> 9
ARTICLE FIVE of the ARTICLES OF INCORPORATION is amended by
increasing the number of $10.00 Par Value Common Shares which the
corporation is authorized to issue from 1,000 shares to 25,000 shares.
(Disregard separation into classes if class voting does not apply to the
amendment voted on.)
ARTICLE THIRD: The number of shares of the corporation outstanding at the
time of the adoption of said amendment or amendments was 140; and the number of
shares of each class entitled to vote as a class on the adoption of said
amendment or amendments, and the designation of each such class were as follows:
</TABLE>
<TABLE>
<CAPTION>
Class Number of Shares
<S> <C>
Common 140
</TABLE>
(Disregard separation into classes if class voting does not apply to the
amendment voted on.)
ARTICLE FOURTH: The number of shares voted for said amendment or
amendments was 140; and the number of shares voted against said amendment of
amendments was _______. The number of shares of each class entitled to vote as a
class voted for and against said amendment or amendments; respectively, was:
<TABLE>
<CAPTION>
Class Number of Shares Voted
For Against
<S> <C> <C>
Common 140 None
</TABLE>
(Disregard these items unless the amendment restates the articles of
incorporation.)
-7-
<PAGE> 10
Item 1. On the date of the adoption of this amendment, restating the articles of
incorporation, the corporation had __________ shares issued, itemized as
follows:
Par value per share
or statement that
Series Number shares are without
Class (If Any) of Shares par value
Item 2. On the date of the adoption of this amendment restating the articles of
incorporation, the corporation had a stated capital of $___________ and a
paid-in surplus of $__________________ or a total of $____________________.
(Disregard this Article where this amendment contains no such provisions.)
ARTICLE FIFTH: The manner in which the exchange, reclassification, or
cancellation of issued shares, or a reduction of the number of authorized shares
of any class below the number of issued shares of that class, provided for in,
or effected by, this amendment, is as follows:
-8-
<PAGE> 11
(Disregard this Paragraph where amendment does not affect stated capital or
paid-in surplus.)
ARTICLE SIXTH: Paragraph 1: The manner in which said amendment or
amendments effect a change in the amount of stated capital or the amount of
paid-in surplus, or both, is as follows:
(Disregard this Paragraph where amendment does not affect stated capital or
paid-in surplus.)
Paragraph 2: The amounts of stated capital and of paid-in surplus as
changed by this amendment are as follows:
<TABLE>
<CAPTION>
Before Amendment After Amendment
<S> <C> <C>
Stated capital ........ $ $
Paid-in surplus ....... $ $
</TABLE>
-9-
<PAGE> 1
AMENDED AND RESTATED
BY-LAWS
OF
STANDARD AUTO PARK, INC.
ARTICLE I
OFFICES
The corporation shall continuously maintain in the State of Illinois a
registered office and a registered agent whose office is identical with such
registered office, and may have other offices within or without the state.
ARTICLE II
SHAREHOLDERS
SECTION 1. ANNUAL MEETING. An annual meeting of the shareholders shall be
held on the first Wednesday in February of each year for the purpose of electing
directors and for the transaction of such other business as may come before the
meeting. If the day fixed for the annual meeting shall be a legal holiday, such
meeting shall be held on the next succeeding business day.
SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders may be
called either by the president, by the board of directors or by the holders of
not less than one-fifth of all the outstanding shares of the corporation
entitled to vote, for the purpose or purposes stated in the call of the meeting.
SECTION 3. PLACE OF MEETING. The board of directors may designate any
place, as the place of meeting for any annual meeting or for any special meeting
called by the board of directors. If no designation is made, or if a special
meeting be otherwise called, the place of meeting shall be held at the principal
office of the corporation.
SECTION 4. NOTICE OF MEETINGS. Written notice stating the place, date, and
hour of the meeting, and in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than ten
nor more than sixty days before the date of the meeting, or in the case of a
merger consolidation, share exchange, dissolution or sale, lease or exchange of
assets not less than twenty nor more than sixty days before the date of the
meeting, either personally or by mail, by or at the direction of the president,
or the secretary, or the officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
<PAGE> 2
addressed to the shareholder at his address as it appears on the records of the
corporation, with postage thereon prepaid. When a meeting is adjourned to
another time or place, notice need not be given of the adjourned meeting if the
time and place thereof are announced at the meeting at which the adjournment is
taken.
SECTION 5. FIXING OF RECORD DATE. For the purpose of determining the
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or to receive payment of any dividend, or other distribution
or allotment of any rights, or to exercise any rights in respect of any change,
conversion or exchange of shares or for the purpose of any other lawful action1
the board of directors of the corporation may fix in advance a record date which
shall not be more than sixty days and, for a meeting of shareholders, not less
than ten days, or in the case of a merger, consolidation, share exchange,
dissolution or sale, lease or exchange of assets, not less than twenty days,
before the date of such meeting. If no record date is fixed, the record date for
the determination of shareholders entitled to notice of or to vote at a meeting
of shareholders shall be the date on which notice of the meeting is mailed, and
the record date for the determination of shareholders for any other purpose
shall be the date on which the board of directors adopts the resolution relating
thereto. A determination of shareholders of record entitled to notice of or to
vote at a meeting of shareholders shall apply to any adjournment of the meeting.
SECTION 6. VOTING LISTS. The officer or agent having charge of the
transfer books for shares of the corporation shall make, within twenty days
after the record date for a meeting of shareholders or at least ten days before
each meeting of shareholders, a complete list of the shareholders entitled to
vote at such meeting, arranged in alphabetical order, showing the address of and
the number of shares registered in the name of the shareholder, which list, for
a period of ten days prior to such meeting, shall be kept on file at the
registered office of the corporation and shall be open to inspection by any
shareholder for any purpose germane to the meeting, at any time during usual
business hours. Such list shall also be produced and kept open at the time and
place of the meeting and may be inspected by any shareholder during the whole
time of the meeting. The original share ledger or transfer book, or a duplicate
thereof kept in this State, shall be prima facie evidence as to who are the
shareholders entitled to examine such list or share ledger or transfer book or
to vote at any meeting of shareholders.
SECTION 7. QUORUM. The holders of a majority of the outstanding shares of
the corporation entitled to vote on a matter present in person or represented by
proxy shall constitute a quorum at any meeting of shareholders; provided that if
less than a majority of the outstanding shares are represented at said meeting,
a majority of the shares so represented may adjourn the meeting at any time
without further notice. If a quorum is present, the affirmative vote of the
majority of the shares represented at the meeting shall be the act of the
shareholders, unless the vote of a greater number or voting by classes is
required by the Business Corporation Act of 1983 ("Business Corporation Act"),
the Articles of Incorporation or these by-laws. At any adjourned meeting at
which a quorum shall be present, any business may be transacted which might have
been transacted at the original meeting. Withdrawal of shareholders from any
meeting shall not cause failure of a duly constituted quorum at that meeting.
-2-
<PAGE> 3
SECTION 8. PROXIES. Each shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy, but no such proxy shall be valid after eleven months from the date of its
execution, unless otherwise provided in the proxy.
No proxy shall be solicited by means of any communication containing a
statement which, at the time and in the light of the circumstances under which
it is made, is false or misleading with respect to any material fact or which
omits to state any material fact necessary in order that the statements made not
be false or misleading.
SECTION 9. VOTING OF SHARES. Each outstanding share, of each class of
shares entitled to vote on a matter, shall be entitled to one vote upon each
matter submitted to a vote at a meeting of shareholders, and in all elections
for directors, every shareholder shall have the right to vote the number of
shares owned by such shareholder for as many persons as there are directors to
be elected1 or to cumulate such votes and give one candidate as many votes as
shall equal the number of directors multiplied by the number of such shares or
to distribute such cumulative votes in any proportion among any number of
candidates.
SECTION 10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares of a corporation
held by the corporation in a fiduciary capacity may be voted and shall be
counted in determining the total number of outstanding shares entitled to vote
at any given time.
Shares registered in the name of another corporation, domestic or foreign,
may be voted by any officer agent1 proxy or other legal representative
authorized to vote such shares under the law of incorporation of such
corporation. A corporation may treat the president or other person holding the
position of chief executive officer of such other corporation as authorized to
vote such shares, together with any other person indicated and any other holder
of an office indicated by the corporation shareholder to the corporation as a
person or an office authorized to vote such shares. Such persons and offices
indicated shall be registered by the corporation on the transfer books for
shares and included in any voting list.
Shares registered in the name of a deceased person, a minor ward or a
person under legal disability may be voted by his or her administrator,
executor, or court appointed guardian, either in person or by proxy without a
transfer of such shares into the name of such administrator, executor, or court
appointed guardian. Shares registered in the name of a trustee may be voted by
him or her, either in person or by proxy.
Shares registered in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his or her name if authority so to do
is contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
-3-
<PAGE> 4
Any number of shareholders may create a voting trust for the purpose of
conferring upon a trustee or trustees the right to vote or otherwise represent
their share, for a period not to exceed ten years, by entering into a written
voting trust agreement specifying the terms and conditions of the voting trust,
and by transferring their shares to such trustee or trustees for the purpose of
the agreement. Any such trust agreement shall not become effective until a
counterpart of the agreement is deposited with the corporation at its registered
office. The counterpart of the voting trust agreement so deposited with the
corporation shall be subject to the same right of examination by a shareholder
of the corporation, in person or by agent or attorney, as are the books and
records of the corporation, and shall be subject to examination by any holder of
a beneficial interest 'in the voting trust, either in person or by agent or
attorney, at any reasonable time for any proper purpose.
Shares of its own stock belonging to this corporation shall not be voted,
directly or indirectly, at any meeting and shall not be counted in determining
the total number of outstanding shares at any given time.
SECTION 11. INSPECTORS. At any meeting of shareholders, the presiding
officer may, or upon the request of any shareholder shall, appoint one or more
persons as inspectors for such meeting.
Such inspectors shall ascertain and report the number of shares
represented at the meeting, based upon their determination of the validity and
effect of proxies; count all votes and report the results; and do such other
acts as are proper to conduct the election and voting with impartiality and
fairness to all the shareholders.
Each report of an inspector shall be in writing and signed by him or by a
majority of them if there be more than one inspector acting at such meeting. If
there is more than one inspector, the report of a majority shall be the report
of the inspectors. The report of the inspector or inspectors on the number of
shares represented at the meeting and the results of the voting shall be prima
facie evidence thereof.
SECTION 12. INFORMAL ACTION BY SHAREHOLDERS. Unless otherwise provided in
the Articles of Incorporation, any action required to be taken at any annual or
special meeting of the shareholders of the corporation, or any other action
which may be taken at a meeting of the shareholders, may be taken without a
meeting and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed (a) if 5 days prior notice of the proposed action is
given in writing to all of the shareholders entitled to vote with respect to the
subject matter thereof, by the holders of outstanding shares having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voting or (b) by all of the shareholders entitled to vote with
respect to the subject matter thereof.
Prompt notice of the taking of the corporation action without a meeting by
less than unanimous written consent shall be given in writing to those
shareholders who have not consented in writing. In the event that the action
which is consented to is such as would have required the filing of a certificate
under any Section of the Business Corporation Act if such
-4-
<PAGE> 5
action had been voted on by the shareholders at a meeting thereof, the
certificate filed under such Section shall state, in lieu of any statement
required by such Section concerning any vote of shareholders, that written
consent has been given in accordance with the provisions of Section 7.10 of the
Business Corporation Act and that written notice has been given as provided in
such Section.
SECTION 13. VOTING BY BALLOT. Voting on any question or in any election
may be by voice unless the presiding officer shall order or any shareholder
shall demand the voting be by ballot.
ARTICLE III
DIRECTORS
SECTION 1. GENERAL POWERS. The business of the corporation shall be
managed by or under the direction of its board of directors.
SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors of
the corporation shall be three (3). Each director shall hold office until the
next annual meeting of shareholders or until his successor shall have been
elected and qualified. Directors need not be residents of Illinois or
shareholders of the corporation. The number of directors may be increased or
decreased from time to time by the amendment of this section; but no decrease
shall have the effect of shortening the term of any incumbent director.
SECTION 3. REGULAR MEETINGS. A regular meeting of the board of directors
shall be held immediately after the annual meeting of shareholders. The board of
directors may provide, by resolution, time and place for the holding of
additional regular meetings without other notice than such resolution.
SECTION 4. SPECIAL MEETINGS. Special meetings of the board of directors
may be called by or at the request of the president or any director. The person
or persons authorized to call special meetings of the board of directors may fix
any place as the place for holding any special meeting of the board of directors
called by them.
SECTION 5. NOTICE. Notice of any special meeting shall be given at least
three (3) days previous thereto by written notice to each director at his
business address. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail so addressed, with postage thereon prepaid.
If notice be given by telegram, such notice shall be deemed to be delivered when
the telegram is delivered to the telegram company. The attendance of a director
at any meeting shall constitute a waiver of notice of such meeting, except where
a director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the board of directors need be specified in the
notice or waiver of notice of such meeting.
-5-
<PAGE> 6
SECTION 6. QUORUM. A majority of the number of directors fixed by these
by-laws shall constitute a quorum for transaction of business at any meeting of
the board of directors, provided that if less than a majority of such number of
directors are present at said meeting, a majority of the directors present may
adjourn the meeting at any time without further notice.
SECTION 7. MANNER OF ACTING. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors, unless the act of a greater number is required by statute, these
by-laws, or the Articles of Incorporation.
SECTION 8. VACANCIES. Any vacancy occurring in the board of directors and
any directorship to be filled by reason of an increase in the number of
directors, shall be filled by election at an annual meeting or at a special
meeting of shareholders called for that purpose.
SECTION 9. ACTION WITHOUT A MEETING. Unless specifically prohibited by the
Articles of Incorporation, any action required to be taken at a meeting of the
board of directors, or any other action which may be taken at a meeting of the
board of directors, or of any committee thereof may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
all the directors entitled to vote with respect to the subject matter thereof,
or by all the members of such committee, as the case may be. Any such consent
signed by all the directors or all the members of the committee shall have the
same effect as a unanimous vote, and may be stated as such in any document filed
with the Secretary of State or with anyone else.
SECTION 10. COMPENSATION. The board of directors, by the affirmative vote
of a majority of directors then in office, and irrespective of any personal
interest of any of its members, shall have authority to establish reasonable
compensation of all directors for services to the corporation as directors,
officers, or otherwise. By resolution of the board of directors the directors
may be paid their expenses, if any, of attendance at each meeting of the board.
No such payment shall, preclude any director from serving the corporation in any
other capacity and receiving compensation therefor.
SECTION 11. PRESUMPTION OF ASSENT. A director of the corporation who is
present at a meeting of the board of directors at which action on any corporate
matter is taken shall be conclusively presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the person acting
as the secretary of the meeting before the adjournment thereof or shall forward
such dissent by registered mail to the secretary of the corporation immediately
after the adjournment of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.
SECTION 12. COMMITTEES. The board of directors by resolution adopted by a
majority of the number of directors fixed by the by-laws or otherwise may create
one or more committees and appoint members of the board to serve on the
committee or committees. Each committee shall have two or more members, who
serve at the pleasure of the board.
-6-
<PAGE> 7
Unless the appointment by the board of directors requires a greater
number, a majority of any committee shall constitute a quorum and a majority of
a quorum is necessary for committee action. A committee may act by unanimous
consent in writing without a meeting and, subject to the provisions of the
by-laws or action by the board of directors, the committee by majority vote of
its members shall determine the time and place of meetings and the notice
required therefor.
To the extent specified by the board of directors or in the Articles of
Incorporation, each committee may exercise the authority of the board of
directors, provided, however, a committee may not:
(a) authorize distributions;
(b) approve or recommend to shareholders any act required to be approved
by shareholders;
(c) fill vacancies on the board or on any of its committees;
(d) elect or remove officers or fix the compensation of any member of
the committee;
(e) adopt, amend or repeal the by-laws;
(f) approve a plan of merger not requiring shareholder approval;
(g) authorize or approve reacquisition of shares, except according to a
general formula or method prescribed by the Board;
(h) authorize or approve the issuance or sale, or contract for sale, of
shares or determine the designation and relative rights,
preferences, and limitations of a series of shares, except that the
board may direct a committee to fix the specific terms of the
issuance or sale or contract for sale or the number of shares to be
allocated to particular employees under an employee benefit plan; or
(i) amend, alter, repeal, or take action inconsistent with any
resolution or action of the board of directors when the resolution
or action of the board of directors provides by its terms that it
shall not be amended, altered or repealed by action of a committee.
SECTION 13. RESIGNATION AND REMOVAL OF DIRECTORS. A director may resign at
any time upon written notice to the board of directors. One of more of the
directors may be removed, with or without cause, at a meeting of shareholders by
the affirmative vote of the holders of a majority of the outstanding shares then
entitled to vote at an election of directors, except as follows:
(a) No director shall be removed at a meeting of shareholders unless the
notice of such meeting shall state that a purpose of the meeting is to vote upon
the removal of one or more directors named in the notice. Only the named
director or directors may be removed at such meeting.
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<PAGE> 8
(b) If less than the entire board is to be removed, no director may be
removed, with or without cause, if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an election of the entire
board of directors.
SECTION 14. TELEPHONIC MEETINGS. The board of directors or any committee
of the board of directors may participate in and act at any meeting of such
board or committee through the use of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in such meeting shall constitute
attendance and presence in person at the meeting of the person or persons so
participating.
ARTICLE IV
OFFICERS
SECTION 1. NUMBER. The officers of the corporation shall be a chairman of
the board of directors, a president, one or more vice-presidents, a treasurer, a
secretary, and such other officers as may be elected or appointed by the board
of directors. Any two or more offices may be held by the same person.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the corporation
shall be elected annually by the board of directors at the meeting of the board
of directors held after each annual meeting of shareholders. If the election of
officers shall not be held at such meeting, such election shall be held as soon
thereafter as may be convenient. Vacancies may be filled or new offices created
and filled at any meeting of the board of directors. Each officer shall hold
office until his successor shall have been duly elected and shall have qualified
or until his death or until he shall resign or shall have been removed in the
manner hereinafter provided. Election of an officer shall not of itself create
contract rights.
SECTION 3. REMOVAL. Any officer elected or appointed by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
SECTION 4. CHAIRMAN OF THE BOARD. The chairman of the board shall preside
over all executive committee meetings of the executive committee of the
corporation, and shall preside at all meetings of the shareholders and of the
board of directors.
He may sign, in lieu of the president, certificates for shares of the
corporation, deeds, mortgages, bonds, contracts or other instruments, which the
board of directors have authorized to be executed, except in cases where the
signing and execution thereof shall be expressly delegated by the board of
directors or these by-laws to some other officer or agent of the corporation or
in cases where the signing and execution thereof is required by law to be
performed by some other officer or agent of the corporation.
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SECTION 5. PRESIDENT. The president shall be the principal executive
officer of the corporation. Subject to the direction and control of the board of
directors, he shall be in charge of the business of the corporation; he shall
see that the resolutions and directions of the board of directors are carried
into effect except in those instances in which that responsibility is
specifically assigned to some other person by the board of directors; and, in
general, he shall discharge all duties incident to the office of president and
such other duties as may be prescribed by the board of directors from time to
time. He shall preside at all meetings of the shareholders and of the board of
directors. Except in those instances in which the authority to execute is
expressly delegated to another officer or agent of the corporation or a
different mode of execution is expressly prescribed by the board of directors or
these by-laws, he may execute for the corporation certificates for its shares,
and any contracts, deeds, mortgages, bonds, or other instruments which the board
of directors has authorized to be executed, and he may accomplish such execution
either under or without the seal of the corporation and either individually or
with the secretary, any assistant secretary, or any other officer thereunto
authorized by the board of directors, according to the requirements of the form
of the instrument. He may vote all securities which the corporation is entitled
to vote except as and to the extent such authority shall be vested in a
different officer or agent of the corporation by the board of directors.
SECTION 6. THE VICE-PRESIDENTS. The vice-president (or in the event there
be more than one vice-president, each of the vice-presidents) shall assist the
president in the discharge of his duties as the president may direct and shall
perform such other duties as from time to time may be assigned to him by the
president or by the board of directors. In the absence of the president or in
the event of his inability or refusal to act, the vice-president (or in the
event there be more than one vice-president, the vice-presidents in the order
designated by the board of directors, or by the president if the board of
directors has not made such a designation, or in the absence of any designation,
then in the order of seniority of tenure as vice-president) shall perform the
duties of the president, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the president. Except in those instances in
which the authority to execute is expressly delegated to another officer or
agent of the corporation or a different mode of execution is expressly
prescribed by the board of directors or these by-laws, the vice-president (or
each of them if there are more than one) may execute for the corporation
certificates for its shares and any contracts, deeds, mortgages, bonds or other
instruments which the board of directors has authorized to be executed, and he
may accomplish such execution either under or without the seal of the
corporation and either individually or with the secretary, any assistant
secretary, or any other officer thereunto authorized by the board of directors,
according to the requirements on the form of the instrument.
SECTION 7. THE TREASURER. The treasurer shall be the principal accounting
and financial officer of the corporation. He shall: (a) have charge of and be
responsible for the maintenance of adequate books of account for the
corporation; (b) have charge and custody of all funds and securities of the
corporation, and be responsible therefor and for the receipt and disbursement
thereof; and (c) perform all the duties incident to the office of treasurer and
such other duties as from time to time may be assigned to him by the president
or by the board of directors.
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SECTION 8. THE SECRETARY. The secretary shall: (a) record the minutes of
the shareholders' and the board of directors' meetings in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these by-laws or as required by law: (c) be custodian of
the corporate records and of the seal of the corporation; (d) keep a register of
the post-office address of each shareholder which shall be furnished to the
secretary by such shareholder; (e) sign with the president, or a vice-president,
or any other officer thereunto authorized by the board of directors,
certificates for shares of the corporation, the issue of which shall have been
authorized by the board of directors, and any contracts, deeds, mortgages,
bonds, or other instruments which the board of directors has authorized to be
executed, according to the requirements of the form of the instrument, except
when a different mode of execution is expressly prescribed by the board of
directors or these by-laws; (f) have general charge of the stock transfer books
of the corporation; (g) perform all duties incident to the office of secretary
and such other duties as from time to time may be assigned to him by the
president or by the board of directors.
SECTION 9. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The assistant
treasurers and assistant secretaries shall perform such duties as shall be
assigned to them by the treasurer or the secretary, respectively, or by the
president or the board of directors. The assistant secretary may sign with the
president, or a vice-president, or any other officer thereunto authorized by the
board of directors, certificates for shares of the corporation, the issue of
which shall have been authorized by the board of directors, and any contracts,
deeds, mortgages, bonds, or other instruments which the board of directors has
authorized to be executed, according to the requirements of the form of the
instrument, except when a different mode of execution is expressly prescribed by
the board of directors or these bylaws.
SECTION 10. SALARIES. The salaries of the officers shall be fixed from
time to time by the board of directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
corporation.
ARTICLE V
CONTRACTS LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. The board of directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the corporation, and such authority
may be general or confined to specific instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the board of directors. Such authority may be
general or confined to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the
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<PAGE> 11
corporation, shall be signed by such officer or officers, agent or agents of the
corporation and in such manner as shall from time to time be determined by
resolution of the board of directors.
SECTION 4. DEPOSITS. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositaries as the board of directors may
select.
ARTICLE VI
CERTIFICATES FOR SHARES AND
THEIR TRANSFER
SECTION 1. CERTIFICATES FOR SHARES. The issued shares of the corporation
shall be represented by certificates or shall be uncertificated shares.
Certificates representing shares of the corporation shall be signed by the
president or a vice-president or by such officer as shall be designated by
resolution of the board of directors and by the secretary or an assistant
secretary, and may be sealed with the seal or a facsimile of the seal of the
corporation. If both of the signatures of the officers be by facsimile, the
certificate shall be manually signed by or on behalf of a duly authorized
transfer agent or clerk. Each certificate representing shares shall be
consecutively numbered or otherwise identified, and shall also state the name of
the person to whom issued, the number and class of shares (with designation of
series, if any), the date of issue, that the corporation is organized under
Illinois law, and the par value or a statement that the shares are without par
value. If the corporation is authorized and does issue shares of more than one
class or of series within a class, the certificate shall also contain such
information or statement as may be required by law.
No certificate shall be issued for any shares until such shares are fully
paid.
The name and address of each shareholder, the number and class of shares
held and the date on which the certificates for the shares were issued shall be
entered on the books of the corporation. The person in whose name shares stand
on the books of the corporation shall be deemed the owner thereof for all
purposes as regards the corporation.
SECTION 2. LOST CERTIFICATES. If a certificate representing shares
allegedly has been lost or destroyed the board of directors may in its
discretion, except as may be required by law, direct that a new certificate be
issued upon such indemnification and other reasonable requirements as it may
impose.
SECTION 3. TRANSFERS OF SHARES. Transfers of shares of the corporation
shall be recorded on the books of the corporation and, except in the case of a
lost or destroyed certificate, shall be made on surrender for cancellation of
the certificate for such shares. A certificate presented for transfer must be
duly endorsed and proper guaranty of signature and other appropriate assurances
that the endorsement is effective may be required.
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<PAGE> 12
Unless otherwise provided by the Articles of Incorporation, or by these
by-laws, the board of directors may provide by resolution that some or all of
any or all classes and series of its shares shall be uncertificated shares,
provided that such resolution shall not apply to shares represented by a
certificate until such certificate is surrendered to the corporation. Within a
reasonable time after the issuance or transfer of uncertificated shares, the
corporation shall send to the registered owner thereof a written notice
containing the information required to be set forth or stated on certificates.
Except as otherwise expressly provided by law, the rights and obligations of the
holders of uncertificated shares and rights and obligations of the holders of
certificates representing shares of the same class and series shall be
identical.
ARTICLE VII
FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the
board of directors.
ARTICLE VIII
DISTRIBUTIONS
The board of directors may authorize, and the corporation may make,
distributions to its shareholders, subject to any restriction in the Articles of
Incorporation and subject also to the limitations following:
No distribution may be made if, after giving it effect:
(a) The corporation would be insolvent; or
(b) The net assets of the corporation would be less than zero or less
than the maximum amount payable at the time of distribution to
shareholders having preferential rights in liquidation if the
corporation were then to be liquidated.
The board of directors may base a determination that a distribution may be
made either on financial statements prepared on the basis of accounting
practices and principles that are reasonable in the circumstances or on a fair
valuation or other method that is reasonable in the circumstances.
The effect of a distribution shall be measured as of the earlier of:
(a) the date of its authorization if payment occurs within 120 days
after the date of authorization or the date of payment if payment
occurs more than 120 days after the date of authorization; or
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(b) In the case of distribution by purchase, redemption, or other
acquisition of the corporation's shares, the earlier of (i) the date
money or other property is transferred or debt incurred by the
corporation of (ii) the date shareholders cease to be shareholders.
ARTICLE IX
SEAL
The corporate seal shall have inscribed thereon the name of the
corporation and the words "Corporate Seal, Illinois." The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any manner
reproduced.
ARTICLE X
WAIVER OF NOTICE
Whenever any notice is required to be given under the provisions of these
by-laws or under the provisions of the articles of incorporation or under the
provisions of The Business Corporation Act, a waiver thereof in writing, signed
by the person or person entitled to such notice, whether before or after the
time stated therein, shall be deemed equivalent to the giving of such notice.
ARTICLE XI
AMENDMENTS
The by-laws of the corporation may be amended, altered, or repealed by the
shareholders or the board of directors, but no by-law adopted by the
shareholders may be altered, amended, or repealed by the board of directors.
ARTICLE XII
INDEMNIFICATION OF OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS
(a) The corporation shall and does hereby indemnify any person who was or
is a party, or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he or she is or was a director, officer, employee or
agent of the corporation, or who is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
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<PAGE> 14
suit or proceeding, if such person acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to the best interest of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
or she reasonably believed to be in or not opposed to the best interests of the
corporation or, with respect to any criminal action or proceeding, that the
person had reasonable cause to believe that his or her conduct was unlawful.
(b) The corporation shall and does hereby indemnify any person who was or
is a party, or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection with the defense or settlement of such action or suit,
if such person acted in good faith and in a manner he or she reasonably believed
to be in, or not opposed to the best interests of the corporation, provided that
no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his or her duty to the corporation, unless, and
only to the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability, but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as the court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful, on the merits or otherwise, in the defense of
any action, suit or proceeding referred to in subsections (a) and (b), or in
defense of any claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) (unless ordered by a
court) shall be made by the corporation only as authorized in the specific case,
upon a determination that indemnification of the director, officer, employee or
agent is, proper in the circumstances because he or she has met the applicable
standard of conduct set forth in subsections (a) or (b). Such determination
shall be made (1) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or
proceedings, or (2) if such a quorum is not obtainable, or even if obtainable,
if a quorum of disinterested directors so directs, by independent legal counsel
in a written opinion, or (3) by the shareholders.
(e) Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the corporation in advance of the final disposition of
such action, suit or proceeding, as authorized by the board of directors in the
specific case, upon receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay such amount, unless it shall
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<PAGE> 15
ultimately be determined that he or she is entitled to be indemnified by the
corporation as authorized in this Article.
(f) The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any by-law, agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in his or her official capacity and
as to action in another capacity while holding such office, and shall continue
as to a person who has ceased to be a director, officer, employee or agent, and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
(g) A corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the corporation,
or who is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against any liability asserted against such person
and incurred by such person in any such capacity, or arising out of his or her
status as such, whether or not the corporation would have the power to indemnify
such person against such liability under the provisions of this Article.
(h) If a corporation has paid indemnity or has advanced expenses to a
director, officer, employee or agent, the corporation shall report the
indemnification or advance in writing to the shareholders with or before the
notice of the next shareholders meeting.
(i) For purposes of this Article, references to "the corporation" shall
include, in addition to the surviving corporation, any merging corporation
(including any corporation having merged with a merging corporation) absorbed in
a merger which, if its separate existence had continued, would have had the
power and authority to indemnify its directors, officers, and employees or
agents, so that any person who was a director, officer, employee or agent of
such merging corporation, or was serving at the request of such merging
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under the provisions of this Article with respect to the surviving
corporation as such person would have with respect to such merging corporation
if its separate existence had continued.
(j) For purposes of this Article, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries. A person who acted in good faith and in a manner he or she
reasonably believed to be in the best interests of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interest of the corporation" as referred to in
this Article.
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ARTICLE XIII
FUTURE AMENDMENTS TO BUSINESS CORPORATION ACT
In the event the Business Corporation Act is amended after the adoption of
these by-laws in a manner which makes these by-laws conflict with the Business
Corporation Act, these by-laws shall be deemed to be amended to comport with
such conflicting provisions of the amended Business Corporation Act.
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UNANIMOUS WRITTEN CONSENT
OF THE SOLE DIRECTOR AND
SHAREHOLDER OF
STANDARD AUTO PARK, INC.
The undersigned, being the sole Director and Shareholder of Standard Auto
Park, Inc. an Illinois corporation, hereby consents in writing to the adoption
of the following resolutions:
RESOLVED, that Myron Warshauer be and hereby is elected as sole
director of the Corporation, to hold such position until his successor has
been duly elected and qualified;
FURTHER RESOLVED, that any and all acts previously taken by the
directors of the Corporation since the date of the last annual meeting to
the date hereof are in all respects expressly ratified and confirmed as
the acts and deeds of the Corporation;
FURTHER RESOLVED, that the following persons be and hereby are
elected to the positions set opposite their names, to hold such office
until their respective successors have been duly elected and qualified:
Chairman of the Board Sidney Warshauer
President Myron Warshauer
Secretary and Treasurer Carol Warshauer
Assistant Secretary Sylvia Starzec
Assistant Secretary Michael K. Wolf
FURTHER RESOLVED, that any and all acts previously taken by the
officers of the Corporation since the date of the last annual meeting to
the date hereof are in all respects expressly ratified and confirmed as
the acts and deeds of the Corporation;
FURTHER RESOLVED, that the form, terms and provisions of the
Agreement to Terminate the Stock Purchase Agreement dated June 1, 1990 by
and among Sidney Warshauer as Trustee of the Sidney Warshauer Trust dated
November 1, 1979, Myron Warshauer and the Corporation, a copy of which is
attached hereto as Exhibit A, terminating that certain Stock Purchase
Agreement dated December 5, 1979 and as amended and restated in that
certain Amended and Restated Stock Purchase Agreement dated November 15,
1982, be and hereby is approved;
FURTHER RESOLVED, that the form, terms and provisions of the Stock
Assignment dated June 1, 1990 by Sidney Warshauer as Trustee of the Sidney
Warshauer Trust dated November 1, 1979, transferring to Myron Warshauer
its 5,880 shares of common stock of the Corporation, a copy of which is
attached hereto as Exhibit B, be and hereby is approved;
<PAGE> 18
FURTHER RESOLVED, that the form, terms and provisions of the Lost
Certificate Affidavit dated June 1, 1990, executed by Sidney Warshauer as
Trustee of the Sidney Warshauer Trust dated November 1, 1979, a copy of
which is attached hereto as Exhibit C, be and hereby is approved;
FURTHER RESOLVED, that Article III, Section 2 of the By-Laws of the
Corporation is amended to read as follows:
"SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of
directors of the corporation shall be one (1). The directors shall
hold office until the next annual meeting of shareholders or until
his successor shall have been elected and qualified. The director
need not be a resident of Illinois or shareholder of the
Corporation. The number of directors may be increased from time to
time by the amendment of this Section."
FURTHER RESOLVED, that Article IV, Section 1 of the By-Laws of the
Corporation is amended to read as follows:
"SECTION 1. NUMBER. The officers of the Corporation shall be a
president, a treasurer, a secretary, and such other officers as may
be elected or appointed by the board of directors. Any two or more
offices may be held by the same person. The board of directors may
appoint a chairman of the board, who need not be a director. The
chairman of the board, if appointed, may sign, in lieu of the
president, certificates for shares of the corporation, deeds,
mortgages, bonds, contracts or other instruments, which the board of
directors have authorized to be executed, except in cases where the
signing and execution thereof shall be expressly delegated by the
board of directors or these By-Laws to some other officer or agent
of the corporation or in cases where the signing and execution
thereof is required by law to be performed by some other officer or
agent of the corporation."
FURTHER RESOLVED, that the appropriate officers of the Corporation
be and hereby are authorized and directed to take such actions as may be
necessary or appropriate to implement the foregoing resolutions.
Dated: June 20, 1990
/s/ Myron Warshauer
--------------------------------
Myron Warshauer,
Director and Shareholder
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<PAGE> 19
FORM B
BEFORE ATTEMPTING TO EXECUTE THESE BLANKS BE SURE TO READ
CAREFULLY THE INSTRUCTIONS ON THE BACK THEREOF.
(THESE ARTICLES MUST BE FILED IN DUPLICATE)
------------------------------
(Do not write in this Space)
STATE OF ILLINOIS,) Date Paid 9-14-60
) ss. Initial License Fee $.50
COOK COUNTY ) Franchise Tax $8.34
Filing Fee $20.00
To CHARLES F. CARPENTIER, Secretary of State: Clerk [illegible]
------------------------------
We the undersigned,
- ---------------------------------------------------------------------------
Name Number Street Address City State
- ---------------------------------------------------------------------------
Lawrence Kasakoff 110 South Dearborn, Chicago, Illinois
- ---------------------------------------------------------------------------
Norman L. Silverman 110 South Dearborn, Chicago, Illinois
- ---------------------------------------------------------------------------
Muriel Stineberg 110 South Dearborn, Chicago, Illinois
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
being natural persons of the age of twenty-one years or more and subscribers to
the shares of the corporation to be organized pursuant hereto, for the purpose
of forming a corporation under "The Business Corporation Act" of the State of
Illinois, do hereby adopt the following Articles of Incorporation:
ARTICLE ONE
The name of the corporation is: STANDARD AUTO PARK, INC.
ARTICLE TWO
The address of its initial registered office in the State of Illinois is: 110 S.
Dearborn St. Street, in the City of Chicago ( 3 ) County of Cook and the name
(Zone)
of its initial Registered Agent at said address is: Lawrence Kasakoff
----------------------------
<PAGE> 20
ARTICLE THREE
The duration of the corporation is: Perpetual
ARTICLE FOUR
The purpose or purposes for which the corporation is organized are:
to operate a parking lot, parking facility, or public or private garage
ARTICLE FIVE
PARAGRAPH 1. The aggregate number of shares which the corporation is authorized
to issue is 1000, divided into one class. The designation of each class, the
number of shares of each class, and the par value, if any, of the shares of each
class, or a statement that the shares of any class are without par value, are as
follows:
Par value per share or
Series Number of statement that shares
Class (If Any) Shares are without par value
Common 1000 $10.00 par value
PARAGRAPH 2. The preferences, qualifications, limitations, restrictions and the
special or relative rights in respect of the shares of each class are:
NONE
ARTICLE SIX
The class and number of shares which the corporation proposes to issue
without further report to the Secretary of State, and the consideration
(expressed in dollars) to be received by the corporation therefor, are:
Total consideration to
Class of shares Number of shares be received therefor:
Common 100 $ 1,000
$
$
$
$
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<PAGE> 21
ARTICLE SEVEN
The corporation will not commence business until at least one thousand
dollars has been received as consideration for the issuance of shares.
ARTICLE EIGHT
The number of directors to be elected at the first meeting of the
shareholders is: three
ARTICLE NINE
PARAGRAPH 1: It is estimated that the value of all property to be owned by the
corporation for the following year wherever located will be $1000
PARAGRAPH 2: It is estimated that the value of the property to be located within
the State of Illinois during the following year will be $1000
PARAGRAPH 3: It is estimated that the gross amount of business which will be
transacted by the corporation during the following year will be $125,000
PARAGRAPH 4: It is estimated that the gross amount of business which will be
transacted at or from places of business in the State of Illinois during the
following year will be $125,000
___________________________________ )
___________________________________ )
___________________________________ )
___________________________________ ) Incorporators
___________________________________ )
___________________________________ )
___________________________________ )
OATH AND ACKNOWLEDGMENT
STATE OF ILLINOIS )
)
Cook County )
I, ________________, a Notary Public, do hereby certify that on the 12th
day of September 1960, Lawrence Kasakoff, Norman L. Silverman and Muriel
Stineberg (Names of Incorporators)
-3-
<PAGE> 22
personally appeared before me and being first duly sworn by me acknowledged they
signed the foregoing document in the respective capacities therein set forth and
declared that the statements therein contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
above written.
Place
(NOTARIAL SEAL)
Here ------------------------------
Notary Public
-4-
<PAGE> 23
FORM B
================================================================================
ARTICLES OF INCORPORATION
STANDARD AUTO PARK, INC.
- --------------------------------------------------------------------------------
================================================================================
The following fees are required to be paid at the time of issuing certificate of
incorporation: Filing fee, $20.00; Initial license fee of 50c per $1,000.00 or
1/20 of 1% of the amount of stated capital and paid-in surplus the corporation
proposes to issue without further report (Article Six); Franchise tax of 1/20 of
1% of the issued, as above noted. However, the minimum annual franchise tax is
$10.00 and varies monthly on $20,000 or less, as follows: January, $15;
February, $14.17; March, $13.34; April, $12.50; May, $11.67; June, $10.84; July,
$10.00; Aug., $9.17; Sept., $8.34; Oct., $7.50; Nov., $6.67; Dec., $5.84; (See
Sec. 133, BCA).
In excess of $20,000 the franchise tax per $1,000.00 is as follows: Jan., $0.75;
Feb., .7084; March, .6667; April, .625; May, .5834; June, .5417; July, .50;
Aug., .4584; Sept., .4167; Oct., .375; Nov., .3334; Dec., .2917.
All shares issued in excess of the amount mentioned in Article Six of this
application must be reported within 60 days from date of issuance thereof, and
franchise tax and license fee paid thereon; otherwise, the corporation is
subject to a penalty of 1% for each month on the amount until reported and
subject to a fine not to exceed $500.00.
The same fees are required for a subsequent issue of shares except the filing
fee is $1.00 instead of $20.00.
================================================================================
-5-
<PAGE> 24
FORM BCA-55
----------------------------
(Do not write in this
space)
Date Paid 12-28-70
License Fee $
Franchise Tax $
Filing Fee $25.00
Clerk [illegible]
----------------------------
(File in Duplicate)
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
STANDARD AUTO PARK, INC.
-------------------------
(Exact Corporate Name)
To JOHN W. LEWIS
Secretary of State
Springfield, Illinois
The undersigned corporation, for the purpose of amending its Articles of
Incorporation and pursuant to the provisions of Section 55 of "The Business
Corporation Act" of the State of Illinois, hereby executes the following
Articles of Amendment:
ARTICLE FIRST: The name of the corporation is:
STANDARD AUTO PARK, INC.
ARTICLE SECOND: The following amendment or amendments were adopted in the
manner prescribed by "The Business Corporation Act" of the State of Illinois:
ARTICLE FIVE of the ARTICLES OF INCORPORATION is amended by
increasing the number of $10.00 Par Value Common Shares which the
corporation is authorized to issue from 1,000 shares to 25,000 shares.
-6-
<PAGE> 25
(Disregard separation into classes if class voting does not apply to the
amendment voted on.)
ARTICLE THIRD: The number of shares of the corporation outstanding at the
time of the adoption of said amendment or amendments was 140; and the number of
shares of each class entitled to vote as a class on the adoption of said
amendment or amendments, and the designation of each such class were as follows:
Class Number of Shares
Common 140
(Disregard separation into classes if class voting does not apply to the
amendment voted on.)
ARTICLE FOURTH: The number of shares voted for said amendment or
amendments was 140; and the number of shares voted against said amendment of
amendments was _______. The number of shares of each class entitled to vote as a
class voted for and against said amendment or amendments; respectively, was:
Class Number of Shares Voted
For Against
Common 140 None
(Disregard these items unless the amendment restates the articles of
incorporation.)
Item 1. On the date of the adoption of this amendment, restating the articles of
incorporation, the corporation had __________ shares issued, itemized as
follows:
-7-
<PAGE> 26
Par value per share
or statement that
Series Number shares are without
Class (If Any) of Shares par value
Item 2. On the date of the adoption of this amendment restating the articles of
incorporation, the corporation had a stated capital of $___________ and a
paid-in surplus of $__________________ or a total of $____________________.
(Disregard this Article where this amendment contains no such provisions.)
ARTICLE FIFTH: The manner in which the exchange, reclassification, or
cancellation of issued shares, or a reduction of the number of authorized shares
of any class below the number of issued shares of that class, provided for in,
or effected by, this amendment, is as follows:
(Disregard this Paragraph where amendment does not affect stated capital or
paid-in surplus.)
ARTICLE SIXTH: Paragraph 1: The manner in which said amendment or
amendments effect a change in the amount of stated capital or the amount of
paid-in surplus, or both, is as follows:
-8-
<PAGE> 27
(Disregard this Paragraph where amendment does not affect stated capital or
paid-in surplus.)
Paragraph 2: The amounts of stated capital and of paid-in surplus as
changed by this amendment are as follows:
Before Amendment After Amendment
Stated capital ........ $ $
Paid-in surplus ....... $ $
-9-
<PAGE> 1
BCA-2.10 (Rev. Jul. 1984) File #
- -----------------------------------------
Submit in Duplicate
Payment must be made by Certified
Check, Cashier's Check, Illinois
Attorney's Check, C.P.A.'s Check
or Money order, payable to "Secretary
of State
DO NOT SEND CASH!
- -----------------------------------------
JIM EDGAR
Secretary of State
State of Illinois
ARTICLES OF INCORPORATION
- -----------------------------------------
This Space For Use By
Secretary of State
Date 12-24-86
License Fee $ .50
Franchise Tax $ 25.00
Filing Fee $ 75.00
$100.50
Clerk /s/
- -----------------------------------------
Pursuant to the provisions of "The Business Corporation Act of 1983", the
undersigned incorporator(s) hereby adopt the following Articles of
Incorporation.
ARTICLE ONE
The name of the corporation is STANDARD/WABASH PARKING CORPORATION
(Shall contain the word "corporation", "company", "incorporated".)
- --------------------------------------------------------------------------------
("limited", or an abbreviation thereof)
ARTICLE TWO
The name and address of the initial registered agent and its registered office
are:
Registered Agent
Myron C. Warshauer
------------------------------------------------------------
First Name Middle Name Last Name
Registered Office
55 E. Monroe St., Suite 3512
------------------------------------------------------------
Number Street Suite # (A.P.O. Box
alone is not
acceptable)
Chicago 60603 Cook
------------------------------------------------------------
City Zip Code County
ARTICLE THREE
The purpose or purposes for which the corporation is organized are:
If not sufficient space to cover this point, add one or more
sheets of this size.
To engage in any lawful act or activity for which corporations may be
organized under the Illinois Business Corporation Act.
ARTICLE FOUR
Paragraph 1: The authorized shares shall be:
Class * Par value per share Number of shares authorized
--------------------------------------------------------------------------
Common $1.00 10,000
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Paragraph 2: The preferences, qualifications, limitations, restrictions
and the special or relative rights in respect of the shares of each class
are:
If not sufficient space to cover this point, add one or more
sheets of this size.
ARTICLE FIVE
The number of shares to issued initially, and the consideration to be received
by the corporation therefor, are:
*Par Value Number of shares Consideration to be
Class per share proposed to be issued received therefor
------------------------------------------------------------------------------
Common $1.00 1,000 $ 1,000.00
------------------------------------------------------------------------------
$
------------------------------------------------------------------------------
$
------------------------------------------------------------------------------
$
------------------------------------------------------------------------------
TOTAL $ 1,000.00
--------------------
- ----------
* A declaration as to a "par value" is optional. This space may be marked "n/a"
when no reference to a par value is
<PAGE> 2
ARTICLE SIX OPTIONAL
The number of directors constituting the initial board of directors of the
corporation is ________________, and the names and addresses of the persons who
are to serve as directors until the first annual meeting of shareholders or
until their successors be elected and qualify are:
Name Residential Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ARTICLE SEVEN OPTIONAL
(a) It is estimated that the value of all property to be
owned by the corporation for the following year
wherever located will be: $________________
(b) It is estimated that the value of the property to be
located within the State of Illinois during the
following year will be: $________________
(c) It is estimated that the gross amount of business which
will be transacted by the corporation during the
following year will be: $________________
(d) It is estimated that the gross amount of business which
will be transacted from places of business in the State
of Illinois during the following year will be: $________________
ARTICLE EIGHT OTHER PROVISIONS
Attach a separate sheet of this size for any other provision to be included in
the Articles of Incorporation, e.g., authorizing pre-emptive rights; denying
cumulative voting; regulating internal affairs; voting majority requirements;
fixing a duration other than perpetual; etc.
NAMES & ADDRESS OF INCORPORATORS
The undersigned incorporator(s) hereby declare(s), under penalties of
perjury, that the statements made in the foregoing Articles of Incorporation are
true.
Dated December 24, 1986
----------- --
Signatures and Names Post Office Address
1. /s/ Gilbert L. Bratten 1. 100 W. Cook Street
---------------------------------- ---------------------------------
Signature Street
Gilbert L. Bratten Springfield, IL 62704
---------------------------------- ---------------------------------
Name (please print) City/Town State Zip
2. 2.
---------------------------------- ---------------------------------
Signature Street
---------------------------------- ---------------------------------
Name (please print) City/Town State Zip
3. 3.
---------------------------------- ---------------------------------
Signature Street
---------------------------------- ---------------------------------
Name (please print) City/Town State Zip
(Signatures must be in ink on original document. Carbon copy, xerox or rubber
stamp signatures may only be used on conformed copies)
NOTE: If a corporation acts as incorporator, the name of the corporation and the
state of incorporation shall be shown and the execution shall be by its
President or Vice-President and verified by him, and attested by its Secretary
or an Assistant Secretary.
Form BCA-2.10
File No.________________________________________________________________________
================================================================================
The following fees are required to be paid at the time of issuing the
Certificate of Incorporation: FILING FEE $75.00; INITIAL LICENSE FEE of 1/20th
of 1% of the consideration to be received for initial issued shares (See Art.
5). MINIMUM $.50; INITIAL FRANCHISE TAX of 1/10 of 1% of the consideration to be
received for initial issued shares (see Art. 5). MINIMUM $25.00.
EXAMPLES OF TOTAL DUE
Consideration to TOTAL
be Received Due*
================================================================================
up to $1,000 $100.50
- --------------------------------------------------------------------------------
$ 5,000 $102.50
- --------------------------------------------------------------------------------
$ 10,000 $105.00
- --------------------------------------------------------------------------------
$ 25,000 $112.00
- --------------------------------------------------------------------------------
$ 50,000 $150.00
- --------------------------------------------------------------------------------
$150,000 $225.00
- --------------------------------------------------------------------------------
Includes Filing Fee + License Fee + Franchise Tax
RETURN TO:
Corporation Department
Secretary of State
Springfield, Illinois 62576
Telephone: (217) 782-6961
================================================================================
<PAGE> 3
File # D5449-285-5
- ---------------------------------
Form BCA-5.10
NFP-105.10
(Rev. Jan. 1995)
- ---------------------------------
George H. Ryan
Secretary of State
Department of Business
Services
Springfield, IL 62756
Telephone (217) 782-3647
- ---------------------------------
STATEMENT OF
CHANGE
OF REGISTERED AGENT
AND/OR REGISTERED OFFICE
- ---------------------------------
FILED
DEC 12 1995
GEORGE H. RYAN
SECRETARY OF STATE
- ---------------------------------
SUBMIT IN DUPLICATE
- ---------------------------------
This space for use by
Secretary of State
Date 12/12/95
Filing Fee $5
Approved: [Initials]
- ---------------------------------
Remit payment in check or money
order, payable to "Secretary of
State."
- ---------------------------------
1. CORPORATE NAME: Standard/Wabash Parking Corporation
--------------------------------------------------------------
2. STATE OR COUNTRY OF INCORPORATION: Illinois
-------------------------------------------
================================================================================
3. Name and address of the registered agent and registered office as they appear
on the records of the office of the Secretary of State (before change):
Registered Agent Myron C. Warshauer
--------------------------------------------------------
First Name Middle Name Last Name
Registered Office 55 E. Monroe St., Suite 3440
--------------------------------------------------------
Number Street Suite No. (A P.O.
Box alone is not
acceptable)
Chicago 60603 Cook
--------------------------------------------------------
City Zip Code County
4. Name and address of the registered agent and registered office shall be
(after all changes herein reported):
Registered Agent Myron C. Warshauer
--------------------------------------------------------
First Name Middle Name Last Name
Registered Office 200 E. Randolph Dr., Suite 4800
--------------------------------------------------------
Number Street Suite No. (A P.O.
Box alone is not
acceptable)
Chicago 60601 Cook
--------------------------------------------------------
City Zip Code County
<PAGE> 4
5. The address of the registered office and the address of the business office
of the registered agent, as changed, will be identical.
6. The above change was authorized by: ("X" one box only)
a. |_| By resolution duly adopted by the board of directors. (Note 5)
b. |X| By action of the registered agent. (Note 6)
NOTE: When the registered agent changes, the signatures of both president and
secretary are required.
7. (If authorized by the board of directors, sign here. See Note 5)
The undersigned corporation has caused this statement to be signed by its
duly authorized officers, each of whom affirms, under penalties of perjury, that
the facts stated herein are true.
Dated _______________________ 19___ ________________________________________
(Exact Name of Corporation)
attested by __________________________ by _____________________________________
(Signature of Secretary or (Signature of Vice President)
Assistant Secretary)
-------------------------- ----------------------------------------
(Type or Print Name and (Type or Print Name and Title)
Title)
(If change of registered office by registered agent, sign here. See Note 6)
The undersigned, under penalties of perjury, affirms that the facts stated
herein are true.
Dated November 8, 1995 /s/
----------- -- ----------------------------------------
(Signature of Registered Agent of Record)
NOTES
1. The registered office may, but need not be the same as the principal office
of the corporation. However, the registered office and the office address of
the registered agent must be the same.
2. The registered office must include a street or road address; a post office
box number alone is not acceptable.
3. A corporation cannot act as its own registered agent.
4. If the registered office is changed from one county to another, then the
corporation must file with the recorder of deeds of the new county a
certified copy of the articles of incorporation and a certified copy of the
statement of change of registered office. Such certified copies may be
obtained ONLY from the Secretary of State.
5. Any change of registered agent must be by resolution adopted by the board of
directors. This statement must then be signed by the president (or
vice-president) and by the secretary (or an assistant secretary).
6. The registered agent may report a change of the registered office of the
corporation for which he or she is registered agent. When the agent reports
such a change, this statement must be signed by the registered agent.
<PAGE> 5
EXPEDITED
SECRETARY OF STATE
MAR 18 1998
EXP. FEES 25.00
COPY - CERT. 10.00
[SEAL of Secretary
of State]
STATE OF ILLINOIS
Office of the Secretary of State
I hereby certify that this is a true
and correct copy, consisting of five
pages, as taken from the original on
file in this office.
/s/ George H. Ryan
GEORGE H. RYAN
SECRETARY OF STATE
DATED: March 18, 1998
-----------------------------
BY: /s/ Julie Jaeger
--------------------------------
<PAGE> 1
BY-LAWS
OF
STANDARD/WABASH PARKING CORPORATION
ARTICLE I
OFFICES
The corporation shall continuously maintain in the State of Illinois
a registered office and a registered agent whose business office is identical
with such registered office, and may have other offices within or without the
state.
ARTICLE II
SHAREHOLDERS
SECTION 1. ANNUAL MEETING. An annual meeting of the shareholders
shall be held on the fourth (4th) Wednesday in December of each year or at such
time as the board of directors may designate for the purpose of electing
directors and for the transaction of such other business as may come before the
meeting. If the day fixed for the annual meeting shall be a legal holiday, such
meeting shall be held on the next succeeding business day.
SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders
may be called either by the president, by the board of directors or by the
holders of not less than one-fifth of all the outstanding shares of the
corporation entitled to vote, for the purpose or purposes stated in the call of
the meeting.
SECTION 3. PLACE OF MEETING. The board of directors may designate
any place, as the place of meeting for any annual meeting or for any special
meeting called by the board of directors. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall be at the office
of the corporation.
SECTION 4. SECTION 4. NOTICE OF MEETINGS. Written notice stating the
place, date, and hour of the meeting and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not less
than 10 nor more than 60 days before the date of the meeting, or in the case of
a merger, consolidation, share exchange, dissolution or sale, lease or exchange
of assets not less than 20 nor more than 60 days before the date of the meeting,
either personally or by mail, by or at the direction of the president, or the
secretary, or the officer or persons calling the meeting, to each shareholder of
record entitled to vote at such meeting. If mailed, such notice shall be deemed
to be delivered when deposited in the United States mail addressed to the
shareholder at his or her address as it appears on the records of the
corporation, with postage thereon prepaid. When a meeting is adjourned to
<PAGE> 2
another time or place, notice need not be given of the adjourned meeting if the
time and place thereof are announced at the meeting at which the adjournment is
taken.
SECTION 5. FIXING OF RECORD DATE. For the purpose of determining the
shareholders entitled to notice of or to vote at any meeting of shareholders, or
shareholders entitled to receive payment of any dividend, or in order to make a
determination of shareholders for any other proper purpose, the board of
directors of the corporation may fix in advance a date as the record date for
any such determination of shareholders, such date in any case to be not more
than 60 days and for a meeting of shareholders, not less than 10 days, or in the
case of a merger, consolidation, share exchange, dissolution or sale, lease or
exchange of assets, not less than 20 days before the date of such meeting. If no
record date is fixed for the determination of shareholders entitled to notice of
or to vote at a meeting of shareholders, or shareholders entitled to receive
payment of a dividend, the date on which notice of the meeting is mailed or the
date on which the resolution of the board of directors declaring such dividend
is adopted, as the case may be, shall be the record date for such determination
of shareholders. A determination of share-holders shall apply to any adjournment
of the meeting.
SECTION 6. VOTING LISTS. The officer or agent having charge of the
transfer book for shares of the corporation shall make, within 20 days after the
record date for a meeting of shareholders or 10 days before such meeting,
whichever is earlier, a complete list of the shareholders entitled to vote at
such meeting, arranged in alphabetical order, with the address of and the number
of shares held by each, which list, for a period of 10 days prior to such
meeting, shall be kept on file at the registered office of the corporation and
shall be subject to inspection by any shareholder, and to copying at the
shareholder's expense, at any time during usual business hours. Such list shall
also be produced and kept open at the time and place of the meeting and shall be
subject to the inspection of any shareholder during the whole time of the
meeting. The original share ledger or transfer book, or a duplicate thereof kept
in this State, shall be prima facie evidence as to who are the shareholders
entitled to examine such list or share ledger or transfer book or to vote at any
meeting of shareholders.
SECTION 7. QUORUM. The holders of a majority of the outstanding
shares of the corporation entitled to vote on a matter, represented in person or
by proxy, shall constitute a quorum for consideration of such matter at any
meeting of shareholders, but in no event shall a quorum consist of less than
one-third of the outstanding shares entitled so to vote; provided that if less
than a majority of the outstanding shares are represented at said meeting, a
majority of the shares so represented may adjourn the meeting at any time
without further notice. If a quorum is present, the affirmative vote of the
majority of the shares represented at the meeting shall be the act of the
shareholders, unless the vote of a greater number or voting by classes is
required by the Business Corporation Act, the articles of incorporation or these
by-laws. At any adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the original
meeting. Withdrawal of shareholders from any meeting shall not cause failure of
a duly constituted quorum at that meeting.
SECTION 8. PROXIES. Each shareholder may appoint a proxy to vote or
otherwise act for him or her by signing an appointment form and delivering it to
the person so
-2-
<PAGE> 3
appointed, but no such proxy shall be valid after 11 months from the date of its
execution, unless otherwise provided in the proxy.
SECTION 9. VOTING OF SHARES. Each outstanding share, regardless of
class, shall be entitled to one vote in each matter submitted to vote at a
meeting of shareholders, and in all elections for directors, every shareholder
shall have the right to vote the number of shares owned by such shareholder for
as many persons as there are directors multiplied by the number of such shares
or to distribute such cumulative votes in any proportion among any number of
candidates. Each shareholder may vote either in person or by proxy as provided
in SECTION 8 hereof.
SECTION 10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares held by the
corporation in a fiduciary capacity may be voted and shall be counted in
determining the total number of outstanding shares entitled to vote at any given
time.
Shares registered in the name of another corporation, domestic or
foreign, may be voted by any officer, agent, proxy or other legal representative
authorized to vote such shares under the law of incorporation of such
corporation.
Shares registered in the name of a deceased person, a minor ward or
a person under legal disability, may be voted by his or her administrator,
executor or court appointed guardian, either in person or by proxy without a
transfer of such shares into the name of such administrator, executor or court
appointed guardian. Shares registered in the name of a trustee may be voted by
him or her, either in person or by proxy.
Shares registered in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his or her name if authority to
do so is contained in an appropriate order of the court by which such receiver
was appointed.
A shareholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred into the name of the pledgee,
and thereafter the pledgee shall be entitled to vote the shares so transferred.
Any number of shareholders may create a voting trust for the purpose
of conferring upon a trustee or trustees the right to vote or otherwise
represent their shares, for a period not to exceed 10 years, by entering into a
written voting trust agreement specifying the terms and conditions of the voting
trust, and by transferring their shares to such trustee or trustees for the
purpose of the agreement. Any such trust agreement shall not become effective
until a counterpart of the agreement is deposited with the corporation at its
registered office. The counterpart of the voting trust agreement so deposited
with the corporation shall be subject to the same right of examination by a
shareholder of the corporation, in person or by agent or attorney, as are the
books and records of the corporation, and shall be subject to examination by any
holder of a beneficial interest in the voting trust, either in person or by
agent or attorney, at any reasonable time for any proper purpose.
-3-
<PAGE> 4
Shares of its own stock belonging to this corporation shall not be
voted, directly or indirectly, at any meeting and shall not be counted in
determining the total number of outstanding shares at any given time, but shares
of its own stock held by it in a fiduciary capacity may be voted and shall be
counted in determining the total number of outstanding shares at any given time.
SECTION 11. CUMULATIVE VOTING. In all elections for directors, every
shareholder shall have the right to vote in person or by proxy, the number of
shares owned by him/her, for as many persons as there are directors to be
elected, or to cumulate such votes, and give one candidate as many votes as the
number of directors multiplied by the number of his/her shares shall equal, or
to distribute them on the same principle among as many candidates as he/she
shall think fit.
The articles of incorporation may be amended to limit or eliminate
cumulative voting rights in all or specified circumstances, or to limit or deny
voting rights or to provide special voting rights as to any class or classes or
series of shares of the corporation.
SECTION 12. INSPECTORS. At any meeting of shareholders, the
presiding officer may, or upon the request of any shareholder, shall appoint one
or more persons as inspectors for such meeting.
Such inspectors shall ascertain and report the number of shares
represented at the meeting, based upon their determination of the validity and
effect of proxies; count all votes and report the results; and do such other
acts as are proper to conduct the election and voting with impartiality and
fairness to all the shareholders.
Each report of an inspector shall be in writing and signed by him or
her or by a majority of them if there be more than one inspector acting at such
meeting. If there is more than one inspector, the report of a majority shall be
the report of the inspectors. The report of the inspector or inspectors on the
number of shares represented at the meeting and the results of the voting shall
be prima facie evidence thereof.
SECTION 13. INFORMAL ACTION BY SHAREHOLDERS. Any action required to
be taken at a meeting of the shareholders, or any other action which may be
taken at a meeting of the shareholders, may be taken without a meeting and
without a vote, if a consent in writing, setting forth the action so taken shall
be signed (a) if 5 days prior notice of the proposed action is given in writing
to all of the shareholders entitled to vote with respect to the subject matter
hereof, by the holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voting or
(b) by all of the shareholders entitled to vote with respect to the subject
matter thereof.
Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given in writing to
those shareholders who have not consented in writing. In the event that the
action which is consented to is such as would have required the filing of a
certificate under any section of the Business Corporation Act if such
-4-
<PAGE> 5
action had been voted on by the shareholders at a meeting thereof, the
certificate filed under such section shall state, in lieu of any statement
required by such section concerning any vote of shareholders, that written
consent has been given in accordance with the provisions of SECTION 7.10 of the
Business Corporation Act and that written notice has been given as provided in
such SECTION 7.10.
SECTION 14. VOTING BY BALLOT. Voting on any question or in any
election may be by voice unless the presiding officer shall order or any
shareholder shall demand that voting be by ballot.
ARTICLE III
DIRECTORS
SECTION 1. GENERAL POWERS. The business of the corporation shall be
managed by or under the direction of its board of directors. A majority of the
board of directors may establish reasonable compensation for their services and
the services of other officers, irrespective of any personal interest.
SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of
directors of the corporation shall be two (2). Each director shall hold office
until the next annual meeting of shareholders; or until his successor shall have
been elected and qualified. Directors need not be residents of Illinois or
shareholders of the corporation. The number of directors may be increased or
decreased from time to time by the amendment of this section. No decrease shall
have the effect of shortening the term of any incumbent director.
SECTION 3. REGULAR MEETINGS. A regular meeting of the board of
directors shall be held without other notice than this by-law, immediately after
the annual meeting of shareholders. The board of directors may provide, by
resolution, the time and place for holding of additional regular meetings
without other notice than such resolution.
SECTION 4. SPECIAL MEETINGS. Special meetings of the board of
directors may be called by or at the request of the president or any two
directors. The person or persons authorized to call special meetings of the
board of directors may fix any place as the place for holding any special
meeting of the board of directors called by them.
SECTION 5. NOTICE. Notice of any special meeting shall be given at
least 5 days previous thereto by written notice to each director at his business
address. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail so addressed, with postage thereon prepaid. If notice
be given by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegram company. The attendance of a director at
any meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the
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purpose of, any regular or special meeting of the board of directors need be
specified in the notice or waiver of notice of such meeting.
SECTION 6. QUORUM. A majority of the number of directors fixed by
these by-laws shall constitute a quorum for transaction of business at any
meeting of the board of directors, provided that it less than a majority of such
number of directors are present at said meeting, a majority of the directors
present may adjourn the meeting at any time without further notice.
SECTION 7. MANNER OF ACTING. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the board of directors, unless the act of a greater number is required by
statute, these by-laws, or the articles of incorporation.
SECTION 8. VACANCIES. Any vacancy on the board of directors may be
filled by election at the next annual or special meeting of shareholders. A
majority of the board of directors may fill any vacancy prior to such annual or
special meeting of shareholders.
SECTION 9. RESIGNATION AND REMOVAL OF DIRECTORS. A director may
resign at any time upon written notice to the board of directors. A director may
be removed with or without cause, by a majority of shareholders if the notice of
the meeting names the director or directors to be removed at said meeting.
SECTION 10. INFORMAL ACTION BY DIRECTORS. The authority of the board
of directors may be exercised without a meeting if a consent in writing, setting
forth the action taken, is signed by all of the directors entitled to vote.
SECTION 11. COMPENSATION. The board of directors, by the affirmative
vote of a majority of directors then in office, and irrespective of any personal
interest of any of its members, shall have authority to establish reasonable
compensation of all directors for services to the corporation as directors,
officers or otherwise notwithstanding any director conflict of interest. By
resolution of the board of directors, the directors may be paid their expenses,
if any, of attendance at each meeting or the board. No such payment previously
mentioned in this section shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
SECTION 12. PRESUMPTION OF ASSENT. A director of the corporation who
is present at a meeting of the board of directors at which action on any
corporate matter is taken shall be conclusively presumed to have assented to the
action taken unless his or her dissent shall be entered in the minutes of the
meeting or unless he or she shall file his or her written dissent to such action
with the person acting as the secretary of the meeting before the adjournment
thereof or shall forward such dissent by registered or certified mail to the
secretary of the corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a director who voted in favor of such
action.
SECTION 13. COMMITTEES. A majority of the board of directors may
create one or more committees of two or more members to exercise appropriate
authority of the board
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of directors. A majority of such committee shall constitute a quorum for
transaction of business. A committee may transact business without a meeting by
unanimous written consent.
ARTICLE IV
OFFICERS
SECTION 1. OFFICERS. The officers of the corporation shall be a
Chairman of the Board, a President, a Treasurer, and a Secretary, all of whom
shall be elected by the Board of Directors and who shall hold office until their
successors are elected and qualified. In addition, the Board of Directors may
elect one or more Vice-Presidents and such Assistant Secretaries and Assistant
Treasurers as they may deem proper. None of the officers (other than the
Chairman of the Board) of the corporation need be directors. The officers shall
be elected at the first meeting of the Board of Directors after each annual
meeting. More than two offices may be held by the same person.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the
corporation shall be elected annually by the board of directors at the first
meeting of the board of directors held after each annual meeting of
shareholders. If the election of officers shall not be held at such meeting,
such election shall be held as soon thereafter as conveniently may be. Vacancies
may be filled or new offices created and filled at any meeting of the board of
directors. Each officer shall hold office until his successor shall have been
duly elected and shall have qualified or until his death or until he shall
resign or shall have been removed in the manner hereinafter provided. Election
of an officer shall not of itself create contract rights.
SECTION 3. REMOVAL. Any officer elected or appointed by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
SECTION 4. CHAIRMAN. The Chairman of the Board shall formulate
policies with respect to the affairs of the corporation, and shall have general
powers of supervision and management. He shall preside at all meetings of
directors and stockholders of the corporation and may call meetings of the Board
of Directors. The Chairman of the Board shall also perform such other duties as
may be assigned to him by the Board of Directors.
SECTION 5. PRESIDENT. The President shall be the chief executive
officer of the corporation and, subject to the direction of the Chairman, shall
supervise and direct and be responsible for the direction of the ongoing
business of the corporation. In the absence of the Chairman of the Board of
directors, the President shall preside at meetings of the stockholders and the
Board of Directors. Except as the Board of Directors shall authorize the
execution thereof in some other manner, the President shall be authorized to
execute bonds, mortgages and other contracts on behalf of the corporation to
cause the corporation's seal to be affixed to any
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instrument requiring such seal, and when so affixed such seal shall be attested
by the signatures of the Secretary or Assistant Secretary.
SECTION 6. THE VICE-PRESIDENTS. The vice-presidents (or in the event
there be more than one vice-president, each of the vice-presidents) shall assist
the president in the discharge of his duties as the president may direct and
shall perform such other duties as from time to time may be assigned to him by
the president or by the board of directors. In the absence of the president or
in the event of his inability or refusal to act, the vice-president (or in the
event there be more than one vice-president, the vice-presidents in the order
designated by the board of directors, or by the president if the board of
directors has not made such a designation, or in the absence of any designation,
then in the order of seniority of tenure as vice-president) shall perform the
duties of the president, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the president. Except in those instances in
which the authority to execute is expressly delegated to another officer or
agent of the corporation or a different mode of execution is expressly
prescribed by the board of directors or these by-laws, the vice-president (or
each of them if there are more than one) may execute for the corporation
certificates for its shares and any contracts, deeds, mortgages, bonds or other
instruments which the board of directors has authorized to be executed, and he
may accomplish such execution either under or without the seal of the
corporation and either individually or with the secretary, any assistant
secretary, or any other officer thereunto authorized by the board of directors,
according to the requirements of the form of the instrument.
SECTION 7. THE TREASURER. The treasurer shall be the principal
accounting and financial officer of the corporation. He shall: (a) have charge
of and be responsible for the maintenance of adequate books of account for the
corporation; (b) have charge and custody of all funds and securities of the
corporation, and be responsible therefor and for the receipt and disbursement
thereof; and (c) perform all the duties incident to the office of treasurer and
such other duties as from time to time may be assigned to him by the president
or by the board of directors. If required by the board of directors, the
treasurer shall give a bond for the faithful discharge of his duties in such sum
and with such surety or sureties as the board of directors may determine.
SECTION 8. THE SECRETARY. The secretary shall: (a) record the
minutes of the shareholders' and of the board of directors' meetings in one or
more books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these by-laws or as required by law; (c) be
custodian of the corporate records and of the seal of the corporation; (d) keep
a register of the post office address of each shareholder which shall be
furnished to the secretary by such shareholder; (e) sign with the president, or
a vice-president, or any other officer there unto authorized by the board of
directors, certificates for shares of the corporation, the issue of which shall
have been authorized by the board of directors, and any contracts, deeds,
mortgages, bonds, or other instruments which the board of directors has
authorized to be executed, according to the requirements of the form of the
instrument, except when a different mode of execution is expressly prescribed by
the board of directors or these by-laws; (f) have general charge of the stock
transfer books of the corporation; (g) perform all duties
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incident to the office of secretary and such other duties as from time to time
may be assigned to him by the president or by the board of directors.
SECTION 9. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The
assistant treasurers and assistant secretaries shall perform such duties as
shall be assigned to them by the treasurer or the secretary, respectively, or by
the president or the board of directors. The assistant secretaries may sign with
the president, or a vice-president, or any other officer thereunto authorized by
the board of directors, certificates for shares of the corporation, the issue of
which shall have been authorized by the board of directors, and any contracts,
deeds, mortgages, bonds, or other instruments which the board of directors has
authorized to be executed, according to the requirements of the form of the
instrument, except when a different mode of execution is expressly prescribed by
the board of directors or these by-laws. The assistant treasurers shall
respectively, if required by the board of directors give bonds for the faithful
discharge of their duties in such sums and with such sureties as the board of
directors shall determine.
SECTION 10. SALARIES. The salaries of the officers shall be fixed
from time to time by the board of directors and no officer shall be prevented
from receiving such salary by reason of the fact that he is also a director of
the corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. The board of directors may authorize any
officer or officers, agent or agents, to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the corporation, and such
authority may be general or confined to specific instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the board of directors.
SECTION 3. DEPOSITS. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositaries as the board of directors
may select.
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ARTICLE VI
SHARES AND THEIR TRANSFER
SECTION 1. SHARES REPRESENTED BY CERTIFICATES AND UNCERTIFICATED
SHARES. Shares either shall be represented by certificates or shall be
uncertificated shares.
Certificates representing shares of the corporation shall be signed
by the appropriate officers and may be sealed with the seal or a facsimile of
the seal of the corporation. If a certificate is countersigned by a transfer
agent or registrar, other than the corporation or its employee, any other
signatures may be facsimile. Each certificate representing shares shall be
consecutively numbered or otherwise identified, and shall also state the name of
the person to whom issued, the number and class of shares (with designation of
series, if any), the date of issue, and that the corporation is organized under
Illinois law. If the corporation is authorized to issue shares of more than one
class or of series within a class, the certificate shall also contain such
information or statement as may be required by law.
Unless prohibited by the articles of incorporation, the board of
directors may provide by resolution that some or all of any class or series of
shares shall be uncertificated shares. Any such resolution shall not apply to
shares represented by a certificate until the certificate has been surrendered
to the corporation. Within a reasonable time after the issuance or transfer of
uncertificated shares, the corporation shall send the registered owner thereof a
written notice of all information that would appear on a certificate. Except as
otherwise expressly provided by law, the rights and obligations of the holders
of uncertificated shares shall be identical to those of the holders of
certificates representing shares of the same class and series.
The name and address of each shareholder, the number and class of
shares held and the date on which the shares were issued shall be entered on the
books of the corporation. The person in whose name shares stand on the books of
the corporation shall be deemed the owner thereof for all purposes as regards
the corporation.
SECTION 2. LOST CERTIFICATES. If a certificate representing shares
has allegedly been lost or destroyed the board of directors may in its
discretion, except as may be required by law, direct that a new certificate be
issued upon such indemnification and other reasonable requirements as it may
impose.
SECTION 3. TRANSFERS OF SHARES. Transfer of shares of the
corporation shall be recorded on the books of the corporation. Transfer of
shares represented by a certificate, except in the case of a lost or destroyed
certificate, shall be made on surrender for cancellation of the certificate for
such shares. A certificate presented for transfer must be duly endorsed and
accompanied by proper guaranty of signature and other appropriate assurances
that the endorsement is effective. Transfer of an uncertificated share shall be
made on receipt by the corporation of an instruction from the registered owner
or other appropriate person. The instruction shall be in writing or a
communication in such form as may be agreed upon in writing by the corporation.
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ARTICLE VII
FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of
the board of directors.
ARTICLE VIII
DISTRIBUTIONS
The board of directors may authorize, and the corporation may make,
distributions to its shareholders, subject to any restrictions in its articles
of incorporation or provided by law.
ARTICLE IX
SEAL
The corporate seal shall have inscribed thereon the name of the
corporation and the words "Corporate Seal, Illinois." The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced, provided that the affixing of the corporate seal to an
instrument shall not give the instrument additional force or effect, or change
the construction thereof, and the use of the corporate seal is not mandatory.
ARTICLE X
WAIVER OF NOTICE
Whenever any notice is required to be given under the provisions of
these by-laws or under the provisions of the articles of incorporation or under
the provisions of The Business Corporation Act of the State of Illinois, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Attendance at any meeting shall
constitute waiver of notice thereof unless the person at the meeting objects to
the holding of the meeting because proper notice was not given.
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ARTICLE XI
INDEMNIFICATION OF OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS
SECTION 1. The corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The termination of
any action, suit or proceeding by judgment or settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
or she reasonably believed to be in or not opposed to the best interest of the
corporation, and with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
SECTION 2. The corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection with the defense or settlement of such action or suit
if he or she acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interests of the corporation and except that
no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation unless and only to
the extent that the court in which such action or suit was brought shall
determine upon application that despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
SECTION 3. To the extent that a director, officer, employee or agent
of a corporation has been successful, on the merits or otherwise, in the defense
of any action, suit or proceeding referred to in sections 1 and 2, or in defense
of any claim, issue or matter therein, such person shall be indemnified against
expenses actually and reasonably incurred by such person in connection
therewith.
SECTION 4. Any indemnification under sections 1 and 2 shall be made
by the corporation only as authorized in the specific case upon a determination
that indemnification of
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the director, officer, employee or agent is proper in the circumstances because
he or she has met the applicable standard of conduct set forth in sections 1 and
2. Such determination shall be made (a) by the board of directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (b) if such a quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (c) by the shareholders.
SECTION 5. Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding, as authorized by the board
of directors in the specific case, upon receipt of an undertaking by or on
behalf of the director, officer, employee or agent to repay such amount, unless
it shall ultimately be determined that he or she is entitled to be indemnified
by the corporation as authorized in this article.
SECTION 6. The indemnification provided by this article shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under any by-law, agreement vote of shareholders or disinterested
directors or otherwise, both as to action in his or her official capacity and as
to action in another capacity while holding such office, and shall continue as
to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
SECTION 7. The corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
such person and incurred by such person in any such capacity, or arising out of
his or her status as such, whether or not the corporation would have the power
to indemnify such person against such liability under the provisions of these
sections.
SECTION 8. If the corporation has paid indemnity or had advanced
expenses to a director, officer, employee or agent, the corporation shall report
the indemnification or advance in writing to the shareholders with or before the
notice of the next shareholders' meeting.
SECTION 9. References to "the corporation" shall include, in
addition to the surviving corporation, any merging corporation, including any
corporation having merged with a merging corporation, absorbed in a merger which
otherwise would have lawfully been entitled to indemnify its directors,
officers, and employees or agents.
ARTICLE XII
AMENDMENTS
Unless the power to make, alter, amend or repeal the bylaws is
reserved to the shareholders by the articles of incorporation, the by-laws of
the corporation may be made,
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altered, amended or repealed by the shareholders or the board of directors, but
no by-law adopted by the shareholders may be altered, amended or repealed by the
board of directors if the by-laws so provide. The by-laws may contain any
provisions for the regulation and management of the affairs of the corporation
not inconsistent with the law or the articles of incorporation.
ARTICLE XIII
REPAYMENT OF SALARY AND EXPENSE REIMBURSEMENTS
Any payments made to an officer, director, employee, or other agent
of the corporation in the nature of salary, wages, other compensation or expense
reimbursements which shall be disallowed in whole or in part as a deductible
expense by the Internal Revenue Service in any judicial or administrative
proceeding, shall be repaid by such officer, director, employee, or other agent
of the corporation to the full extent of such disallowance. In lieu of payment
by such person or persons, subject to the determination of the Board of
Directors, proportionate amounts may be withheld from his or their future
compensation payments until the amount so owed to the corporation has been
recovered.
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OFFICERS' AGREEMENT
The undersigned, being officers of Standard/Wabash Parking
Corporation, do hereby agree to be bound by all of the terms and conditions of
Article XIII of the By-laws of the corporation relating to the repayment of
salary and expense reimbursements. Said Article XIII reads as follows:
ARTICLE XIII
REPAYMENT OF SALARY AND EXPENSE REIMBURSEMENTS
Any payments made to an officer, director, employee, or other agent
of the corporation in the nature of salary, wages, other compensation or expense
reimbursements which shall be disallowed in whole or in part as a deductible
expense by the Internal Revenue Service in any judicial or administrative
proceeding, shall be repaid by such officer, director, employee, or other agent
of the corporation to the full extent of such disallowance. In lieu of payment
by such person or persons, subject to the determination of the Board of
Directors, proportionate amounts may be withheld from his or their future
compensation payments until the amount so owed to the corporation has been
recovered.
Dated: December 24, 1986
/s/ Sylvia Starzec /s/ Stanley Warshauer
- -------------------------- ---------------------------
Sylvia Starzec Stanley Warshauer
/s/ Michael E. Swartz /s/ Myron C. Warshauer
- -------------------------- ---------------------------
Michael E. Swartz Myron C. Warshauer
/s/ James A. Wilhelm /s/ Steven A. Warshauer
- -------------------------- ---------------------------
James A. Wilhelm Steven A. Warshauer
/s/ Allan Lombardo
---------------------------
Allan Lombardo
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<PAGE> 1
AGREEMENT OF LIMITED PARTNERSHIP
OF
STANDARD PARKING OF CANADA, L.P.
This Agreement of Limited Partnership (this "Agreement") is made as
of July 15, 1996, by and between Standard Parking Corporation, an Illinois
corporation, as general partner (the "General Partner") and Standard Parking,
L.P., a Delaware limited partnership, as the limited partner (the "Limited
Partner"), under and governed by the provisions of laws of Illinois, for the
purposes and upon the terms and conditions hereinafter set forth. The General
Partner and the Limited Partner are sometimes herein referred to individually as
a "Partner" and collectively as the "Partners".
Agreement
NOW, THEREFORE, in consideration of the mutual promises, terms and
conditions contained therein, the receipt and sufficiency of which are hereby
acknowledged, the Partners hereby agree as follows:
1. ORGANIZATION
a. Formation of Limited Partnership. The Partnership shall commence on
the date the certificate of limited partnership is filed with the
Secretary of State of the State of Illinois and shall thereafter
continue without interruption as a limited partnership pursuant to
the governing regulations for partnerships under the laws of the
State of Illinois until terminated pursuant to the terms of this
Agreement.
b. Name. The name of the Partnership shall be Standard Parking of
Canada, L.P. (hereinafter referred to as the "Partnership").
However, the business of the Partnership may be conducted, upon
compliance with all applicable laws, under any other name designated
in writing by the General Partner to the Limited Partner.
c. Principal Place of Business. The Partnership's principal place of
business shall be: 200 East Randolph Drive, Suite 4800, Chicago,
Illinois 60601, or such other place as the General Partner may from
time to time designate in writing to Limited Partner. The
Partnership may maintain other offices at such other places as the
General Partner deems advisable.
d. Purpose. The purposes for which the Partnership is formed are to
manage and operate parking facilities within the U.S.A. and Canada,
and all other activities reasonably associated therewith.
e. Term. The term of the Partnership shall be perpetual unless sooner
terminated as hereinafter provided.
<PAGE> 2
2. PARTNERS' NAMES, ADDRESSES AND CAPITAL CONTRIBUTIONS
a. General Partner.
(1) The name and address of the General Partner is set forth in Schedule
"A" hereto attached, as amended from time to time. The General
Partner has contributed $100.00 to the capital of the Partnership;
(2) The General Partner, as general partner, shall not be required to
make any additional capital contribution to the Partnership.
b. Limited Partner.
(1) The Limited Partner's address is set forth in Schedule "A". The
Limited Partner shall contribute $9,900.00 to the capital of the
Partnership;
(2) The Limited Partner shall not be required to make any additional
capital contribution to the Partnership.
c. Partnership's Capital.
(1) No Partner shall be paid interest on any capital contribution;
(2) No Partner shall have the right to withdraw, or receive any return
of its capital contribution, except as may be specifically provided
herein;
(3) Under circumstances requiring a return of any capital contribution,
no Partner shall have the right to receive property, other than
cash, except as may be specifically provided herein.
d. Liability of Partners. The Limited Partner shall not be liable for
the debts, liabilities, contracts or any other obligations of the
Partnership. The Limited Partner shall not be required to lend any
funds to the Partnership. The General Partner shall not have any
personal liability for the repayment of the capital contribution of
the Limited Partner.
3. ALLOCATION OF PROFIT OR LOSS; DISTRIBUTIONS
a. Profit or Loss. Profit, loss and tax credits for each fiscal period
of the Partnership shall be allocated among the Partners as follows:
To the General partner, one percent (1%) and to the Limited Partner,
ninety-nine percent (99%).
b. Distributions. Cash Flow shall be distributed to the Partners in the
proportions set forth in Section 3.a.
c. Gain. Gain, if any, upon sale of substantially all of its assets or
the liquidation of the Partnership, if any, shall be allocated among
the Partners as follows:
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(1) Each Partner with a negative balance in its capital account shall be
allocated gain in the proportion which such negative balance bears
to the negative balances of all Partners with negative balances in
their capital accounts until the gain so allocated equals the
aggregate amount of the negative balances of all such Partners.
(2) To the extent gain exceeds the amount allocated pursuant to Section
3.c.(1) above, such excess shall be allocated to each Partner in an
amount equal to the amount required, if any, to credit the capital
account of such Partner so that the balance of its capital account
is equal to the amount of his capital contribution provided that, to
the extent the gain is insufficient to accomplish the foregoing,
gain shall be allocated to the Partners under this Section 3.c.(2)
in proportion to the partners' respective capital contribution.
(3) The remaining gain, if any, shall be allocated among the Partners in
accordance with the ratio of sharing Profit and Loss as set forth in
Section 3.a.
4. RIGHTS, POWERS AND DUTIES OF GENERAL PARTNERS AND DESIGNATION OF TAX
MATTERS PARTNER
a. Management and Control of the Partnership.
(1) Subject to the consent of the Limited Partner where required by this
Agreement, the General Partner, within the authority granted to it
under this Agreement, shall have the exclusive right to manage the
business of the Partnership and they are hereby authorized to take
any action of any kind and to do anything and everything they deem
necessary in accordance with the provisions of this Agreement.
(2) The Limited Partner shall not participate in or have any control
over the Partnership's business and shall not have any authority or
right to act for or bind the Partnership. The Limited Partner hereby
consents to the exercise by the General Partner of the powers
respectively conferred on them by this Agreement.
(3) All of the Partnership's expenses shall be billed directly, to the
extent practicable, to and paid by the Partnership. The General
Partner shall not be reimbursed by the Partnership for any indirect
expenses incurred in performing services for the Partnership, such
as salaries, rent, utilities and other overhead items. However,
business enterprises owned or controlled by the General Partner or
its affiliates may be compensated for services actually performed
for the Partnership pursuant to the authority of the General
Partner.
b. Authority of the General Partners.
Except to the extent otherwise provided herein, the General Partner for
and in the name and on behalf of the Partnership is hereby authorized:
(1) to effect the purposes set forth in Section 1.d. hereof; and
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(2) to execute any and all agreements, contracts, documents,
certifications and instruments necessary or convenient in connection
with the management and operation of the Partnership.
c. Restrictions on Authority of the General Partner.
Without the consent of the Limited Partner, the General Partner shall not
have the authority to:
(1) sell, exchange, lease, mortgage, pledge, or transfer all or
substantially all of the assets of the Partnership other than in the
ordinary course of business;
(2) incur indebtedness by the Partnership other than in the ordinary
course of business; or
(3) change the nature of the Partnership's business.
d. Duties and Obligations of the General Partner.
(1) The General Partner shall take all actions which may be necessary or
appropriate for the continuation of the Partnership's valid
existence as a limited partnership under the law of the State of
Illinois.
(2) The General Partner shall devote to the Partnership such time as may
be necessary for the proper performance of its duties hereunder, but
the General Partner is not expected to devote its full time to the
performance of such duties.
e. Compensation of General Partners. The General Partner shall not in
its capacity as General Partner receive any salary, fees, profits or
distributions except profits, distributions, fees and allocations to
which they may be entitled under Paragraph 3.
f. Designation Duties and Authority of Tax Matters Partner.
(1) The General Partner shall be the tax matters partner (the "Tax
Matters Partner") of the Partnership, as provided in regulations
pursuant to Section 6231 of the Internal Revenue Code (the "Code")
and the Tax Matters Partner is the authorized member of the
Partnership pursuant to Subsection 165(1.15) of the Income Tax Act
(Canada). Each Partner, by the execution of this Agreement consents
to such designation of the Tax Matters Partner and agrees to
execute, certify, acknowledge, deliver, swear to, file and record at
the appropriate public offices such documents as may be necessary or
appropriate to evidence such consent.
(2) To the extent and in the manner provided by applicable law and
regulations, the Tax Matters Partner shall furnish the name,
address, interest and taxpayer identification number of each
Partner, including any successor, to the Secretary of the Treasury
or appropriate delegate (the "Secretary").
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<PAGE> 5
(3) To the extent and in the manner provided by applicable law and
regulations, the Tax Matters Partner shall keep each Partner
informed of the administrative and judicial proceedings for the
adjustment at the Partnership's level of any item required to be
taken into account by a Partner for income tax purposes.
5. TRANSFERABILITY OF PARTNER'S INTEREST
a. Restrictions on Transfers of Interest.
(1) No sale or exchange of any interest in the Partnership (an
"Interest") may be made if the sale or exchange of the Interest
sought to be sold or exchanged, when added to the total of all other
Interests sold or exchanged within the period of twelve (12)
consecutive months prior thereto, would, in the opinion of counsel
for the Partnership, result in the Partnership being considered to
have been terminated within the meaning of Section 708 of the Code.
(2) No transfer or assignment of any Interest may be made if counsel for
the Partnership shall be of the opinion that such transfer or
assignment would be in violation of any state securities or "blue
sky" laws (including any investment suitability standards)
applicable to the Partnership.
(3) The Limited Partner may not sell or assign its Partnership Interest
except with the written consent of the General Partner.
6. DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP
a. Events Causing Dissolution. The Partnership shall terminate upon the
happening of any of the following events:
(1) The bankruptcy or dissolution of the sole General Partner;
(2) After the Partnership's assets have been fully liquidated;
(3) The election by the General Partner to dissolve the Partnership.
b. Liquidation. Upon dissolution of the Partnership, the General
Partner shall liquidate the assets of the Partnership and, after
reserving an amount necessary to pay all debts and obligations of
the Partnership, apply and distribute the proceeds thereof as
contemplated by this Agreement and cause the cancellation of the
Partnership's Certificate of Limited Partnership.
7. BOOKS AND RECORDS, ACCOUNTING, REPORTS, TAX ELECTIONS, ETC.
a. Records.
(1) The General Partner shall maintain at the office of the Partnership
established pursuant to Section 1.c., the following records:
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<PAGE> 6
(a) a current list containing the full name and last known
business or residence address of each partner set forth in
alphabetical order;
(b) a copy of the Certificate of Limited Partnership and all
Certificates of Amendment thereto, together with executed
copies of any powers of attorney pursuant to which any
certificate was executed;
(c) copies of the Partnership's federal, state and local income
tax returns and reports, if any, for the three most recent
years;
(2) Records required to be kept pursuant to subparagraph (1) above shall
be subject to inspection and copying at the office of the
Partnership established pursuant to Section 1.c. at the reasonable
request and expense of the requesting Partner during ordinary
business hours.
(3) The accountants selected by the General Partner shall prepare for
execution by the General Partner all tax returns of the Partnership.
Partnership books need not be kept in a manner consistent with the
accounting principles employed in determining Federal income tax.
b. Basis of Accounting and Fiscal Year. The books of the Partnership
shall be kept on the same basis as that of the Limited Partner. The
fiscal year of the Partnership shall end on same date as that of the
Limited Partner.
c. Bank Accounts. The bank accounts of the Partnership shall be
maintained in such banking institutions as the General Partner shall
determine, and withdrawals shall be made only in the regular course
of the Partnership's business on such signature or signatures as the
General Partner may determine. All deposits and other funds not
needed in the operation of the business may be invested in U.S.
government securities, securities issued or guaranteed by U.S.
government agencies, securities issued or guaranteed by state or
municipalities (including for the purposes hereof U.S., state or
municipal securities sold by a financial institution with an
agreement to repurchase on a fixed date), certificates of deposit
and time or demand deposits in commercial banks, bankers'
acceptances, and commercial paper. The funds of the Partnership
shall not be commingled with the funds of any other person.
d. Capital Accounts
(1) There shall be maintained a capital account for each Partner. The
amount of each Partner's capital contribution to the Partnership and
any return thereof shall be credited or debited, as the case may be,
to such Partner's capital account. From time to time, but not less
often than annually, the share of each Partner in profit and loss
and cash flow and sale proceeds shall be credited or charged to such
Partner's capital account.
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<PAGE> 7
(2) If at any time the Partnership shall suffer a loss as a result of
which the capital account of any Partner shall be a negative amount,
such loss shall be carried as a charge against such Partner's
capital account, and such Partner's share of subsequent profits of
the Partnership shall be applied to restore such deficit in such
Partner's capital account, but no Partner shall be required to make
any further contribution to the capital of the Partnership to
restore a loss, to discharge any liability of the Partnership or for
any other purposes, except as may be required by law nor shall any
Limited Partner be personally liable for any liabilities of the
Partnership or the General Partners except as otherwise provided by
law.
(3) Gain upon a sale, if any, shall be allocated among the Partners and
credited to their respective capital accounts.
8. MISCELLANEOUS PROVISIONS
a. Admission and Amendments
(1) Each Limited Partner, substituted Limited Partner, additional
General Partner and successor General Partner shall become a
signatory hereof by signing such number of counterpart signature
pages to this Agreement and such other instrument or instruments,
and in such manner and at such time, as the then General Partner
shall reasonably determine. By so signing, the substituted Limited
Partner, successor General Partner or additional General Partner, as
the case may be, shall be deemed to have adopted, and to have agreed
to be bound by all of the provisions of this Agreement, as amended
from time to time in accordance with the provisions of this
Agreement; provided, however, that no such counterpart shall be
binding until it shall have been accepted by the General Partner.
b. In addition to the amendments otherwise authorized herein,
amendments may be made to this Agreement from time to time by the
General Partner with the consent of the Limited Partners; provided,
however, that without the consent of the Limited Partners to be
adversely affected by the amendment, this Agreement may not be
amended so as to (a) convert a Limited Partner's Interest into a
General Partner's interest; (b) modify the limited liability of a
Limited Partner; or (c) alter the Interest of a Partner in profit or
loss or cash flow.
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<PAGE> 8
IN WITNESS WHEREOF, the undersigned General Partner and the Limited Partner have
executed this Agreement as of the date and year first above written.
Standard Parking Corporation
By: /s/
---------------------------------
Its: President
----------------------------
Standard Parking, L.P.
By: Standard Parking Corporation, its general partner
By: /s/
---------------------------------
Its: President
----------------------------
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<PAGE> 9
SCHEDULE A
Standard Parking Corporation
200 East, Randolph, Suite 4800
Chicago, Illinois 60601
Standard Parking, L.P.
200 East Randolph, Suite 4800
Chicago, Illinois 60601
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<PAGE> 1
STANDARD PARKING/CENTRAL I, L.L.C.
OPERATING AGREEMENT
- --------------------------------------------------------------------------------
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION, BUT HAVE BEEN ISSUED PURSUANT TO
EXEMPTIONS UNDER THE SECURITIES ACT OF 1933, AS AMENDED. FURTHERMORE, MEMBERSHIP
INTERESTS HAVE NOT BEEN REGISTERED WITH THE SECURITIES COMMISSIONER OF THE STATE
OF ILLINOIS OR ANY OTHER STATE. ACCORDINGLY, THE SALE, TRANSFER, PLEDGE,
HYPOTHECATION, OR OTHER DISPOSITION OF SUCH MEMBERSHIP INTEREST IS RESTRICTED
AND MAY NOT BE ACCOMPLISHED EXCEPT IN ACCORDANCE SECTION 5 AND OTHER APPLICABLE
PROVISIONS OF THIS AGREEMENT, AND AN APPLICABLE REGISTRATION STATEMENT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT A REGISTRATION STATEMENT IS
UNNECESSARY.
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<PAGE> 2
STANDARD PARKING/CENTRAL I, L.L.C.
OPERATING AGREEMENT
This Limited Liability Company Operating Agreement (the "Agreement")
is made as of March __, 1995, in Chicago, Illinois by and among Standard Parking
Corporation, an Illinois corporation (the "Manager"), and those parties who,
from time to time, execute this Agreement as members and are listed on attached
Schedule A. The Manager and such signatories to this Agreement are collectively
called the "Members", and each is sometimes individually called a "Member".
Agreement
NOW, THEREFORE, in consideration of the mutual promises, terms and
conditions contained herein, the receipt and sufficiency of which are hereby
acknowledged, the Members hereby agree as follows:
1. FORMATION, PURPOSES AND DURATION
1.1. Formation and Name.
a. The Members agree to and hereby form a company pursuant to the
Limited Liability Company Act of the State of Delaware (the "State")
to be known as the "Standard Parking/Central I, L.L.C." (the
"Company").
b. The ownership interests, rights and obligations of the Members as
members in the Company shall be as provided in the Limited Liability
Company Act of the State of Delaware (the "LLC Act"), as amended
from time to time, except as provided in this Agreement. Such
ownership interests, rights and obligations of a Member are called
such Member's "Membership Interest" in this Agreement. The portion
of all the outstanding Membership Interests held by a Member is
expressed as a percentage (the "Percentage Interest") which is
listed opposite the Member's name on Schedule A.
c. The Company shall bear the expenses incident to its formation,
including, but not limited to, filing and recording fees, taxes and
legal and accounting fees incident to the formation and operation of
the Company.
1.2. Purposes of the Company. The purposes of the Company shall be:
a. to undertake any and all lawful business activity under the LLC Act;
b. To invest in, acquire, hold, maintain, improve, develop, sell,
assign, transfer, operate, lease, mortgage, exchange and otherwise
deal in real estate or personal property, or interest in real estate
or personal property, or any other venture or business or
investment;
<PAGE> 3
OPERATING AGREEMENT
c. To obtain any financing necessary to pursue such purposes; and
d. To perform any and all acts reasonably necessary to the fulfillment
of the foregoing purposes.
1.3. Principal Place of Business. The Company shall be deemed to have its
principal place of business at:
55 East Monroe
Suite 3440
Chicago, Illinois 60603
(the "Company's Office") or such other place as determined by the Manager from
time to time.
1.4. Title to Company Property. Legal title to all Company properties
shall be taken and at all times held in the name of the Company, except that any
real estate held by the Company may alternatively be held in the name of a
trustee for the Company, provided that the Company is specifically designated by
name as sole beneficiary or principal under a written trust agreement executed
by any such trustee. The manner of holding title to the Company real estate,
whether in the name of the Company or such trustee, is solely for the
convenience of the Company; all such Company real estate shall be treated as the
property of the Company subject to the terms of this Agreement; and the power to
direct any such trustee shall rest solely in the Company and shall be
exercisable solely upon the direction of the Manager.
1.5. Term. The term of the Company shall commence on the date of the
filing or the Certificate of Organization (the "Certificate") with the
appropriate authorities of the State, and, unless sooner terminated in
accordance with other provisions of this Agreement, shall end on December 31,
2045.
2. CAPITAL CONTRIBUTIONS, PERCENTAGE INTERESTS AND DISTRIBUTIONS
2.1. Initial Capital Contribution. Each Member shall contribute that
amount of cash indicated on Schedule A opposite such Member's name to the
capital of the Company.
2.2. Capital Accounts.
a. A capital account (a "Capital Account") shall be established and
maintained for each Member in accordance with the Internal Revenue
Code of 1986, as amended (the "Code"), and with regulations
promulgated thereunder by the U.S. Department of the Treasury (the
"Treasury Regulations") and shall be subject to adjustment as
provided in Section 2.2.b.
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<PAGE> 4
OPERATING AGREEMENT
b. In accordance with and subject to the Treasury Regulations, the
Capital Account of each Member shall from time to time be:
(1) Increased by (i) the amount of cash and the gross asset value
of property contributed by such Member, (ii) such Member's
share of the profits of the Company, determined pursuant to
Section 5.7 for Capital Account purposes, whether or not
distributed, and (iii) the amount any Company liabilities
assumed by such Member or which are secured by any Company
Property distributed to such Member; and
(2) Decreased by (i) the amount of cash and the gross asset value
of property distributed to such Member, (ii) such Member's
share of losses of the Company, determined pursuant to Section
5.7 for Capital Account purposes, and (iii) the amount of any
liabilities of such Member assumed by the Company or which are
secured by any property contributed by such Member to the
Company.
c. Except as otherwise provided in this Agreement, whenever it becomes
necessary to ascertain the balance of any Member's Capital Account,
such a determination shall be made after giving effect to all
allocations of profits and losses of the Company for the current
year and all distributions for such year in respect of transactions
effected prior to the date as of which such determination is to be
made. No Member shall be entitled to (i) make any withdrawal from
its Capital Account or to receive any distribution from the Company,
except as expressly provided in this Agreement, or (ii) make any
additional capital contribution to the Company other than as
provided herein. No Member shall be entitled to any interest on such
Member's capital contributions to the Company.
d. Any dispute between the Members with respect to determination of
Capital Accounts or otherwise with respect to the manner or method
of accounting by the Company shall be resolved by the Company's
accountants.
e. In the event that property is distributed by the Company to a Member
(including distributions in liquidation of the Company), the Capital
Accounts of the Members shall be adjusted immediately before such
distribution, in accordance with the applicable allocation of
profits and losses, to reflect the profits or losses that would have
been realized by the Company if the distributed property had been
sold on the date of its distribution for its fair market value.
2.3. Distributions of Cash Flow. Cash flow shall be distributed in respect
of each year or portion of a year after (i) payment of all expenses, debts and
obligations of the Company then due and payable, including those due to the
Manager, and (ii) the establishment or increase of
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<PAGE> 5
OPERATING AGREEMENT
any reserves established by the Manager in its sole discretion, including
reserves for anticipated operating expenses,
a. First, to the Members pro rata in accordance with any positive
balance in such Members' Capital Accounts to the extent of such
positive balances; and
b. Second, any remaining cash flow shall be distributed according to
the Members' Percentage Interests.
2.4. Time of Determination and Distribution of Cash Flow. Cash flow shall,
except as otherwise provided in this Agreement, be determined and distributed
from time to time by the Manager in its sole discretion.
3. RIGHTS AND DUTIES OF THE MANAGER
3.1. Management of Company Business. The Manager shall be solely
responsible for the management of the Company's business with all rights and
powers generally conferred by law or necessary, advisable or consistent in
connection therewith.
a. The signature of a duly authorized Officer of the Company or of the
Manager shall be required and sufficient to bind the Company. No
creditor, vendor or other persons dealing with the Company shall be
required to investigate the authority of the Manager or secure
approval or confirmation of any of the other Members.
b. The Manager shall have all rights and powers required for or
appropriate for the management of the Company's business.
3.2. Expenses. The Company shall pay all of its reasonable expenses (which
expenses may be either billed directly to the Company or reimbursed to the
Manager. The Manager may retain and pay compensation to persons or firms
rendering administrative, architectural, technical, management, leasing,
brokerage, insurance, development, accounting, legal and other services to the
Company, including, without limitation, one or more Manager or affiliates of the
Manager.
3.3. Indemnification of the Manager. The Manager shall not be liable,
responsible or accountable in damages or otherwise to the Company or to a Member
for any acts performed by them, within the scope of the authority conferred on
the Manager, provided they have acted in good faith and shall not be guilty of
willful misconduct, gross negligence or breach of fiduciary duty.
a. Except where the Manager has acted in bad faith or shall be guilty
of willful misconduct, the Company shall indemnify and hold such
Manager harmless from and against any judgments, penalties, fines,
amounts paid in settlement and any other loss, damages or expense
(including reasonable attorneys fees, court costs
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<PAGE> 6
OPERATING AGREEMENT
and witness fees) incurred because of any action performed by them
on behalf of the Company in accordance with the terms hereof. In the
event of any action by a Member or the Company against the Manager,
the Company shall indemnify and hold harmless such Manager, from and
against all expenses incurred by such Manager in the defense or
settlement of such action, including reasonable attorneys' fees that
may be paid or incurred, if the indemnified party is not liable as a
result of his, her or its own bad faith, willful misconduct, gross
negligence or breach of his, her or its fiduciary duty, provided
that: (i) no indemnification shall be made in respect of any claim,
issue or matter as to which such Person shall have been adjudged to
be liable under such standards unless and only to the extent that
the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such Person is fairly and
reasonably entitled to indemnity of such expenses that such court
shall deem proper; and (ii) to the extent that such Person has been
successful on the merits or otherwise in defense of any such action,
or in defense of any claim, issue or matter therein, such Person
shall be indemnified by the Company against expenses, including
reasonable attorneys' fees, actually and reasonably incurred by such
person in connection therewith. Expenses incurred by the Manager in
defending any action, suit or proceeding shall be paid or reimbursed
by the Company promptly upon receipt from such Manager of an
undertaking on its part to repay such expenses if it shall
ultimately be determined that it is not entitled to be indemnified.
b. If any counsel shall be retained to represent the Manager at Company
expense under this Section with respect to any claim by a third
party; and if the same claim shall be made against a Member, then,
the Member shall request of the Manager that such counsel, at
Company expense, represent the interests of such Member with respect
to such claim to the extent such counsel shall determine it can do
so without conflict of interest, and the Member shall not be
entitled to reimbursement for any counsel fees charged by counsel
retained by such Member for representation that shall duplicate
representation available from the Manager's counsel. A Member shall
be entitled to reimbursement from the Company for counsel fees
incurred for representation that the Manager's counsel shall have
refused to supply, provided that such Member has made a request to
the Manager for legal representation and is otherwise entitled to
reimbursement of such fees under the provisions of this Section.
c. Notwithstanding the foregoing provisions, (i) no person shall be
entitled to any indemnity with respect to any matters as to which
such person shall have acted in bad faith and shall have been
adjudicated guilty of willful misconduct, gross negligence or breach
of his, her or its fiduciary duties; and (ii) any indemnity under
this Section shall be provided out of and to the extent of Company
assets only, and no Member shall have any personal liability on
account thereof. The
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<PAGE> 7
OPERATING AGREEMENT
foregoing provisions shall not be construed to require any Member to
contribute any additional capital to the Company, and the sole
recourse for any such indemnity shall be limited to the assets of
the Company, at any time, and from time to time.
d. The indemnification provisions of this Agreement are not intended to
be for the benefit of any creditor or other person (other than the
Manager in its capacity as the Manager and other than any person
acting in his or her capacity as a Delegatee) to whom any debts,
liabilities, or obligations are owed by (or who otherwise has any
claim against) the Company or any of the Members; and no such
provisions shall create any right or remedy enforceable by such
creditor or other person against the Company or any of the Members.
For the purposes of this Section, any Delegatee shall have the same
rights to indemnification as the Manager.
e. The Manager shall not be liable to the Members because any taxing
authorities disallow or adjust income, deduction or credits in the
Company tax returns. Furthermore, the Manager shall not have any
liability for the repayment of the capital contributions or loans of
the Members.
3.4. Other Business Activities; Disclosure; Waiver.
a. Any Member, Manager or any officer, director, employee, partner,
shareholder, member or other person holding legal or beneficial
interest in any entity which is a Member or Manager, may engage in
or possess an interest in other business ventures of every nature
and description, including business ventures which compete with the
Company, independently or with others, and neither the Company nor
the Members shall have any right by virtue of this Agreement in or
to such independent ventures or to the income or profits derived
therefrom.
b. If a business in which a Member has an interest, or in which an
affiliate of a Member has an interest, proposes to transact business
with the Company, then such Member shall give notice to the Manager
of its interest or the interest of its affiliate and business may be
conducted with such entity upon terms approved by the Manager.
4. OFFICERS
4.1. Appointment of Officers. The Manager may select such Officers as it
deems necessary or desirable for the effective management of the Company and the
pursuit of the Company's business. Manager hereby appoints those persons
designated in Section 4.11 to the offices set forth after their names.
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<PAGE> 8
OPERATING AGREEMENT
4.2. Number. The Officers of the Company may be a President, one or more
Vice-Presidents (the number thereof to be determined by the Manager), a
Secretary, and a Treasurer, and such Assistant Secretaries, Assistant Treasurers
or other Officers as may be appointed by the Manager. Any two or more offices
may be held by the same Person. All Officers and agents of the Company shall
have such express authority and perform such duties in the management of the
property and affairs of the Company as may be provided herein, or as may be
determined by resolution of the Manager not inconsistent with this Agreement,
and such implied authority as is recognized by the common law from time to time.
4.3. Appointment and Term of Office. The initial Officers of the Company
are designated in Section 4.11, and otherwise the Officers of the Company shall
be appointed by the Manager by written action taken and/or meetings held for
such purpose. The Manager may create and fill new offices from time to time. An
Officer shall hold office until his or her successor shall have been duly
appointed and shall have qualified, until his or her death or until he or she
shall resign or shall have been removed in the manner hereinafter provided.
Election or appointment of an Officer or agent shall not of itself create
contract rights.
4.4. Removal. Any Officer or agent may be removed by the Manager whenever
in its judgment the best interests of the Company would be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the
Person so removed.
4.5. Vacancies. A vacancy in any office because of death, resignation,
removal, disqualification, or otherwise, or because of the creation of an
office, may be filled by the Manager for the unexpired portion of the term.
4.6. The President. The President shall be the principal executive Officer
of the Company and, subject to the control of the Manager, shall in general
supervise and control all of the business and affairs of the Company. He or she
may sign, with the Secretary or any other Officer of the Company thereunto
authorized by the Manager, contracts or other instruments which the Manager has
authorized to be executed on behalf of the Company, except in cases where the
signing and execution thereof shall be expressly delegated by the Manager or by
this Agreement to some other Officer or agent of the Company or to the President
alone, or shall be required by law to be otherwise signed or executed; and in
general shall perform all duties incident to the office of President and such
other duties as may be prescribed by the Manager from time to time.
4.7. The Vice-Presidents. In the absence of the President or in the event
of his or her inability or refusal to act, the Vice-President (or in the event
there be more than one Vice-President, the Vice-Presidents in the order
designated, or in the absence of any designation, then in the order of their
election) shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. Any Vice-President may perform such other duties as from time to time
may be assigned to him or her by the President or by the Manager.
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<PAGE> 9
OPERATING AGREEMENT
4.8. The Secretary. The Secretary shall: (a) keep, or supervise and be
responsible for the keeping of, the minutes and records of all meetings and
official actions of the Members and of the Manager, and any committees of the
Manager in one or more books provided for that purpose; (b) see that all notices
of such meetings are duly given or waivers of notice obtained in accordance with
the provisions of this Agreement or as required by law; (c) be custodian of the
Company records; (d) keep a register of the post office address of each Member
which shall be furnished to the Secretary by such Member; (e) have the authority
to certify this Agreement, resolutions of the Manager and committees thereof,
and other documents of the Company as true and correct copies thereof; and (f)
in general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him or her by the President or by
the Manager.
4.9. Assistant Secretaries. The Assistant Secretaries, in general, shall
perform such duties and exercise such authority as shall be assigned or granted
to them by the President or by the Manager.
4.10. Compensation. Except as otherwise provided in any written employment
agreement duly executed on behalf of the Company and except as otherwise set
forth below, the compensation (including salaries and benefits) of the Officers
shall be fixed from time to time by resolution of the Manager and no Officer
shall be prevented from receiving such compensation by reason of the fact that
he or she is also the Manager of the Company.
4.11. Identity of Officers. The initial Officers of the Company shall be
as follows:
a. Myron C. Warshauer shall be the President.
b. Michael K. Wolf shall be a Senior Vice President and the Secretary.
c. Allan Lombardo shall be the Executive Vice President.
d. Steven A. Warshauer shall be a Senior Vice President.
e. Michael E. Swartz shall be a Senior Vice President.
f. James A. Wilhelm shall be a Senior Vice President.
5. ACCOUNTING AND TAXES
5.1. Books and Records.
a. At all times during the term hereof, the Manager shall use its best
efforts to cause accurate books and records of account to be
maintained in which are to be entered all matters relating to the
business and operations of the Company, including all income,
expenditures, assets and liabilities thereof.
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<PAGE> 10
OPERATING AGREEMENT
b. Each Member is entitled to any information reasonably necessary for
the Member for the preparation of such Member's federal or state tax
returns.
5.2. Rights of Inspection. Each Member and/or its authorized
representatives shall have the right to inspect, examine and copy (at such
Member's expense) the books, records, files, securities and other documents of
the Company during the regular business hours of the Company upon giving
reasonable notice and stating reasonable cause therefore.
5.3. Fiscal Year. The fiscal year of the Company shall end on December 31
of each year.
5.4. Accounts. The Manager may deposit Company funds in such bank or
investment accounts as they select in its sole discretion. The Manager shall be
an authorized signatory on such accounts.
5.5. Other Accounting Decisions. All accounting decisions for the Company
(other than those specifically provided for in any other Section of this
Agreement) shall be made by the Manager.
5.6. Preparation of Tax Returns. Upon being provided by the Members with
all information required for their preparation, the Manager or its agents shall,
on behalf of the Company, use its best efforts to cause all federal, state and
local income tax returns of the Company to be prepared. The Manager will use its
best efforts to cause copies of all tax returns of the Company to be made
available for review by the Members at least twenty days prior to the statutory
date for filing, including extensions thereof, if any.
5.7. Allocations to Members.
a. Subject to Sections 5.7.b and 5.7.c, all items of income, gain,
profits, losses, credits and deductions of the Company shall be
allocated to the Members in proportion to the Members' Percentage
Interests.
b. Solely for federal, state, and local income tax purposes and not for
book or Capital Account purposes, except to the extent required by
Treasury Regulations, depreciation, amortization, gain, or loss with
respect to property that is properly reflected on the Company's
books at a value that differs from its adjusted basis for federal
income tax purposes shall be allocated in accordance with the
principles and requirements of Section 704(c) of the Code and the
Treasury Regulations promulgated thereunder, and in accordance with
the requirements of the relevant provisions of the Treasury
Regulations issued under Code Section 704(b). For Capital Account
purposes, depreciation, amortization, gain, or loss with respect to
property that is properly reflected on the Company's books at a
value that differs from its adjusted basis for tax purposes shall be
determined in accordance with the rules of Treasury Regulation
Section 1.704-1 (b)(2)(iv)(g).
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<PAGE> 11
OPERATING AGREEMENT
c. To the extent required to give the foregoing allocations effect for
federal income tax purposes, the requirements of Treasury
Regulations Sections 1.704(b)(2)(ii)(d) and 1.704-2 are incorporated
herein by reference, and this Agreement shall be construed as having
any provisions necessary to satisfy such requirements.
d. Allocations with Respect to Transferred Membership Interests.
In the event of a Transfer (as defined in Section 6, below) of a
Member's Membership Interest or any portion thereof, the Member's
items of profits and losses shall be allocated between the
Transferor (as defined herein) and the Transferee (as defined
herein) in the ratio of the number of days in the fiscal year of the
Company before and after the effective date of the Transfer.
5.8. Tax Decisions Not Specified. Tax decisions and elections for the
Company not provided for herein shall be made in the discretion of the Manager.
5.9. Tax Matters Member. The Manager named first in the Articles will be
the tax matters partner (the "Tax Matters Partner") for purposes of Sections
6221-6231 of the Code and the Treasury Regulations. The Tax Matters Partner
agrees to use its best efforts to comply in good faith with all provisions of
the Code concerning a tax matters partner and to take all actions necessary to
make each Member a notice partner under the Code. The Tax Matters Partner will
use its best efforts to give each Member copies of all notices or other material
communications delivered to or by it with respect to federal, state or local tax
matters, negotiations, decisions, settlements or other events. The Tax Matters
Partner may choose the forum in which to pursue any litigation without the
consent of the Members.
6. SALE OR TRANSFER
6.1. General. Except as provided in Section 6.4.c, below, no Member shall
(i) sell, assign, transfer, convey, give, mortgage, pledge, charge or otherwise
encumber (collectively, "Transfer"), all or any part of its Membership Interest,
or (ii) contract to Transfer all or any part of its Membership Interest, or
(iii) suffer or permit the Transfer of all or any part of its Membership
Interest whether voluntarily or by operation of law, without in each instance
obtaining the prior written consent of the Manager, which consent may be
withheld in the sole discretion of the Manager. Any attempt to Transfer a
Membership Interest without the required consent shall be void. The giving of
consent in connection with one or more Transfers shall not limit or waive the
need for such consent in connection with any other Transfers.
6.2. Securities Law Limitations. Notwithstanding anything in this
Agreement, no Membership Interests may be Transferred except as permitted under
the Securities Act of 1933, as amended, and applicable state securities laws or
exemption therefrom.
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<PAGE> 12
OPERATING AGREEMENT
6.3. Agreement with Transferees. In the event that, pursuant to the
provisions of this Section 6 and with any required prior written consent of the
Manager, any Member (a "Transferor") shall Transfer its Membership Interest to
any person or entity (a "Transferee"), no such Transfer shall be made or shall
be effective to make such Transferee a Member or entitle such Transferee to any
benefits or rights hereunder until the proposed Transferee agrees in writing to
(i) assume and be bound by all of the terms and provisions of this Agreement and
all of the obligations of the Transferor, and (ii) be subject to all the
restrictions to which the Transferor is subject under the terms of this
Agreement and any further agreements with respect to the Facility or as
contemplated by this Agreement to which the Transferor is then subject or is
then required to be a party.
6.4. Transfer by Reason of Death and Other Events.
a. If, as a result of a Member's death, divorce, bankruptcy, or, in the
case of a non-natural person, dissolution, termination, liquidation
or distribution, a Membership Interest or a portion thereof is
Transferred, without consideration to the estate of the Transferor,
to or in trust substantially for the benefit of lineal descendants
of the Transferor or to the Transferor's grantor or controlling
owner, the Transferee shall not become a Member as a result of such
Transfer without the consent of the Manager, except as provided in
Section 6.4.c, below.
b. If the Company does not dissolve as a result of a Transfer by reason
of an election of the remaining Members to continue the Company (or
because the Transfer is not a cause of dissolution described in
Section 7.1) but the Manager does not consent to the Transferee
becoming a Member, the Transferee of a Transfer described in Section
6.4.a shall have the right to receive a payment of cash, by means of
a promissory note of the Company and/or the distribution of an
undivided interest in the property of the Company the sum of the
values of which shall not exceed the Transferor's rights in
liquidation of the Transferor's Membership Interest under Section
7.3 determined as of the date of the Transfer.
c. Sections 6.4.a, and 6.4.b notwithstanding, if the Transferee to whom
the Withdrawing Transferor's Membership Interest is being
Transferred pursuant to an event described in Section 6.4.a is
already a Member, consent of the Manager shall not be required for
the Transfer to be effective.
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<PAGE> 13
OPERATING AGREEMENT
7. DISSOLUTION
7.1. Causes of Dissolution.
The Company shall be dissolved only in the event:
a. Of the death, removal, liquidation, dissolution, withdrawal or
bankruptcy of any Member;
b. That all or substantially all of the Company's non-cash property is
sold or otherwise transferred to any person which is not controlled
by the Company;
c. That the Members mutually agree to terminate the Company;
d. That the Company by its terms, as set forth in this Agreement, is
terminated;
e. That there is a general assignment of the assets of the Company for
the benefit of its creditors, or the adjudication of the Company as
bankrupt; or
f. That the Company is dissolved by operation of law.
7.2. Procedure in Dissolution and Liquidation.
a. Upon dissolution of the Company pursuant to Section 7.1, unless the
Company is reconstituted under Section 9.2, the Manager shall
proceed with reasonable promptness to wind up the affairs of and
liquidate the business of the Company.
b. During the period of the winding up of the affairs of the Company,
the rights and obligations of the Manager set forth herein with
respect to the management of the Company shall continue.
c. The assets of the Company shall be applied or distributed in
liquidation in the following order of priority:
(1) In payment of debts and obligations of the Company;
(2) To the Members in payment of their respective outstanding
Capital Accounts; and
(3) Any excess to the Members in proportion to their Percentage
Interests.
7.3. Liquidation of a Membership Interest. A distribution in respect of
the liquidation of a Member's Membership Interest shall be in the same amount as
would have been distributed to such Member had the Company liquidated at the
time of the liquidation of the Membership Interest. Payment of such liquidation
amount shall be made in cash, a promissory note of the
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<PAGE> 14
OPERATING AGREEMENT
Company and/or an undivided interest in the property of the Company, in the
Manager's sole discretion.
8. MEMBERS
8.1. Limitation on Members' Liabilities. A Member, including the Manager,
shall not be bound by, or be personally liable for, the expenses, liabilities or
obligations of the Company or the Manager, and the liability of each Member
shall be limited solely to the amount of such Member's contribution to the
capital of the Company required under the provisions of Section 2 hereof, except
as required by the laws of the State,
8.2. No Control of Business or Right to Act for Company. Other than the
Manager, a Member shall take no part in the management, conduct or control of
the business of the Company and shall have no right or authority to act for or
to bind the Company.
9. WITHDRAWAL OR DEATH OF THE MANAGER
9.1. Withdrawal by the Manager. The Manager may upon thirty (30) days
notice to the Members withdraw as manager of the Company.
9.2. Reconstitution of Company After Withdrawal or Death of the Manager.
Upon the withdrawal, liquidation, dissolution or bankruptcy of the Manager or
other event causing a dissolution under Section 7.1.a, the remaining Members
(not including for such purposes the estate of a deceased Manager or any
Transferee who has not satisfied the requirements of Section 6 to become a
Member) shall have the right to elect to continue the business of the Company,
in a reconstituted form if necessary, if, within 90 days after the withdrawal of
the Manager, all Members agree in writing to continue the business of the
Company and to the appointment of one or more additional managers, if necessary.
The exercise of the rights of reconstitution granted in this Section 9 shall not
in any way constitute any Member a manager or impose any personal liability on
any Member. Immediately upon the agreement of all Members to continue the
business, the Members, and/or any successor Manager shall prepare, execute, and
file for recordation of new Articles of Organization, or an amendment thereto,
if required, and shall take or cause to be taken all steps required in
connection with the continuation of the business in accordance with the
applicable laws of the State.
9.3. Accounting. If the withdrawal or other terminating event of the
Manager does not result in the dissolution and winding up of the Company's
business because such business is being continued in a reconstituted form as
provided above, the Members, and/or the successor Manager shall promptly have an
accounting prepared by the auditors of the Company covering the transactions of
the Company from the end of the immediately preceding fiscal year through the
date of such withdrawal, death or other terminating event.
-13-
<PAGE> 15
OPERATING AGREEMENT
10. GENERAL PROVISIONS
10.1. Entire Agreement. This Agreement constitutes the entire agreement
among the Members and supersedes all agreements, representations, warranties,
statements, promises and understandings, whether oral or written, with respect
to the subject matter hereof. None of the Members shall be bound by nor charged
with any oral or written agreements, representations, warranties, statements,
promises or understandings not specifically set forth in this Agreement or the
exhibits and schedules hereto.
10.2. Notices.
a. Any and all notices, requests, demands, elections and other
communications (collectively "Communications" and each separately a
"Communication") given in connection with this Agreement shall be
effective and deemed adequately delivered (a "Deemed Delivery") only
if delivered in writing to the Member for whom such Communications
are intended (the "Recipient") and such Deemed Delivery shall be
deemed to occur on the earlier of (a) the date it shall be delivered
to the address of the Recipient on the records of the Company (the
"Recipient's Address"), (b) the date delivery shall have been
refused at the Recipient's Address, (c) with respect to a notice
sent by mail, the date as of which the postal service shall have
indicated such notice to be undeliverable at the Recipient's Address
or (d) with respect to a notice sent by facsimile to the facsimile
number required by this Agreement and in respect of which a
facsimile receipt confirmation statement is printed, (i) the next
business day after receipt, if the notice is sent at or after five
(5) p.m. in the time zone of the Recipient, or (ii) the day of
receipt if the notice is sent before five (5) p.m. in the time zone
of the Recipient. The addresses and facsimile numbers required by
this Agreement, unless changed pursuant to Section 10.2.b, are:
(1) To the Company or the Manager:
55 East Monroe
Suite 3440
Chicago, Illinois 60603
Facsimile: (312) 621-3354
Attn: Myron C. Warshauer
-14-
<PAGE> 16
OPERATING AGREEMENT
with a copy in each case to:
Sachnoff & Weaver, Ltd.
30 South Wacker Drive
29th Floor
Chicago, Illinois 60606
Facsimile: (312) 207-6400
Attn: Stewart Dolin
(2) To the remaining Members, at the addresses or facsimile
numbers listed on Schedule A.
b. By giving to the Company at least ten (10) days' written notice
thereof, the Members and their respective Transferees shall have the
right from time to time and at any time during the term of this
Agreement to change their respective addressee, address and/or
facsimile number for notices, and each shall have the right to
specify as its address and/or facsimile number for notices any other
address and/or facsimile number within the United States of America.
10.3. Validity. In the event that any provision of this Agreement shall be
held to be invalid or unenforceable, the same shall not affect in any respect
whatsoever the validity or enforceability of the remainder of this Agreement.
10.4. Attorneys' Fees. Should any litigation be commenced by the Company
against any Member or between by any Member or Members against the Company or
the Manager concerning any provision of this Agreement or the rights and duties
of any person or entity in relation thereto, the party or parties prevailing in
such litigation shall be entitled, in addition to such other relief as may be
granted, to a reasonable sum as and for its or their attorneys' fees and court
costs in such litigation which shall be determined by the court in such
litigation or in a separate action brought for that purpose.
10.5. Survival of Rights. Except as provided herein to the contrary, this
Agreement shall be binding upon and inure to the benefit of the Members
signatory hereto, and their respective permitted successors and assigns.
10.6. Governing Law. This Agreement has been entered into in the State and
all questions with respect to this Agreement and the rights and liabilities of
the parties hereto shall be governed by the internal laws of the State.
10.7. Submission to Jurisdiction, etc. The Members hereby irrevocably
submit to the jurisdiction of any state or federal court sitting in the State of
Illinois in connection with any action or proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby and waive irrevocably
any objection to venue or objections in the nature of forum non
-15-
<PAGE> 17
OPERATING AGREEMENT
conveniens that they may have. The venue for any action to enforce or construe
this Agreement shall be Cook County, Illinois.
10.8. No Partition. No Member shall have the right to, and each Member
hereby covenants that it will not, withdraw from the Company, bring any action
to partition any Company property nor dissolve, terminate or liquidate, or
petition a court for the dissolution, termination, or liquidation of the
Company, except as provided in this Agreement, and no Member at any time shall
have the right to petition or to take any action to subject any Company assets
or any part thereof to the authority of any court of bankruptcy, insolvency,
receivership or similar proceeding, unless there is unanimous consent of the
Members.
10.9. Waiver. No consent or waiver, express or implied, by a Member to or
of any breach or default by another Member in the performance by such other
Member of its obligations hereunder shall be deemed or construed to be a consent
or waiver to or of any other breach or default in the performance by such other
Member of the same or any other obligations of such other Member hereunder.
10.10. Remedies Not Exclusive. The rights and remedies of the Members and
the Company hereunder shall not be mutually exclusive, i.e., the exercise of one
or more of the provisions hereof shall not preclude the exercise of any other
provisions hereof. Each of the Members confirms that damages at law will be an
inadequate remedy for a breach or threatened breach of this Agreement and agrees
that, in the event of a breach or threatened breach of any provision hereof, the
respective rights and obligations hereunder shall be enforceable by specific
performance, injunction or other equitable remedy, but nothing herein contained
is intended to, nor shall it, limit or affect any rights at law or by statute or
otherwise of any Member aggrieved as against the other for a breach or
threatened breach of any provision hereof, it being the intention of this
Section to make clear the agreement of the Members that the respective rights
and obligations of the Members hereunder shall be enforceable in equity as at
law or otherwise.
10.11. Construction. All personal pronouns used in this Agreement, whether
used in the masculine, feminine or neuter gender, shall include all other
genders; and the singular shall include the plural and vice versa. Titles of
Sections and Subsections are for convenience only, and neither limit nor amplify
the provisions of this Agreement itself. References to Sections or Subsections
shall refer to Sections or Subsections of this Agreement, unless otherwise
indicated. The use herein of the word "including," when following any general
statement, term or matter, shall not be construed to limit such statement, term
or matter to the specific items or matters set forth immediately following such
word or to similar items or matters, whether or not non-limiting language (such
as "without limitation," or "but not limited to," or words of similar import) is
used with reference thereto, but rather shall be deemed to refer to all other
items or matters that could reasonably fall within the broadest possible scope
of such general statement, term or matter. For the purposes of this Agreement,
"and/or" means one or the other or both, or anyone or more or all, of the things
or persons in connection with which the conjunction is used.
-16-
<PAGE> 18
OPERATING AGREEMENT
10.12. Incorporation by Reference. Any exhibits or schedules referred to
herein are those attached to this Agreement and shall be deemed to be
incorporated as a part of this Agreement.
10.13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
shall constitute one and the same agreement.
10.14. Further Assurances. Each party hereto agrees to do all acts and
things, and to make, execute and deliver such written instruments, as shall from
time to time be reasonably required to carry out the terms and provisions of
this Agreement.
10.15. No Third Party Rights. This Agreement shall not (directly,
indirectly, contin-gently or otherwise) confer or be construed as conferring any
rights or benefits on any person or entity that is not a named Member or a
permitted Transferee of a Member hereunder.
IN WITNESS WHEREOF, this Agreement is executed as of the date first
stated above.
Standard Parking Corporation, Member Standard Parking, L.P., Member
and Manager
By: Standard Parking Corporation, its
General Partner
By: /s/ Myron C. Warshauer By: /s/ Myron C. Warshauer
------------------------- --------------------------
Its: President Its: President
------------------------- --------------------------
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<PAGE> 19
OPERATING AGREEMENT
SCHEDULE A
MEMBERS
THIS SCHEDULE MAY BE AMENDED FROM TIME TO TIME WITHOUT THE CONSENT OF THE
MEMBERS TO REFLECT THE ADDITION OF NEW MEMBERS, THE ISSUANCE OF NEW
INTERESTS, THE SALE OR EXCHANGE OF INTERESTS, OR OTHER SHIFTS OF
MEMBERSHIP INTERESTS PURSUANT TO THE AGREEMENT OR A CHANGE OF ADDRESS OR
FACSIMILE NUMBER OF A MEMBER FOR WHICH NOTICE WAS GIVEN TO THE COMPANY
PURSUANT TO THIS AGREEMENT.
<TABLE>
<CAPTION>
Facsimile Initial Percentage
Name and Address Number Capital Contribution Interest
- ---------------- ------ -------------------- --------
<S> <C> <C> <C>
Standard Parking (312) 621-3354 $ 200.00 1%
Corporation
55 East Monroe
Suite 3440
Chicago, Illinois 60603
Standard Parking, L.P (312) 621-3354 $19,800.00 99%
55 East Monroe.
Suite 3440
Chicago, Illinois 60603
</TABLE>
-18-
<PAGE> 1
STANDARD PARKING/CENTRAL II, L.L.C.
OPERATING AGREEMENT
- --------------------------------------------------------------------------------
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION, BUT HAVE BEEN ISSUED PURSUANT TO
EXEMPTIONS UNDER THE SECURITIES ACT OF 1933, AS AMENDED. FURTHERMORE, MEMBERSHIP
INTERESTS HAVE NOT BEEN REGISTERED WITH THE SECURITIES COMMISSIONER OF THE STATE
OF ILLINOIS OR ANY OTHER STATE. ACCORDINGLY, THE SALE, TRANSFER, PLEDGE,
HYPOTHECATION, OR OTHER DISPOSITION OF SUCH MEMBERSHIP INTEREST IS RESTRICTED
AND MAY NOT BE ACCOMPLISHED EXCEPT IN ACCORDANCE SECTION 5 AND OTHER APPLICABLE
PROVISIONS OF THIS AGREEMENT, AND AN APPLICABLE REGISTRATION STATEMENT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT A REGISTRATION STATEMENT IS
UNNECESSARY.
- --------------------------------------------------------------------------------
<PAGE> 2
STANDARD PARKING/CENTRAL II, L.L.C.
OPERATING AGREEMENT
This Limited Liability Company Operating Agreement (the "Agreement")
is made as of March __, 1995, in Chicago, Illinois by and among Standard Parking
Corporation, an Illinois corporation (the "Manager"), and those parties who,
from time to time, execute this Agreement as members and are listed on attached
Schedule A. The Manager and such signatories to this Agreement are collectively
called the "Members", and each is sometimes individually called a "Member".
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, terms and
conditions contained herein, the receipt and sufficiency of which are hereby
acknowledged, the Members hereby agree as follows:
1. FORMATION, PURPOSES AND DURATION
1.1. Formation and Name.
a. The Members agree to and hereby form a company pursuant to the
Limited Liability Company Act of the State of Delaware (the "State")
to be known as the "Standard Parking Central II, L.L.C." (the
"Company").
b. The ownership interests, rights and obligations of the Members as
members in the Company shall be as provided in the Limited Liability
Company Act of the State of Delaware (the "LLC Act"), as amended
from time to time, except as provided in this Agreement. Such
ownership interests, rights and obligations of a Member are called
such Member's "Membership Interest" in this Agreement. The portion
of all the outstanding Membership Interests held by a Member is
expressed as a percentage (the "Percentage Interest") which is
listed opposite the Member's name on Schedule A.
c. The Company shall bear the expenses incident to its formation,
including, but not limited to, filing and recording fees, taxes and
legal and accounting fees incident to the formation and operation of
the Company.
1.2. Purposes of the Company. The purposes of the Company shall be:
a. to undertake any and all lawful business activity under the LLC Act;
b. To invest in, acquire, hold, maintain, improve, develop, sell,
assign, transfer, operate, lease, mortgage, exchange and otherwise
deal in real estate or personal
<PAGE> 3
OPERATING AGREEMENT
property, or interest in real estate or personal property, or any
other venture or business or investment;
c. To obtain any financing necessary to pursue such purposes; and
d. To perform any and all acts reasonably necessary to the fulfillment
of the foregoing purposes.
1.3. Principal Place of Business. The Company shall be deemed to have its
principal place of business at:
55 East Monroe
Suite 3440
Chicago, Illinois 60603
(the "Company's Office") or such other place as determined by the Manager from
time to time.
1.4. Title to Company Property. Legal title to all Company properties
shall be taken and at all times held in the name of the Company, except that any
real estate held by the Company may alternatively be held in the name of a
trustee for the Company, provided that the Company is specifically designated by
name as sole beneficiary or principal under a written trust agreement executed
by any such trustee. The manner of holding title to the Company real estate,
whether in the name of the Company or such trustee, is solely for the
convenience of the Company; all such Company real estate shall be treated as the
property of the Company subject to the terms of this Agreement; and the power to
direct any such trustee shall rest solely in the Company and shall be
exercisable solely upon the direction of the Manager.
1.5. Term. The term of the Company shall commence on the date of the
filing or the Certificate of Organization (the "Certificate") with the
appropriate authorities of the State, and, unless sooner terminated in
accordance with other provisions of this Agreement, shall end on December 31,
2045.
2. CAPITAL CONTRIBUTIONS, PERCENTAGE INTERESTS AND DISTRIBUTIONS
2.1. Initial Capital Contribution. Each Member shall contribute that
amount of cash indicated on Schedule A opposite such Member's name to the
capital of the Company.
2.2. Capital Accounts.
a. A capital account (a "Capital Account") shall be established and
maintained for each Member in accordance with the Internal Revenue
Code of 1986, as amended (the "Code"), and with regulations
promulgated thereunder by the U.S.
-2-
<PAGE> 4
OPERATING AGREEMENT
Department of the Treasury (the "Treasury Regulations") and shall be
subject to adjustment as provided in Section 2.2.b.
b. In accordance with and subject to the Treasury Regulations, the
Capital Account of each Member shall from time to time be:
(1) Increased by (i) the amount of cash and the gross asset value
of property contributed by such Member, (ii) such Member's
share of the profits of the Company, determined pursuant to
Section 5.7 for Capital Account purposes, whether or not
distributed, and (iii) the amount any Company liabilities
assumed by such Member or which are secured by any Company
Property distributed to such Member; and
(2) Decreased by (i) the amount of cash and the gross asset value
of property distributed to such Member, (ii) such Member's
share of losses of the Company, determined pursuant to Section
5.7 for Capital Account purposes, and (iii) the amount of any
liabilities of such Member assumed by the Company or which are
secured by any property contributed by such Member to the
Company.
c. Except as otherwise provided in this Agreement, whenever it becomes
necessary to ascertain the balance of any Member's Capital Account,
such a determination shall be made after giving effect to all
allocations of profits and losses of the Company for the current
year and all distributions for such year in respect of transactions
effected prior to the date as of which such determination is to be
made. No Member shall be entitled to (i) make any withdrawal from
its Capital Account or to receive any distribution from the Company,
except as expressly provided in this Agreement, or (ii) make any
additional capital contribution to the Company other than as
provided herein. No Member shall be entitled to any interest on such
Member's capital contributions to the Company.
d. Any dispute between the Members with respect to determination of
Capital Accounts or otherwise with respect to the manner or method
of accounting by the Company shall be resolved by the Company's
accountants.
e. In the event that property is distributed by the Company to a Member
(including distributions in liquidation of the Company), the Capital
Accounts of the Members shall be adjusted immediately before such
distribution, in accordance with the applicable allocation of
profits and losses, to reflect the profits or losses that would have
been realized by the Company if the distributed property had been
sold on the date of its distribution for its fair market value.
-3-
<PAGE> 5
OPERATING AGREEMENT
2.3. Distributions of Cash Flow. Cash flow shall be distributed in respect
of each year or portion of a year after (i) payment of all expenses, debts and
obligations of the Company then due and payable, including those due to the
Manager, and (ii) the establishment or increase of any reserves established by
the Manager in its sole discretion, including reserves for anticipated operating
expenses,
a. First, to the Members pro rata in accordance with any positive
balance in such Members' Capital Accounts to the extent of such
positive balances; and
b. Second, any remaining cash flow shall be distributed according to
the Members' Percentage Interests.
2.4. Time of Determination and Distribution of Cash Flow. Cash flow shall,
except as otherwise provided in this Agreement, be determined and distributed
from time to time by the Manager in its sole discretion.
3. RIGHTS AND DUTIES OF THE MANAGER
3.1. Management of Company Business. The Manager shall be solely
responsible for the management of the Company's business with all rights and
powers generally conferred by law or necessary, advisable or consistent in
connection therewith.
a. The signature of a duly authorized Officer of the Company or of the
Manager shall be required and sufficient to bind the Company. No
creditor, vendor or other persons dealing with the Company shall be
required to investigate the authority of the Manager or secure
approval or confirmation of any of the other Members.
b. The Manager shall have all rights and powers required for or
appropriate for the management of the Company's business.
3.2. Expenses. The Company shall pay all of its reasonable expenses (which
expenses may be either billed directly to the Company or reimbursed to the
Manager. The Manager may retain and pay compensation to persons or firms
rendering administrative, architectural, technical, management, leasing,
brokerage, insurance, development, accounting, legal and other services to the
Company, including, without limitation, one or more Manager or affiliates of the
Manager.
3.3. Indemnification of the Manager. The Manager shall not be liable,
responsible or accountable in damages or otherwise to the Company or to a Member
for any acts performed by them, within the scope of the authority conferred on
the Manager, provided they have acted in good faith and shall not be guilty of
willful misconduct, gross negligence or breach of fiduciary duty.
-4-
<PAGE> 6
OPERATING AGREEMENT
a. Except where the Manager has acted in bad faith or shall be guilty
of willful misconduct, the Company shall indemnify and hold such
Manager harmless from and against any judgments, penalties, fines,
amounts paid in settlement and any other loss, damages or expense
(including reasonable attorneys fees, court costs and witness fees)
incurred because of any action performed by them on behalf of the
Company in accordance with the terms hereof. In the event of any
action by a Member or the Company against the Manager, the Company
shall indemnify and hold harmless such Manager, from and against all
expenses incurred by such Manager in the defense or settlement of
such action, including reasonable attorneys' fees that may be paid
or incurred, if the indemnified party is not liable as a result of
his, her or its own bad faith, willful misconduct, gross negligence
or breach of his, her or its fiduciary duty, provided that: (i) no
indemnification shall be made in respect of any claim, issue or
matter as to which such Person shall have been adjudged to be liable
under such standards unless and only to the extent that the court in
which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, such Person is fairly and
reasonably entitled to indemnity of such expenses that such court
shall deem proper; and (ii) to the extent that such Person has been
successful on the merits or otherwise in defense of any such action,
or in defense of any claim, issue or matter therein, such Person
shall be indemnified by the Company against expenses, including
reasonable attorneys' fees, actually and reasonably incurred by such
person in connection therewith. Expenses incurred by the Manager in
defending any action, suit or proceeding shall be paid or reimbursed
by the Company promptly upon receipt from such Manager of an
undertaking on its part to repay such expenses if it shall
ultimately be determined that it is not entitled to be indemnified.
b. If any counsel shall be retained to represent the Manager at Company
expense under this Section with respect to any claim by a third
party; and if the same claim shall be made against a Member, then,
the Member shall request of the Manager that such counsel, at
Company expense, represent the interests of such Member with respect
to such claim to the extent such counsel shall determine it can do
so without conflict of interest, and the Member shall not be
entitled to reimbursement for any counsel fees charged by counsel
retained by such Member for representation that shall duplicate
representation available from the Manager's counsel. A Member shall
be entitled to reimbursement from the Company for counsel fees
incurred for representation that the Manager's counsel shall have
refused to supply, provided that such Member has made a request to
the Manager for legal representation and is otherwise entitled to
reimbursement of such fees under the provisions of this Section.
c. Notwithstanding the foregoing provisions, (i) no person shall be
entitled to any indemnity with respect to any matters as to which
such person shall have acted in
-5-
<PAGE> 7
OPERATING AGREEMENT
bad faith and shall have been adjudicated guilty of willful
misconduct, gross negligence or breach of his, her or its fiduciary
duties; and (ii) any indemnity under this Section shall be provided
out of and to the extent of Company assets only, and no Member shall
have any personal liability on account thereof. The foregoing
provisions shall not be construed to require any Member to
contribute any additional capital to the Company, and the sole
recourse for any such indemnity shall be limited to the assets of
the Company, at any time, and from time to time.
d. The indemnification provisions of this Agreement are not intended to
be for the benefit of any creditor or other person (other than the
Manager in its capacity as the Manager and other than any person
acting in his or her capacity as a Delegatee) to whom any debts,
liabilities, or obligations are owed by (or who otherwise has any
claim against) the Company or any of the Members; and no such
provisions shall create any right or remedy enforceable by such
creditor or other person against the Company or any of the Members.
For the purposes of this Section, any Delegatee shall have the same
rights to indemnification as the Manager.
e. The Manager shall not be liable to the Members because any taxing
authorities disallow or adjust income, deduction or credits in the
Company tax returns. Furthermore, the Manager shall not have any
liability for the repayment of the capital contributions or loans of
the Members.
3.4. Other Business Activities; Disclosure; Waiver.
a. Any Member, Manager or any officer, director, employee, partner,
shareholder, member or other person holding legal or beneficial
interest in any entity which is a Member or Manager, may engage in
or possess an interest in other business ventures of every nature
and description, including business ventures which compete with the
Company, independently or with others, and neither the Company nor
the Members shall have any right by virtue of this Agreement in or
to such independent ventures or to the income or profits derived
therefrom.
b. If a business in which a Member has an interest, or in which an
affiliate of a Member has an interest, proposes to transact business
with the Company, then such Member shall give notice to the Manager
of its interest or the interest of its affiliate and business may be
conducted with such entity upon terms approved by the Manager.
-6-
<PAGE> 8
OPERATING AGREEMENT
4. OFFICERS
4.1. Appointment of Officers. The Manager may select such Officers as it
deems necessary or desirable for the effective management of the Company and the
pursuit of the Company's business. Manager hereby appoints those persons
designated in Section 4.11 to the offices set forth after their names.
4.2. Number. The Officers of the Company may be a President, one or more
Vice-Presidents (the number thereof to be determined by the Manager), a
Secretary, and a Treasurer, and such Assistant Secretaries, Assistant Treasurers
or other Officers as may be appointed by the Manager. Any two or more offices
may be held by the same Person. All Officers and agents of the Company shall
have such express authority and perform such duties in the management of the
property and affairs of the Company as may be provided herein, or as may be
determined by resolution of the Manager not inconsistent with this Agreement,
and such implied authority as is recognized by the common law from time to time.
4.3. Appointment and Term of Office. The initial Officers of the Company
are designated in Section 4.11, and otherwise the Officers of the Company shall
be appointed by the Manager by written action taken and/or meetings held for
such purpose. The Manager may create and fill new offices from time to time. An
Officer shall hold office until his or her successor shall have been duly
appointed and shall have qualified, until his or her death or until he or she
shall resign or shall have been removed in the manner hereinafter provided.
Election or appointment of an Officer or agent shall not of itself create
contract rights.
4.4. Removal. Any Officer or agent may be removed by the Manager whenever
in its judgment the best interests of the Company would be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the
Person so removed.
4.5. Vacancies. A vacancy in any office because of death, resignation,
removal, disqualification, or otherwise, or because of the creation of an
office, may be filled by the Manager for the unexpired portion of the term.
4.6. The President. The President shall be the principal executive Officer
of the Company and, subject to the control of the Manager, shall in general
supervise and control all of the business and affairs of the Company. He or she
may sign, with the Secretary or any other Officer of the Company thereunto
authorized by the Manager, contracts or other instruments which the Manager has
authorized to be executed on behalf of the Company, except in cases where the
signing and execution thereof shall be expressly delegated by the Manager or by
this Agreement to some other Officer or agent of the Company or to the President
alone, or shall be required by law to be otherwise signed or executed; and in
general shall perform all duties incident to the office of President and such
other duties as may be prescribed by the Manager from time to time.
-7-
<PAGE> 9
OPERATING AGREEMENT
4.7. The Vice-Presidents. In the absence of the President or in the event
of his or her inability or refusal to act, the Vice-President (or in the event
there be more than one Vice-President, the Vice-Presidents in the order
designated, or in the absence of any designation, then in the order of their
election) shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. Any Vice-President may perform such other duties as from time to time
may be assigned to him or her by the President or by the Manager.
4.8. The Secretary. The Secretary shall: (a) keep, or supervise and be
responsible for the keeping of, the minutes and records of all meetings and
official actions of the Members and of the Manager, and any committees of the
Manager in one or more books provided for that purpose; (b) see that all notices
of such meetings are duly given or waivers of notice obtained in accordance with
the provisions of this Agreement or as required by law; (c) be custodian of the
Company records; (d) keep a register of the post office address of each Member
which shall be furnished to the Secretary by such Member; (e) have the authority
to certify this Agreement, resolutions of the Manager and committees thereof,
and other documents of the Company as true and correct copies thereof; and (f)
in general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him or her by the President or by
the Manager.
4.9. Assistant Secretaries. The Assistant Secretaries, in general, shall
perform such duties and exercise such authority as shall be assigned or granted
to them by the President or by the Manager.
4.10. Compensation. Except as otherwise provided in any written employment
agreement duly executed on behalf of the Company and except as otherwise set
forth below, the compensation (including salaries and benefits) of the Officers
shall be fixed from time to time by resolution of the Manager and no Officer
shall be prevented from receiving such compensation by reason of the fact that
he or she is also the Manager of the Company.
4.11. Identity of Officers. The initial Officers of the Company shall be
as follows:
a. Myron C. Warshauer shall be the President.
b. Michael K. Wolf shall be a Senior Vice President and the Secretary.
c. Allan Lombardo shall be the Executive Vice President.
d. Steven A. Warshauer shall be a Senior Vice President.
e. Michael E. Swartz shall be a Senior Vice President.
f. James A. Wilhelm shall be a Senior Vice President.
-8-
<PAGE> 10
OPERATING AGREEMENT
5. ACCOUNTING AND TAXES
5.1. Books and Records.
a. At all times during the term hereof, the Manager shall use its best
efforts to cause accurate books and records of account to be
maintained in which are to be entered all mailers relating to the
business and operations of the Company, including all income,
expenditures, assets and liabilities thereof.
b. Each Member is entitled to any information reasonably necessary for
the Member for the preparation of such Member's federal or state tax
returns.
5.2. Rights of Inspection. Each Member and/or its authorized
representatives shall have the right to inspect, examine and copy (at such
Member's expense) the books, records, files, securities and other documents of
the Company during the regular business hours of the Company upon giving
reasonable notice and stating reasonable cause therefore.
5.3. Fiscal Year. The fiscal year of the Company shall end on December 31
of each year.
5.4. Accounts. The Manager may deposit Company funds in such bank or
investment accounts as they select in its sole discretion. The Manager shall be
an authorized signatory on such accounts.
5.5. Other Accounting Decisions. All accounting decisions for the Company
(other than those specifically provided for in any other Section of this
Agreement) shall be made by the Manager.
5.6. Preparation of Tax Returns. Upon being provided by the Members with
all information required for their preparation, the Manager or its agents shall,
on behalf of the Company, use its best efforts to cause all federal, state and
local income tax returns of the Company to be prepared. The Manager will use its
best efforts to cause copies of all tax returns of the Company to be made
available for review by the Members at least twenty days prior to the statutory
date for filing, including extensions thereof, if any.
5.7. Allocations to Members.
a. Subject to Sections 5.7.b and 5.7.c, all items of income, gain,
profits, losses, credits and deductions of the Company shall be
allocated to the Members in proportion to the Members' Percentage
Interests.
b. Solely for federal, state, and local income tax purposes and not for
book or Capital Account purposes, except to the extent required by
Treasury Regulations, depreciation, amortization, gain, or loss with
respect to property that is properly
-9-
<PAGE> 11
OPERATING AGREEMENT
reflected on the Company's books at a value that differs from its
adjusted basis for federal income tax purposes shall be allocated in
accordance with the principles and requirements of Section 704(c) of
the Code and the Treasury Regulations promulgated thereunder, and in
accordance with the requirements of the relevant provisions of the
Treasury Regulations issued under Code Section 704(b). For Capital
Account purposes, depreciation, amortization, gain, or loss with
respect to property that is properly reflected on the Company's
books at a value that differs from its adjusted basis for tax
purposes shall be determined in accordance with the rules of
Treasury Regulation Section 1.704-1 (b)(2)(iv)(g).
c. To the extent required to give the foregoing allocations effect for
federal income tax purposes, the requirements of Treasury
Regulations Sections 1.704(b)(2)(ii)(d) and 1.704-2 are incorporated
herein by reference, and this Agreement shall be construed as having
any provisions necessary to satisfy such requirements.
d. Allocations with Respect to Transferred Membership Interests.
In the event of a Transfer (as defined in Section 6, below) of a
Member's Membership Interest or any portion thereof, the Member's items of
profits and losses shall be allocated between the Transferor (as defined herein)
and the Transferee (as defined herein) in the ratio of the number of days in the
fiscal year of the Company before and after the effective date of the Transfer.
5.8. Tax Decisions Not Specified. Tax decisions and elections for the
Company not provided for herein shall be made in the discretion of the Manager.
5.9. Tax Matters Member. The Manager named first in the Articles will be
the tax matters partner (the "Tax Matters Partner") for purposes of Sections
6221-6231 of the Code and the Treasury Regulations. The Tax Matters Partner
agrees to use its best efforts to comply in good faith with all provisions of
the Code concerning a tax matters partner and to take all actions necessary to
make each Member a notice partner under the Code. The Tax Matters Partner will
use its best efforts to give each Member copies of all notices or other material
communications delivered to or by it with respect to federal, state or local tax
matters, negotiations, decisions, settlements or other events. The Tax Matters
Partner may choose the forum in which to pursue any litigation without the
consent of the Members.
6. SALE OR TRANSFER
6.1. General. Except as provided in Section 6.4.c, below, no Member shall
(i) sell, assign, transfer, convey, give, mortgage, pledge, charge or otherwise
encumber (collectively, "Transfer"), all or any part of its Membership Interest,
or (ii) contract to Transfer all or any part of its Membership Interest, or
(iii) suffer or permit the Transfer of all or any part of its Membership
Interest whether voluntarily or by operation of law, without in each instance
-10-
<PAGE> 12
OPERATING AGREEMENT
obtaining the prior written consent of the Manager, which consent may be
withheld in the sole discretion of the Manager. Any attempt to Transfer a
Membership Interest without the required consent shall be void. The giving of
consent in connection with one or more Transfers shall not limit or waive the
need for such consent in connection with any other Transfers.
6.2. Securities Law Limitations. Notwithstanding anything in this
Agreement, no Membership Interests may be Transferred except as permitted under
the Securities Act of 1933, as amended, and applicable state securities laws or
exemption therefrom.
6.3. Agreement with Transferees. In the event that, pursuant to the
provisions of this Section 6 and with any required prior written consent of the
Manager, any Member (a "Transferor") shall Transfer its Membership Interest to
any person or entity (a "Transferee"), no such Transfer shall be made or shall
be effective to make such Transferee a Member or entitle such Transferee to any
benefits or rights hereunder until the proposed Transferee agrees in writing to
(i) assume and be bound by all of the terms and provisions of this Agreement and
all of the obligations of the Transferor, and (ii) be subject to all the
restrictions to which the Transferor is subject under the terms of this
Agreement and any further agreements with respect to the Facility or as
contemplated by this Agreement to which the Transferor is then subject or is
then required to be a party.
6.4. Transfer by Reason of Death and Other Events.
a. If, as a result of a Member's death, divorce, bankruptcy, or, in the
case of a non-natural person, dissolution, termination, liquidation
or distribution, a Membership Interest or a portion thereof is
Transferred, without consideration to the estate of the Transferor,
to or in trust substantially for the benefit of lineal descendants
of the Transferor or to the Transferor's grantor or controlling
owner, the Transferee shall not become a Member as a result of such
Transfer without the consent of the Manager, except as provided in
Section 6.4.c, below.
b. If the Company does not dissolve as a result of a Transfer by reason
of an election of the remaining Members to continue the Company (or
because the Transfer is not a cause of dissolution described in
Section 7.1) but the Manager does not consent to the Transferee
becoming a Member, the Transferee of a Transfer described in Section
6.4.a shall have the right to receive a payment of cash, by means of
a promissory not of the Company and/or the distribution of an
undivided interest in the property of the Company the sum of the
values of which shall not exceed the Transferor's rights in
liquidation of the Transferor's Membership Interest under Section
7.3 determined as of the date of the Transfer.
c. Sections 6.4.a, and 6.4.b notwithstanding, if the Transferee to whom
the Withdrawing Transferor's Membership Interest is being
Transferred pursuant to
-11-
<PAGE> 13
OPERATING AGREEMENT
an event described in Section 6.4.a is already a Member, consent of
the Manager shall not be required for the Transfer to be effective.
7. DISSOLUTION
7.1. Causes of Dissolution.
The Company shall be dissolved only in the event:
a. Of the death, removal, liquidation, dissolution, withdrawal or
bankruptcy of any Member;
b. That all or substantially all of the Company's non-cash property is
sold or otherwise transferred to any person which is not controlled
by the Company;
c. That the Members mutually agree to terminate the Company;
d. That the Company by its terms, as set forth in this Agreement, is
terminated;
e. That there is a general assignment of the assets of the Company for
the benefit of its creditors, or the adjudication of the Company as
bankrupt; or
f. That the Company is dissolved by operation of law.
7.2. Procedure in Dissolution and Liquidation.
a. Upon dissolution of the Company pursuant to Section 7.1, unless the
Company is reconstituted under Section 9.2, the Manager shall
proceed with reasonable promptness to wind up the affairs of and
liquidate the business of the Company.
b. During the period of the winding up of the affairs of the Company,
the rights and obligations of the Manager set forth herein with
respect to the management of the Company shall continue.
c. The assets of the Company shall be applied or distributed in
liquidation in the following order of priority:
(1) In payment of debts and obligations of the Company;
(2) To the Members in payment of their respective outstanding
Capital Accounts; and
(3) Any excess to the Members in proportion to their Percentage
Interests.
-12-
<PAGE> 14
OPERATING AGREEMENT
7.3. Liquidation of a Membership Interest. A distribution in respect of
the liquidation of a Member's Membership Interest shall be in the same amount as
would have been distributed to such Member had the Company liquidated at the
time of the liquidation of the Membership Interest. Payment of such liquidation
amount shall be made in cash, a promissory note of the Company and/or an
undivided interest in the property of the Company, in the Manager's sole
discretion.
8. MEMBERS
8.1. Limitation on Members' Liabilities. A Member, including the Manager,
shall not be bound by, or be personally liable for, the expenses, liabilities or
obligations of the Company or the Manager, and the liability of each Member
shall be limited solely to the amount of such Member's contribution to the
capital of the Company required under the provisions of Section 2 hereof, except
as required by the laws of the State,
8.2. No Control of Business or Right to Act for Company. Other than the
Manager, a Member shall take no part in the management, conduct or control of
the business of the Company and shall have no right or authority to act for or
to bind the Company.
9. WITHDRAWAL OR DEATH OF THE MANAGER
9.1. Withdrawal by the Manager. The Manager may upon thirty (30) days
notice to the Members withdraw as manager of the Company.
9.2. Reconstitution of Company After Withdrawal or Death of the Manager.
Upon the withdrawal, liquidation, dissolution or bankruptcy of the Manager or
other event causing a dissolution under Section 7.1. a, the remaining Members
(not including for such purposes the estate of a deceased Manager or any
Transferee who has not satisfied the requirements of Section 6 to become a
Member) shall have the right to elect to continue the business of the Company,
in a reconstituted form if necessary, if, within 90 days after the withdrawal of
the Manager, all Members agree in writing to continue the business of the
Company and to the appointment of one or more additional managers, if necessary.
The exercise of the rights of reconstitution granted in this Section 9 shall not
in any way constitute any Member a manager or impose any personal liability on
any Member. Immediately upon the agreement of all Members to continue the
business, the Members, and/or any successor Manager shall prepare, execute, and
file for recordation of new Articles of Organization, or an amendment thereto,
if required, and shall take or cause to be taken all steps required in
connection with the continuation of the business in accordance with the
applicable laws of the State.
9.3. Accounting. If the withdrawal or other terminating event of the
Manager does not result in the dissolution and winding up of the Company's
business because such business is being continued in a reconstituted form as
provided above, the Members, and/or the successor Manager shall promptly have an
accounting prepared by the auditors of the Company covering
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<PAGE> 15
OPERATING AGREEMENT
the transactions of the Company from the end of the immediately preceding fiscal
year through the date of such withdrawal, death or other terminating event.
10. GENERAL PROVISIONS
10.1. Entire Agreement. This Agreement constitutes the entire agreement
among the Members and supersedes all agreements, representations, warranties,
statements, promises and understandings, whether oral or written, with respect
to the subject matter hereof. None of the Members shall be bound by nor charged
with any oral or written agreements, representations, warranties, statements,
promises or understandings not specifically set forth in this Agreement or the
exhibits and schedules hereto.
10.2. Notices.
a. Any and all notices, requests, demands, elections and other
communications (collectively "Communications" and each separately a
"Communication") given in connection with this Agreement shall be
effective and deemed adequately delivered (a "Deemed Delivery") only
if delivered in writing to the Member for whom such Communications
are intended (the "Recipient") and such Deemed Delivery shall be
deemed to occur on the earlier of (a) the date it shall be delivered
to the address of the Recipient on the records of the Company (the
"Recipient's Address"), (b) the date delivery shall have been
refused at the Recipient's Address, (c) with respect to a notice
sent by mail, the date as of which the postal service shall have
indicated such notice to be undeliverable at the Recipient's Address
or (d) with respect to a notice sent by facsimile to the facsimile
number required by this Agreement and in respect of which a
facsimile receipt confirmation statement is printed, (i) the next
business day after receipt, if the notice is sent at or after five
(5) p.m. in the time zone of the Recipient, or (ii) the day of
receipt if the notice is sent before five (5) p.m. in the time zone
of the Recipient. The addresses and facsimile numbers required by
this Agreement, unless changed pursuant to Section 10.2.b, are:
(1) To the Company or the Manager:
55 East Monroe
Suite 3440
Chicago, Illinois 60603
Facsimile: (312) 621-3354
Attn: Myron C. Warshauer
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<PAGE> 16
OPERATING AGREEMENT
with a copy in each case to:
Sachnoff & Weaver, Ltd.
30 South Wacker Drive
29th Floor
Chicago, Illinois 60606
Facsimile: (312) 207-6400
Attn: Stewart Dolin
(2) To the remaining Members, at the addresses or facsimile
numbers listed on Schedule A.
b. By giving to the Company at least ten (10) days' written notice
thereof, the Members and their respective Transferees shall have the
right from time to time and at any time during the term of this
Agreement to change their respective addressee, address and/or
facsimile number for notices, and each shall have the right to
specify as its address and/or facsimile number for notices any other
address and/or facsimile number within the United States of America.
10.3. Validity. In the event that any provision of this Agreement shall be
held to be invalid or unenforceable, the same shall not affect in any respect
whatsoever the validity or enforceability of the remainder of this Agreement.
10.4. Attorneys' Fees. Should any litigation be commenced by the Company
against any Member or between by any Member or Members against the Company or
the Manager concerning any provision of this Agreement or the rights and duties
of any person or entity in relation thereto, the party or parties prevailing in
such litigation shall be entitled, in addition to such other relief as may be
granted, to a reasonable sum as and for its or their attorneys' fees and court
costs in such litigation which shall be determined by the court in such
litigation or in a separate action brought for that purpose.
10.5. Survival of Rights. Except as provided herein to the contrary, this
Agreement shall be binding upon and inure to the benefit of the Members
signatory hereto, and their respective permitted successors and assigns.
10.6. Governing Law. This Agreement has been entered into in the State and
all questions with respect to this Agreement and the rights and liabilities of
the parties hereto shall be governed by the internal laws of the State.
10.7. Submission to Jurisdiction. etc. The Members hereby irrevocably
submit to the jurisdiction of any state or federal court sitting in the State of
Illinois in connection with any action or proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby and waive irrevocably
any objection to venue or objections in the nature of forum non
-15-
<PAGE> 17
OPERATING AGREEMENT
conveniens that they may have. The venue for any action to enforce or construe
this Agreement shall be Cook County, Illinois.
10.8. No Partition. No Member shall have the right to, and each Member
hereby covenants that it will not, withdraw from the Company, bring any action
to partition any Company property nor dissolve, terminate or liquidate, or
petition a court for the dissolution, termination, or liquidation of the
Company, except as provided in this Agreement, and no Member at any time shall
have the right to petition or to take any action to subject any Company assets
or any part thereof to the authority of any court of bankruptcy, insolvency,
receivership or similar proceeding, unless there is unanimous consent of the
Members.
10.9. Waiver. No consent or waiver, express or implied, by a Member to or
of any breach or default by another Member in the performance by such other
Member of its obligations hereunder shall be deemed or construed to be a consent
or waiver to or of any other breach or default in the performance by such other
Member of the same or any other obligations of such other Member hereunder.
10.10. Remedies Not Exclusive. The rights and remedies of the Members and
the Company hereunder shall not be mutually exclusive, i.e., the exercise of one
or more of the provisions hereof shall not preclude the exercise of any other
provisions hereof. Each of the Members confirms that damages at law will be an
inadequate remedy for a breach or threatened breach of this Agreement and agrees
that, in the event of a breach or threatened breach of any provision hereof, the
respective rights and obligations hereunder shall be enforceable by specific
performance, injunction or other equitable remedy, but nothing herein contained
is intended to, nor shall it, limit or affect any rights at law or by statute or
otherwise of any Member aggrieved as against the other for a breach or
threatened breach of any provision hereof, it being the intention of this
Section to make clear the agreement of the Members that the respective rights
and obligations of the Members hereunder shall be enforceable in equity as at
law or otherwise.
10.11. Construction. All personal pronouns used in this Agreement, whether
used in the masculine, feminine or neuter gender, shall include all other
genders; and the singular shall include the plural and vice versa. Titles of
Sections and Subsections are for convenience only, and neither limit nor amplify
the provisions of this Agreement itself. References to Sections or Subsections
shall refer to Sections or Subsections of this Agreement, unless otherwise
indicated. The use herein of the word "including," when following any general
statement, term or matter, shall not be construed to limit such statement, term
or matter to the specific items or matters set forth immediately following such
word or to similar items or matters, whether or not non-limiting language (such
as "without limitation," or "but not limited to," or words of similar import) is
used with reference thereto, but rather shall be deemed to refer to all other
items or matters that could reasonably fall within the broadest possible scope
of such general statement, term or matter. For the purposes of this Agreement,
"and/or" means one or the other or both, or anyone or more or all, of the things
or persons in connection with which the conjunction is used.
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<PAGE> 18
OPERATING AGREEMENT
10.12. Incorporation by Reference. Any exhibits or schedules referred to
herein are those attached to this Agreement and shall be deemed to be
incorporated as a part of this Agreement.
10.13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
shall constitute one and the same agreement.
10.14. Further Assurances. Each party hereto agrees to do all acts and
things, and to make, execute and deliver such written instruments, as shall from
time to time be reasonably required to carry out the terms and provisions of
this Agreement.
10.15. No Third Party Rights. This Agreement shall not (directly,
indirectly, contingently or otherwise) confer or be construed as conferring any
rights or benefits on any person or entity that is not a named Member or a
permitted Transferee of a Member hereunder.
IN WITNESS WHEREOF, this Agreement is executed as of the date first
stated above.
Standard Parking Corporation, Standard Parking, L.P., Member
Member and Manager
By: Standard Parking Corporation, its
General Partner
By: /s/ Myron C. Warshauer By: /s/ Myron C. Warshauer
---------------------------- ----------------------------
Its: President Its: President
---------------------------- ----------------------------
-17-
<PAGE> 19
OPERATING AGREEMENT
SCHEDULE A
MEMBERS
THIS SCHEDULE MAY BE AMENDED FROM TIME TO TIME WITHOUT THE CONSENT OF THE
MEMBERS TO REFLECT THE ADDITION OF NEW MEMBERS, THE ISSUANCE OF NEW
INTERESTS, THE SALE OR EXCHANGE OF INTERESTS, OR OTHER SHIFTS OF
MEMBERSHIP INTERESTS PURSUANT TO THE AGREEMENT OR A CHANGE OF ADDRESS OR
FACSIMILE NUMBER OF A MEMBER FOR WHICH NOTICE WAS GIVEN TO THE COMPANY
PURSUANT TO THIS AGREEMENT.
<TABLE>
<CAPTION>
Facsimile Initial Percentage
Name and Address Number Capital Contribution Interest
- ---------------- ------ -------------------- --------
<S> <C> <C> <C>
Standard Parking (312) 621-3354 $ 200.00 1%
Corporation
55 East Monroe
Suite 3440
Chicago, Illinois 60603
Standard Parking, L.P (312) 621-3354 $19,800.00 99%
55 East Monroe
Suite 3440
Chicago, Illinois 60603
</TABLE>
-18-
<PAGE> 1
EXECUTION COPY
================================================================================
APCOA, Inc.
----------------------------------------
$140,000,000
9 1/4% SENIOR SUBORDINATED NOTES DUE 2008
----------------------------------------
------------------------------
INDENTURE
DATED AS OF MARCH 30, 1998
------------------------------
State Street Bank and Trust Company
Trustee
================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section
310 (a)(1) 7.10
(a)(2) 7.10
(a)(3) NA.
(a)(4)N.A.
(a)(5) 7.10
(b) 7.03; 7.10
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312 (a) 2.05
(b)13.03
(c) 13.03
313(a) 7.06
(b)(1) 7.06
(b)(2) 7.06; 7.07
(c) 7.06;13.02
(d)7.06
314(a) 4.03;13.05
(b) N.A.
(c)(1) 13.04
(c)(2) 13.04
(c)(3) N.A.
(d)N.A.
(e) 13.05
(f)N.A.
315 (a)7.0l
(b)7.05,13.02
(c) 7.01
(d)7.01
(e)6.1 1
316 (a)(last sentence) 2.09
(a)( 1 )(A)6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
(c) 2.13
317 (a)(1) 6.08
(a)(2)6.09
<PAGE> 3
(b) 2.04
318(a) 13.01
(b) N.A.
(c)13.01
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
<PAGE> 4
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.....................1
Section 1.1 Definitions..............................................1
Section 1.2. Other Definitions.......................................18
Section 1.3 Incorporation by Reference of Trust Indenture Act.......18
Section 1.4 Rules of Construction...................................19
ARTICLE 2. THE NOTES.....................................................19
Section 2.1 Form and Dating.........................................19
Section 2.2 Execution and Authentication............................21
Section 2.3 Registrar and Paying Agent..............................22
Section 2.4 Paying Agent to Hold Money in Trust.....................22
Section 2.5 Holder Lists............................................23
Section 2.6 Transfer and Exchange...................................23
Section 2.7 Replacement Notes.......................................31
Section 2.8 Outstanding Notes.......................................32
Section 2.9 Treasury Notes..........................................32
Section 2.10 Temporary Notes.........................................32
Section 2.11 Cancellation............................................33
Section 2.12 Defaulted Interest......................................33
Section 2.13 Record Date.............................................33
Section 2.14 Computation of Interest.................................33
Section 2.15 CUSIP Number............................................34
ARTICLE 3. REDEMPTION AND PREPAYMENT.....................................34
Section 3.1 Notices to Trustee......................................34
Section 3.2 Selection of Notes to be Redeemed or Purchased..........34
Section 3.3 Notice of Redemption....................................35
Section 3.4 Effect of Notice of Redemption..........................36
Section 3.5 Deposit of Redemption or Purchase Price.................36
Section 3.6 Notes Redeemed in Part..................................36
Section 3.7 Optional Redemption.....................................36
Section 3.8 Mandatory Redemption....................................36
Section 3.9 Repurchase Offers.......................................37
ARTICLE 4. COVENANTS.....................................................39
Section 4.1 Payment of Notes........................................39
Section 4.2 Maintenance of Office or Agency.........................39
Section 4.3 Commission Reports......................................40
Section 4.4 Compliance Certificate..................................40
Section 4.5 Taxes...................................................41
Section 4.6 Stay, Extension and Usury Laws..........................41
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Section 4.7 Restricted Payments.....................................42
Section 4.8 Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries.................................44
Section 4.9 Incurrence of Indebtedness and Issuance of
Preferred Stock.........................................45
Section 4.10 Assets Sales............................................48
Section 4.11 Transactions with Affiliates............................48
Section 4.12 Liens...................................................50
Section 4.13 Sale and Leaseback Transactions.........................50
Section 4.14 Offer to Purchase Upon Change of Control................50
Section 4.15 Corporate Existence.....................................51
Section 4.16 Limitation on Issuances of Capital Stock of Wholly
Owned Restricted Subsidiaries...........................51
Section 4.17 Limitations on Issuances of Guarantees of
Indebtedness............................................52
Section 4.18 Business Activities.....................................52
Section 4.19 Additional Guarantees...................................52
Section 4.20 Payment for Consents....................................53
Section 4.21 Anti-Layering...........................................53
ARTICLE 5. SUCCESSORS....................................................53
Section 5.1 Merger, Consolidation of Sale of Assets.................53
Section 5.2 Successor Corporation Substituted.......................54
ARTICLE 6. DEFAULTS AND REMEDIES.........................................54
Section 6.1 Events of Default.......................................54
Section 6.2 Acceleration............................................56
Section 6.3 Other Remedies..........................................57
Section 6.4 Waiver of Past Defaults.................................57
Section 6.5 Control by Majority.....................................57
Section 6.6 Limitation on Suits.....................................58
Section 6.7 Rights of Holders of Notes to Receive Payment...........58
Section 6.8 Collection Suit by Trustee..............................58
Section 6.9 Trustee May File Proofs of Claim........................58
Section 6.10 Priorities..............................................59
Section 6.11 Undertaking for Costs...................................59
ARTICLE 7. TRUSTEE.......................................................60
Section 7.1 Duties of Trustee.......................................60
Section 7.2 Rights of Trustee.......................................61
Section 7.3 Individual Rights of Trustee............................62
Section 7.4 Trustee's Disclaimer....................................62
Section 7.5 Notice of Defaults......................................62
Section 7.6 Reports by Trustee to Holders of the Notes..............62
Section 7.7 Compensation And Indemnity..............................63
Section 7.8 Replacement of Trustee..................................64
Section 7.9 Successor Trustee by Merger, etc........................65
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Section 7.10 Eligibility; Disqualification...........................65
Section 7.11 Preferential Collection of Claims Against The
Company.................................................65
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE......................65
Section 8.1 Option to Effect Legal Defeasance or Covenant
Defeasance..............................................65
Section 8.2 Legal Defeasance and Discharge..........................65
Section 8.3 Covenant Defeasance.....................................66
Section 8.4 Conditions to Legal or Covenant Defeasance..............66
Section 8.5 Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions...........68
Section 8.6 Repayment to The Company................................68
Section 8.7 Reinstatement...........................................69
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER..............................69
Section 9.1 Without Consent of Holders of the Notes.................69
Section 9.2 With Consent of Holders of Notes........................70
Section 9.3 Compliance with Trust Indenture Act.....................71
Section 9.4 Revocation and Effect of Consents.......................71
Section 9.5 Notation on or Exchange of Notes........................72
Section 9.6 Trustee to Sign Amendments, etc.........................72
ARTICLE 10. SUBORDINATION.................................................72
Section 10.1 Agreement to Subordinate................................72
Section 10.2 Liquidation; Dissolution; Bankruptcy....................72
Section 10.3 Default on Designated Senior Debt.......................73
Section 10.4 Acceleration of Notes...................................74
Section 10.5 When Distribution Must Be Paid Over.....................74
Section 10.6 Notice by the Company...................................74
Section 10.7 Subrogation.............................................74
Section 10.8 Relative Rights.........................................75
Section 10.9 Subordination May Not Be Impaired by the Company........75
Section 10.10 Distribution or Notice to Representative................76
Section 10.11 Rights of Trustee and Paying Agent......................76
Section 10.12 Authorization to Effect Subordination...................77
Section 10.13 Amendments..............................................77
ARTICLE 11. GUARANTEE OF NOTES............................................77
Section 11.1 Note Guarantee..........................................77
Section 11.2 Execution and Delivery of Note Guarantee................78
Section 11.3 Subsidiary Guarantors May Consolidate, etc., on
Certain Terms...........................................79
Section 11.4 Releases Following Sale of Assets, Merger, Sale of
Capital Stock Etc.......................................80
Section 11.5 Additional Subsidiary Guarantors........................80
Section 11.6 Limitation on Subsidiary Guarantor Liability............80
Section 11.7 "Trustee" to Include Paying Agent.......................81
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ARTICLE 12. SUBORDINATION OF NOTE GUARANTEE...............................81
Section 12.1 Agreement to Subordinate................................81
Section 12.2 Liquidation; Dissolution; Bankruptcy....................81
Section 12.3 Default on Designated Guarantor Senior Debt.............82
Section 12.4 Acceleration of Note Guarantees.........................82
Section 12.5 When Distribution Must Be Paid Over.....................83
Section 12.6 Notice by Subsidiary Guarantor..........................83
Section 12.7 Subrogation.............................................83
Section 12.8 Relative Rights.........................................84
Section 12.9 Subordination May Not Be Impaired by Subsidiary
Guarantor...............................................84
Section 12.10 Distribution or Notice to Representative................85
Section 12.11 Rights of Trustee and Paying Agent......................85
Section 12.12 Authorization to Effect Subordination...................86
Section 12.13 Amendments..............................................86
ARTICLE 13. MISCELLANEOUS.................................................86
Section 13.1 Trust Indenture Act Controls............................86
Section 13.2 Notices.................................................86
Section 13.3 Communication by Holders of Notes with Other
Holders of Notes........................................87
Section 13.4 Certificate and Opinion as to Conditions Precedent......88
Section 13.5 Statements Required in Certificate or Opinion...........88
Section 13.6 Rules by Trustee and Agents.............................88
Section 13.7 No Personal Liability of Directors, Officers,
Employees and Stockholders..............................88
Section 13.8 Governing Law...........................................89
Section 13.9 No Adverse Interpretation of Other Agreements...........89
Section 13.10 Successors..............................................89
Section 13.11 Severability............................................89
Section 13.12 Counterpart Originals...................................89
Section 13.13 Table of Contents, Headings, etc........................89
EXHIBITS
Exhibit A FORM OF NOTE....................................................
Exhibit B FORM OF CERTIFICATE OF TRANSFEROR...............................
Exhibit C FORM OF CERTIFICATE FROM ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR...............................
Exhibit D FORM OF NOTE GUARANTEE..........................................
Exhibit E FORM OF SUPPLEMENTAL INDENTURE..................................
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<PAGE> 8
Indenture, dated as of March 30, 1998, among APCOA, Inc., a Delaware
corporation (the "Company"), Tower Parking, Inc., a Ohio corporation, Graelic,
Inc. a Ohio corporation, APCOA Capital Corporation, a Delaware corporation, A-1
Auto Park, Inc., a Georgia corporation, Metropolitan Parking System, Inc., a
Massachusetts corporation, Events Parking Company, Inc., a Massachusetts
corporation, Standard Parking, L.P., a Delaware limited partnership, Standard
Parking Corporation, an Illinois corporation, Standard Parking Corporation, MW,
an Illinois corporation, Standard Auto Park, Inc., an Illinois corporation,
Standard/Wabash Parking Corporation, an Illinois corporation, Standard Parking
of Canada, L.P., an Illinois limited partnership, Standard Parking I, L.L.C., a
Delaware limited Liability corporation and Standard Parking II, L.L.C., a
Delaware limited Liability corporation (each of the above, with the exception of
the Company, a "Subsidiary Guarantor" and together, the "Subsidiary Guarantors")
and State Street Bank and Trust Company, as trustee (the "Trustee").
The Company, the Subsidiary Guarantors and the Trustee agree as
follows for the benefit of each other and for the equal and ratable benefit of
the holders of the Company's 9 1/4% Senior Subordinated Notes due 2008 (the
"Senior Subordinated Notes") and the new 9 1/4% Senior Subordinated Notes due
2008 (the "New Senior Subordinated Notes" and, together with the Senior
Subordinated Notes, the "Notes"):
<PAGE> 9
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1. Definitions.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or
exchange of beneficial interests in a Global Note, the rules and procedures of
the Depositary that apply to such transfer and exchange.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by way of a
sale and leaseback) other than sales of inventory in the ordinary course of
business consistent with past practices provided that the sale, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole will be governed by the
provisions of the Indenture described above under the caption "--Change of
Control" and/or the provisions described above under the caption "--Merger,
Consolidation or Sale of Assets" and not by the provisions of the Asset Sale
covenant), and (ii) the issue or sale by the Company or any of its Restricted
Subsidiaries of Equity Interests of any of the Company's Restricted
Subsidiaries, in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (a) that have a fair market
value in excess of $3.0 million or (b) for net proceeds in excess of $3.0
million. Notwithstanding the foregoing: (i) a transfer of assets by the Company
to a Wholly Owned Restricted Subsidiary or by a Wholly Owned Restricted
Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary, (ii)
an issuance of Equity Interests by a Wholly Owned Restricted Subsidiary to the
Company or to another Wholly Owned Restricted
<PAGE> 10
Subsidiary, and (iii) a Restricted Payment that is permitted by the covenant
described above under the caption "--Restricted Payments" will not be deemed to
be Asset Sales.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or
any authorized committee of such board of directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) certificates of deposit
and eurodollar time deposits with maturities of six months or less from the date
of acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any lender party to the New
Credit Facility or with any domestic commercial bank having capital and surplus
in excess of $500 million and a Thompson Bank Watch Rating of "B" or better,
(iv) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (ii) and (iii) above
entered into with any financial institution meeting the qualifications specified
in clause (iii) above, and (v) commercial paper having the highest rating
obtainable from Moody's Investors Service, Inc. or Standard & Poor's Corporation
and in each case maturing within six months after the date of acquisition.
"Cedel" means Cedel Bank, societe anonyme.
2
<PAGE> 11
"Change of Control" means the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition (other than by
way of merger or consolidation), in one or a series of related transactions, of
all or substantially all of the assets of Holdings and its Subsidiaries or of
the Company and its Subsidiaries, in each case, taken as a whole to any "person"
(as such term is used in Section 13(d)(3) of the Exchange Act) other than the
Principals or their Related Parties (as defined below), (ii) the adoption of a
plan relating to the liquidation or dissolution of Holdings or the Company,
(iii) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as defined
above), other than the Principals and their Related Parties, becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire, whether
such right is currently exercisable or is exercisable only upon the occurrence
of a subsequent condition), directly or indirectly, of more than 50% of the
Voting Stock of Holdings or the Company (measured by voting power rather than
number of shares), (iv) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors or (v) Holdings
or the Company consolidates with, or merges with or into, any Person or sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates with,
or merges with or into, Holdings or the Company, in any such event pursuant to a
transaction in which any of the outstanding Voting Stock of Holdings or the
Company is converted into or exchanged for cash, securities or other property,
other than any such transaction where the Voting Stock of Holdings or the
Company outstanding immediately prior to such transaction is converted into or
exchanged for Voting Stock (other than Disqualified Stock) of the surviving or
transferee Person constituting a majority of the outstanding shares of such
Voting Stock of such surviving or transferee Person (immediately after giving
effect to such issuance).
"Commission" means the Securities and Exchange Commission.
"Company" means APCOA, Inc., a Delaware corporation.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Subsidiaries for such period, to the extent that
such provision for taxes was included in computing such Consolidated Net Income,
plus (iii) consolidated interest expense of such Person and its Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income, plus (iv) depreciation, amortization
(including amortization of goodwill and other intangibles but excluding
3
<PAGE> 12
amortization of prepaid cash expenses that were paid in a prior period) and
other non-cash expenses (excluding any such non-cash expense to the extent that
it represents an accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of such
Person and its Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income, plus (v) one-time charges related to the
Combination, to the extent that such charges were deducted in computing
Consolidated Net Income, plus (vi) in connection with any acquisition by the
Company or a Restricted Subsidiary, projected quantifiable improvements in
operating results (on an annualized basis) due to cost reductions calculated in
good faith by the Company or one of its Restricted Subsidiaries, as evidenced by
(A) in the case of cost reductions of less than $10.0 million, an Officers'
Certificate delivered to the Trustee and (B) in the case of cost reductions of
$10.0 million or more, a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee, minus (vii) non-cash items
increasing such Consolidated Net Income for such period. Notwithstanding the
foregoing, the provision for taxes on the income or profits of, and the
depreciation and amortization and other non-cash charges of, a Subsidiary of the
referent Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent that a corresponding amount would be
permitted at the date of determination to be dividend to the Company by such
Subsidiary without prior governmental approval (that has not been obtained), and
without direct or indirect restriction pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) of any Person that is
not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Subsidiary or its stockholders,
(iii) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded, (iv) the cumulative effect of a change in accounting principles shall
be excluded and (v) the Net Income of any Unrestricted Subsidiary shall be
excluded, whether or not distributed to the Company or one of its Restricted
Subsidiaries for purposes of the covenant described under the covenant
"Incurrence of Indebtedness and Issuance of Preferred Stock."
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than
4
<PAGE> 13
Disqualified Stock) that by its terms is not entitled to the payment of
dividends unless such dividends may be declared and paid only out of net
earnings in respect of the year of such declaration and payment, but only to the
extent of any cash received by such Person upon issuance of such preferred
stock, less (x) all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of tangible assets of a going concern
business made within 12 months after the acquisition of such business)
subsequent to the date of the Indenture in the book value of any asset owned by
such Person or a consolidated Subsidiary of such Person, (y) all investments as
of such date in unconsolidated Subsidiaries and in Persons that are not
Subsidiaries (except, in each case, Permitted Investments), and (z) all
unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of the Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 13.2 hereof or such other address as to which
the Trustee may give notice to the Company.
"Credit Agent" means The First National Bank of Chicago, in its
capacity as Agent for the lenders party to the New Credit Facility or any
successor thereto or any person otherwise appointed.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Definitive Notes" means Notes that are in the form of EXHIBIT A-1
attached hereto (but without including the text referred to in footnotes 1 and 3
thereto).
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.3 hereof as
the Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to Section 2.6 of this Indenture, and,
thereafter, "Depositary" shall mean or include such successor.
"Designated Senior Debt" means (i) any Indebtedness outstanding
under the New Credit Facility and (ii) any other Senior Debt permitted under the
Indenture the principal amount of which is $25.0 million or more and that has
been designated by the Company as "Designated Senior Debt.
"Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to
5
<PAGE> 14
the date that is 91 days after the date on which the Notes mature; provided,
however, that any Capital Stock that would not qualify as Disqualified Stock but
for change of control provisions shall not constitute Disqualified Stock if the
provisions are not more favorable to the holders of such Capital Stock than the
provisions described under Section 4.14 hereof.
"DLJ" means Donaldson, Lufkin & Jenrette Securities Corporation.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Morgan Guaranty Trust Company of New York, the
Brussels office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the offer by the Company to Holders to
exchange Senior Subordinated Notes for New Senior Subordinated Notes.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the New Credit Facility) in
existence on the date of the Indenture, until such amounts are repaid.
"Fixed Charges" means, with respect to any Person for any period,
the sum, without duplication, of (i) the consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
(including, without limitation, original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Debt, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations) and (ii) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period, and (iii) to
the extent paid by such Person, any interest expense on Indebtedness of another
Person that is Guaranteed by such Person or one of its Restricted Subsidiaries
or secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries (whether or not such Guarantee or Lien is called upon) and (iv) the
product of (a) all dividend payments, whether or not in cash, on any series of
preferred stock of such Person or any of its Restricted Subsidiaries, other than
dividend payments on Equity Interests payable solely in Equity Interests of the
Company, times (b) a fraction, the numerator of which is one and the denominator
of which is one minus the then current combined federal, state and local
statutory tax rate of such Person, expressed as a decimal, in each case, on a
consolidated basis and in accordance with GAAP.
6
<PAGE> 15
"Fixed Charge Coverage Ratio" means with respect to any Person for
any period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the Company or
any of its Restricted Subsidiaries incurs, assumes, Guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, Guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period. In addition, for
purposes of making the computation referred to above, (i) acquisitions that have
been made by the Company or any of its Restricted Subsidiaries, including
through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be deemed to have
occurred on the first day of the four-quarter reference period and Consolidated
Cash Flow for such reference period shall be calculated without giving effect to
clause (iii) of the proviso set forth in the definition of Consolidated Net
Income, and (ii) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, and (iii) the
Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the referent Person
or any of its Restricted Subsidiaries following the Calculation Date.
"Foreign Subsidiary" means any Subsidiary organized and existing
under the laws of a jurisdiction other than those of any state or commonwealth
in the Unites States of America.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date of the Indenture.
"Global Notes" means the Rule 144A Global Notes, the Regulation S
Temporary Global Notes and the Regulation S Permanent Global Notes.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner
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<PAGE> 16
(including, without limitation, letters of credit and reimbursement agreements
in respect thereof), of all or any part of any Indebtedness.
"Guarantor Senior Debt" means Senior Debt of a Subsidiary Guarantor.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or currency rates.
"Holberg" means Holberg Industries, Inc., a Delaware corporation,
the indirect parent of the Company.
"Holder" means a Person in whose name a Note is registered.
"Holdings" means AP Holdings, Inc., a Delaware corporation and the
parent (but not 100% owner) of APCOA, Inc.
"Indebtedness" means, with respect to any Person, any indebtedness
of such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, as well as all indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
indebtedness is assumed by such Person) and, to the extent not otherwise
included, the Guarantee by such Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be (i) the
accreted value thereof, in the case of any Indebtedness that does not require
current payments of interest, and (ii) the principal amount thereof, together
with any interest thereon that is more than 30 days past due, in the case of any
other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Indirect Participant" means a Person who holds an interest through
a Participant.
"Initial Purchasers" means Donaldson, Lufkin & Jenrette Securities
Corporation and First Chicago Capital Markets, Inc.
"Insolvency or Liquidation Proceedings" means (i) any insolvency or
bankruptcy case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding, relative to the Company or to the creditors
of the Company, as such, or to the assets of the Company, or (ii) any
liquidation, dissolution, reorganization or winding up of the Company, whether
voluntary or involuntary and involving insolvency or bankruptcy, or (iii) any
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<PAGE> 17
assignment for the benefit of creditors or any other marshalling of assets and
liabilities of the Company.
"Institutional Accredited Investor" means an "accredited investor"
as defined in Rule 501(a)(l), (2), (3) or (7) under the Securities Act.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Restricted Subsidiary of the Company, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Equity Interests of such
Restricted Subsidiary not sold or disposed of in an amount determined as
provided in the final paragraph of the covenant described above under the
caption "--Restricted Payments."
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the principal Corporate
Trust Office of the Trustee is located or at a place of payment are authorized
by law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment shall be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages then owing
pursuant to Section 5 of the Registration Rights Agreement.
"AP Holdings" means AP Holdings, Inc., a Delaware corporation, the
parent of the Company.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i) any
gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with (a) any Asset Sale (including,
without limitation, dispositions pursuant to sale and leaseback transactions) or
(b) the
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<PAGE> 18
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP.
"New Credit Facility" means that certain Credit Agreement, dated as
of the date of the Indenture, by and among the Company, the lenders and other
parties thereto from time to time and The First National Bank of Chicago, as
agent, together with all related documents executed or delivered pursuant
thereto at any time (including, without limitation, all mortgages, guarantees,
security agreements and all other collateral and security documents), in each
case as such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of available borrowings
thereunder provided that such increase in borrowings is within the definition of
Permitted Indebtedness or is otherwise permitted under the covenant described
"Incurrence of Indebtedness and Issuance of Preferred Stock") or adding
Subsidiaries as additional borrowers or guarantors thereunder) all or any
portion of the Indebtedness and other Obligations under such agreement or
agreements or any successor or replacement agreement or agreements, and whether
by the same or any other agent, lender or group of lenders.
"New Senior Subordinated Notes" means the Company's 9 1/4% Senior
Subordinated Notes due 2008, which will be issued in exchange for the Company's
Senior Subordinated Notes.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise), or (c) constitutes the lender; (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Notes being offered hereby) of the Company or any of its Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity; and
(iii) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Company or any of its Restricted
Subsidiaries.
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<PAGE> 19
"Note Custodian" means the Trustee, when serving as custodian for
the Depositary with respect to the Notes in global form, or any successor entity
thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness, and in all cases whether now
outstanding or hereafter created, assumed or incurred and including, without
limitation, interest accruing subsequent to the filing of a petition in
bankruptcy at the rate provided in the relevant document, whether or not an
allowed claim, and any obligation to redeem or defease any of the foregoing.
"Offering" means the offer and sale of the Senior Subordinated Notes
as contemplated by the Offering Memorandum.
"Offering Memorandum" means the Offering Memorandum, dated March 25,
1998, relating to the Company's offering and placement of the Senior
Subordinated Notes.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 13.5 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
13.5 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Participant" means, with respect to DTC, Euroclear or Cedel, a
Person who has an account with DTC, Euroclear or Cedel, respectively (and, with
respect to DTC, shall include Euroclear and Cedel).
"payment in full" (together with any correlative phrases e.g. "paid
in full" and "pay in full") means (i) with respect to any Senior Debt other than
Senior Debt under or in respect of the New Credit Facility, payment in full
thereof or due provision for payment thereof (x) in accordance with the terms of
the agreement or instrument pursuant to which such Senior Debt was issued or is
governed or (y) otherwise to the reasonable satisfaction of the holders of such
Senior Debt, which shall include, in any Insolvency or Liquidation Proceeding,
approval by such holders individually or as a class, of the provision for
payment thereof, and (ii) with respect to Senior Debt under or in respect of the
New Credit Facility, payment in full thereof in cash or Cash Equivalents.
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<PAGE> 20
"Permitted Business" means any of the businesses and any other
businesses related to the businesses engaged in by the Company and its
respective Restricted Subsidiaries on the date of the Indenture.
"Permitted Investments" means (a) any Investment in the Company or
in a Wholly Owned Restricted Subsidiary of the Company that is engaged in a
Permitted Business; (b) any Investment in Cash Equivalents; (c) any Investment
by the Company or any Restricted Subsidiary of the Company in a Person, if as a
result of such Investment (i) such Person becomes a Wholly Owned Restricted
Subsidiary of the Company that is engaged in a Permitted Business or (ii) such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the Company
or a Wholly Owned Restricted Subsidiary of the Company that is engaged in a
Permitted Business; (d) any Restricted Investment made as a result of the
receipt of non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with the covenant described above under the caption
"--Repurchase at the Option of Holders--Asset Sales"; (e) any acquisition of
assets solely in exchange for the issuance of Equity Interests (other than
Disqualified Stock) of the Company; (f) loans and advances made after the date
of the Indenture to Holberg Industries, Inc. not to exceed $10.0 million at any
time outstanding; (g) make and permit to remain outstanding travel and other
like advances in the ordinary course of business consistent with past practices
to officers and employees of the Company or a Subsidiary of the Company; (h)
other Investments made after the date of the Indenture in any Person having an
aggregate fair market value (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when taken together
with all other Investments made pursuant to this clause (h) that are at the time
outstanding, not to exceed $10 million; and (i) loans and advances made after
the date of the Indenture to Holdings, not to exceed $9.0 million at any time
outstanding.
"Permitted Liens" means (i) Liens securing Senior Debt under the New
Credit Facility that were permitted by the terms of the Indenture to be
incurred; (ii) Liens in favor of the Company; (iii) Liens on property of a
Person existing at the time such Person is merged into or consolidated with the
Company or any Restricted Subsidiary of the Company; provided that such Liens
were in existence prior to the contemplation of such merger or consolidation and
do not extend to any assets other than those of the Person merged into or
consolidated with the Company; (iv) Liens on property existing at the time of
acquisition thereof by the Company or any Restricted Subsidiary of the Company,
provided that such Liens were in existence prior to the contemplation of such
acquisition; (v) Liens to secure the performance of bids, tenders, contracts,
statutory obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of business; (vi)
Liens existing on the date of the Indenture; (vii) Liens for taxes, assessments
or governmental charges or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings promptly instituted and
diligently concluded, provided that any reserve or other appropriate provision
as shall be required in conformity with GAAP shall have been made therefor;
(viii) Liens incurred in the ordinary course of business of the Company or any
Restricted Subsidiary of the Company with respect to obligations that do not
exceed $5.0 million at any one time outstanding and that (a) are not incurred in
connection with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business) and (b) do not in
the aggregate
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<PAGE> 21
materially detract from the value of the property or materially impair the use
thereof in the operation of business by the Company or such Restricted
Subsidiary; (ix) Liens on assets of Unrestricted Subsidiaries that secure
Non-Recourse Debt of Unrestricted Subsidiaries; (x) Liens on the daily revenues
in favor of Persons other than the Company and its Restricted Subsidiaries who
are parties to parking facility agreements for the amounts due to them pursuant
thereto; (xi) Liens arising by applicable law in respect of employees' wages,
salaries or commissions not overdue; and (xii) Liens arising out of judgments or
awards not in excess of $5.0 million with respect to which the Company or its
Subsidiary with respect to which the Company or such Subsidiaries are
prosecuting an appeal or a proceeding or review and the enforcement of such lien
is stayed pending such appeal or review.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that: (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount of
(or accreted value, if applicable), plus accrued interest on, the Indebtedness
so extended, refinanced, renewed, replaced, defeased or refunded plus the amount
of reasonable expenses incurred in connection therewith); (ii) such Permitted
Refinancing Indebtedness has a final maturity date later than the final maturity
date of, and has a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Notes on terms at least as
favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (iv) such Indebtedness is incurred either by the
Company or by the Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Principals" means Holberg Industries, Inc., John V. Holten or, in
the case of the Company, Holdings.
"Private Placement Legend" means the legend initially set forth on
the Senior Subordinated Notes in the form set forth in Section 2.6(f) hereof.
"Public Equity Offering" means a public offering of Equity Interests
(other than Disqualified Stock) of (i) the Company or (ii) Holdings, to the
extent that the net proceeds thereof are contributed to the Company as a capital
contribution, that, in each case, results in net proceeds to the Company of at
least $25.0 million.
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<PAGE> 22
"QIB" means a "qualified institutional buyer" as defined in Rule
144A under the Securities Act.
"Receivables" means, with respect to any Person or entity, all of
the following property and interests in property of such Person or entity,
whether now existing or existing in the future or hereafter acquired or arising:
(i) accounts, (ii) accounts receivable incurred in the ordinary course of
business, including without limitation, all rights to payment created by or
arising from sales of goods, leases of goods or the rendition of services no
matter how evidenced, whether or not earned by performance, (iii) all rights to
any goods or merchandise represented by any of the foregoing after creation of
the foregoing, including, without limitation, returned or repossessed goods,
(iv) all reserves and credit balances with respect to any such accounts
receivable or account debtors, (v) all letters of credit, security, or
guarantees for any of the foregoing, (vi) all insurance policies or reports
relating to any of the foregoing, (vii) all collection or deposit accounts
relating to any of the foregoing, (viii) all proceeds of the foregoing and (ix)
all books and records relating to any of the foregoing.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date hereof, by and among the Company, the Subsidiary
Guarantors and the Initial Purchasers.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Notes" means the Regulation S Temporary Global
Notes or the Regulation S Permanent Global Notes as applicable.
"Regulation S Permanent Global Notes" means the permanent global
notes that do not contain the paragraphs referred to in footnote 1 to the form
of the Note attached hereto as EXHIBIT A-2, and that are deposited with and
registered in the name of the Depositary or its nominee, representing a series
of Notes sold in reliance on Regulation S.
"Regulation S Temporary Global Notes" means the temporary global
notes that contain the paragraphs referred to in footnote 1 to the form of the
Note attached hereto as EXHIBIT A-2, and that are deposited with and registered
in the name of the Depositary or its nominee, representing a series of Notes
sold in reliance on Regulation S.
"Related Party" with respect to any Principal means (A) any
controlling stockholder or partner, 80% (or more) owned Subsidiary, or spouse or
immediate family member (in the case of an individual) of such Principal or (B)
any trust, corporation, partnership, limited liability company or other entity,
the beneficiaries, stockholders, partners, members, owners or Persons
beneficially holding an 80% or more controlling interest of which consist of
such Principal and/or such other Persons referred to in the immediately
preceding clause (A).
"Reorganization Securities" means securities distributed to the
Holders of the Notes in an Insolvency or Liquidation Proceeding pursuant to a
plan of reorganization consented to by each class of the Senior Debt, but only
if all of the terms and conditions of such securities (including, without
limitation, term, tenor, interest, amortization, subordination, standstills,
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<PAGE> 23
covenants and defaults), are at least as favorable (and provide the same
relative benefits) to the holders of Senior Debt and to the holders of any
security distributed in such Insolvency or Liquidation Proceeding on account of
any such Senior Debt as the terms and conditions of the Notes and the Indenture
are, and provide to the holders of Senior Debt.
"Representative" means the trustee, agent or representative for any
Senior Debt.
"Responsible Officer" when used with respect to the Trustee, means
any officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Beneficial Interest" means any beneficial interest of a
Participant or Indirect Participant in the Rule 144A Global Note or the
Regulation S Global Note.
"Restricted Broker Dealer" has the meaning set forth in the
Registration Rights Agreement.
"Restricted Global Notes" means the Rule 144A Global Notes and the
Regulation S Global Notes, all of which shall bear the Private Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Notes" means the permanent global notes that
contain the paragraph referred to in footnote 1 and the additional schedule
referred to in footnote 3 to the form of the Note attached hereto as EXHIBIT
A-1, and that is deposited with and registered in the name of the Depositary or
its nominee, representing a series of Notes sold in reliance on Rule 144A.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means (i) all Indebtedness outstanding under the New
Credit Facility, including any Guarantees thereof and all Hedging Obligations
with respect thereto, (ii) any other Indebtedness permitted to be incurred by
the Company or its Restricted Subsidiaries under the terms of the Indenture,
unless the instrument under which such Indebtedness is incurred expressly
provides that it is on a parity with or subordinated in right of payment to the
Notes and (iii) all Obligations with respect to the foregoing. Notwithstanding
anything to the contrary in the foregoing, Senior Debt will not include (w) any
liability for federal, state, local or other taxes owed or owing by the Company,
(x) any Indebtedness of the Company to any of its
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<PAGE> 24
Subsidiaries or other Affiliates, (y) any trade payables or (z) any Indebtedness
that is incurred in violation of the Indenture.
"Senior Subordinated Notes" means the Company's 9 1/4% Senior
Subordinated Notes due 2008.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantors" means all Subsidiaries of the Company that
execute a Note Guarantee of the Notes substantially in the form of EXHIBIT D
attached hereto.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.
77aaa-77bbbb), as amended, as in effect on the date hereof.
"Transfer Restricted Securities" means Notes or beneficial interests
therein that bear or are required to bear the Private Placement Legend.
"Trustee" means State Street Bank and Trust Company until a
successor replaces it in accordance with the applicable provisions of this
Indenture, and thereafter means the successor.
"Unrestricted Global Notes" means one or more Global Notes that do
not and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means (i) any Subsidiary that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution; but only to the
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<PAGE> 25
extent that such Subsidiary: (a) has no Indebtedness other than Non-Recourse
Debt; (b) is not party to any agreement, contract, arrangement or understanding
with the Company or any Restricted Subsidiary of the Company unless the terms of
any such agreement, contract, arrangement or understanding are no less favorable
to the Company or such Restricted Subsidiary than those that might be obtained
at the time from Persons who are not Affiliates of the Company; (c) is a Person
with respect to which neither the Company nor any of its Restricted Subsidiaries
has any direct or indirect obligation (x) to subscribe for additional Equity
Interests or (y) to maintain or preserve such Person's financial condition or to
cause such Person to achieve any specified levels of operating results; (d) has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries; and (e)
has at least one director on its board of directors that is not a director or
executive officer of the Company or any of its Restricted Subsidiaries and has
at least one executive officer that is not a director or executive officer of
the Company or any of its Restricted Subsidiaries. Any such designation by the
Board of Directors shall be evidenced to the Trustee by filing with the Trustee
a certified copy of the Board Resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by Section 4.7 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary
shall be deemed to be incurred by a Restricted Subsidiary of the Company as of
such date (and, if such Indebtedness is not permitted to be incurred as of such
date under Section 4.9 hereof, the Company shall be in default of such
covenant). The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such Indebtedness
is permitted under Section 4.9 hereof, and (ii) no Default or Event of Default
would be in existence following such designation.
"Voting Stock" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person and one
or more Wholly Owned Subsidiaries of such Person.
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Section 1.2. Other Definitions.
Defined in
Term Section
"Affiliate Transaction".............................4.11
"Asset Sale Offer"..................................4.10
"Change of Control Offer"...........................4.14
"Change of Control Payment".........................4.14
"Change of Control Payment Date"....................4.14
"Covenant Defeasance"................................8.3
"Custodian"..........................................6.1
"DTC"................................................2.3
"Event of Default"...................................6.1
"Excess Proceeds"...................................4.10
"incur"..............................................4.9
"Legal Defeasance"...................................8.2
"Offer Amount".......................................3.9
"Offer Period".......................................3.9
"Paying Agent".......................................2.3
"Payment Default"....................................6.1
"Permitted Debt".....................................4.9
"Purchase Date"......................................3.9
"Registrar"..........................................2.3
"Repurchase Offer"...................................3.9
"Restricted Payments"................................4.7
Section 1.3. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company, each Subsidiary Guarantor
and any successor obligor upon the Notes.
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All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by the Commission rule
under the TIA have the meanings so assigned to them therein.
Section 1.4. Rules of Construction.
Unless the context otherwise requires:
(1) term has the meaning assigned to it herein;
(2) an accounting term not otherwise defined herein has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement or successor sections or
rules adopted by the Commission from time to time.
ARTICLE 2.
THE NOTES
Section 2.1. Form and Dating.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of EXHIBIT A-1 or EXHIBIT A-2 attached hereto. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its authentication.
The Notes initially shall be issued in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and the Company, the
Subsidiary Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
(a) Global Notes. Notes offered and sold to QIBs in reliance on Rule
144A shall be issued initially in the form of Rule 144A Global Notes, which
shall be deposited on behalf of the purchasers of the Notes represented thereby
with a custodian of the Depositary, and registered in the name of the Depositary
or a nominee of the Depositary, duly executed by the Company and authenticated
by the Trustee as hereinafter provided. The aggregate principal amount of the
Rule 144A Global Notes may from time to time be increased or decreased by
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adjustments made on the records of the Trustee and the Depositary or its nominee
as hereinafter provided.
Notes offered and sold in reliance on Regulation S shall be issued
initially in the form of the Regulation S Temporary Global Note, which shall be
deposited on behalf of the purchasers of the Notes represented thereby with the
Trustee, as custodian for the Depositary, and registered in the name of the
Depositary or the nominee of the Depositary for the accounts of designated
agents holding on behalf of Euroclear or Cedel, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The "40-day restricted
period" (as defined in Regulation S) shall be terminated upon the receipt by the
Trustee of (i) a written certificate from the Depositary, together with copies
of certificates from Euroclear and Cedel certifying that they have received
certification of non-United States beneficial ownership of 100% of the aggregate
principal amount of the Regulation S Temporary Global Notes (except to the
extent of any beneficial owners thereof who acquired an interest therein
pursuant to another exemption from registration under the Securities Act and who
will take delivery of a beneficial ownership interest in a Rule 144A Global
Note, all as contemplated by Section 2.6(a)(ii) hereof), and (ii) an Officers'
Certificate from the Company certifying as to the same matters covered in clause
(i) above. Following the termination of the 40-day restricted period, beneficial
interests in the Regulation S Temporary Global Note shall be exchanged for
beneficial interests in Regulation S Permanent Global Notes pursuant to the
Applicable Procedures. Simultaneously with the authentication of Regulation S
Permanent Global Notes, the Trustee shall cancel the Regulation S Temporary
Global Notes. The aggregate principal amount of the Regulation S Temporary
Global Notes and the Regulation S Permanent Global Notes may from time to time
be increased or decreased by adjustments made on the records of the Trustee and
the Depositary or its nominee, as the case may be, in connection with transfers
of interest as hereinafter provided.
Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be reduced or increased, as appropriate, to reflect exchanges,
redemptions and transfers of interests. Any endorsement of a Global Note to
reflect the amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee or the Note Custodian, at
the direction of the Trustee, in accordance with instructions given by the
Holder thereof as required by Section 2.6 hereof.
The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "Management
Regulations" and "Instructions to Participants" of Cedel shall be applicable to
interests in the Regulation S Temporary Global Notes and the Regulation S
Permanent Global Notes that are held by Participants through Euroclear or Cedel.
The Trustee shall have no obligation to notify Holders of any such procedures or
to monitor or enforce compliance with the same.
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Except as set forth in Section 2.6 hereof, the Global Notes may be
transferred, in whole and not in part, only to another nominee of the Depositary
or to a successor of the Depositary or its nominee.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to
Rule 144A Global Notes and Regulation S Permanent Global Notes deposited with or
on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver the Global Notes that (i) shall be
registered in the name of the Depositary or the nominee of the Depositary and
(ii) shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary's instructions or held by the Trustee as custodian for the
Depositary.
Participants shall have no rights either under this Indenture with
respect to any Global Note held on their behalf by the Depositary or by the Note
Custodian as custodian for the Depositary or under such Global Note, and the
Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Participants, the
operation of customary practices of such Depositary governing the exercise of
the rights of an owner of a beneficial interest in any Global Note.
(c) Definitive Notes. Notes issued in certificated form shall be
substantially in the form of EXHIBIT A-1 attached hereto (but without including
the text referred to in footnotes 1 and 3 thereto).
Section 2.2. Execution and Authentication.
An Officer shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Notes shall be substantially as
set forth in EXHIBIT A-1 or EXHIBIT A-2 hereto.
The Trustee shall, upon a written order of the Company signed by an
Officer directing the Trustee to authenticate the Notes, authenticate Notes for
original issue up to the aggregate principal amount stated in paragraph 4 of the
Notes. The Trustee shall, upon written order of the Company signed by an
Officer, authenticate New Senior Subordinated Notes for
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original issuance in exchange for a like principal amount of Senior Subordinated
Notes exchanged in the Exchange Offer or otherwise exchanged for New Senior
Subordinated Notes pursuant to the terms of the Registration Rights Agreement.
The aggregate principal amount of Notes outstanding at any time may not exceed
such amount except as provided in Section 2.7 hereof.
The Trustee may (at the Company's expense) appoint an authenticating
agent acceptable to the Company to authenticate Notes. An authenticating agent
may authenticate Notes whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to deal with the
Company or an Affiliate of the Company.
Section 2.3. Registrar and Paying Agent.
The Company shall maintain (i) an office or agency where Notes may
be presented for registration of transfer or for exchange ("Registrar") and (ii)
an office or agency where Notes may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more additional paying agents. The term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Note Custodian with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and Paying
Agent with respect to the Definitive Notes.
Section 2.4. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
shall notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
the
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occurrence of events specified in Section 6.1(vii) through (ix) hereof, the
Trustee shall serve as Paying Agent for the Notes.
Section 2.5. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company and/or the Subsidiary Guarantors shall furnish to
the Trustee at least seven (7) Business Days before each interest payment date
and at such other times as the Trustee may request in writing, a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of the Holders of Notes and the Company and the Subsidiary Guarantors
shall otherwise comply with TIA ss. 312(a).
Section 2.6. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. The transfer and exchange
of Global Notes or beneficial interests therein shall be effected through the
Depositary, in accordance with this Indenture and the procedures of the
Depositary therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. Beneficial
interests in a Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same Global Note in
accordance with the transfer restrictions set forth in the legend in subsection
(g) of this Section 2.6. Transfers of beneficial interests in the Global Notes
to Persons required to take delivery thereof in the form of an interest in
another Global Note shall be permitted as follows:
(i) Rule 144A Global Note to Regulation S Global Note. If, at
any time, an owner of a beneficial interest in a Rule 144A Global Note deposited
with the Depositary (or the Trustee as custodian for the Depositary) wishes to
transfer its beneficial interest in such Rule 144A Global Note to a Person who
is required or permitted to take delivery thereof in the form of an interest in
a Regulation S Global Note, such owner shall, subject to the Applicable
Procedures, exchange or cause the exchange of such interest for an equivalent
beneficial interest in a Regulation S Global Note as provided in this Section
2.6(a)(i). Upon receipt by the Trustee of (1) instructions given in accordance
with the Applicable Procedures from a Participant directing the Trustee to
credit or cause to be credited a beneficial interest in the Regulation S Global
Note in an amount equal to the beneficial interest in the Rule 144A Global Note
to be exchanged, (2) a written order given in accordance with the Applicable
Procedures containing information regarding the Participant account of the
Depositary and the Euroclear or Cedel account to be credited with such increase,
and (3) a certificate in the form of EXHIBIT B-1 hereto given by the owner of
such beneficial interest stating that the transfer of such interest has been
made in compliance with the transfer restrictions applicable to the Global Notes
and pursuant to and in accordance with Rule 903 or Rule 904 of Regulation S,
then the Trustee, as Registrar, shall instruct the Depositary to reduce or cause
to be reduced the aggregate principal amount at maturity of the applicable Rule
144A Global Note and to increase or cause to be increased the aggregate
principal amount at maturity of the applicable Regulation S Global Note by the
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principal amount at maturity of the beneficial interest in the Rule 144A Global
Note to be exchanged or transferred, to credit or cause to be credited to the
account of the Person specified in such instructions, a beneficial interest in
the Regulation S Global Note equal to the reduction in the aggregate principal
amount at maturity of the Rule 144A Global Note, and to debit, or cause to be
debited, from the account of the Person making such exchange or transfer the
beneficial interest in the Rule 144A Global Note that is being exchanged or
transferred.
(ii) Regulation S Global Note to Rule 144A Global Note. If, at
any time, after the expiration of the 40-day restricted period, an owner of a
beneficial interest in a Regulation S Global Note deposited with the Depositary
or with the Trustee as custodian for the Depositary wishes to transfer its
beneficial interest in such Regulation S Global Note to a Person who is required
or permitted to take delivery thereof in the form of an interest in a Rule 144A
Global Note, such owner shall, subject to the Applicable Procedures, exchange or
cause the exchange of such interest for an equivalent beneficial interest in a
Rule 144A Global Note as provided in this Section 2.6(a)(ii). Upon receipt by
the Trustee of (1) instructions from Euroclear or Cedel, if applicable, and the
Depositary, directing the Trustee, as Registrar, to credit or cause to be
credited a beneficial interest in the Rule 144A Global Note equal to the
beneficial interest in the Regulation S Global Note to be exchanged, such
instructions to contain information regarding the Participant account with the
Depositary to be credited with such increase, (2) a written order given in
accordance with the Applicable Procedures containing information regarding the
participant account of the Depositary and (3) a certificate in the form of
Exhibit B-2 attached hereto given by the owner of such beneficial interest
stating (A) if the transfer is pursuant to Rule 144A, that the Person
transferring such interest in a Regulation S Global Note reasonably believes
that the Person acquiring such interest in a Rule 144A Global Note is a QIB and
is obtaining such beneficial interest in a transaction meeting the requirements
of Rule 144A and any applicable blue sky or securities laws of any state of the
United States, (B) that the transfer complies with the requirements of Rule 144
under the Securities Act, (C) if the transfer is to an Institutional Accredited
Investor that such transfer is in compliance with the Securities Act and a
certificate in the form of Exhibit C attached hereto and, if such transfer is in
respect of an aggregate principal amount of less than $250,000, an Opinion of
Counsel acceptable to the Company that such transfer is in compliance with the
Securities Act or (D) if the transfer is pursuant to any other exemption from
the registration requirements of the Securities Act, that the transfer of such
interest has been made in compliance with the transfer restrictions applicable
to the Global Notes and pursuant to and in accordance with the requirements of
the exemption claimed, such statement to be supported by an Opinion of Counsel
from the transferee or the transferor in form reasonably acceptable to the
Company and to the Registrar and in each case, in accordance with any applicable
securities laws of any state of the United States or any other applicable
jurisdiction, then the Trustee, as Registrar, shall instruct the Depositary to
reduce or cause to be reduced the aggregate principal amount at maturity of such
Regulation S Global Note and to increase or cause to be increased the aggregate
principal amount at maturity of the applicable Rule 144A Global Note by the
principal amount at maturity of the beneficial interest in the Regulation S
Global Note to be exchanged or transferred, and the Trustee, as Registrar, shall
instruct the Depositary, concurrently with such reduction, to credit or cause to
be credited to the account of the Person specified in such instructions a
beneficial interest in the applicable Rule 144A Global Note equal to the
reduction in the aggregate principal amount at maturity of
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such Regulation S Global Note and to debit or cause to be debited from the
account of the Person making such transfer the beneficial interest in the
Regulation S Global Note that is being exchanged or transferred.
(b) Transfer and Exchange of Definitive Notes. When Definitive Notes
are presented by a Holder to the Registrar with a request to register the
transfer of the Definitive Notes or to exchange such Definitive Notes for an
equal principal amount of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested only
if the Definitive Notes are presented or surrendered for registration of
transfer or exchange, are endorsed and contain a signature guarantee or
accompanied by a written instrument of transfer in form satisfactory to the
Registrar duly executed by such Holder or by his attorney and contains a
signature guarantee, duly authorized in writing and the Registrar received the
following documentation (all of which may be submitted by facsimile):
(i) in the case of Definitive Notes that are Transfer
Restricted Securities, such request shall be accompanied by the following
additional information and documents, as applicable:
(A) if such Transfer Restricted Security is being
delivered to the Registrar by a Holder for registration in the name of such
Holder, without transfer, or such Transfer Restricted Security is being
transferred to the Company or any of its Subsidiaries, a certification to that
effect from such Holder (in substantially the form of Exhibit B-3 hereto); or
(B) if such Transfer Restricted Security is being
transferred to a QIB in accordance with Rule 144A under the Securities Act or
pursuant to an exemption from registration in accordance with Rule 144 under the
Securities Act or pursuant to an effective registration statement under the
Securities Act, a certification to that effect from such Holder (in
substantially the form of EXHIBIT B-3 hereto); or
(C) if such Transfer Restricted Security is being
transferred to a Non-U.S. Person in an offshore transaction in accordance with
Rule 904 under the Securities Act, a certification to that effect from such
Holder (in substantially the form of EXHIBIT B-3 hereto);
(D) if such Transfer Restricted Security is being
transferred to an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other than those listed
in subparagraphs (B) and (C) above, a certification to that effect from such
Holder (in substantially the form of EXHIBIT B-3 hereto), a certification
substantially in the form of EXHIBIT C hereto, and, if such transfer is in
respect of an aggregate principal amount of Notes of less than $250,000, an
Opinion of Counsel acceptable to the Company that such transfer is in compliance
with the Securities Act; or
(E) if such Transfer Restricted Security is being
transferred in reliance on any other exemption from the registration
requirements of the Securities Act, a certification to that effect from such
Holder (in substantially the form of EXHIBIT B-3 hereto) and
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an Opinion of Counsel from such Holder or the transferee reasonably acceptable
to the Company and to the Registrar to the effect that such transfer is in
compliance with the Securities Act.
(c) Transfer of a Beneficial Interest in a Rule 144A Global Note or
Regulation S Permanent Global Note for a Definitive Note.
(i) Any Person having a beneficial interest in a Rule 144A
Global Note or Regulation S Permanent Global Note may upon request, subject to
the Applicable Procedures, exchange such beneficial interest for a Definitive
Note. Upon receipt by the Trustee of written instructions or such other form of
instructions as is customary for the Depositary (or Euroclear or Cedel, if
applicable), from the Depositary or its nominee on behalf of any Person having a
beneficial interest in a Rule 144A Global Note or Regulation S Permanent Global
Note, and, in the case of a Transfer Restricted Security, the following
additional information and documents (all of which may be submitted by
facsimile):
(A) if such beneficial interest is being transferred to
the Person designated by the Depositary as being the beneficial owner, a
certification to that effect from such Person (in substantially the form of
EXHIBIT B-4 hereto);
(B) if such beneficial interest is being transferred to
a QIB in accordance with Rule 144A under the Securities Act or pursuant to an
exemption from registration in accordance with Rule 144 under the Securities Act
or pursuant to an effective registration statement under the Securities Act, a
certification to that effect from the transferor (in substantially the form of
EXHIBIT B-4 hereto);
(C) if such beneficial interest is being transferred to
an Institutional Accredited Investor, pursuant to a private placement exemption
from the registration requirements of the Securities Act (and based on an
opinion of counsel if the Company so requests), a certification to that effect
from such Holder (in substantially the form of EXHIBIT B-4 hereto) and a
certificate from the applicable transferee (in substantially the form of EXHIBIT
C hereto); or
(D) if such beneficial interest is being transferred in
reliance on any other exemption from the registration requirements of the
Securities Act, a certification to that effect from the transferor (in
substantially the form of EXHIBIT B-4 hereto) and an Opinion of Counsel from the
transferee or the transferor reasonably acceptable to the Company and to the
Registrar to the effect that such transfer is in compliance with the Securities
Act, in which case the Trustee or the Note Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and procedures
existing between the Depositary and the Note Custodian, cause the aggregate
principal amount of Rule 144A Global Notes or Regulation S Permanent Global
Notes, as applicable, to be reduced accordingly and, following such reduction,
the Company shall execute and, the Trustee shall authenticate and deliver to the
transferee a Definitive Note in the appropriate principal amount.
(ii) Definitive Notes issued in exchange for a beneficial
interest in a Rule 144A Global Note or Regulation S Permanent Global Note, as
applicable, pursuant to this
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Section 2.6(c) shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
Indirect Participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Definitive Notes to the Persons in whose names such Notes are
so registered. Following any such issuance of Definitive Notes, the Trustee, as
Registrar, shall instruct the Depositary to reduce or cause to be reduced the
aggregate principal amount at maturity of the applicable Global Note to reflect
the transfer.
(d) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.6), a Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
(e) Transfer and Exchange of a Definitive Note for a Beneficial
Interest in a Global Note. A definitive Note may not be transferred or exchanged
for a beneficial interest in a Global Note.
(f) Authentication of Definitive Notes in Absence of Depositary. If
at any time:
(i) the Depositary for the Notes notifies the Company that the
Depositary is unwilling or unable to continue as Depositary for the Global Notes
and a successor Depositary for the Global Notes is not appointed by the Company
within 90 days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Trustee
in writing that it elects to cause the issuance of Definitive Notes under this
Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.2 hereof, authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Notes in exchange for such Global Notes.
(g) Legends.
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Note certificate evidencing Global Notes and Definitive
Notes (and all Notes issued in exchange therefor or substitution thereof) shall
bear the legend (the "Private Placement Legend") in substantially the following
form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY
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EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (l)(a) INSIDE THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT,
(c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER
THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7)
OF THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED
INVESTOR"), THAT PRIOR TO SUCH TRANSFER, FURNISHED THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE
OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN
RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES
LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, OR (e) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND, IN THE CASE OF CLAUSE (b), (c), (d)
OR (e), BASED UPON AN OPINION OF COUNSEL IF THE COMPANY
SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY
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<PAGE> 37
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a Global
Note) pursuant to Rule 144 under the Securities Act or pursuant to an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that
is a Definitive Note, the Registrar shall permit the Holder thereof to exchange
such Transfer Restricted Security for a Definitive Note that does not bear the
legend set forth in (i) above and rescind any restriction on the transfer of
such Transfer Restricted Security upon receipt of a certification from the
transferring holder substantially in the form of EXHIBIT B-4 hereto; and
(B) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer Restricted Security shall not be
required to bear the legend set forth in (i) above, but shall continue to be
subject to the provisions of Section 2.6(a) and (b) hereof; provided, however,
that with respect to any request for an exchange of a Transfer Restricted
Security that is represented by a Global Note for a Definitive Note that does
not bear the legend set forth in (i) above, which request is made in reliance
upon Rule 144, the Holder thereof shall certify in writing to the Registrar that
such request is being made pursuant to Rule 144 (such certification to be
substantially in the form of EXHIBIT B-4 hereto).
(iii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a Global
Note) in reliance on any exemption from the registration requirements of the
Securities Act (other than exemptions pursuant to Rule 144A or Rule 144 under
the Securities Act) in which the Holder or the transferee provides an Opinion of
Counsel to the Company and the Registrar in form and substance reasonably
acceptable to the Company and the Registrar (which Opinion of Counsel shall also
state that the transfer restrictions contained in the legend are no longer
applicable):
(A) in the case of any Transfer Restricted Security that
is a Definitive Note, the Registrar shall permit the Holder thereof to exchange
such Transfer Restricted Security for a Definitive Note that does not bear the
legend set forth in (i) above and rescind any restriction on the transfer of
such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer Restricted Security shall not be
required to bear the legend set forth in (i) above, but shall continue to be
subject to the provisions of Section 2.6(a) and (b) hereof.
(iv) Notwithstanding the foregoing, upon the consummation of
the Exchange Offer in accordance with the Registration Rights Agreement, the
Company shall issue and, upon receipt of an authentication order in accordance
with Section 2.2 hereof, the Trustee shall authenticate (i) one or more
Unrestricted Global Notes in aggregate principal amount equal to the principal
amount of the Restricted Beneficial Interests tendered for acceptance by persons
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<PAGE> 38
that are not (x) broker-dealers, (y) Persons participating in the distribution
of the Notes or (z) Persons who are affiliates (as defined in Rule 144) of the
Company and accepted for exchange in the Exchange Offer and (ii) Definitive
Notes that do not bear the Private Placement Legend in an aggregate principal
amount equal to the principal amount of the Restricted Definitive Notes accepted
for exchange in the Exchange Offer. Concurrently with the issuance of such
Notes, the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Notes to be reduced accordingly and the Company shall execute
and the Trustee shall authenticate and deliver to the Persons designated by the
Holders of Definitive Notes so accepted Definitive Notes in the appropriate
principal amount.
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in Global Notes have been exchanged for Definitive
Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for Definitive Notes, redeemed, repurchased or cancelled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by the Trustee
or the Notes Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any stamp or transfer tax or similar governmental charge
payable in connection therewith (other than any such stamp or transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant to
Sections 2.10, 3.6, 4.10, 4.14 and 9.5 hereto).
(iii) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Global Notes or Definitive
Notes surrendered upon such registration of transfer or exchange.
(iv) The Registrar shall not be required:(A) to issue, to
register the transfer of or to exchange Notes during a period beginning at the
opening of fifteen (15) Business Days before the day of any selection of Notes
for redemption under Section 3.2 hereof and ending at the close of business on
the day of selection, (B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part, or (C) to register the transfer of or to
exchange a Note between a record date and the next succeeding interest payment
date.
(v) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem and treat
the Person in whose name
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<PAGE> 39
any Note is registered as the absolute owner of such Note for the purpose of
receiving payment of principal of and interest on such Notes and for all other
purposes, and neither the Trustee, any Agent nor the Company shall be affected
by notice to the contrary.
(vi) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.2 hereof.
Section 2.7. Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or the Company
and the Trustee receives evidence to their satisfaction of the destruction, loss
or theft of any Note, the Company shall issue and the Trustee, upon the written
order of the Company signed by an Officer of the Company, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company and the Trustee may
charge for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.8. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section 2.8 as not outstanding. Except as set forth in Section 2.9 hereof, a
Note does not cease to be outstanding because the Company or any Subsidiary
Guarantor or an Affiliate of the Company or any Subsidiary Guarantor holds the
Note.
If a Note is replaced pursuant to Section 2.7 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.1 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
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<PAGE> 40
Section 2.9. Treasury Notes.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or any Subsidiary Guarantor, or by any Affiliate of the Company or any
Subsidiary Guarantor shall be considered as though not outstanding, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes shown on the
Trustee's register as being so owned shall be so disregarded. Notwithstanding
the foregoing, Notes that are to be acquired by the Company or any Subsidiary
Guarantor or an Affiliate of the Company or any Subsidiary Guarantor pursuant to
an exchange offer, tender offer or other agreement shall not be deemed to be
owned by such entity until legal title to such Notes passes to such entity.
Section 2.10. Temporary Notes.
Until Definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon a written order
of the Company signed by an Officer of the Company. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Company considers appropriate for temporary Notes. Without unreasonable delay,
the Company shall prepare and the Trustee shall upon receipt of a written order
of the Company signed by an Officer authenticate Definitive Notes in exchange
for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits
of this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver to the Trustee for cancellation
any Notes previously authenticated and delivered hereunder or which the Company
may have acquired in any manner whatsoever, and all Notes so delivered shall be
promptly cancelled by the Trustee. All Notes surrendered for registration of
transfer, exchange or payment, if surrendered to any Person other than the
Trustee, shall be delivered to the Trustee. The Trustee and no one else shall
cancel all Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation. Subject to Section 2.7 hereof, the Company may not
issue new Notes to replace Notes that it has redeemed or paid or that have been
delivered to the Trustee for cancellation. All cancelled Notes held by the
Trustee shall be destroyed and certification of their destruction delivered to
the Company, unless by a written order, signed by an Officer of the Company, the
Company shall direct that cancelled Notes be returned to it.
Section 2.12. Defaulted Interest.
If the Company or any Subsidiary Guarantor defaults in a payment of
interest on the Notes, it shall pay the defaulted interest in any lawful manner
plus, to the extent lawful, interest payable on the defaulted interest, to the
Persons who are Holders on a subsequent special record date, which date shall be
at the earliest practicable date but in all events at least five (5)
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<PAGE> 41
Business Days prior to the payment date, in each case at the rate provided in
the Notes and in Section 4.1 hereof. The Company shall fix or cause to be fixed
each such special record date and payment date, and shall promptly thereafter,
notify the Trustee of any such date. At least fifteen (15) days before the
special record date, the Company (or the Trustee, in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
Section 2.13. Record Date.
The record date for purposes of determining the identity of Holders
of the Notes entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be determined as provided for
in TIA ss. 316 (c).
Section 2.14. Computation of Interest.
Interest on the Notes shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
Section 2.15. CUSIP Number.
The Company in issuing the Notes may use a "CUSIP" number, and if it
does so, the Trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Holders, provided that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in the CUSIP number.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.1. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.7 hereof, it shall furnish to the Trustee, at
least 45 days but not more than 60 days before a redemption date (unless a
shorter period is acceptable to the Trustee) an Officers' Certificate setting
forth (i) the Section of this Indenture pursuant to which the redemption shall
occur, (ii) the redemption date, (iii) the principal amount of Notes to be
redeemed and (iv) the redemption price.
If the Company is required to make an offer to purchase Notes
pursuant to Section 4.10 or 4.14 hereof, it shall furnish to the Trustee, at
least 45 days before the scheduled purchase date, an Officers' Certificate
setting forth (i) the section of this Indenture pursuant to which the offer to
purchase shall occur, (ii) the terms of the offer, (iii) the principal amount of
Notes to be purchased, (iv) the purchase price, (v) the purchase date and (vi)
and further setting forth a statement to the effect that (a) the Company or one
its Subsidiaries has affected an Asset Sale
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<PAGE> 42
and there are Excess Proceeds aggregating more than $15.0 million or (b) a
Change of Control has occurred, as applicable.
Section 3.2. Selection of Notes to be Redeemed or Purchased.
If less than all of the Notes are to be redeemed at any time,
selection of Notes for redemption will be made by the Trustee in compliance with
the requirements of the principal national securities exchange, if any, on which
the Notes are listed, or, if the Notes are not so listed, on a pro rata basis,
by lot or by such method as the Trustee shall deem fair and appropriate;
provided that no Notes of $1,000 or less shall be redeemed in part. Notices of
redemption shall be mailed by first class mail at least 30 but not more than 60
days before the redemption date to each Holder of Notes to be redeemed at its
registered address. Notices of redemption may not be conditional. If any Note is
to be redeemed in part only, the notice of redemption that relates to such Note
shall state the portion of the principal amount thereof to be redeemed. A new
Note in principal amount equal to the unredeemed portion thereof will be issued
in the name of the Holder thereof upon cancellation of the original Note. Notes
called for redemption become due on the date fixed for redemption. On and after
the redemption date, interest ceases to accrue on Notes or portions of them
called for redemption.
Section 3.3. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail or cause to be mailed by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price for the Notes and accrued interest, and
Liquidated Damages, if any;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Notes to be redeemed and that, after the redemption
date, upon surrender of such Note, a new Note or Notes in principal amount equal
to the unredeemed portion shall be issued upon surrender of the original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such redemption
payment, interest and Liquidated Damages, if any, on Notes called for redemption
ceases to accrue on and after the redemption date;
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<PAGE> 43
(7) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense; provided,
however, that the Company shall have delivered to the Trustee, at least 45 days
prior to the redemption date (or such shorter period as shall be acceptable to
the Trustee), an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in the notice as provided
in the preceding paragraph. The notice mailed in the manner herein provided
shall be conclusively presumed to have been duly given whether or not the Holder
receives such notice. In any case, failure to give such notice by mail or any
defect in the notice to the Holder of any Note shall not affect the validity of
the proceeding for the redemption of any other Note.
Section 3.4. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.3
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price plus accrued and unpaid interest and
Liquidated Damages, if any, to such date. A notice of redemption may not be
conditional.
Section 3.5. Deposit of Redemption or Purchase Price.
On or before 10:00 a.m. (New York City time) on each redemption date
or the date on which Notes must be accepted for purchase pursuant to Section
4.10 or 4.14, the Company shall deposit with the Trustee or with the Paying
Agent money sufficient to pay the redemption price of and accrued and unpaid
interest and Liquidated Damages, if any, on all Notes to be redeemed or
purchased on that date. The Trustee or the Paying Agent shall promptly return to
the Company upon its written request any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of (including any applicable premium), accrued interest and
Liquidated Damages, if any, on all Notes to be redeemed or purchased.
If Notes called for redemption or tendered in an Asset Sale Offer or
Change of Control Offer are paid or if the Company has deposited with the
Trustee or Paying Agent money sufficient to pay the redemption or purchase price
of, unpaid and accrued interest and Liquidated Damages, if any, on all Notes to
be redeemed or purchased, on and after the redemption or purchase date interest
and Liquidated Damages, if any, shall cease to accrue on the Notes or the
portions of Notes called for redemption or tendered and not withdrawn in an
Asset Sale Offer or Change of Control Offer (regardless of whether certificates
for such securities are actually surrendered). If a Note is redeemed or
purchased on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest and Liquidated
Damages, if any, shall be paid to the Person in whose name such Note was
registered at the close of business on such record date. If any Note called for
redemption shall not be so paid upon
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<PAGE> 44
surrender for redemption because of the failure of the Company to comply with
the preceding paragraph, interest shall be paid on the unpaid principal and
Liquidated Damages, if any, from the redemption or purchase date until such
principal and Liquidated Dames, if any, is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case, at the rate provided
in the Notes and in Section 4.1 hereof.
Section 3.6. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
Section 3.7. Optional Redemption.
(a) Except as set forth in the next paragraph, the Notes will not be
redeemable at the Company's option prior to March , 2003. Thereafter, the Notes
will be subject to redemption at any time at the option of the Company, in whole
or in part, upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
<S> <C>
2003..................................... 104.625%
2004..................................... 103.083%
2005..................................... 101.542%
2006 and thereafter...................... 100.000%
</TABLE>
(b) Notwithstanding the foregoing, at any time prior to March 15,
2001, the Company may redeem up to 35% of the original aggregate principal
amount of Notes at a redemption price of 109.25% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages thereon, if
any, to the redemption date, with the net cash proceeds of a Public Equity
Offering; provided that at least 65% of the original aggregate principal amount
of Notes remains outstanding immediately after the occurrence of such
redemption; and provided, further, that such redemption shall occur within 45
days of the date of the closing of such Public Equity Offering.
Section 3.8. Mandatory Redemption.
Except as set forth under Sections 3.9, 4.10 and 4.14 hereof, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.
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Section 3.9. Repurchase Offers.
In the event that the Company shall be required to commence an offer
to all Holders to repurchase Notes (a "Repurchase Offer") pursuant to Section
4.10 hereof, an "Excess Proceeds Offer," or pursuant to Section 4.14 hereof, a
"Change of Control Offer," the Company shall follow the procedures specified
below.
A Repurchase Offer shall commence no earlier than 30 days and no
later than 60 days after a Change of Control (unless the Company is not required
to make such offer pursuant to Section 4.14(c) hereof) or an Excess Proceeds
Offer Triggering Event (as defined below), as the case may be, and remain open
for a period of twenty (20) Business Days following its commencement and no
longer, except to the extent that a longer period is required by applicable law
(the "Offer Period"). No later than five (5) Business Days after the termination
of the Offer Period (the "Purchase Date"), the Company shall purchase the
principal amount of Notes required to be purchased pursuant to Section 4.10
hereof, in the case of an Excess Proceeds Offer, or 4.14 hereof, in the case of
a Change of Control Offer (the "Offer Amount") or, if less than the Offer Amount
has been tendered, all Notes tendered in response to the Repurchase Offer.
Payment for any Notes so purchased shall be made in the same manner as interest
payments are made.
If the Purchase Date is on or after an interest record date and on
or before the related interest payment date, any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest or Liquidated Damages, if any, shall be payable to Holders who tender
Notes pursuant to the Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to such Repurchase
Offer. The Repurchase Offer shall be made to all Holders. The notice, which
shall govern the terms of the Repurchase Offer, shall describe the transaction
or transactions that constitute the Change of Control or Excess Proceeds Offer
Triggering Event, as the case may be and shall state:
(a) that the Repurchase Offer is being made pursuant to this Section
3.9 and Section 4.10 or 4.14 hereof, as the case may be, and the length of time
the Repurchase Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Repurchase Offer shall cease to accrue
interest and Liquidated Damages, if any, after the Purchase Date;
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<PAGE> 46
(e) that Holders electing to have a Note purchased pursuant to a
Repurchase Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note, duly completed,
or transfer by book-entry transfer, to the Company, the Depositary, or the
Paying Agent at the address specified in the notice not later than the close of
business on the last day of the Offer Period;
(f) that Holders shall be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(g) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(h) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before 10:00 a.m. (New York City time) on each Purchase Date,
the Company shall irrevocably deposit with the Trustee or Paying Agent in
immediately available funds the aggregate purchase price with respect to a
principal amount of Notes equal to the Offer Amount, together with accrued and
unpaid interest and Liquidated Damages, if any, thereon, to be held for payment
in accordance with the terms of this Section 3.9. On the Purchase Date, the
Company shall, to the extent lawful, (i) accept for payment, on a pro rata basis
to the extent necessary, the Offer Amount of Notes or portions thereof tendered
pursuant to the Repurchase Offer, or if less than the Offer Amount has been
tendered, all Notes tendered, (ii) deliver or cause the Paying Agent or
depository, as the case may be, to deliver to the Trustee Notes so accepted and
(iii) deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.9. The Company, the Depositary or the Paying Agent, as
the case may be, shall promptly (but in any case not later than three (3)
Business Days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Company for purchase, plus any accrued and unpaid interest and
Liquidated Damages, if any, thereon, and the Company shall promptly issue a new
Note, and the Trustee, shall authenticate and mail or deliver such new Note, to
such Holder, equal in principal amount to any unpurchased portion of such
Holder's Notes surrendered. Any Note not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company shall publicly
announce in a newspaper of general circulation or in a press release provided to
a nationally recognized financial wire service the results of the Repurchase
Offer on the Purchase Date.
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Other than as specifically provided in this Section 3.9, any
purchase pursuant to this Section 3.9 shall be made pursuant to the provisions
of Sections 3.1, 3.2, 3.5 and 3.6 hereof.
ARTICLE 4.
COVENANTS
Section 4.1. Payment of Notes.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Notes on the dates and in the manner provided in the
Notes. The Company shall pay all Liquidated Damages, if any, in the same manner
on the dates and in the amounts set forth in the Registration Rights Agreement.
Principal, premium and Liquidated Damages, if any, and interest, shall be
considered paid for all purposes hereunder on the date the Paying Agent if other
than the Company or a Subsidiary thereof holds, as of 10:00 a.m. (New York City
time) money deposited by the Company in immediately available funds and
designated for and sufficient to pay all such principal, premium and Liquidated
Damages, if any, and interest, then due.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Notes to
the extent lawful, it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
Section 4.2. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City of
New York an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee or Registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.3 hereof.
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Section 4.3. Commission Reports.
From and after the earlier of the effective date of the Exchange
Offer Registration Statement or the effective date of the Shelf Registration
Statement, whether or not required by the rules and regulations of the
Commission, so long as any Notes are outstanding, the Company shall furnish to
the Holders of Notes (i) all quarterly and annual financial information that
would be required to be contained in a filing with the Commission on Forms 10-Q
and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report thereon
by the Company's certified independent accountants and (ii) all current reports
that would be required to be filed with the Commission on Form 8-K if the
Company were required to file such reports. In addition, whether or not required
by the rules and regulations of the Commission, the Company shall file a copy of
all such information and reports with the Commission for public availability
(unless the Commission will not accept such a filing) within the time periods
that would have been applicable had the Company been subject to such rules and
regulations and make such information available to securities analysts and
prospective investors upon request. In addition, the Company has agreed that,
for so long as any Notes remain outstanding, it shall furnish to the Holders, to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act. The Company shall at all times comply with TIA ss. 314(a).
The financial information to be distributed to Holders of Notes
shall be filed with the Trustee and mailed to the Holders at their addresses
appearing in the register of Notes maintained by the Registrar, within 90 days
after the end of the Company's fiscal years and within 45 days after the end of
each of the first three quarters of each such fiscal year.
The Company shall provide the Trustee with a sufficient number of
copies of all reports and other documents and information and, if requested by
the Company, the Trustee will deliver such reports to the Holders under this
Section 4.3.
Section 4.4. Compliance Certificate.
The Company shall deliver to the Trustee, within 90 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether each has kept, observed, performed and fulfilled its
obligations under this Indenture (including, with respect to any Restricted
Payments made during such year, the basis upon which the calculations required
by Section 4.7 hereof were computed, which calculations may be based on the
Company's latest available financial statements), and further stating, as to
each such Officer signing such certificate, that, to the best of his or her
knowledge, each entity has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
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that, to the best of his or her knowledge, no event has occurred and remains in
existence by reason of which payments on account of the principal of, premium or
Liquidated Damages, if any, or interest on the Notes is prohibited or if such
event has occurred, a description of the event and what action the Company is
taking or proposes to take with respect thereto.
So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, in connection with the
year-end financial statements delivered pursuant to Section 4.3 hereof, the
Company shall use its best efforts to deliver a written statement of the
Company's independent public accountants (who shall be a firm of established
national reputation) that in making the examination necessary for certification
of such financial statements, nothing has come to their attention that would
lead them to believe that the Company has violated any provisions of Article
Four or Section 5.1 hereof or, if any such violation has occurred, specifying
the nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation. In the event that such
written statement of the Company's independent public accountants cannot be
obtained, the Company shall deliver an Officers' Certificate certifying that it
has used its best efforts to obtain such statements and was unable to do so.
The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.5. Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency all material taxes, assessments and governmental
levies, except such as are contested in good faith and by appropriate
proceedings and with respect to which appropriate reserves have been taken in
accordance with GAAP.
Section 4.6. Stay, Extension and Usury Laws.
The Company and each Subsidiary Guarantor covenants (to the extent
that it may lawfully do so) that it shall not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and the
Company and each Subsidiary Guarantor (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
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Section 4.7. Restricted Payments.
From and after the date hereof the Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly: (i)
declare or pay any dividend or make any other payment or distribution on account
of the Company's or any of its Restricted Subsidiaries' Equity Interests
(including, without limitation, any payment in connection with any merger or
consolidation involving the Company) or to the direct or indirect holders of the
Company's or any of its Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company); (ii) purchase, redeem
or otherwise acquire or retire for value (including without limitation, in
connection with any merger or consolidation involving the Company) any Equity
Interests of the Company or any direct or indirect parent of the Company; (iii)
make any payment on or with respect to, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness that is pari passu with
or subordinated to the Notes (other than Notes), except a payment of interest or
principal at Stated Maturity; or (iv) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"), unless, at the time of and
after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of the covenant described
below under caption "--Incurrence of Indebtedness and Issuance of Preferred
Stock"; and
(c) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Subsidiaries after the
date of the Indenture (excluding Restricted Payments permitted by clause (ii)
and (iii) of the next succeeding paragraph), is less than the sum of (i) 50% of
the Consolidated Net Income of the Company for the period (taken as one
accounting period) from the beginning of the first fiscal quarter commencing
after the date of the Indenture to the end of the Company's most recently ended
fiscal quarter for which internal financial statements are available at the time
of such Restricted Payment (or, if such Consolidated Net Income for such period
is a deficit, less 100% of such deficit), plus (ii) 100% of the aggregate net
cash proceeds received by the Company from the issue or sale since the date of
the Indenture of Equity Interests of the Company (other than Disqualified Stock)
or of Disqualified Stock or debt securities of the Company that have been
converted into such Equity Interests (other than Equity Interests (or
Disqualified Stock or convertible debt securities) sold to a Subsidiary of the
Company and other than Disqualified Stock or convertible debt securities that
have been converted into Disqualified Stock), plus (iii) to the extent that any
Restricted Investment that was made after the date of the Indenture is sold for
cash or otherwise liquidated or repaid for cash, the lesser of (A) the cash
return of capital with
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respect to such Restricted Investment (less the cost of disposition, if any) and
(B) the initial amount of such Restricted Investment plus (iv) if any
Unrestricted Subsidiary (A) is redesignated as a Restricted Subsidiary, the fair
market value of such redesignated Subsidiary (as determined in good faith by the
Board of Directors) as of the date of its redesignation or (B) pays any cash
dividends or cash distributions to the Company or any of its Restricted
Subsidiaries, 50% of any such cash dividends or cash distributions made after
the date of the Indenture.
The foregoing provisions will not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of the
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any pari passu or subordinated Indebtedness or Equity Interests
of the Company in exchange for, or out of the net cash proceeds of the
substantially concurrent sale or issuance (other than to a Restricted Subsidiary
of the Company) of, other Equity Interests of the Company (other than any
Disqualified Stock); (iii) the defeasance, redemption, repurchase or other
acquisition of pari passu or subordinated Indebtedness with the net cash
proceeds from an incurrence of Permitted Refinancing Indebtedness; (iv) the
payment of any dividend by a Restricted Subsidiary of the Company to the holders
of its Equity Interests on a pro rata basis; (v) Investments in any Person
(other than the Company or a Wholly-Owned Restricted Subsidiary) engaged in a
Permitted Business in an amount taken together with all other Investments made
pursuant to this clause (v) that are at that time outstanding not to exceed $5.0
million; (vi) other Investments in Unrestricted Subsidiaries having an aggregate
fair market value, taken together with all other Investments made pursuant to
this clause (vi) that are at that time outstanding, not to exceed $2.0 million;
(vii) payments to Holdings or Holberg pursuant to the tax sharing agreement
among Holberg and other members of the affiliated corporations of which Holberg
is the common parent; (viii) the designation of certain of the Company's
Subsidiaries as Unrestricted Subsidiaries immediately prior to the date of the
Indenture; (ix) the payment of a one-time dividend or distribution by the
Company to pay fees, expenses, commissions and discounts in connection with the
offering by Holdings of debt securities used to finance the Preferred Stock
Contribution; (x) the redemption in connection with the Transactions of the
preferred stock of the Company held by Holberg; (xi) the repurchase, redemption
or other acquisition or retirement for value of any Equity Interests of Holdings
or the Company held by any member of Holdings' or the Company's (or any of their
Restricted Subsidiaries) management pursuant to any management equity
subscription agreement or stock option agreement or in connection with the
termination of employment of any employees or management of Holdings or the
Company or their Subsidiaries; provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity Interests shall not
exceed $2.0 million in the aggregate plus the aggregate cash proceeds received
by Holdings or the Company after the date of the Indenture from any reissuance
of Equity Interests by Holdings or the Company to members of management of
Holdings or the Company and their Restricted Subsidiaries; and (xii) other
Restricted Payments in an aggregate amount not to exceed $10.0 million.
The Board of Directors may designate any Restricted Subsidiary to be
an Unrestricted Subsidiary if such designation would not cause a Default;
provided that in no event shall the business currently operated by any
Subsidiary Guarantor be transferred to or held by an
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Unrestricted Subsidiary. For purposes of making such determination, all
outstanding Investments by the Company and its Restricted Subsidiaries (except
to the extent repaid in cash) in the Subsidiary so designated will be deemed to
be Restricted Payments at the time of such designaiion and will reduce the
amount available for Restricted Payments under the first paragraph of this
covenant. All such outstanding Investments will be deemed to constitute
Investments in an amount equal to the fair market value of such Investments at
the time of such designation (as determined in good faith by the Board of
Directors). Such designation will only be permitted if such Restricted Payment
would be permitted at such time and if such Restricted Subsidiary otherwise
meets the definition of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any non-cash Restricted Payment shall be determined in good
faith by the Board of Directors whose resolution with respect thereto shall be
delivered to the Trustee such determination to be based upon an opinion or
appraisal issued by an accounting, appraisal or investment banking firm of
national standing if such fair market value exceeds $10.0 million. Not later
than the date of making any Restricted Payment, the Company shall deliver to the
Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
the covenant `tRestricted Paymentstt were computed, together with a copy of any
fairness opinion or appraisal required by the Indenture.
Section 4.8. Dividends and Other Payment Restrictions Affecting Restricted
Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(a) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or
(2) with respect to any other interest or participation in, or measured by, its
profits, or (b) pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries or (iii) transfer any of its properties or assets to
the Company or any of its Restricted Subsidiaries, except for such encumbrances
or restrictions existing under or by reason of (a) Existing Indebtedness as in
effect on the date of the Indenture, (b) the New Credit Facility as in effect as
of the date of the Indenture, and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings
thereof; provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacement or refinancings are no more
restrictive in the aggregate (as determined by the Credit Agent in good faith)
with respect to such dividend and other payment restrictions than those
contained in the New Credit Facility as in effect on the date of the Indenture,
(c) the Indenture and the Notes, (d) any applicable law, rule, regulation or
order, (e) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets
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of any Person, other than the Person, or the property or assets of the Person,
so acquired; provided that, in the case of Indebtedness, such Indebtedness was
permitted by the terms of the Indenture to be incurred, (f) by reason of
customary non-assignment provisions in leases entered into in the ordinary
course of business and consistent with past practices, (g) purchase money
obligations for property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (iii) above on the property so
acquired, (h) Permitted Refinancing Indebtedness; provided that the material
restrictions contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive than those contained in the agreements
governing the Indebtedness being refinanced, (i) contracts for the sale of
assets, including without limitation customary restrictions with respect to a
Subsidiary pursuant to an agreement that has been entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary, and Q) restrictions on cash or other deposits or net worth imposed
by customers under contracts entered into in the ordinary course of business.
Section 4.9. Incurrence of Indebtedness and Issuance of Preferred Stock.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt) and that the
Company will not issue any Disqualified Stock and will not permit any of its
Subsidiaries to issue any shares of preferred stock; provided, however, that the
Company may incur Indebtedness (including Acquired Debt) or issue shares of
Disqualified Stock if the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock is issued would have been at
least 2.0 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred, or the Disqualified Stock had been issued, as the case may
be, at the beginning of such four-quarter period.
The provisions of the first paragraph of this covenant will not
apply to the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):
(i) the incurrence by the Company of revolving credit Indebtedness
and letters of credit pursuant to New Credit Facility; provided that the
aggregate principal amount of all revolving credit Indebtedness (with letters of
credit being deemed to have a principal amount equal to the maximum potential
liability of the Company and its Subsidiaries thereunder) outstanding under the
New Credit Facility after giving effect to such incurrence does not exceed $40.0
million less the aggregate amount of all Net Proceeds of Asset Sales applied to
repay revolving credit Indebtedness under the New Credit Facility and to
permanently reduce the commitment thereunder pursuant to the covenant described
under Section 4.10;
(ii) the incurrence by the Company and its Restricted Subsidiaries
of the Existing Indebtedness;
(iii) the incurrence by the Company and the Subsidiary Guarantors of
Indebtedness represented by the Notes and the Note Guarantees, respectively;
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(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case incurred for the purpose
of financing all or any part of the purchase price or cost of construction or
improvement of property, plant or equipment used in the business of the Company
or such Restricted Subsidiary (whether through the direct purchase of assets or
the Capital Stock of any Person owning such Assets), in an aggregate principal
amount not to exceed $7.5 million;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness in connection with the acquisition of assets or a
new Restricted Subsidiary; provided that such Indebtedness was incurred by the
prior owner of such assets or such Restricted Subsidiary prior to such
acquisition by the Company or one of its Subsidiaries and was not incurred in
connection with, or in contemplation of, such acquisition by the Company or one
of its Subsidiaries; provided further that the principal amount (or accreted
value, as applicable) of such Indebtedness, together with any other outstanding
Indebtedness incurred pursuant to this clause (v), does not exceed $5.0 million;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to refund, refinance or replace Indebtedness that was
permitted by the Indenture to be incurred under the first paragraph hereof or
clauses (i), (ii), (iii), (iv), (v) or (xv) of this paragraph;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and any
of its Wholly Owned Restricted Subsidiaries; provided, however, that (i) if the
Company is the obligor on such Indebtedness and the payee is not a Subsidiary
Guarantor, such Indebtedness is expressly subordinated to the prior payment in
full in cash of all Obligations with respect to the Notes and (ii)(A) any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a Wholly Owned
Restricted Subsidiary and (B) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a Wholly Owned
Restricted Subsidiary shall be deemed, in each case, to constitute an incurrence
of such Indebtedness by the Company or such Restricted Subsidiary, as the case
may be;
(viii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing
or hedging currency risk or interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(ix) the guarantee by the Company or any of its Restricted
Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the
Company that was permitted to be incurred by another provision of this covenant;
(x) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt; provided, however, that if any such Indebtedness ceases to be
Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to
constitute an incurrence of
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Indebtedness by a Restricted Subsidiary of the Company that was not permitted by
this clause (x);
(xi) Indebtedness incurred by the Company or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to letters of
credit issued in the ordinary course of business, including without limitation
to letters of credit in respect to workers' compensation claims or
self-insurance, surety bonds or other Indebtedness with respect to reimbursement
type obligations regarding workers' compensation claims provided, however, that
upon the drawing of such letters of credit or the incurrence of such
Indebtedness, such obligations are reimbursed within 30 days following such
drawing or incurrence;
(xii) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred or assumed in connection
with the disposition of any business, asset or Subsidiary, other than guarantees
of Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Subsidiary for the purpose of financing such acquisition;
provided that the maximum aggregate liability of all such Indebtedness shall at
no time exceed 50% of the gross proceeds actually received by the Company;
(xiii) obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary in
the ordinary course of business;
(xiv) guarantees incurred in the ordinary course of business in an
aggregate principal amount not to exceed $5.0 million; and
(xv) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness, including Attributable Debt incurred
after the date of the Indenture, in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any other
Indebtedness incurred pursuant to this clause (xv), not to exceed $25.0 million.
For purposes of determining compliance with this covenant, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xv) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this covenant and such item of Indebtedness will be
treated as having been incurred pursuant to only one of such clauses or pursuant
to the first paragraph hereof. The incurrence of Indebtedness pursuant to the
first paragraph of the covenant described above shall not be classified as any
of the Items in clauses (i) through (xv) above. Accrual of interest and the
accretion of accreted value will not be deemed to be an incurrence of
Indebtedness for purposes of this covenant.
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Section 4.10. Assets Sales.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the time of
such Asset Sale at least equal to the fair market value (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of and (ii) at least 80% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash;
provided that the amount of (x) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet), of the Company or any
Restricted Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated to the Notes or any guarantee thereof) that are
assumed by the transferee of any such assets pursuant to a customary novation
agreement that releases the Company or such Restricted Subsidiary from further
liability and (y) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are
converted by the Company or such Restricted Subsidiary into cash within 180 days
(to the extent of the cash received), shall be deemed to be cash for purposes of
this provision.
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds, at its option, (a) to permanently
repay Senior Debt, (and to correspondingly reduce commitments with respect
thereto in the case of revolving borrowings), or (b) to the acquisition of a
controlling interest in another business, the making of a capital expenditure or
the acquisition of other long-term assets and parking facility agreements, in
each case, in a Permitted Business. Pending the final application of any such
Net Proceeds, the Company may temporarily reduce the revolving Indebtedness
under the New Credit Facility or otherwise invest such Net Proceeds in any
manner that is not prohibited by the Indenture. Any Net Proceeds from Asset
Sales that are not applied or invested as provided in the first sentence of this
paragraph will be deemed to constitute "Excess Proceeds." When the aggregate
amount of Excess Proceeds exceeds $10.0 million, the Company will be required to
make an offer to all Holders of Notes (an "Asset Sale Offer") to purchase the
maximum principal amount of Notes that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the principal
amount thereof plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the date of purchase, in accordance with the procedures set forth in
the Indenture. To the extent that the aggregate amount of Notes tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
may use any remaining Excess Proceeds for general corporate purposes. If the
aggregate principal amount of Notes surrendered by Holders thereof exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes to be purchased on
a pro rata basis. Upon completion of such offer to purchase, the amount of
Excess Proceeds shall be reset at zero.
Section 4.11. Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction,
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contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction")
unless (i) such Affiliate Transaction is on terms that are no less favorable to
the Company or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5.0 million, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
either aggregate consideration in excess of $10.0 million, an opinion as to the
fairness to the Holders of such Affiliate Transaction from a financial point of
view issued by an accounting, appraisal or investment banking firm of national
standing; provided that the following shall not be deemed Affiliate
Transactions: (q) the Company's lease on behalf of Holberg of a plane under
arrangements consistent with past practices, (r) the Company's payment of the
fees and expenses of the offering of Holdings' 11__% Senior Discount Notes
due 2008, (s) on or about the Effective Date, the Company's cancellation and
forgiveness of approximately $4.5 million of advances previously made to
Holberg, (t) any employment agreement entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business and consistent with
the past practice of the Company or such Restricted Subsidiary, (u) transactions
between or among the Company and/or its Restricted Subsidiaries, (v) Permitted
Investments and Restricted Payments that are permitted by the provisions of
Section 4.7 hereof, (w) customary loans, advances, fees and compensation paid
to, and indemnity provided on behalf of, officers, directors, employees or
consultant of the Company or any of its Restricted Subsidiaries, (x) annual
management fees paid to Holberg not to exceed $5.0 million in any one year, (y)
transaction pursuant to any contract or agreement in effect on the date hereof
as the same may be amended, modified or replaced from time to time so long as
any such amendment, modification or replacement is no less favorable to the
Company and its Restricted Subsidiaries than contract or agreement as in effect
on the Issue Date or is approved by a majority of the disinterested directors of
AP Holdings, Inc., (z) transactions between the Company or its Restricted
Subsidiaries on the one hand, and Holberg on the other hand, involving the
procuring on provision of financial or advisory services by Holberg; provided
that fees and expenses payable to Holberg do not exceed the usual and customary
fees and expenses for similar services, (aa) transactions between the Company or
its Restricted Subsidiaries on the one hand, and DLJ or its Affiliates on the
other hand, involving the provision of financial, advisory, lending, placement
or underwriting services by DLJ; provided that fees payable to DLJ do not exceed
the usual and customary fees of DLJ for similar services, (bb) the insurance
arrangements between AP Holdings, Inc. and its Subsidiaries and an Affiliate of
Holberg that are not less favorable to the Company or any of its Subsidiaries
than those that are in effect on the date hereof provided such arrangements are
conducted in the ordinary course of business consistent with past practices, and
(cc) payments under the tax sharing agreement among Holberg and other members of
the affiliated group of corporations of which it is the common parent.
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Section 4.12. Liens.
The Company shall not and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind securing trade payables or Indebtedness
that does not constitute Senior Debt (other than Permitted Liens) upon any of
their property or assets, now owned or hereafter acquired.
Section 4.13. Sale and Leaseback Transactions.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company may enter into a sale and leaseback transaction if (i) the Company
could have (a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to the covenant
described above under the caption "--Incurrence of Additional Indebtedness and
Issuance of Preferred Stock" and (b) incurred a Lien to secure such Indebtedness
pursuant to the covenant described above under the caption "--Liens," (ii) the
gross cash proceeds of such sale and leaseback transaction are at least equal to
the fair market value (as determined in good faith by the Board of Directors and
set forth in an Officers' Certificate delivered to the Trustee) of the property
that is the subject of such sale and leaseback transaction and (iii) the
transfer of assets in such sale and leaseback transaction is permitted by, and
the Company applies the proceeds of such transaction in compliance with, the
covenant described hereof under Section 4.10."
Section 4.14. Offer to Purchase Upon Change of Control.
Upon the occurrence of a Change of Control, each Holder of Notes
will have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of Control Offer") at an offer price in
cash equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on the date specified in such notice, which date shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date"), pursuant to the procedures
required by Section 3.9 hereof and described in such notice. The Company shall
comply with the requirements of Rule 1 4e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control.
On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent will promptly mail to each Holder of Notes so tendered
the Change of Control
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Payment for such Notes, and the Trustee will promptly authenticate and mail (or
cause to be transferred by book entry) to each Holder a new Note equal in
principal amount to any unpurchased portion of the Notes surrendered, if any;
provided that each such new Note will be in a principal amount of $1,000 or an
integral multiple thereof. Prior to complying with the provisions of this
Section 4.14, but in any event within 90 days following a Change of Control, the
Company shall either repay all outstanding Senior Debt or obtain the requisite
consents, if any, under all agreements governing outstanding Senior Debt to
permit the repurchase of Notes required by this Section 4.14. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Change of Control provisions described above will be applicable
whether or not any other provisions of this Indenture are applicable. Except as
described above with respect to a Change of Control, this Indenture does not
contain provisions that permit the Holders of the Notes to require that the
Company repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction.
The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth herein applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
Section 4.15. Corporate Existence.
Subject to Section 4.14 and Article 5 hereof, as the case may be,
the Company and each Subsidiary Guarantor shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each of its
Subsidiaries in accordance with the respective organizational documents (as the
same may be amended from time to time) of the Company or any such Subsidiary and
the rights (charter and statutory), licenses and franchises of the Company and
its Subsidiaries; provided that the Company shall not be required to preserve
any such right, license or franchise, or the corporate, partnership or other
existence of any of its Subsidiaries, if the Board of Directors of the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries, taken as a whole,
and that the loss thereof is not adverse in any material respect to the Holders
of the Notes.
Section 4.16. Limitation on Issuances of Capital Stock of Wholly Owned
Restricted Subsidiaries.
The Company (i) shall not, and shall not permit any Wholly Owned
Restricted Subsidiary of the Company to, transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of any Wholly Owned Subsidiary of the
Company to any Person (other than the Company or a Wholly Owned Restricted
Subsidiary of the Company), unless (a) such transfer, conveyance, sale, lease or
other disposition is of all the Capital Stock of such Wholly Owned Restricted
Subsidiary and (b) the cash Net Proceeds from such transfer, conveyance, sale,
lease or other disposition are applied in accordance with Section 4.10 hereof
and (ii) will not permit any
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Wholly Owned Restricted Subsidiary of the Company to issue any of its Equity
Interests (other than, if necessary, shares of its Capital Stock constituting
directors' qualifying shares) to any Person other than to the Company or a
Wholly Owned Restricted Subsidiary of the Company.
Section 4.17. Limitations on Issuances of Guarantees of Indebtedness.
The Company shall not permit any Restricted Subsidiary, directly or
indirectly, to Guarantee or pledge any assets to secure the payment of any other
Indebtedness of the Company unless either such Restricted Subsidiary (x) is a
Subsidiary Guarantor or (y) simultaneously executes and delivers a supplemental
indenture to the Indenture providing for the Guarantee of the payment of the
Notes by such Restricted Subsidiary, which Guarantee shall be senior to or pari
passu with such Restricted Subsidiary's Guarantee of or pledge to secure such
other Indebtedness. Notwithstanding the foregoing, any such Guarantee by a
Restricted Subsidiary of the Notes shall provide by its terms that it shall be
automatically and unconditionally released and discharged upon any sale,
exchange or transfer, to any Person not an Affiliate of the Company, of all of
the Company's stock in, or all or substantially all the assets of, such
Restricted Subsidiary, which sale, exchange or transfer is made in compliance
with the applicable provisions hereof. The form and substance of such Guarantee
shall be substantially similar to EXHIBIT D hereto.
Section 4.18. Business Activities.
The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any business other than Permitted Businesses, except to
such extent as would not be material to the Company and its Restricted
Subsidiaries taken as a whole.
Section 4.19. Additional Guarantees.
If (i) the Company or any of its Restricted Subsidiaries shall,
after the date hereof, transfer or cause to be transferred, including by way of
any Investment, in one or a series of transactions (whether or not related), any
assets, businesses, divisions, real property or equipment having an aggregate
fair market value (as determined in good faith by the Board of Directors) in
excess of $1.0 million to any Restricted Subsidiary that is not a Subsidiary
Guarantor or a foreign Subsidiary, (ii) the Company or any of its Restricted
Subsidiaries shall acquire another Restricted Subsidiary other than a foreign
Subsidiary having total assets with a fair market value (as determined in good
faith by the Board of Directors) in excess of $1.0 million, or (iii) any
Restricted Subsidiary other than a foreign Subsidiary shall incur Acquired Debt
in excess of $1.0 million, then the Company shall, at the time of such transfer,
acquisition or incurrence, (A) cause such transferee, acquired Restricted
Subsidiary or Restricted Subsidiary incurring Acquired Debt (if not then a
Subsidiary Guarantor) to execute a Note Guarantee of the Obligations of the
Company under the Notes in the form and substance substantially similar to
EXHIBIT D hereto and (B) deliver to the Trustee an Opinion of Counsel, in form
reasonably satisfactory to the Trustee, that such Note Guarantee is a valid,
binding and enforceable obligation of such transferee, acquired Restricted
Subsidiary or Restricted Subsidiary incurring Acquired Debt, subject to
customary exceptions for bankruptcy, fraudulent conveyance and equitable
principles. Notwithstanding the foregoing, the Company or any of its Restricted
Subsidiaries may make a
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Restricted Investment in any Wholly Owned Restricted Subsidiary of the Company
without compliance with this Section 4.19, provided that such Restricted
Investment is permitted by Section 4.7 hereof.
Section 4.20. Payment for Consents.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions hereof or
the Notes unless such consideration is offered to be paid or is paid to all
Holders of the Notes that consent, waive or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or
agreement.
Section 4.21. Anti-Layering.
The Company shall not incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is both (a) subordinate or
junior in right of payment to any Senior Debt and (b) senior in any respect in
right of payment to the Notes. No Subsidiary Guarantor shall incur, create,
issue, assume, guarantee or otherwise become liable for any Indebtedness that is
both (a) subordinate or junior in right of payment to its Senior Debt and (b)
senior in right of the Section 4.9 hereof.
ARTICLE 5.
SUCCESSORS
Section 5.1 Merger, Consolidation of Sale of Assets.
The Company shall not consolidate or merge with or into (whether or
not the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the Notes
and this Indenture pursuant to a supplemental indenture in a form substantially
similar to EXHIBIT E hereto; (iii) immediately after such transaction no Default
or Event of Default exists; (iv) except in the case of a merger of the Company
with or into a Wholly Owned Restricted Subsidiary of the Company, the Company or
the entity or Person formed by or surviving any such consolidation or merger (if
other than the Company), or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made will, at the time of such
transaction and after giving pro forma effect thereto as if such transaction had
occurred at the beginning of the applicable four-quarter period,
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be permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph of the Section
4.9 hereof.
Section 5.2. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.1 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and shall exercise every
right and power of the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein; provided, that, (i)
solely for the purposes of computing Consolidated Net Income for purposes of
clause (b) of the first paragraph of Section 4.7 hereof, the Consolidated Net
Income of any person other than the Company and its Subsidiaries shall be
included only for periods subsequent to the effective time of such merger,
consolidation, combination or transfer of assets; and (ii) in the case of any
sale, assignment, transfer, lease, conveyance, or other disposition of less than
all of the assets of the predecessor Company, the predecessor Company shall not
be released or discharged from the obligation to pay the principal of or
interest and Liquidated Damages, if any, on the Notes.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.1 Events of Default.
Each of the following constitutes an "Event of Default":
(i) default for 30 days in the payment when due of interest
on, or Liquidated Damages with respect to, the Notes;
(ii) default in payment when due of principal of or premium,
if any, on the Notes;
(iii) failure by the Company to comply with the provisions
described under Sections 4.10 or 4.14 or Article 5 hereof;
(iv) failure by the Company for 30 days after notice from the
Trustee or at least 30% in principal amount of the Notes then outstanding to
comply with the provisions described under Sections 4.7 or 4.9 hereof;
(v) failure by the Company for 60 days after notice from the
Trustee or at least 25% in principal amount of the Notes then outstanding to
comply with any of its other agreement in this Indenture or the Notes;
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(vi) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Subsidiaries (or
the payment of which is guaranteed by the Company or any of its Subsidiaries)
whether such Indebtedness or Guarantee now exists, or is created after the date
hereof, which default (a) is caused by a failure to pay principal of or premium,
if any, or interest on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (a "Payment
Default") or (b) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $15.0 million or more;
(vii) failure by the Company or any of its Subsidiaries to pay
final judgments aggregating in excess of $5.0 million, which judgments are not
paid, discharged or stayed for a period of 60 days;
(viii) the Company or any of its Significant Subsidiaries or
any group of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, pursuant to or within the meaning of Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in an
involuntary case,
(c) consents to the appointment of a Custodian of it or for all or
substantially all of its property,
(d) makes a general assignment for the benefit of its creditors, or
(e) generally is not paying its debts as they become due; or
(i) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(f) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary in an involuntary case;
(g) appoints a Custodian of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary or for all or substantially all of the
property of the Company or any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary;
or
(h) orders the liquidation of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary; and the order or decree remains unstayed
and in effect for 60 consecutive days.
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The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
Section 6.2. Acceleration.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately provided, however, that
if any Indebtedness or Obligation is outstanding pursuant to the New Credit
Facility, upon a declaration of acceleration by the holders of the Notes or the
Trustee, all principal and interest under this Indenture shall be due and
payable upon the earlier of (x) the day five Business Days after the provision
to the Company, the Credit Agent and the Trustee of such written notice of
acceleration or (y) the date of acceleration of any Indebtedness under the New
Credit Facility; and provided, further, that in the event of an acceleration
based upon an Event of Default set forth in clause (vi) above, such declaration
of acceleration shall be automatically annulled if the holders of Indebtedness
which is the subject of such failure to pay at maturity or acceleration have
rescinded their declaration of acceleration in respect of such Indebtedness or
such failure to pay at maturity shall have been cured or waived within 30 days
thereof and no other Event of Default has occurred during such 30-day period
which has not been cured, paid or waived. Notwithstanding the foregoing, in the
case of an Event of Default as described in (viii) and (ix) of Section 6.1
hereof, all outstanding Notes will become due and payable without further action
or notice. Holders of the Notes may not enforce this Indenture or the Notes
except as provided in this Indenture.
In the case of any Event of Default occurring by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Notes pursuant to
the optional redemption provisions of Section 3.7(a) hereof, an equivalent
premium shall also become and be immediately due and payable to the extent
permitted by law upon the acceleration of the Notes. If an Event of Default
occurs prior to March 15, 2003 by reason of any willful action (or inaction)
taken (or not taken) by or on behalf of the Company with the intention of
avoiding the prohibition on redemption of the Notes prior to March 15, 2003,
then the amount payable in respect of such Notes for purposes of this paragraph
for each of the twelve-month periods beginning on March 15 of the years
indicated below shall be set forth below, expressed as percentages of the
principal amount that would otherwise be due but for the provisions of this
sentence, plus accrued and unpaid interest and Liquidated Damages, if any, to
the date of payment:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
1998............................................109.250%
1999............................................108.325%
2000............................................107.400%
2001............................................106.475%
2002............................................105.550%
</TABLE>
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Section 6.3. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, interest and Liquidated Damages, if any, on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
Section 6.4. Waiver of Past Defaults.
The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under this Indenture (including any acceleration (other than an automatic
acceleration resulting from an Event of Default under clause (viii) or (ix) of
Section 6.1 hereof) except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes (other than as a result
of an acceleration), which shall require the consent of all of the Holders of
the Notes then outstanding.
Section 6.5. Control by Majority.
The Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust power conferred on it. However, (i) the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability, and (ii) the Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with such
direction. In case an Event of Default shall occur (which shall not be cured),
the Trustee will be required, in the exercise of its power, to use the degree of
care of a prudent man in the conduct of his own affairs. Notwithstanding any
provision to the contrary in this Indenture, the Trustee is under no obligation
to exercise any of its rights or powers under this Indenture at the request of
any Holder of Notes, unless such Holder shall offer to the Trustee security and
indemnity satisfactory to it against any loss, liability or expense.
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Section 6.6. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this
Indenture, the Note Guarantees or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default or the Trustee receives such notice from the
Company;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
Section 6.7. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium, if any, interest,
and Liquidated Damages, if any, on the Note, on or after the respective due
dates expressed in the Note (including in connection with an offer to purchase),
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
Section 6.8. Collection Suit by Trustee.
If an Event of Default specified in Section 6.1(i) or (ii) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium and Liquidated Damages, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
Section 6.9. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings
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relative to the Company (or any other obligor upon the Notes), its creditors or
its property and shall be entitled and empowered to collect, receive and
distribute any money or other securities or property payable or deliverable upon
the conversion or exchange of the Notes or on any such claims and any Custodian
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.7 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7 hereof out
of the estate in any such proceeding, shall be denied for any reason, payment of
the same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.7 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, if any, interest, and Liquidated Damages, if any,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium, if any, interest, and
Liquidated Damages, if any, respectively;
Third: without duplication, to the Holders for any other Obligations
owing to the Holders under this Indenture and the Notes; and
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment
to Holders of Notes pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its
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discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.7
hereof, or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.1. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing of which a
Responsible Officer of the Trustee has knowledge, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture and use the same
degree of care and skill in its exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture or the TIA and the Trustee need perform
only those duties that are specifically set forth in this Indenture or the TIA
and no others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 7.1;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5 hereof.
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(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section 7.1.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.2. Rights of Trustee.
(a) The Trustee may conclusively rely on the truth of the statements
and correctness of the opinions contained in, and shall be protected from acting
or refraining from acting upon, any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. Prior to taking, suffering or
admitting any action, the Trustee may consult with counsel of the Trustee's own
choosing and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company or any Subsidiary
Guarantor shall be sufficient if signed by an Officer of the Company or
Subsidiary Guarantor, as applicable.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee against the costs,
expenses and liabilities that might be incurred by it in compliance with such
request or direction.
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Section 7.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner of Notes and may otherwise deal with the Company, the Subsidiary
Guarantors or any Affiliate of the Company or any Subsidiary Guarantor with the
same rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the Commission for permission to continue as Trustee or
resign. Any Agent may do the same with like rights and duties. The Trustee is
also subject to Sections 7.10 and 7.11 hereof.
Section 7.4. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, the Note Guarantees or the
Notes, it shall not be accountable for the Company's use of the proceeds from
the Notes or any money paid to the Company or upon the Company's direction under
any provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.5. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it
is known to a Responsible Officer of the Trustee, the Trustee shall mail to
Holders of Notes a notice of the Default or Event of Default within 90 days
after it occurs. Except in the case of a Default or Event of Default in payment
on any Note pursuant to Section 6.1(i) or (ii) hereof, the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the Holders
of the Notes.
Section 7.6. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA ss. 313(a) (but if no event described in
TIA ss. 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA ss.
313(b). The Trustee shall also transmit by mail all reports as required by TIA
ss. 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Company has informed the Trustee in writing the
Notes are listed in accordance with TIA ss. 313(d). The Company shall promptly
notify the Trustee when the Notes are listed on any stock exchange and of any
delisting thereof.
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Section 7.7. Compensation And Indemnity.
The Company and the Subsidiary Guarantors shall pay to the Trustee
from time to time reasonable compensation for its acceptance of this Indenture
and services hereunder. To the extent permitted by law, the Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee promptly upon request for
all reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
The Company and the Subsidiary Guarantors shall indemnify the
Trustee against any and all losses, liabilities or expenses incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company and the Subsidiary Guarantors (including this
Section 7.7) and defending itself against any claim (whether asserted by the
Company, the Subsidiary Guarantors or any Holder or any other person) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall notify the
Company and the Subsidiary Guarantors promptly of any claim for which it may
seek indemnity. Failure by the Trustee to so notify the Company and the
Subsidiary Guarantors shall not relieve the Company and the Subsidiary
Guarantors of its obligations hereunder. The Company and the Subsidiary
Guarantors shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the Company and the
Subsidiary Guarantors shall pay the reasonable fees and expenses of such
counsel. The Company and the Subsidiary Guarantors need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld.
The obligations of the Company and the Subsidiary Guarantors under
this Section 7.7 shall survive the satisfaction and discharge of this Indenture.
To secure the Company's and the Subsidiary Guarantors' payment
obligations in this Section 7.7, the Trustee shall have a Lien prior to the
Notes on all money or property held or collected by the Trustee, except that
held in trust to pay principal, interest and Liquidated Damages, if any, on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture and the resignation or removal of the Trustee.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.1 (viii) or (ix) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
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Section 7.8. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.8.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who
has been a Holder of a Note for at least six months, fails to comply with
Section 7.10 hereof, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and the duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its
succession to the Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, provided
that all sums owing to the Trustee hereunder have been paid and subject to the
Lien provided for in Section 7.7 hereof. Notwithstanding replacement of the
Trustee pursuant to this Section 7.8, the Company's obligations under Section
7.7 hereof shall continue for the benefit of the retiring Trustee.
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Section 7.9. Successor Trustee by Merger, etc.
If the Trustee or any Agent consolidates, merges or converts into,
or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor Trustee or any Agent, as applicable.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities. The Trustee and its direct parent shall at all
times have a combined capital surplus of at least $50.0 million as set forth in
its most recent annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
Section 7.11. Preferential Collection of Claims Against The Company.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company and the Subsidiary Guarantors may, at the option of
their respective Boards of Directors evidenced by a resolution set forth in an
Officers' Certificate, at any time, elect to have either Section 8.2 or 8.3
hereof be applied to all outstanding Notes and Note Guarantees upon compliance
with the conditions set forth below in this Article 8.
Section 8.2. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Company and each Subsidiary Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.4 hereof,
be deemed to have been discharged from their respective obligations with respect
to all outstanding Notes and Note Guarantees on the date the conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
Legal Defeasance means that the Company and each Subsidiary Guarantor shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes and Note Guarantees, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.5 hereof and the other Sections
of this Indenture referred to in (a) and (b) below, and to have satisfied all
their respective other obligations under such Notes and Note Guarantees and
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this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, premium, if any, and interest and
Liquidated Damages, if any, on such Notes when such payments are due from the
trust referred to in Section 8.4(a); (b) the Company's obligations with respect
to such Notes under Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.10 and 4.2 hereof;
(c) the rights, powers, trusts, duties and immunities of the Trustee including
without limitation thereunder Section 7.7, 8.5 and 8.7 hereof and the Company's
obligations in connection therewith and (d) the provisions of this Article 8.
Subject to compliance with this Article 8, the Company may exercise its option
under this Section 8.2 notwithstanding the prior exercise of its option under
Section 8.3 hereof.
Section 8.3. Covenant Defeasance.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Company and each Subsidiary Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.4 hereof,
be released from its obligations under the covenants contained in Sections 3.9,
4.5, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19,
5.1 and 11.1 hereof with respect to the outstanding Notes and Note Guarantees on
and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes and Note Guarantees shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes and Note
Guarantees shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes
and Note Guarantees, the Company or any of its Subsidiaries may omit to comply
with and shall have no liability in respect of any term, condition or limitation
set forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.1 hereof, but, except as specified above, the remainder of this
Indenture and such Notes and Note Guarantees shall be unaffected thereby. In
addition, upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, subject to the satisfaction of the conditions
set forth in Section 8.4 hereof, Sections 6.1(iii) through 6.1(v) hereof shall
not constitute Events of Default.
Section 8.4. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Notes and Note Guarantees:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable
Government Securities, or
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a combination thereof, in such amounts as shall be sufficient, in the opinion of
a nationally recognized firm of independent public accountants, to pay the
principal of, premium and Liquidated Damages, if any, and interest on the
outstanding Notes on the stated maturity or on the applicable redemption date,
as the case may be, and the Company must specify whether the Notes are being
defeased to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.2 hereof, the Company
shall have delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date hereof, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such opinion of counsel shall confirm that, the Holders of the outstanding Notes
shall not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and shall be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.3 hereof, the Company
shall have delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes shall not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and shall be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit) or insofar
as Events of Default from bankruptcy or insolvency events are concerned, at any
time in the period ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under any material agreement
or instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) the Company shall have delivered to the Trustee an opinion of
counsel to the effect that after the 91st day following the deposit, the trust
funds shall not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of Notes over the other creditors of the Company with
the intent of defeating, hindering, delaying or defrauding creditors of the
Company or others; and
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(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an opinion of counsel, each stating that all conditions
precedent provided for relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Section 8.5. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.6 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.5, the
"Trustee") pursuant to Section 8.4 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, interest and
Liquidated Damages, if any, but such money need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.4 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the written
request of the Company and be relieved of all liability with respect to any
money or non-callable Government Securities held by it as provided in Section
8.4 hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.4(a) hereof), are in
excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.6. Repayment to The Company.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, interest or Liquidated Damages, if any, on any Note and remaining unclaimed
for one year after such principal, and premium, if any, or interest or
Liquidated Damages, if any, has become due and payable shall be paid to the
Company on its written request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30
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days from the date of such notification or publication, any unclaimed balance of
such money then remaining shall be repaid to the Company.
Section 8.7. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or noncallable Government Securities in accordance with Section 8.2 or
8.3 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Company and the Subsidiary Guarantors
under this Indenture, the Notes and the Note Guarantees shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.2 or 8.3
hereof until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.2 or 8.3 hereof, as the case may be;
provided, however, that, if the Company makes any payment of principal of,
premium, if any, interest or Liquidated Damages, if any, on any Note following
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money held
by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.1. Without Consent of Holders of the Notes.
Notwithstanding Section 9.2 of this Indenture, without the consent
of any Holder of Notes the Company and the Trustee may amend or supplement this
Indenture, the Notes or the Note Guarantees:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(c) to provide for the assumption of the Company's or a Subsidiary
Guarantor's obligations to the Holders of the Notes in the case of a merger, or
consolidation pursuant to Article 5 or Article 11 hereof, as applicable;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any Holder of the Notes;
(e) to comply with requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the TIA;
(f) to issue additional Notes hereunder; provided that the aggregate
principal amount of Notes issued hereunder shall not exceed $200 million; or
(g) to allow any Subsidiary to Guarantee the Notes.
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Upon the written request of the Company accompanied by a resolution
of its Board of Directors of the Company authorizing the execution of any such
amended or supplemental indenture, and upon receipt by the Trustee of the
documents described in Section 9.6 hereof, the Trustee shall join with the
Company and the Subsidiary Guarantors in the execution of any amended or
supplemental indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 9.2. With Consent of Holders of Notes.
Except as provided below in this Section 9.2, or as provided in
Section 10.13 or Section 12.13, this Indenture, the Notes or the Note Guarantees
may be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer, for Notes), and, any existing default or compliance with any
provision of this Indenture, the Notes or the Note Guarantees may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Notes (including consents obtained in connection with or a tender
offer or exchange offer for the Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 9.6 hereof, the Trustee shall
join with the Company and the Subsidiary Guarantors in the execution of such
amended or supplemental indenture unless such amended or supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may, but shall not be obligated to, enter
into such amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.2 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof. After an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Company shall mail to the Holders of each Note affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
indenture or waiver.
Subject to Sections 6.2, 6.4, 6.7, 10.13 and 12.13 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding may amend or waive compliance in a particular instance by the
Company or the Subsidiary Guarantors with any provision of this Indenture, the
Notes or the Note Guarantees. However, without the consent of each Holder
affected, an amendment, or waiver may not (with respect to any Note held by a
non-consenting Holder):
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(a) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes (other than
provisions relating to Sections 3.9, 4.10 and 4.14 hereof);
(c) reduce the rate of or change the time for payment of interest on
any Note;
(d) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the Notes and a waiver of the payment default that resulted
from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in Section 6.4 or 6.7 hereof;
(g) waive a redemption or repurchase payment with respect to any
Note (other than a payment required by Section 4.10 or 4.14 hereof); or
(h) make any change in the amendment and waiver provisions of this
Article 9.
Section 9.3. Compliance with Trust Indenture Act
Every amendment or supplement to this Indenture, the Note Guarantees
or the Notes shall be set forth in an amended or supplemental indenture that
complies with the TIA as then in effect.
Section 9.4. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. When an amendment, supplement or waiver becomes effective in
accordance with its terms, it thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date
for determining which Holders of the Notes must consent to such amendment,
supplement or waiver. If the Company fixes a record date, the record date shall
be fixed at (i) the later of 30 days prior to the first solicitation of such
consent or the date of the most recent list of Holders of Notes furnished for
the Trustee prior to such solicitation pursuant to Section 2.5 hereof or (ii)
such other date as the Company shall designate.
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Section 9.5. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
Section 9.6. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company and the Subsidiary Guarantors may not sign an amendment or
supplemental indenture until their respective Boards of Directors approve it. In
signing or refusing to sign any amended or supplemental indenture the Trustee
shall be entitled to receive and (subject to Section 7.1 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section 11.4
hereof, an Officers' Certificate and an Opinion of Counsel stating that the
execution of such amended or supplemental indenture is authorized or permitted
by this Indenture, that it is not inconsistent herewith, and that it will be
valid and binding upon the Company and the Subsidiary Guarantors in accordance
with its terms.
ARTICLE 10.
SUBORDINATION
Section 10.1. Agreement to Subordinate.
The Company agrees, and each Holder of Notes by accepting a Note
agrees, that the Indebtedness evidenced by the Note is subordinated in right of
payment, to the extent and in the manner provided in this Article, to the prior
payment in full of all Senior Debt (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed), and that the subordination
is for the benefit of the holders of Senior Debt.
Section 10.2. Liquidation; Dissolution; Bankruptcy.
Upon any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors in any
Insolvency or Liquidation Proceeding with respect to the Company, all amounts
due or to become due under or with respect to all Senior Debt shall first be
paid in full in cash or cash equivalents before any payment is made on account
of the Notes and all other Obligations with respect thereto, except that the
Holders of Notes may receive Reorganization Securities. Upon any such Insolvency
or Liquidation Proceeding, any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or securities (other than
Reorganization Securities), to which the Holders of the Notes or the Trustee
would be entitled shall be paid by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such payment or
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distribution, or by the Holders of the Notes or by the Trustee if received by
them, directly to the holders of Senior Debt (pro rata to such holders on the
basis of the amounts of Senior Debt held by such holders) or their
Representative or Representatives, as their interests may appear, for
application to the payment of the Senior Debt remaining unpaid until all such
Senior Debt has been paid in full in cash, after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of Senior
Debt.
Section 10.3. Default on Designated Senior Debt.
(a) In the event of and during the continuation of any default in
the payment of principal of, interest or premium, if any, on any Senior Debt, or
any Obligation owing from time to time under or in respect of Senior Debt, or in
the event that any event of default (other than a payment default) with respect
to any Senior Debt shall have occurred and be continuing and shall have resulted
in such Senior Debt becoming or being declared due and payable prior to the date
on which it would otherwise have become due and payable, or
(b) if any event of default other than as described in clause (a)
above with respect to any Designated Senior Debt shall have occurred and be
continuing permitting the holders of such Designated Senior Debt (or their
Representative or Representatives) to declare such Designated Senior Debt due
and payable prior to the date on which it would otherwise have become due and
payable, then no payment shall be made by or on behalf of the Company on account
of the Notes (other than payments in the form of Reorganization Securities) (x)
in case of any payment or nonpayment default specified in (a), unless and until
such default shall have been cured or waived in writing in accordance with the
instruments governing such Senior Debt or such acceleration shall have been
rescinded or annulled, or (y) in case of any nonpayment event of default
specified in (b), during the period (a "Payment Blockage Period") commencing on
the date the Company and the Trustee receive written notice (a "Payment Notice")
of such event of default specifically referring to this Article 10 (which notice
shall be binding on the Trustee and the Holders of Notes as to the occurrence of
such a payment default or nonpayment event of default) from the Credit Agent (or
other holders of Designated Senior Debt or their Representative or
Representatives) and ending on the earliest of (A) 179 days after such date, (B)
the date, if any, on which the Trustee receives written notice from the Credit
Agent (or other holders of Designated Senior Debt or their Representative or
Representatives), as the case may be, stating that such Designated Senior Debt
to which such default relates is paid in full in cash or such default is cured
or waived in writing in accordance with the instruments governing such
Designated Senior Debt by the holders of such Designated Senior Debt and (C) the
date on which the Trustee receives written notice from the Credit Agent (or
other holders of Designated Senior Debt or their Representative or
Representatives), as the case may be, terminating the Payment Blockage Period.
During any consecutive 360-day period, the aggregate of all Payment Blockage
Periods shall not exceed 179 days and there shall be a period of at least 181
consecutive days in each consecutive 360-day period when no Payment Blockage
Period is in effect. No event of default which existed or was continuing with
respect to the Senior Debt for which notice commencing a Payment Blockage Period
was given on the date such Payment Blockage Period commenced shall be or be made
the basis for the commencement of any
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subsequent Payment Blockage Period unless such event of default is cured or
waived for a period of not less than 90 consecutive days.
Section 10.4. Acceleration of Notes.
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the
acceleration.
Section 10.5. When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder of a Note receives any
payment of any Obligations with respect to the Notes at a time when such payment
is prohibited by Section 10.3 hereof, such payment shall be held by the Trustee
or such Holder, in trust for the benefit of, and shall be paid forthwith over
and delivered, upon written request, to, the holders of Senior Debt as their
interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
With respect to the holders of Senior Debt, the Trustee undertakes
to perform only such obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Indenture against
the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders of the Notes or
the Company or any other Person money or assets to which any holders of Senior
Debt shall be entitled by virtue of this Article 10, except if such payment is
made as a result of the willful misconduct or gross negligence of the Trustee.
Section 10.6. Notice by the Company.
The Company shall promptly notify the Trustee and the Paying Agent
of any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article, which notice shall
specifically refer to this Article 10, but failure to give such notice shall not
affect the subordination of the Notes to the Senior Debt as provided in this
Article.
Section 10.7. Subrogation.
After all Senior Debt is paid in full and until the Notes are paid
in full, Holders of the Notes shall be subrogated (equally and ratably with all
other pari passu indebtedness) to the rights of holders of Senior Debt to
receive distributions applicable to Senior Debt to the extent that distributions
otherwise payable to the Holders of the Notes have been applied to the payment
of Senior Debt. A distribution made under this Article to holders of Senior Debt
that otherwise would have been made to Holders of the Notes is not, as between
the Company and Holders of the Notes, a payment by the Company on the Notes.
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Section 10.8. Relative Rights.
This Article defines the relative rights of Holders of the Notes and
holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders of the Notes, the
obligations of the Company, which are absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders of the Notes and creditors
of the Company other than their rights in relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder of the Notes from exercising
its available remedies upon a Default or Event of Default, subject to the rights
of holders and owners of Senior Debt to receive distributions and payments
otherwise payable to Holders of the Notes.
If the Company fails because of this Article to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
Section 10.9. Subordination May Not Be Impaired by the Company.
No right of any holder of Senior Debt to enforce the subordination
of the Indebtedness evidenced by the Notes shall be impaired by any act or
failure to act by the Company or any Holder or by the failure of the Company or
any Holder to comply with this Indenture.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt, or any of them, may, at any time and from
time to time, without the consent of or notice to the Holders of the Notes,
without incurring any liabilities to any Holder of any Notes and without
impairing or releasing the subordination and other benefits provided in this
Indenture or the obligations of the Holders of the Notes to the holders of the
Senior Debt, even if any right of reimbursement or subrogation or other right or
remedy of any Holder of Notes is affected, impaired or extinguished thereby, do
any one or more of the following:
(1) change the manner, place or terms of payment or change or extend
the time of payment of, or renew, exchange, amend, increase or alter, the terms
of any Senior Debt, any security therefor or guaranty thereof or any liability
of any obligor thereon (including any guarantor) to such holder, or any
liability incurred directly or indirectly in respect thereof or otherwise amend,
renew, exchange, extend, modify, increase or supplement in any manner any Senior
Debt or any instrument evidencing or guaranteeing or securing the same or any
agreement under which Senior Debt is outstanding;
(2) sell, exchange, release, surrender, realize upon, enforce or
otherwise deal with in any manner and in any order any property pledged,
mortgaged or otherwise securing
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Senior Debt or any liability of any obligor thereon, to such holder, or any
liability incurred directly or indirectly in respect thereof;
(3) settle or compromise any Senior Debt or any other liability of
any obligor of the Senior Debt to such holder or any security therefor or any
liability incurred directly or indirectly in respect thereof and apply any sums
by whomsoever paid and however realized to any liability (including, without
limitation, Senior Debt) in any manner or order; and
(4) fail to take or to record or to otherwise perfect, for any
reason or for no reason, any lien or security interest securing Senior Debt by
whomsoever granted, exercise or delay in or refrain from exercising any right or
remedy against any obligor or any guarantor or any other person, elect any
remedy and otherwise deal freely with any obligor and any security for the
Senior Debt or any liability of any obligor to such holder or any liability
incurred directly or indirectly in respect thereof.
Section 10.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders
of Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred
to in this Article 10, the Trustee and the Holders of the Notes shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of the Notes for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Debt and other Indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 10.
Section 10.11. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least three Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article, which notice shall
specifically refer to this Article 10. Only the Company or a Representative may
give the notice. Nothing in this Article 10 shall impair the claims of, or
payments to, the Trustee under or pursuant to Section 7.7 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
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Section 10.12. Authorization to Effect Subordination.
Each Holder of a Note by the Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as the Holder's attorney-in-fact for
any and all such purposes, including without limitation the timely filing of a
claim for the unpaid balance of the Notes held by such Holder in the form
required in any Insolvency or Liquidation Proceeding and causing such claim to
be approved. If the Trustee does not file a proper proof of claim or proof of
debt in the form required in any proceeding referred to in Section 6.9 hereof at
least 30 days before the expiration of the time of such claim, the
Representatives of the Designated Senior Debt, including the Credit Agent, are
hereby authorized to file an appropriate claim for and on behalf of the Holders
of the Notes.
Section 10.13. Amendments.
Any amendment to the provisions of this Article 10 shall require the
consent of the Holders of at least 75% in aggregate amount of Notes then
outstanding if such amendment would adversely affect the rights of the Holders
of Notes.
ARTICLE 11.
GUARANTEE OF NOTES
Sectiuon 11.1 Note Guarantee.
Subject to Section 11.6 hereof, each of the Subsidiary Guarantors
hereby, jointly and severally, unconditionally guarantees to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Notes and the Obligations of the Company hereunder and
thereunder, that: (a) the principal of, premium, if any, interest and Liquidated
Damages, if any, on the Notes will be promptly paid in full when due, subject to
any applicable grace period, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal, premium, if any, (to the
extent permitted by law) interest on any interest, if any, and Liquidated
Damages, if any, on the Notes, and all other payment Obligations of the Company
to the Holders or the Trustee hereunder or thereunder will be promptly paid in
full and performed, all in accordance with the terms hereof and thereof, and (b)
in case of any extension of time of payment or renewal of any Notes or any of
such other Obligations, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, subject to
any applicable grace period, whether at stated maturity, by acceleration,
redemption or otherwise. Failing payment when so due of any amount so guaranteed
for whatever reason the Subsidiary Guarantors will be jointly and severally
obligated to pay the same immediately. An Event of Default under this Indenture
or the Notes shall constitute an event of default under the Note Guarantees, and
shall entitle the Holders to accelerate the Obligations of the Subsidiary
Guarantors hereunder in the same manner and to the same extent as the
Obligations of the Company. The Subsidiary Guarantors hereby agree that their
Obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder
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with respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
Subsidiary Guarantor. Each Subsidiary Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and covenants
that this Note Guarantee will not be discharged except by complete performance
of the Obligations contained in the Notes and this Indenture. If any Holder or
the Trustee is required by any court or otherwise to return to the Company, the
Subsidiary Guarantors, or any Note Custodian, Trustee, liquidator or other
similar official acting in relation to either the Company or the Subsidiary
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Subsidiary Guarantor agrees that it shall not be entitled
to, and hereby waives, any right of subrogation in relation to the Holders in
respect of any Obligations guaranteed hereby. Each Subsidiary Guarantor further
agrees that, as between the Subsidiary Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the Obligations
guaranteed hereby may be accelerated as provided in Article 6 for the purposes
of this Note Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such Obligations as provided in Article 6 hereof, such Obligations (whether or
not due and payable) shall forthwith become due and payable by the Subsidiary
Guarantors for the purpose of this Note Guarantee. The Subsidiary Guarantors
shall have the right to seek contribution from any non-paying Subsidiary
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Note Guarantees.
Section 11.2. Execution and Delivery of Note Guarantee.
To evidence its Note Guarantee set forth in Section 11.1, each
Subsidiary Guarantor hereby agrees that a notation of such Note Guarantee
substantially in the form of EXHIBIT D shall be endorsed by an Officer of such
Subsidiary Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Subsidiary Guarantor, by
manual or facsimile signature, by an Officer of such Subsidiary Guarantor.
Each Subsidiary Guarantor hereby agrees that its Note Guarantee set
forth in Section 11.1 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Subsidiary Guarantors.
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Section 11.3. Subsidiary Guarantors May Consolidate, etc., on Certain Terms
(a) Except as set forth in Articles 4 and 5 hereof, nothing
contained in this Indenture shall prohibit a merger between a Subsidiary
Guarantor and another Subsidiary Guarantor or a merger between a Subsidiary
Guarantor and the Company.
(b) Subject to Section 11.4 hereof, no Subsidiary Guarantor may
consolidate with or merge with or into (whether or not such Subsidiary Guarantor
is the surviving Person), another corporation, Person or entity whether or not
affiliated with such Subsidiary Guarantor unless, subject to the provisions of
the following paragraph, (i) the Person formed by or surviving any such
consolidation or merger (if other than such Subsidiary Guarantor) assumes all
the obligations of such Subsidiary Guarantor pursuant to a supplemental
indenture in form and substance reasonably satisfactory to the Trustee, under
the Notes and this Indenture; (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists; (iii) such Subsidiary
Guarantor, or any Person formed by or surviving any such consolidation or
merger, would have Consolidated Net Worth (immediately after giving effect to
such transaction), equal to or greater than the Consolidated Net Worth of such
Subsidiary Guarantor immediately preceding the transaction; and (iv) the Company
would be permitted by virtue of its pro forma Fixed Charge Coverage Ratio,
immediately after giving effect to such transaction, to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the first paragraph of Section 4.9. The requirements of clauses (iii)
and (iv) of this paragraph will not apply in the case of a consolidation with or
merger with or into any other Person if the acquisition of all of the Equity
Interests in such Person would have complied with the provisions of Sections 4.7
and 4.9 hereof.
(c) In the case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor Person, by supplemental
indenture, executed and delivered to the Trustee and substantially in the form
of EXHIBIT E hereto, of the Note Guarantee endorsed upon the Notes and the due
and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Subsidiary Guarantor, such successor Person
shall succeed to and be substituted for the Subsidiary Guarantor with the same
effect as if it had been named herein as a Subsidiary Guarantor; provided that,
solely for purposes of computing Consolidated Net Income for purposes of clause
(b) of the first paragraph of Section 4.7 hereof, the Consolidated Net Income of
any Person other than the Company and its Restricted Subsidiaries shall only be
included for periods subsequent to the effective time of such merger,
consolidation, combination or transfer of assets. Such successor Person
thereupon may cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. All of the Note
Guarantees so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Note
Guarantees had been issued at the date of the execution hereof.
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Section 11.4. Releases Following Sale of Assets, Merger, Sale of Capital Stock
Etc.
In the event (a) of a sale or other disposition of all of the assets
of any Subsidiary Guarantor, by way of merger, consolidation or otherwise, or a
sale or other disposition of all of the capital stock of any Subsidiary
Guarantor, or (b) that the Company designates a Subsidiary Guarantor to be an
Unrestricted Subsidiary, or such Subsidiary Guarantor ceases to be a Subsidiary
of the Company, then such Subsidiary Guarantor (in the event of a sale or other
disposition, by way of such a merger, consolidation or otherwise, of all of the
capital stock of such Subsidiary Guarantor or any such designation) or the
entity acquiring the property (in the event of a sale or other disposition of
all of the assets of such Subsidiary Guarantor) shall be released and relieved
of any obligations under its Note Guarantee; provided that the Net Proceeds of
such sale or other disposition are applied in accordance with the provisions of
Section 4.10 and, if applicable, Section 4.14 hereof. In the case of a sale,
assignment, lease, transfer, conveyance or other disposition of all or
substantially all of the assets of a Subsidiary Guarantor, upon the assumption
provided for in clause (i) of the Section 11.3(b) hereof, such Subsidiary
Guarantor shall be discharged from all further liability and obligation under
this Indenture. Upon delivery by the Company to the Trustee of an Officers'
Certificate to the effect of the foregoing, the Trustee shall execute any
documents reasonably required in order to evidence the release of any Subsidiary
Guarantor from its Obligation under its Note Guarantee. Any Subsidiary Guarantor
not released from its Obligations under its Note Guarantee shall remain liable
for the full amount of principal of, premium, if any, interest and Liquidated
Damages, if any, on the Notes and for the other Obligations of such Subsidiary
Guarantor under the Indenture as provided in this Article 11.
Section 11.5. Additional Subsidiary Guarantors.
Any Person that was not a Subsidiary Guarantor on the date of this
Indenture may become a Subsidiary Guarantor by executing and delivering to the
Trustee (a) a supplemental indenture in substantially the form of EXHIBIT E, and
(b) an Opinion of Counsel to the effect that such supplemental indenture has
been duly authorized and executed by such Person and constitutes the legal,
valid, binding and enforceable obligation of such Person (subject to such
customary exceptions concerning creditors rights', fraudulent transfers, public
policy and equitable principles as may be acceptable to the Trustee in its
discretion).
Section 11.6. Limitation on Subsidiary Guarantor Liability.
For purposes hereof, each Subsidiary Guarantor's liability shall be
limited to the lesser of (i) the aggregate amount of the Obligations of the
Company under the Notes and this Indenture and (ii) the amount, if any, which
would not have (A) rendered such Subsidiary Guarantor insolvent" (as such term
is defined in the United States Bankruptcy Code and in the Debtor and Creditor
Law of the State of New York) or (B) left such Subsidiary Guarantor with
unreasonably small capital at the time its Note Guarantee of the Notes was
entered into; provided that, it will be a presumption in any lawsuit or other
proceeding in which a Subsidiary Guarantor is a party that the amount guaranteed
pursuant to the Note Guarantee is the amount set forth in clause (i) above
unless any creditor, or representative of creditors of such Subsidiary
Guarantor,
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or debtor in possession or trustee in bankruptcy of the Subsidiary Guarantor,
otherwise proves in such a lawsuit that the aggregate liability of the
Subsidiary Guarantor is the amount set forth in clause (ii) above. In making any
determination as to solvency or sufficiency of capital of a Subsidiary Guarantor
in accordance with the previous sentence, the right of such Subsidiary Guarantor
to contribution from other Subsidiary Guarantors, and any other rights such
Subsidiary Guarantor may have, contractual or otherwise, shall be taken into
account.
Section 11.7. "Trustee" to Include Paying Agent.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article 11 shall in each case (unless the context
shall otherwise require) be construed as extending to and including such Paying
Agent within its meaning as fully and for all intents and purposes as if such
Paying Agent were named in this Article 11 in place of the Trustee.
ARTICLE 12.
SUBORDINATION OF NOTE GUARANTEE
Section 12.1 Agreement to Subordinate
The Subsidiary Guarantors agree, and each Holder by accepting a Note
agrees, that all Note Guarantee Obligations, shall be subordinated in right of
payment, to the extent and in the manner provided in this Article 12, to the
prior payment in full of all Guarantor Senior Debt, whether outstanding on the
date hereof or thereafter incurred and that the subordination is for the benefit
of the holders of Guarantor Senior Debt.
Section 12.2. Liquidation; Dissolution; Bankruptcy.
Upon any payment or distribution of assets of the Subsidiary
Guarantors of any kind or character, whether in cash, property or securities, to
creditors in any Insolvency or Liquidation Proceeding with respect to any
Subsidiary Guarantor all amounts due or to become due under or with respect to
all Guarantor Senior Debt shall first be paid in full in cash or cash
equivalents before any payment is made on account of the Note Guarantees and all
other Obligations with respect thereto, except that the Holders of Note
Guarantees may receive Reorganization Securities. Upon any such Insolvency or
Liquidation Proceeding, any payment or distribution of assets of any Subsidiary
Guarantor of any kind or character, whether in cash, property or securities
(other than Reorganization Securities), to which the Holders of the Note
Guarantees or the Trustee would be entitled shall be paid by the Subsidiary
Guarantors or by any receiver, trustee in bankruptcy, liquidating trustee, agent
or other person making such payment or distribution, or by the Holders of the
Note Guarantees or by the Trustee if received by them, directly to the holders
of Guarantor Senior Debt (0ro rata to such holders on the basis of the amounts
of Guarantor Senior Debt held by such holders) or their Representative or
Representatives, as their interests may appear, for application to the payment
of the Guarantor Senior Debt remaining unpaid until all such Guarantor Senior
Debt has been paid in full, after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of Guarantor Senior
Debt.
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Section 12.3. Default on Designated Guarantor Senior Debt.
(a) In the event of and during the continuation of any default in
the payment of principal of, interest or premium, if any, on any Guarantor
Senior Debt, or any Obligation owing from time to time under or in respect of
Guarantor Senior Debt, or in the event that any event of default (other than a
payment default) with respect to any Guarantor Senior Debt shall have occurred
and be continuing and shall have resulted in such Guarantor Senior Debt becoming
or being declared due and payable prior to the date on which it would otherwise
have become due and payable, or (b) if any event of default other than as
described in clause (a) above with respect to any Designated Senior Debt shall
have occurred and be continuing permitting the holders of such Designated Senior
Debt (or their Representative or Representatives) to declare such Designated
Senior Debt due and payable prior to the date on which it would otherwise have
become due and payable, then no payment shall be made by or on behalf of any
Subsidiary Guarantor on account of the Note Guarantees (other than payments in
the form of Reorganization Securities) (x) in case of any payment or nonpayment
default specified in (a), unless and until such default shall have been cured or
waived in writing in accordance with the instruments governing such Guarantor
Senior Debt or such acceleration shall have been rescinded or annulled, or (y)
in case of any nonpayment event of default specified in (b), during the period
(a "Payment Blockage Period") commencing on the date the Subsidiary Guarantors
and the Trustee receive written notice (a "Payment Notice") of such event of
default specifically referring to this Article 12 (which notice shall be binding
on the Trustee and the Holders of Note Guarantees as to the occurrence of such a
payment default or nonpayment event of default) from the Credit Agent (or other
holders of Designated Senior Debt or their Representative or Representatives)
and ending on the earliest of (A) 179 days after such date, (B) the date, if
any, on which the Trustee receives written notice from the Credit Agent (or
other holders of Designated Senior Debt or their Representative or
Representatives), as the case may be, stating that such Designated Senior Debt
to which such default relates is paid in full or such default is cured or waived
in writing in accordance with the instruments governing such Designated Senior
Debt by the holders of such Designated Senior Debt and (C) the date on which the
Trustee receives written notice from the Credit Agent (or other holders of
Designated Senior Debt or their Representative or Representatives), as the case
may be, terminating the Payment Blockage Period. During any consecutive 360-day
period, the aggregate of all Payment Blockage Periods shall not exceed 179 days
and there shall be a period of at least 181 consecutive days in each consecutive
360-day period when no Payment Blockage Period is in effect. No event of default
which existed or was continuing with respect to the Guarantor Senior Debt to
which notice commencing a Payment Blockage Period was given on the date such
Payment Blockage Period commenced shall be or be made the basis for the
commencement of any subsequent Payment Blockage Period unless such event of
default is cured or waived for a period of not less than 90 consecutive days.
Section 12.4. Acceleration of Note Guarantees.
If payment of the Note Guarantees is accelerated because of an Event
of Default, the Subsidiary Guarantor shall promptly notify such Representatives
of Guarantor Senior Debt of the acceleration.
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Section 12.5. When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder of a Note Guarantee
receives any payment of any Obligations with respect to the Note Guarantees at a
time when such payment is prohibited by Section 12.3 hereof, such payment shall
be held by the Trustee or such Holder, in trust for the benefit of, and shall be
paid forthwith over and delivered, upon written request, to, the holders of
Guarantor Senior Debt as their interests may appear or their Representative
under the indenture or other agreement (if any) pursuant to which Guarantor
Senior Debt may have been issued, as their respective interests may appear, for
application to the payment of all Obligations with respect to Guarantor Senior
Debt remaining unpaid to the extent necessary to pay such Obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Guarantor Senior Debt.
With respect to the holders of Guarantor Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 12, and no implied covenants or
obligations with respect to the holders of Guarantor Senior Debt shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Guarantor Senior Debt, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Holders of the Note Guarantees or the Company or any other Person
money or assets to which any holders of Guarantor Senior Debt shall be entitled
by virtue of this Article 12, except if such payment is made as a result of the
willful misconduct or gross negligence of the Trustee.
Section 12.6. Notice by Subsidiary Guarantor.
The Subsidiary Guarantors shall promptly notify the Trustee and the
Paying Agent of any facts known to the Subsidiary Guarantors that would cause a
payment of any Obligations with respect to the Note Guarantees to violate this
Article, which notice shall specifically refer to this Article 12, but failure
to give such notice shall not affect the subordination of the Note Guarantees to
the Guarantor Senior Debt as provided in this Article.
Section 12.7. Subrogation.
After all Guarantor Senior Debt is paid in full and until the Notes
are paid in full, Holders of the Note Guarantees shall be subrogated (equally
and ratably with all pari passu indebtedness) to the rights of holders of
Guarantor Senior Debt to receive distributions applicable to Guarantor Senior
Debt to the extent that distributions otherwise payable to the Holders of the
Note Guarantees have been applied to the payment of Guarantor Senior Debt. A
distribution made under this Article to holders of Guarantor Senior Debt that
otherwise would have been made to Holders of the Note Guarantees is not, as
between the Subsidiary Guarantors and Holders of the Note Guarantees, a payment
by the Subsidiary Guarantors on the Note Guarantees.
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Section 12.8. Relative Rights.
This Article defines the relative rights of Holders of the Note
Guarantees and holders of Guarantor Senior Debt. Nothing in this Indenture
shall:
(i) impair, as between the Subsidiary Guarantors and Holders
of the Note Guarantees, the obligations of the Subsidiary Guarantors, which are
absolute and unconditional, to pay principal of and interest on the Notes in
accordance with the terms of the Note Guarantees;
(ii) affect the relative rights of Holders of the Note
Guarantees and creditors of the Subsidiary Guarantors other than their rights in
relation to holders of Guarantor Senior Debt; or
(iii) prevent the Trustee or any Holder of the Note Guarantees
from exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Guarantor Senior Debt to receive
distributions and payments otherwise payable to Holders of the Note Guarantees.
If the Subsidiary Guarantors fail because of this Article to pay
principal of or interest on a Note on the due date in accordance with the terms
of the Note Guarantees, the failure is still a Default or Event of Default.
Section 12.9. Subordination May Not Be Impaired by Subsidiary Guarantor.
No right of any holder of Guarantor Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Note Guarantees shall be
impaired by any act or failure to act by the Subsidiary Guarantors or any Holder
or by the failure of the Subsidiary Guarantors or any Holder to comply with this
Indenture.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Guarantor Senior Debt, or any of them, may, at any
time and from time to time, without the consent of or notice to the Holders of
the Note Guarantees, without incurring any liabilities to any Holder of any Note
Guarantees and without impairing or releasing the subordination and other
benefits provided in this Indenture or the obligations of the Holders of the
Note Guarantees to the holders of the Guarantor Senior Debt, even if any right
of reimbursement or subrogation or other right or remedy of any Holder of Note
Guarantees is affected, impaired or extinguished thereby, do any one or more of
the following:
(i) change the manner, place or terms of payment or change or
extend the time of payment of, or renew, exchange, amend, increase or alter, the
terms of any Guarantor Senior Debt, any security therefor or guaranty thereof or
any liability of any obligor thereon (including any guarantor) to such holder,
or any liability incurred directly or indirectly in respect thereof or otherwise
amend, renew, exchange, extend, modify, increase or supplement in any manner any
Guarantor Senior Debt or any instrument evidencing or guaranteeing or securing
the same or any agreement under which Guarantor Senior Debt is outstanding;
84
<PAGE> 93
(ii) sell, exchange, release, surrender, realize upon, enforce
or otherwise deal with in any manner and in any order any property pledged,
mortgaged or otherwise securing Guarantor Senior Debt or any liability of any
obligor thereon, to such holder, or any liability incurred directly or
indirectly in respect thereof;
(iii) settle or compromise any Guarantor Senior Debt or any
other liability of any obligor of the Guarantor Senior Debt to such holder or
any security therefor or any liability incurred directly or indirectly in
respect thereof and apply any sums by whomsoever paid and however realized to
any liability (including, without limitation, Guarantor Senior Debt) in any
manner or order; and
(iv) fail to take or to record or to otherwise perfect, for
any reason or for no reason, any lien or security interest securing Guarantor
Senior Debt by whomsoever granted, exercise or delay in or refrain from
exercising any right or remedy against any obligor or any guarantor or any other
person, elect any remedy and otherwise deal freely with any obligor and any
security for the Guarantor Senior Debt or any liability of any obligor to such
holder or any liability incurred directly or indirectly in respect thereof.
Section 12.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders
of Guarantor Senior Debt, the distribution may be made and the notice given to
their Representative.
Upon any payment or distribution of assets of any Subsidiary
Guarantor referred to in this Article 12, the Trustee and the Holders of the
Note Guarantees shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction or upon any certificate of such Representative
or of the liquidating trustee or agent or other Person making any distribution
to the Trustee or to the Holders of the Note Guarantees for the purpose of
ascertaining the Persons entitled to participate in such distribution, the
holders of the Guarantor Senior Debt and other Indebtedness of the Company or
any Subsidiary Guarantor, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article 12.
Section 12.11. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 12 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes or the Note Guarantees, unless the Trustee shall
have received at its Corporate Trust Office at least three Business Days prior
to the date of such payment written notice of facts that would cause the payment
of any Obligations with respect to the Notes or the Note Guarantees to violate
this Article, which notice shall specifically refer to this Article 12. Only the
Company, the Subsidiary Guarantors or a Representative may give the notice.
Nothing in this Article 12 shall impair the claims of, or payments to, the
Trustee under or pursuant to Section 7.7 hereof.
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The Trustee in its individual or any other capacity may hold
Guarantor Senior Debt with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights.
Section 12.12. Authorization to Effect Subordination.
Each Holder of a Note Guarantee by the Holder's acceptance thereof
authorizes and directs the Trustee on the Holder's behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
this Article 12, and appoints the Trustee to act as the Holder's
attorney-in-fact for any and all such purposes, including without limitation the
timely filing of a claim for the unpaid balance of the Notes held by such Holder
in the form required in any Insolvency or Liquidation Proceeding and causing
such claim to be approved. If the Trustee does not file a proper proof of claim
or proof of debt in the form required in any proceeding referred to in Section
6.9 hereof at least 30 days before the expiration of the time of such claim, the
Representatives of the Designated Senior Debt, including the Credit Agent, are
hereby authorized to file an appropriate claim for and on behalf of the Holders
of the Note Guarantees.
Section 12.13. Amendments
Any amendment to the provisions of this Article 12 shall require the
consent of the Holders of at least 75% in aggregate amount of Notes then
outstanding if such amendment would adversely affect the rights of the Holders
of Note Guarantees.
ARTICLE 13.
MISCELLANEOUS
Section 13.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA ss.318(c), the imposed duties shall control.
Section 13.2. Notices.
Any notice or communication by the Company, the Subsidiary
Guarantors or the Trustee to the others is duly given if in writing and
delivered in Person or mailed by first class mail (registered or certified,
return receipt requested), telecopier or overnight air courier guaranteeing next
day delivery, to the others' address:
If to the Company or the Subsidiary Guarantors:
APCOA, Inc.
800 Superior Avenue
Cleveland, Ohio
Telecopier No.: (216) 523-8080
Attention: President
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<PAGE> 95
With a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019-6188
Telecopier No.: (212) 403-2000
Attention: Adam O. Emmerich
If to the Trustee:
State Street Bank and Trust Company
225 Asylum Street
Hartford, Connecticut 06103
Telecopier No.: (860) 244-1897
Attention: Corporate Trust Department
The Company, the Subsidiary Guarantors or the Trustee, by notice to
the others may designate additional or different addresses for subsequent
notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier promising next Business Day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail or by overnight air courier promising next Business Day delivery to
its address shown on the register kept by the Registrar. Any notice or
communication shall also be so mailed to any Person described in TIA ss. 313(c),
to the extent required by the TIA. Failure to mail a notice or communication to
a Holder or any defect in it shall not affect its sufficiency with respect to
other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 13.3. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA ss. 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA ss. 312(c).
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<PAGE> 96
Section 13.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or the Subsidiary
Guarantors to the Trustee to take any action under this Indenture (other than
the initial issuance of the Senior Subordinated Notes), the Company or
Subsidiary Guarantor shall furnish to the Trustee upon request:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 13.5 hereof) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 13.5 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
Section 13.5. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss. 31 4(a)(4)) shall comply with the provisions of TIA
ss. 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 13.6. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 13.7. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No director, officer, employee, incorporator or stockholder of the
Company or the Subsidiary Guarantors, as such, shall have any liability for any
obligations of the Company or any Subsidiary Guarantor under the Notes, this
Indenture, the Note Guarantees or for any claim
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<PAGE> 97
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
Section 13.8. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.
Section 13.9. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
Section 13.10. Successors.
All agreements of the Company and the Subsidiary Guarantors in this
Indenture, the Notes and the Note Guarantees shall bind their respective
successors and assigns. All agreements of the Trustee in this Indenture shall
bind its successors and assigns.
Section 13.11. Severability.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 13.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 13.13. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
89
<PAGE> 98
SIGNATURES
Dated as of March 30, 1998
Very truly yours,
APCOA, INC.
By: /s/ W. Stuelpe Jr.
--------------------------------------
Name: G. Walter Stuelpe, Jr.
Title: President
TOWER PARKING, INC.
By: /s/ W. Stuelpe Jr.
--------------------------------------
Name: G. Walter Stuelpe, Jr.
Title: President
GRAELIC, INC.
By: /s/ W. Stuelpe Jr.
--------------------------------------
Name: G. Walter Stuelpe, Jr.
Title: Vice President
<PAGE> 99
APCOA CAPITAL CORPORATION
By: /s/ W. Stuelpe Jr.
--------------------------------------
Name: G. Walter Stuelpe, Jr.
Title: President
A-1 AUTO PARK, INC.
By: /s/ W. Stuelpe Jr.
--------------------------------------
Name: G. Walter Stuelpe, Jr.
Title: President
METROPOLITAN PARKING SYSTEM, INC.
By: /s/ W. Stuelpe Jr.
--------------------------------------
Name: G. Walter Stuelpe, Jr.
Title: Vice President
EVENTS PARKING, INC.
By: /s/ W. Stuelpe Jr.
--------------------------------------
Name: G. Walter Stuelpe, Jr.
Title: Vice President
2
<PAGE> 100
STANDARD PARKING, L.P.
By: /s/ Myron C. Warshauer
--------------------------------------
Name: MYRON C. WARSHAUER
Title: PRESIDENT
STANDARD PARKING CORPORATION
By: /s/ Myron C. Warshauer
--------------------------------------
Name: MYRON C. WARSHAUER
Title: PRESIDENT
STANDARD PARKING CORPORATION, IL
By: /s/ Myron C. Warshauer
--------------------------------------
Name: MYRON C. WARSHAUER
Title: PRESIDENT
STANDARD PARKING CORPORATION, MW
By: /s/ Myron C. Warshauer
--------------------------------------
Name: MYRON C. WARSHAUER
Title: PRESIDENT
3
<PAGE> 101
STANDARD AUTO PARK
By: /s/ Myron C. Warshauer
--------------------------------------
Name: MYRON C. WARSHAUER
Title: PRESIDENT
STANDARD/WABASH PARKING CORPORATION
By: /s/ Myron C. Warshauer
--------------------------------------
Name: MYRON C. WARSHAUER
Title: PRESIDENT
STANDARD PARKING OF CANADA, L.P.
By: STANDARD PARKING CORPORATION,
its Managing Partner
By: /s/ Myron C. Warshauer
--------------------------------------
Name: MYRON C. WARSHAUER
Title: PRESIDENT OF STANDARD PARKING
CORPORATION, GENERAL PARTNER OF
STANDARD PARKING OF
CANADA, L.P.
STANDARD PARKING I, L.L.C.
By: STANDARD PARKING CORPORATION,
its Managing Partner
By: /s/ Myron C. Warshauer
--------------------------------------
Name: MYRON C. WARSHAUER
Title: PRESIDENT OF STANDARD
PARKING, MANAGING MEMBER OF
STANDARD PARKING I, L.L.C.
4
<PAGE> 102
STANDARD PARKING II, L.L.C.
By: STANDARD PARKING CORPORATION,
its Managing Partner
By: /s/ Myron C. Warshauer
--------------------------------------
Name: MYRON C. WARSHAUER
Title: PRESIDENT OF STANDARD
PARKING, MANAGING MEMBER OF
STANDARD PARKING II, L.L.C.
STATE STREET BANK AND TRUST COMPANY
as Trustee
By:
--------------------------------
Name: MICHAEL M. HOPKINS
Title: VICE PRESIDENT
5
<PAGE> 103
EXHIBIT A
(Face of Senior Subordinated Note)
9 1/4% Senior Subordinated Notes due 2008
No.____ $____________________
CUSIP NO.00185 WAA4
APCOA, Inc. promises to pay to ___________________ or registered
assigns, the principal sum of___________ Dollars on March 15, 2008.
Interest Payment Dates: March 15 and September 15 Record Dates:
March 1 and March 15
APCOA, INC.
By: ____________________________
Name:
Title:
This is one of the
Senior Subordinated Notes referred to in the
within-mentioned Indenture:
Dated: ____________
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: __________________________
(Back of Senior Subordinated Note)
9 1/4% Senior Subordinated Notes due 2008
[Unless and until it is exchanged in whole or in part for Senior
Subordinated Notes in definitive form, this Senior Subordinated Note may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary. Unless this certificate is presented by
an authorized representative of The Depository Trust Company (55 Water Street,
<PAGE> 104
New York, New York) ("DTC"), to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL in as much as the registered owner hereof, Cede & Co., has an
interest herein.](1)
[THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) INSIDE THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
OF THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(a)(l), (2), (3) OR (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL
ACCREDITED INVESTOR"), THAT PRIOR TO SUCH TRANSFER, FURNISHED THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF
WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF
AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND, IN THE CASE OF CLAUSE (b),
(c), (d) or (e), BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS),
(2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND,
IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
- ----------
(1) This paragraph should be included only if the Senior Subordinated Note
is issued in global form.
2
<PAGE> 105
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE.](2)
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. APCOA, Inc., a Delaware corporation, or its successor
(the "Company"), promises to pay interest on the principal amount of this Senior
Subordinated Note at the rate of 9 1/4% per annum and shall pay the Liquidated
Damages, if any, payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages, if any, in United States dollars (except as otherwise provided herein)
semi-annually in arrears on March 15 and September 15, commencing on September
15, 1998, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Interest on the Senior
Subordinated Notes shall accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from the date of issuance; provided
that if there is no existing Default or Event of Default in the payment of
interest, and if this Senior Subordinated Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date,
except in the case of the original issuance of Senior Subordinated Notes, in
which case interest shall accrue from the date of authentication. The Company
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess
of the then applicable interest rate on the Senior Subordinated Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful. Interest shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior
Subordinated Notes (except defaulted interest) and Liquidated Damages, if any,
on the applicable Interest Payment Date to the Persons who are registered
Holders of Senior Subordinated Notes at the close of business on March 1 or
September 1 next preceding the Interest Payment Date, even if such Senior
Subordinated Notes are cancelled after such record date and on or before such
Interest Payment Date, except as provided in Section 2.12 of the Indenture with
respect to defaulted interest. The Senior Subordinated Notes shall be payable as
to principal, premium and Liquidated Damages, if any, and interest at the office
or agency of the Company maintained for such purpose within or without the City
and State of New York, or, at the option of the Company, payment of interest and
Liquidated Damages, if any, may be made by check mailed to the Holders at their
addresses set forth in the register of Holders; provided that payment by wire
transfer of immediately available funds shall be required with respect to
principal of, premium and Liquidated Damages, if any, and interest on, all
Global Notes and all other Senior Subordinated Notes the Holders of which shall
have provided written wire transfer instructions to
- ----------
(2) This paragraph should be removed upon the exchange of Senior
Subordinated Notes for New Senior Subordinated Notes in the Exchange Offer or
upon the registration of the Senior Subordinated Notes pursuant to the terms of
the Registration Rights Agreement.
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the Company and the Paying Agent. Such payment shall be in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and
Trust Company, the Trustee under the Indenture, shall act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Senior Subordinated Notes under
an Indenture dated as of March 30, 1998 ("Indenture") among the Company, the
Subsidiary Guarantors and the Trustee. The terms of the Senior Subordinated
Notes include those stated in the Indenture and those made a part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code ____ 77aaa-77bbbb) (the "TIA"). The Senior Subordinated Notes are
subject to all such terms, and Holders are referred to the Indenture and such
Act for a statement of such terms. The Senior Subordinated Notes are general
unsecured Obligations of the Company limited to $200,000,000 in aggregate
principal amount, plus amounts, if any, sufficient to pay premium or Liquidated
Damages, if any, and interest on outstanding Senior Subordinated Notes as set
forth in Paragraph 2 hereof.
5. OPTIONAL REDEMPTION.
Except as set forth in the next paragraph, the Senior Subordinated
Notes shall not be redeemable at the Company's option prior to March 15, 2003.
Thereafter, the Senior Subordinated Notes shall be subject to redemption at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below together with accrued and unpaid interest and any
Liquidated Damages, if any, thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on March 15 of the years
indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2003............................................104.625%
2004............................................103.083%
2005............................................101.542%
2006 and thereafter.............................100.000%
</TABLE>
Notwithstanding the foregoing, at any time prior to March 15, 2001,
the Company may redeem up to 35% of the original aggregate principal amount of
Senior Subordinated Notes at a redemption price of 109.25% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
to the redemption date, with the net proceeds of a Public Equity Offering;
provided that at least 65% of the original aggregate principal amount of Senior
Subordinated Notes remains outstanding immediately after the occurrence of such
redemption; and provided, further, that such redemption shall occur within 45
days of the date of the closing of such Public Equity Offering.
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6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Senior Subordinated Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, each Holder of
Senior Subordinated Notes will have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Senior Subordinated Notes pursuant to the offer
described below (the "Change of Control Offer") at an offer price in cash
equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any, thereon, to the date of
purchase. Within 30 days following any Change of Control, the Company will
mail a notice to each Holder describing the transaction or transactions
that constitute the Change of Control setting forth the procedures
governing the Change of Control Offer required by the Indenture.
(b) When the aggregate amount of Excess Proceeds exceeds $15.0
million, the Company shall offer to all Holders of Senior Subordinated
Notes (an "Asset Sale Offer") to purchase the maximum principal amount of
Senior Subordinated Notes that may be purchased out of the Excess Proceeds
at an offer price in cash equal to 100% of principal amount thereof, plus
accrued and unpaid interest, and Liquidated Damages thereon, if any, to
the date of purchase in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of Senior Subordinated
Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for any
general corporate purposes. If the aggregate principal amount of Senior
Subordinated Notes surrendered by Holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Senior Subordinated Notes to
be purchased on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset at zero.
(c) Holders of the Senior Subordinated Notes that are the
subject of an offer to purchase will receive a Change of Control Offer or
Asset Sale Offer from the Company prior to any related purchase date and
may elect to have such Senior Subordinated Notes purchased by completing
the form titled "Option of Holder to Elect Purchase" appearing below.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Senior Subordinated Notes are to be redeemed at its registered
address. Senior Subordinated Notes in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000, unless all of the Senior
Subordinated Notes held by a Holder are to be redeemed. On and after the
redemption date, interest and Liquidated Damages, if any, ceases to accrue on
the Senior Subordinated Notes or portions thereof called for redemption.
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9. SUBORDINATION. The Notes are subordinated to Senior Debt, which
is all Indebtedness and other Obligations specified below payable directly or
indirectly the Company, or any of its Restricted Subsidiaries whether
outstanding on the date of the Indenture or thereafter created, incurred or
assumed by the Company or any of its Restricted Subsidiaries: (i) the principal
of, interest on and all other Obligations related to the New Credit Facility
(including without limitation all loans, letters of credit and other extensions
of credit under the New Credit Facility, and all expenses, fees, reimbursements,
indemnities and other amounts owing pursuant to the New Credit Facility); (ii)
amounts payable in respect of any Hedging Obligations; (iii) all Indebtedness
not prohibited by Section 4.9 hereof that is not expressly pari passu with or
subordinated to the Senior Subordinated Notes; and (iv) all permitted renewals,
extensions, refundings or refinancings thereof. All post-petition interest on
Senior Debt shall constitute Senior Debt. Notwithstanding anything to the
contrary in the foregoing, Senior Debt will not include (i) Indebtedness of the
Company or any of its Restricted Subsidiaries to any other Restricted
Subsidiaries which is not a Subsidiary Guarantor, (ii) any Indebtedness which by
the express terms of the agreement or instrument creating, evidencing or
governing the same is junior or subordinate in right of payment to any item of
Senior Debt, (iii) any trade payable arising from the purchase of goods or
materials or for services obtained in the ordinary course of business, or (iv)
Indebtedness incurred in violation of the Indenture. To the extent provided in
the Indenture, Senior Debt must be paid before the Notes may be paid. The
Company agrees and each Holder of Notes by accepting a Note consents and agrees
to the subordination provided in the Indenture and authorizes the Trustee to
give it effect.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Subordinated Notes
are in registered form without coupons in initial denominations of $1,000 and
integral multiples of $1,000. The transfer of the Senior Subordinated Notes may
be registered and the Senior Subordinated Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Senior Subordinated Note or portion of a Senior Subordinated
Note selected for redemption, except for the unredeemed portion of any Senior
Subordinated Note being redeemed in part. Also, it need not exchange or register
the transfer of any Senior Subordinated Notes for a period of 15 days before a
selection of Senior Subordinated Notes to be redeemed or during the period
between a record date and the corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of a Senior
Subordinated Note may be treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to the following
paragraphs, the Indenture, the Senior Subordinated Notes and the Note Guarantees
may be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the Senior Subordinated Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of or, tender offer or exchange offer for Senior Subordinated Notes), and any
existing Default or Event of Default or compliance with any provision of the
Indenture, the Senior Subordinated Notes or the Note Guarantees may be waived
6
<PAGE> 109
with the consent of the Holders of a majority in principal amount of the then
outstanding Senior Subordinated Notes (including consents obtained in connection
with a tender offer or exchange offer for Senior Subordinated Notes).
Without the consent of any Holder of Senior Subordinated Notes, the
Company and the Trustee may amend or supplement the Indenture, the Note
Guarantees or the Senior Subordinated Notes to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Senior Subordinated Notes in
addition to or in place of certificated Senior Subordinated Notes, to provide
for the assumption of the Company's or a Subsidiary Guarantor's obligations to
Holders of Senior Subordinated Notes in the case of a merger or consolidation,
to make any change that would provide any additional rights or benefits to the
Holders of Senior Subordinated Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, to comply with the requirements
of the Commission in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act or to allow any Subsidiary to guarantee
the Senior Subordinated Notes. Any amendments with respect to subordination
provisions of the Notes or the Note Guarantees would require the consent of the
Holders of at least 75% in aggregate amount of Notes then outstanding if such
amendment would be adversely affect the rights of the Holders of Notes.
13. DEFAULTS AND REMEDIES. Events of Default include: (i) default
for 30 days in the payment when due of interest on or Liquidated Damages, if
any, with respect to the Senior Subordinated Notes; (ii) default in payment when
due of the principal of or premium, if any, on the Senior Subordinated Notes;
(iii) failure by the Company or any Restricted Subsidiary to comply with the
provisions described in Sections 4.10, 4.14 or 5.1 of the Indenture; (iv)
failure by the Company or any Restricted Subsidiary for 30 days after notice
from the Trustee or at least 25% in principal amount of the Senior Subordinated
Notes to comply with the provisions described in Sections 4.7 and 4.9, of the
Indenture; (v) failure by the Company or any Subsidiary for 60 days after notice
from the Trustee or the Holders of at least 25% in principal amount of the
Senior Subordinated Notes then outstanding to comply with its other agreements
in the Indenture or the Senior Subordinated Notes; (vi) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of their its Subsidiaries (or the payment of which is guaranteed
by the Company or any of its Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the date of the Indenture, which
default (A) (i) is caused by a failure to pay when due at final stated maturity
(giving effect to any grace period related thereto) any principal of or premium,
if any, or interest on such Indebtedness (a "Payment Default") or (ii) results
in the acceleration of such Indebtedness prior to its express maturity and (B)
in each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$15.0 million or more; (vii) failure by the Company or any of its Subsidiaries
to pay final judgments aggregating in excess of $5.0 million, which judgments
are not paid discharged or stayed within 60 days after their entry; and (viii)
certain events of bankruptcy or insolvency with respect to the Company, any of
its Significant Subsidiaries or any group of Subsidiaries that, taken together,
would constitute a Significant Subsidiary.
7
<PAGE> 110
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Senior
Subordinated Notes may declare all the Senior Subordinated Notes to be due and
payable immediately provided, however, that if any Indebtedness or Obligation is
outstanding pursuant to the New Credit Facility, upon a declaration of
acceleration by the holders of the Senior Subordinated Notes or the Trustee, all
principal and interest under the Indenture shall be due and payable upon the
earlier of (x) the day five Business Days after the provision to the Company,
the Credit Agent and the Trustee of such written notice of acceleration or (y)
the date of acceleration of any Indebtedness under the New Credit Facility; and
provided, further, that in the event of an acceleration based upon an Event of
Default set forth in clause (vi) above, such declaration of acceleration shall
be automatically annulled if the holders of Indebtedness which is the subject of
such failure to pay at maturity or acceleration have rescinded their declaration
of acceleration in respect of such Indebtedness or such failure to pay at
maturity shall have been cured or waived within 30 days thereof and no other
Event of Default has occurred during such 30-day period which has not been
cured, paid or waived. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, with respect to
the Company or any of its Significant Subsidiaries all outstanding Senior
Subordinated Notes will become due and payable without further action or notice.
Holders of the Senior Subordinated Notes may not enforce the Indenture or the
Senior Subordinated Notes except as provided in the Indenture. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Senior Subordinated Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Senior
Subordinated Notes notice of any continuing Default or Event of Default (except
a Default or Event of Default relating to the payment of principal or interest)
if it determines that withholding notice is in their interest.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company, the Subsidiary Guarantors or their respective
Affiliates, and may otherwise deal with the Company, the Subsidiary Guarantors
or their respective Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder, of the Company or any Subsidiary Guarantor, as
such, shall have any liability for any obligations of the Company or any
Subsidiary Guarantor under the Senior Subordinated Notes, the Indenture or the
Note Guarantees or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Senior Subordinated Notes by
accepting a Senior Subordinated Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Senior
Subordinated Notes and any Note Guarantee.
16. AUTHENTICATION. This Senior Subordinated Note shall not be valid
until authenticated by the manual signature of the Trustee or an authenticating
agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the
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<PAGE> 111
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES.
In addition to the rights provided to Holders of the Senior Subordinated Notes
under the Indenture, Holders of Transferred Restricted Securities (as defined in
the Registration Rights Agreement) shall have all the rights set forth in the
Registration Rights Agreement, dated as of the date hereof, among the Company,
the Subsidiary Guarantors and the Initial Purchaser (the "Registration Rights
Agreement").
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Senior Subordinated Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to the Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Senior Subordinated Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
APCOA, Inc.
800 Superior Avenue
Cleveland, Ohio
Telecopy: (216) 523-8080
Chief Financial Officer
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<PAGE> 112
ASSIGNMENT FORM
To assign this Senior Subordinated Note, fill in the form below: (I)
or (we) assign and transfer this Senior Subordinated Note to (Insert assignee's
soc. sec. or tax I.D. no.) (Print or type assignee's name, address and zip code)
and irrevocably appoint to transfer this Senior Subordinated Note on the books
of the Company. The agent may substitute another to act for him.
Date:
Your Signature:
(Sign exactly as your name appears on the face of this Senior Subordinated Note)
Signature Guarantee:
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Senior Subordinated Note purchased
by the Company pursuant to Section 4.10 or 4.14 of the Indenture, check the box
below:
__Section 4.10 __Section 4.14
If you want to elect to have only part of the Senior Subordinated
Note purchased by the Company pursuant to Section 4.10 or Section 4.14 of the
Indenture, state the amount you elect to have purchased: $___________
Date:Your Signature:
(Sign exactly as your name appears on the Senior Subordinated Note)
Tax Identification No.:
Signature Guarantee.
10
<PAGE> 113
SCHEDULE OF EXCHANGES OF SENIOR SUBORDINATED NOTES
The following exchanges of a part of this Global Note for other
Senior Subordinated Notes have been made:
Signature of
Amount of Principal authorized
Amount of increase in Amount of this officer of
decrease in Principal Global Note Trustee or
Principal Amount of following such Senior
Date of Amount of this this Global decrease (or Subordinated
Exchange Global Note Note increase) Note Custodian
11
<PAGE> 114
EXHIBIT A-2
(Face of Regulation S Temporary Global Note)
9 1/4% Senior Subordinated Notes due 2008
No. ____ $_________________
CIN NO. U00328AA9
APCOA, Inc. promises to pay to __________________ or registered
assigns, the principal sum of_________ Dollars on ___________, 2008.
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
APCOA, INC.
By: _______________________________
Name:
Title:
This is one of the
Senior Subordinated Notes referred to in the
within-mentioned Indenture:
Dated: ____________________________
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:________________________________
12
<PAGE> 115
(Back of Regulation S Temporary Global Note)
9__% Senior Subordinated Note due 2008
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SENIOR
SUBORDINATED NOTES IN DEFINITIVE FORM, THIS SENIOR SUBORDINATED NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET,
NEW YORK, NEW YORK) ("DTC"),TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER
ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
[THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
OF THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(a)(l), (2), (3) OR (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL
ACCREDITED INVESTOR"), THAT PRIOR TO SUCH TRANSFER, FURNISHED THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF
WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF
AN
<PAGE> 116
AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND, IN THE CASE OF CLAUSES
(b), (c), (d) or (e), BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE.
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE SENIOR
SUBORDINATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S
TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON
PRIOR TO THE EXCHANGE OF THIS SENIOR SUBORDINATED NOTE FOR A REGULATION S
TEMPORARY GLOBAL NOTE AS CONTEMPLATED BY THE INDENTURE.]3
Until this Regulation S Temporary Global Note is exchanged for
Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to
receive payments of interest or Liquidated Damages, if any, hereon although
interest and Liquidated Damages, if any, will continue to accrue; until so
exchanged in full, this Regulation S Temporary Global Note shall in all other
respects be entitled to the same benefits as other Senior Subordinated Notes
under the Indenture.
This Regulation S Temporary Global Note is exchangeable in whole or
in part for one or more Regulation S Permanent Global Notes or Rule 144A Global
Notes only (i) on or after the termination of the 40-day restricted period (as
defined in Regulation S) and (ii) upon presentation of certificates (accompanied
by an Opinion of Counsel, if applicable) required by Article 2 of the Indenture.
Upon exchange of this Regulation S Temporary Global Note for one or more
Regulation S Permanent Global Notes or Rule 144A Global Notes, the Trustee shall
cancel this Regulation S Temporary Global Note.
This Regulation S Temporary Global Note shall not become valid or
obligatory until the certificate of authentication hereon shall have been duly
manually signed by the Trustee in accordance with the Indenture. This Regulation
S Temporary Global Note shall be governed by and construed in accordance with
the laws of the State of the New York. All references to
- ----------
(3) These paragraphs should be removed upon the exchange of Regulation S
Temporary Global Notes for Regulation S Permanent Global Notes pursuant to the
Indenture.
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<PAGE> 117
"$," "Dollars," "dollars" or "U.S. $" are to such coin or currency of the United
States of America as at the time shall be legal tender for the payment of public
and private debts therein.
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. APCOA, Inc., a Delaware corporation, or its successor
(the "Company"), promises to pay interest on the principal amount of this Senior
Subordinated Note at the rate of 9 1/4% per annum and shall pay the Liquidated
Damages, if any, payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages, if any, in United States dollars (except as otherwise provided herein)
semi-annually in arrears on March 15 and September 15, commencing on September
15, 1998, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Interest on the Senior
Subordinated Notes shall accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from the date of issuance; provided
that if there is no existing Default or Event of Default in the payment of
interest, and if this Senior Subordinated Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date,
except in the case of the original issuance of Senior Subordinated Notes, in
which case interest shall accrue from the date of authentication. The Company
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess
of the then applicable interest rate on the Senior Subordinated Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful. Interest shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior
Subordinated Notes (except defaulted interest) and Liquidated Damages, if any,
on the applicable Interest Payment Date to the Persons who are registered
Holders of Senior Subordinated Notes at the close of business on the July 1 or
January 1 next preceding the Interest Payment Date, even if such Senior
Subordinated Notes are cancelled after such record date and on or before such
Interest Payment Date, except as provided in Section 2.12 of the Indenture with
respect to defaulted interest. The Senior Subordinated Notes shall be payable as
to principal, premium and Liquidated Damages, if any, and interest at the office
or agency of the Company maintained for such purpose within or without the City
and State of New York, or, at the option of the Company, payment of interest and
Liquidated Damages, if any, may be made by check mailed to the Holders at their
addresses set forth in the register of Holders; provided that payment by wire
transfer of immediately available funds shall be required with respect to
principal of, premium and Liquidated Damages, if any, and interest on, all
Global Notes and all other Senior Subordinated Notes the Holders of which shall
have provided written wire transfer instructions to the Company and the Paying
Agent. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
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3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and
Trust Company, the Trustee under the Indenture, shall act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Senior Subordinated Notes under
an Indenture dated as of July 11, 1997 ("Indenture") among the Company, the
Subsidiary Guarantors and the Trustee. The terms of the Senior Subordinated
Notes include those stated in the Indenture and those made a part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code ss.ss. 77aaa-77bbbb) (the "TIA"). The Senior Subordinated Notes are subject
to all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Senior Subordinated Notes are general unsecured
Obligations of the Company limited to $200,000,000 in aggregate principal
amount, plus amounts, if any, sufficient to pay premium or Liquidated Damages,
if any, and interest on outstanding Senior Subordinated Notes as set forth in
Paragraph 2 hereof.
5. OPTIONAL REDEMPTION.
Except as set forth in the next paragraph, the Senior Subordinated
Notes shall not be redeemable at the Company's option prior to March 15, 2003.
Thereafter, the Senior Subordinated Notes shall be subject to redemption at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below together with accrued and unpaid interest and any
Liquidated Damages, if any, thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on March 15 of the years
indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2003............................................104.625%
2004............................................103.083%
2005............................................101.542%
2006 and thereafter.............................100.000%
</TABLE>
Notwithstanding the foregoing, at any time prior to March, 2001, the
Company may redeem up to 35% of the original aggregate principal amount of
Senior Subordinated Notes at a redemption price of 109.25% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
to the redemption date, with the net proceeds of a Public Equity Offering;
provided that at least 65% of the original aggregate principal amount of Senior
Subordinated Notes remains outstanding immediately after the occurrence of such
redemption; and provided, further, that such redemption shall occur within 45
days of the date of the closing of such Public Equity Offering.
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6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Senior Subordinated Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, each Holder of Senior
Subordinated Notes will have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Senior Subordinated Notes pursuant to the offer
described below (the "Change of Control Offer") at an offer price in cash
equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any, thereon, to the date of
purchase. Within 30 days following any Change of Control, the Company will
mail a notice to each Holder describing the transaction or transactions
that constitute the Change of Control setting forth the procedures
governing the Change of Control Offer required by the Indenture.
(b) When the aggregate amount of Excess Proceeds exceeds $15.0
million, the Company shall offer to all Holders of Senior Subordinated
Notes (an "Asset Sale Offer") to purchase the maximum principal amount of
Senior Subordinated Notes that may be purchased out of the Excess Proceeds
at an offer price in cash equal to 100% of principal amount thereof, plus
accrued and unpaid interest, and Liquidated Damages thereon, if any, to
the date of purchase in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of Senior Subordinated
Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for any
general corporate purposes. If the aggregate principal amount of Senior
Subordinated Notes surrendered by Holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Senior Subordinated Notes to
be purchased on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset at zero.
(c) Holders of the Senior Subordinated Notes that are the
subject of an offer to purchase will receive a Change of Control Offer or
Asset Sale Offer from the Company prior to any related purchase date and
may elect to have such Senior Subordinated Notes purchased by completing
the form titled "Option of Holder to Elect Purchase" appearing below.
1. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Senior Subordinated Notes are to be redeemed at its registered
address. Senior Subordinated Notes in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000, unless all of the Senior
Subordinated Notes held by a Holder are to be redeemed. On and after the
redemption date, interest and Liquidated Damages, if any, ceases to accrue on
the Senior Subordinated Notes or portions thereof called for redemption.
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<PAGE> 120
2. SUBORDINATION. The Notes are subordinated to Senior Debt, which
is all Indebtedness and other Obligations specified below payable directly or
indirectly the Company, or any of its Restricted Subsidiaries whether
outstanding on the date of the Indenture or thereafter created, incurred or
assumed by the Company or any of its Restricted Subsidiaries: (i) the principal
of, interest on and all other Obligations related to the New Credit Facility
(including without limitation all loans, letters of credit and other extensions
of credit under the New Credit Facility, and all expenses, fees, reimbursements,
indemnities and other amounts owing pursuant to the New Credit Facility); (ii)
amounts payable in respect of any Hedging Obligations; (iii) all Indebtedness
not prohibited by Section 4.9 hereof that is not expressly pari passu with or
subordinated to the Senior Subordinated Notes; and (iv) all permitted renewals,
extensions, refundings or refinancings thereof. All post-petition interest on
Senior Debt shall constitute Senior Debt. Notwithstanding anything to the
contrary in the foregoing, Senior Debt will not include (i) Indebtedness of the
Company or any of its Restricted Subsidiaries to any other Restricted
Subsidiaries which is not a Subsidiary Guarantor, (ii) any Indebtedness which by
the express terms of the agreement or instrument creating, evidencing or
governing the same is junior or subordinate in right of payment to any item of
Senior Debt, (iii) any trade payable arising from the purchase of goods or
materials or for services obtained in the ordinary course of business, or (iv)
Indebtedness incurred in violation of the Indenture. To the extent provided in
the Indenture, Senior Debt must be paid before the Notes may be paid. The
Company agrees and each Holder of Notes by accepting a Note consents and agrees
to the subordination provided in the Indenture and authorizes the Trustee to
give it effect.
3. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Subordinated Notes
are in registered form without coupons in initial denominations of $1,000 and
integral multiples of $1,000. The transfer of the Senior Subordinated Notes may
be registered and the Senior Subordinated Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Senior Subordinated Note or portion of a Senior Subordinated
Note selected for redemption, except for the unredeemed portion of any Senior
Subordinated Note being redeemed in part. Also, it need not exchange or register
the transfer of any Senior Subordinated Notes for a period of 15 days before a
selection of Senior Subordinated Notes to be redeemed or during the period
between a record date and the corresponding Interest Payment Date.
4. PERSONS DEEMED OWNERS. The registered Holder of a Senior
Subordinated Note may be treated as its owner for all purposes.
5. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to the following
paragraphs, the Indenture, the Senior Subordinated Notes and the Note Guarantees
may be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the Senior Subordinated Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of or, tender offer or exchange offer for Senior Subordinated Notes), and any
existing Default or Event of Default or compliance with any provision of the
Indenture, the Senior Subordinated Notes or the Note Guarantees may be waived
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<PAGE> 121
with the consent of the Holders of a majority in principal amount of the then
outstanding Senior Subordinated Notes (including consents obtained in connection
with a tender offer or exchange offer for Senior Subordinated Notes).
Without the consent of any Holder of Senior Subordinated Notes, the
Company and the Trustee may amend or supplement the Indenture, the Note
Guarantees or the Senior Subordinated Notes to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Senior Subordinated Notes in
addition to or in place of certificated Senior Subordinated Notes, to provide
for the assumption of the Company's or a Subsidiary Guarantor's obligations to
Holders of Senior Subordinated Notes in the case of a merger or consolidation,
to make any change that would provide any additional rights or benefits to the
Holders of Senior Subordinated Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, to comply with the requirements
of the Commission in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act or to allow any Subsidiary to guarantee
the Senior Subordinated Notes. Any amendments with respect to subordination
provisions of the Notes or the Note Guarantees would require the consent of the
Holders of at least 75% in aggregate amount of Notes then outstanding if such
amendment would be adversely affect the rights of the Holders of Notes.
6. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest on or Liquidated Damages, if any,
with respect to the Senior Subordinated Notes; (ii) default in payment when due
of the principal of or premium, if any, on the Senior Subordinated Notes; (iii)
failure by the Company or any Restricted Subsidiary to comply with the
provisions described in Sections 4.10, 4.14 or 5.1 of the Indenture; (iv)
failure by the Company or any Restricted Subsidiary for 30 days after notice
from the Trustee or at least 25% in principal amount of the Senior Subordinated
Notes to comply with the provisions described in Sections 4.7 and 4.9, of the
Indenture; (v) failure by the Company or any Subsidiary for 60 days after notice
from the Trustee or the Holders of at least 25% in principal amount of the
Senior Subordinated Notes then outstanding to comply with its other agreements
in the Indenture or the Senior Subordinated Notes; (vi) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of their its Subsidiaries (or the payment of which is guaranteed
by the Company or any of its Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the date of the Indenture, which
default (A) (i) is caused by a failure to pay when due at final stated maturity
(giving effect to any grace period related thereto) any principal of or premium,
if any, or interest on such Indebtedness (a "Payment Default") or (ii) results
in the acceleration of such Indebtedness prior to its express maturity and (B)
in each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$15.0 million or more; (vii) failure by the Company or any of its Subsidiaries
to pay final judgments aggregating in excess of $5.0 million, which judgments
are not paid discharged or stayed within 60 days after their entry; and (viii)
certain events of bankruptcy or insolvency with respect to the Company, any of
its Significant Subsidiaries or any group of Subsidiaries that, taken together,
would constitute a Significant Subsidiary.
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<PAGE> 122
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Senior
Subordinated Notes may declare all the Senior Subordinated Notes to be due and
payable immediately provided, however, that if any Indebtedness or Obligation is
outstanding pursuant to the New Credit Facility, upon a declaration of
acceleration by the holders of the Senior Subordinated Notes or the Trustee, all
principal and interest under the Indenture shall be due and payable upon the
earlier of (x) the day five Business Days after the provision to the Company,
the Credit Agent and the Trustee of such written notice of acceleration or (y)
the date of acceleration of any Indebtedness under the New Credit Facility; and
provided, further, that in the event of an acceleration based upon an Event of
Default set forth in clause (vi) above, such declaration of acceleration shall
be automatically annulled if the holders of Indebtedness which is the subject of
such failure to pay at maturity or acceleration have rescinded their declaration
of acceleration in respect of such Indebtedness or such failure to pay at
maturity shall have been cured or waived within 30 days thereof and no other
Event of Default has occurred during such 30-day period which has not been
cured, paid or waived. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, with respect to
the Company or any of its Significant Subsidiaries all outstanding Senior
Subordinated Notes will become due and payable without further action or notice.
Holders of the Senior Subordinated Notes may not enforce the Indenture or the
Senior Subordinated Notes except as provided in the Indenture. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Senior Subordinated Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Senior
Subordinated Notes notice of any continuing Default or Event of Default (except
a Default or Event of Default relating to the payment of principal or interest)
if it determines that withholding notice is in their interest.
7. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company, the Subsidiary Guarantors or their respective
Affiliates, and may otherwise deal with the Company, the Subsidiary Guarantors
or their respective Affiliates, as if it were not the Trustee.
8. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder, of the Company or any Subsidiary Guarantor, as
such, shall have any liability for any obligations of the Company or any
Subsidiary Guarantor under the Senior Subordinated Notes, the Indenture or the
Note Guarantees or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Senior Subordinated Notes by
accepting a Senior Subordinated Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Senior
Subordinated Notes and any Note Guarantee.
9. AUTHENTICATION. This Senior Subordinated Note shall not be valid
until authenticated by the manual signature of the Trustee or an authenticating
agent.
10. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the
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<PAGE> 123
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
11. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES.
In addition to the rights provided to Holders of the Senior Subordinated Notes
under the Indenture, Holders of Transferred Restricted Securities (as defined in
the Registration Rights Agreement) shall have all the rights set forth in the
Registration Rights Agreement, dated as of the date hereof, among the Company,
the Subsidiary Guarantors and the Initial Purchaser (the "Registration Rights
Agreement").
12. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Senior Subordinated Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to the Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Senior Subordinated Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
APCOA, Inc.
800 Superior Avenue
Cleveland, Ohio 44114
Telecopy: (216) 523-8080
Chief Financial Officer
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<PAGE> 124
SCHEDULE OF EXCHANGES FOR GLOBAL NOTES
The following exchanges of a part of this Regulation S Temporary
Global Note for other Global Notes have been made:
Amount of decrease Amount of increase Principal Amount of Signature
of
Signature of
Amount of Principal authorized
Amount of increase in Amount of this office of
decrease in Principal Global Note Trustee or
Principal Amount of following such Senior
Amount of this this Global decrease (or Subordinated
Date of Exchange Global Note Note increase) Note Custodian
- ---------------- --------------- -------------- --------------- --------------
10
<PAGE> 125
EXHIBIT B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM RULE 144A
GLOBAL NOTE TO REGULATION S GLOBAL NOTE
(Pursuant to Section 2.6(a)(1) of the Indenture)
State Street Bank and Trust Company
225 Asylum Street
Hartford, Connecticut 06103
Re: 9__% Senior Subordinated Notes due 2008 of APCOA, Inc.
Reference is hereby made to the Indenture, dated as of March 30, 1998 (the
"Indenture"), among APCOA, Inc., a Delaware corporation (the "Company"), Tower
Parking, Inc., an Ohio corporation ("Tower"), Graelic, Inc., and Ohio
corporation ("Graelic"), APCOA Capital Corporation, a Delaware corporation
("APCOA Capital"), A-1 Auto Park, Inc., a Georgia corporation ("A-1 Auto"),
Metropolitan Parking System, Inc., a Massachusetts corporation ("Metropolitan"),
Events Parking Company, Inc., a Massachusetts corporation ("Events Parking"),
Standard Parking, L.P., a Delaware limited partnership ("SP"), Standard Parking
Corporation, an Illinois corporation ("SPC"), Standard Parking Corporation, IL,
an Illinois corporation ("SPC, IL"), Standard Parking Corporation, MW, an
Illinois corporation ("SPC, MW"), Standard Auto Park, Inc., an Illinois
corporation ("Standard Auto"), Standard/Wabash Parking Corporation, an Illinois
corporation ("S/W"), Standard Parking of Canada, L.P., a Illinois limited
partnership ("SP Canada"), Standard Parking I, L.L.C., a Delaware limited
liability company ("SPI"), Standard Parking II, L.L.C., a Delaware limited
liability company ("SPII"), (the "Subsidiary Guarantors") and State Street Bank
and Trust Company, as trustee (the "Trustee"). Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
This letter relates to $ ________________ principal amount of Senior
Subordinated Notes which are evidenced by one or more Rule 144A Global Notes and
held with the Depositary in the name of _________________________ (the
"Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Senior Subordinated Notes to a Person who will take delivery
thereof in the form of an equal principal amount of Senior Subordinated Notes
evidenced by one or more Regulation S Global Notes, which amount, immediately
after such transfer, is to be held with the Depositary through Euroclear or
Cedel or both.
In connection with such request and in respect of such Senior Subordinated
Notes, the Transferor hereby certifies that such transfer has been effected in
compliance with the transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with Rule 903 or Rule 904 under the United States
Securities Act of 1933, as amended (the "Securities Act"), and accordingly the
Transferor hereby further certifies that:
(1) The offer of the Senior Subordinated Notes was not made to a person in
the United States;
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<PAGE> 126
(2) either:
(a) at the time the buy order was originated, the transferee was outside
the United States or the Transferor and any person acting on its
behalf reasonably believed and believes that the transferee was
outside the United States; or
(b) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither the Transferor nor
any person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 904(b) of Regulation S;
(4) the transaction is not part of a plan or scheme to evade the
registration provisions of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest being
transferred as described above is to be held with the Depositary through
Euroclear or Cedel or both.
Upon giving effect to this request to exchange a beneficial interest in a
Rule 144A Global Note for a beneficial interest in a Regulation S Global Note,
the resulting beneficial interest shall be subject to the restrictions on
transfer applicable to Regulation S Global Notes pursuant to the Indenture and
the Securities Act and, if such transfer occurs prior to the end of the 40-day
restricted period associated with the initial offering of Senior Subordinated
Notes, the additional restrictions applicable to transfers of interest in the
Regulation S Temporary Global Note.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company, the Subsidiary Guarantors and Donaldson,
Lufkin & Jenrette Securities Corporation and First Chicago Capital Markets,
Inc., the initial purchasers of such Senior Subordinated Notes being
transferred. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By:______________________________
Name:
Title:
Dated:
cc: APCOA, Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
First Chicago Capital Markets, Inc.
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<PAGE> 127
EXHIBIT B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM REGULATION S
GLOBAL NOTE TO RULE 144A GLOBAL NOTE
(Pursuant to Section 2.6(a)(ii) of the Indenture)
State Street Bank and Trust Company
225 Superior Avenue
Hartford, Connecticut 06103
Re: 9 1/4% Senior Subordinated Notes due 2008 of APCOA, Inc.
Reference is hereby made to the Indenture, dated as of March 30, 1998 (the
"Indenture"), among APCOA, Inc., a Delaware corporation (the "Company"), Tower
Parking, Inc., an Ohio corporation ("Tower"), Graelic, Inc., and Ohio
corporation ("Graelic"), APCOA Capital Corporation, a Delaware corporation
("APCOA Capital"), A-1 Auto Park, Inc., a Georgia corporation ("A-1 Auto"),
Metropolitan Parking System, Inc., a Massachusetts corporation ("Metropolitan"),
Events Parking Company, Inc., a Massachusetts corporation ("Events Parking"),
Standard Parking, L.P., a Delaware limited partnership ("SP"), Standard Parking
Corporation, an Illinois corporation ("SPC"), Standard Parking Corporation, IL,
an Illinois corporation ("SPC, IL"), Standard Parking Corporation, MW, an
Illinois corporation ("SPC, MW"), Standard Auto Park, Inc., an Illinois
corporation ("Standard Auto"), Standard/Wabash Parking Corporation, an Illinois
corporation ("S/W"), Standard Parking of Canada, L.P., a Illinois limited
partnership ("SP Canada"), Standard Parking I, L.L.C., a Delaware limited
liability company ("SPI"), Standard Parking II, L.L.C., a Delaware limited
liability company ("SPII"), (the "Subsidiary Guarantors") and State Street Bank
and Trust Company, as trustee (the "Trustee"). Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
This letter relates to $__________ principal amount of Senior Subordinated
Notes which are evidenced by one or more Regulation S Global Notes and held with
the Depositary through Euroclear or Cedel in the name of
______________________________________ (the "Transferor"). The Transferor has
requested a transfer of such beneficial interest in the Senior Subordinated
Notes to a Person who will take delivery thereof in the form of an equal
principal amount of Senior Subordinated Notes evidenced by one or more Rule 144A
Global Notes, to be held with the Depositary.
In connection with such request and in respect of such Senior Subordinated
Notes, the Transferor hereby certifies that:
[CHECK ONE]
such transfer is being effected pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, the Transferor hereby further certifies that the Senior
Subordinated Notes are being transferred to a
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<PAGE> 128
Person that the Transferor reasonably believes is purchasing the Senior
Subordinated Notes for its own account, or for one or more accounts with respect
to which such Person exercises sole investment discretion, and such Person and
each such account is a "qualified institutional buyer" within the meaning of
Rule 144A in a transaction meeting the requirements of Rule 144A;
or
such transfer is being effected pursuant to and in accordance with Rule
144 under the Securities Act,
or
such transfer is being effected pursuant to an exemption under the
Securities Act other than Rule 144A, Rule 144 or Rule 904 and the Transferor
further certifies that the Transfer complies with the transfer restrictions
applicable to beneficial interests in Global Notes and Definitive Senior
Subordinated Notes bearing the Private Placement Legend and the requirements of
the exemption claimed, which certification is supported by (x) if such transfer
is in respect of a principal amount of Senior Subordinated Notes at the time of
Transfer of $250,000 or more, a certificate executed by the Transferee in the
form of EXHIBIT C to the Indenture, or (y) if such Transfer is in respect of a
principal amount of Senior Subordinated Notes at the time of transfer of less
than $250,000, (1) a certificate executed in the form of EXHIBIT C to the
Indenture and (2) an Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this certification),
to the effect that (1) such Transfer is in compliance with the Securities Act
and (2) such Transfer complies with any applicable blue sky securities laws of
any state of the United States;
or
such transfer is being effected pursuant to an effective registration
statement under the Securities Act;
or
such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or Rule
144, and the Transferor hereby further certifies that the Senior Subordinated
Notes are being transferred in compliance with the transfer restrictions
applicable to the Global Notes and in accordance with the requirements of the
exemption claimed, which certification is supported by an Opinion of Counsel,
provided by the transferor or the transferee (a copy of which the Transferor has
attached to this certification) in form reasonably acceptable to the Company and
to the Registrar, to the effect that such transfer is in compliance with the
Securities Act;
and such Senior Subordinated Notes are being transferred in compliance
with any applicable blue sky securities laws of any state of the United States.
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<PAGE> 129
Upon giving effect to this request to exchange a beneficial interest in
Regulation S Global Notes for a beneficial interest in 144A Global Senior
Subordinated Notes, the resulting beneficial interest shall be subject to the
restrictions on transfer applicable to Rule 144A Global Notes pursuant to the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for your benefit
and the benefit of the Company, the Subsidiary Guarantors and Donaldson, Lufkin
& Jenrette Securities Corporation, and First Chicago Capital Markets, Inc., the
initial purchasers of such Senior Subordinated Notes being transferred. Terms
used in this certificate and not otherwise defined in the Indenture have the
meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By: ______________________________
Name:
Title:
Dated:
cc: APCOA, Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
First Chicago Capital Markets, Inc.
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<PAGE> 130
EXHIBIT B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF DEFINITIVE SENIOR SUBORDINATED NOTES
(Pursuant to Section 2.6(b) of the Indenture)
State Street Bank and Trust Company
225 Asylum Avenue
Hartford, Connecticut 06103
Re: 9__% Senior Subordinated Notes due 2008 of APCOA, Inc.
Reference is hereby made to the Indenture, dated as of March 30, 1998 (the
"Indenture"), among APCOA, Inc., a Delaware corporation (the "Company"), Tower
Parking, Inc., an Ohio corporation ("Tower"), Graelic, Inc., and Ohio
corporation ("Graelic"), APCOA Capital Corporation, a Delaware corporation
("APCOA Capital"), A-1 Auto Park, Inc., a Georgia corporation ("A-1 Auto"),
Metropolitan Parking System, Inc., a Massachusetts corporation ("Metropolitan"),
Events Parking Company, Inc., a Massachusetts corporation ("Events Parking"),
Standard Parking, L.P., a Delaware limited partnership ("SP"), Standard Parking
Corporation, an Illinois corporation ("SPC"), Standard Parking Corporation, IL,
an Illinois corporation ("SPC, IL"), Standard Parking Corporation, MW, an
Illinois corporation ("SPC, MW"), Standard Auto Park, Inc., an Illinois
corporation ("Standard Auto"), Standard/Wabash Parking Corporation, an Illinois
corporation ("S/W"), Standard Parking of Canada, L.P., a Illinois limited
partnership ("SP Canada"), Standard Parking I, L.L.C., a Delaware limited
liability company ("SPI"), Standard Parking II, L.L.C., a Delaware limited
liability company ("SPII"), (the "Subsidiary Guarantors") and State Street Bank
and Trust Company, as trustee (the "Trustee"). Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
This relates to $ _________ principal amount of Senior Subordinated Notes
which are evidenced by one or more Definitive Senior Subordinated Notes in the
name of__________ (the "Transferor"). The Transferor has requested an exchange
or transfer of such Definitive Senior Subordinated Note(s) in the form of an
equal principal amount of Senior Subordinated Notes evidenced by one or more
Definitive Senior Subordinated Notes, to be delivered to the Transferor or, in
the case of a transfer of such Senior Subordinated Notes, to such Person as the
Transferor instructs the Trustee.
In connection with such request and in respect of the Senior Subordinated
Notes surrendered to the Trustee herewith for exchange (the "Surrendered Senior
Subordinated Notes"), the Holder of such Surrendered Senior Subordinated Notes
hereby certifies that:
[CHECK ONE]
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<PAGE> 131
the Surrendered Senior Subordinated Notes are being acquired for the
Transferor's own account, without transfer;
or
the Surrendered Senior Subordinated Notes are being transferred to the
Company;
or
the Surrendered Senior Subordinated Notes are being transferred pursuant
to and in accordance with Rule 144A under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby
further certifies that the Surrendered Senior Subordinated Notes are being
transferred to a Person that the Transferor reasonably believes is purchasing
the Surrendered Senior Subordinated Notes for its own account, or for one or
more accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a "qualified institutional
buyer" within the meaning of Rule 144A, in each case in a transaction meeting
the requirements of Rule 144A;
or
the Surrendered Senior Subordinated Notes are being transferred in a
transaction permitted by Rule 144 under the Securities Act;
or
the Surrendered Senior Subordinated Notes are being transferred pursuant
to an exemption under the Securities Act other than Rule 144A, Rule 144 or Rule
904 and the Transferor further certifies that the Transfer complies with the
transfer restrictions applicable to beneficial interests in Global Notes and
Definitive Senior Subordinated Notes bearing the Private Placement Legend and
the requirements of the exemption claimed, which certification is supported by
(x) if such transfer is in respect of a principal amount of Senior Subordinated
Notes at the time of Transfer of $250,000 or more, a certificate executed by the
Transferee in the form of EXHIBIT C to the Indenture, or (y) if such Transfer is
in respect of a principal amount of Senior Subordinated Notes at the time of
transfer of less than $250,000, (1) a certificate executed in the form of
EXHIBIT C to the Indenture and (2) an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has attached to
this certification), to the effect that (I) such Transfer is in compliance with
the Securities Act and (2) such Transfer complies with any applicable blue sky
securities laws of any state of the United States;
or
the Surrendered Senior Subordinated Notes are being transferred pursuant
to an effective registration statement under the Securities Act; or
17
<PAGE> 132
such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or Rule
144, and the Transferor hereby further certifies that the Senior Subordinated
Notes are being transferred in compliance with the transfer restrictions
applicable to the Global Notes and in accordance with the requirements of the
exemption claimed, which certification is supported by an Opinion of Counsel,
provided by the transferor or the transferee (a copy of which the Transferor has
attached to this certification) in form reasonably acceptable to the Company and
to the Registrar, to the effect that such transfer is in compliance with the
Securities Act;
and the Surrendered Senior Subordinated Notes are being transferred in
compliance with any applicable blue sky securities laws of any state of the
United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company, the Subsidiary Guarantors and Donaldson,
Lufkin & Jenrette Securities Corporation and First Chicago Capital Markets,
Inc., the initial purchasers of such Senior Subordinated Notes being
transferred. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By: ____________________________
Name:
Title:
Dated:
cc: APCOA, Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
First Chicago Capital Markets, Inc.
EXHIBIT B-4
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM RULE 144A GLOBAL NOTE OR REGULATION S PERMANENT GLOBAL NOTE
TO DEFINITIVE SENIOR SUBORDINATED NOTE
(Pursuant to Section 2.6(c) of the Indenture)
State Street Bank and Trust Company
225 Asylum Street
Hartford, Connecticut 06103
Re: 9 1/4% Senior Subordinated Notes due 2008 of APCOA, Inc.
Reference is hereby made to the Indenture, dated as of March 30, 1998 (the
"Indenture"), among APCOA, Inc., a Delaware corporation (the "Company"), Tower
Parking, Inc., an Ohio
18
<PAGE> 133
corporation ("Tower"), Graelic, Inc., and Ohio corporation ("Graelic"), APCOA
Capital Corporation, a Delaware corporation ("APCOA Capital"), A-1 Auto Park,
Inc., a Georgia corporation ("A-1 Auto"), Metropolitan Parking System, Inc., a
Massachusetts corporation ("Metropolitan"), Events Parking Company, Inc., a
Massachusetts corporation ("Events Parking"), Standard Parking, L.P., a Delaware
limited partnership ("SP"), Standard Parking Corporation, an Illinois
corporation ("SPC"), Standard Parking Corporation, IL, an Illinois corporation
("SPC, IL"), Standard Parking Corporation, MW, an Illinois corporation ("SPC,
MW"), Standard Auto Park, Inc., an Illinois corporation ("Standard Auto"),
Standard/Wabash Parking Corporation, an Illinois corporation ("S/W"), Standard
Parking of Canada, L.P., a Illinois limited partnership ("SP Canada"), Standard
Parking I, L.L.C., a Delaware limited liability company ("SPI"), Standard
Parking II, L.L.C., a Delaware limited liability company ("SPII"), (the
"Subsidiary Guarantors") and State Street Bank and Trust Company, as trustee
(the "Trustee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
This letter relates to $___________ principal amount of Senior
Subordinated Notes which are evidenced by a beneficial interest in one or more
Rule 144A Global Notes or Regulation S Permanent Global Notes in the name of
______________ (the "Transferor"). The Transferor has requested an exchange or
transfer of such beneficial interest in the form of an equal principal amount of
Senior Subordinated Notes evidenced by one or more Definitive Senior
Subordinated Notes, to be delivered to the Transferor or, in the case of a
transfer of such Senior Subordinated Notes, to such Person as the Transferor
instructs the Trustee.
In connection with such request and in respect of the Senior Subordinated
Notes surrendered to the Trustee herewith for exchange (the "Surrendered Senior
Subordinated Notes"), the Holder of such Surrendered Senior Subordinated Notes
hereby certifies that:
[CHECK ONE]
the Surrendered Senior Subordinated Notes are being transferred to the
beneficial owner of such Senior Subordinated Notes;
or
the Surrendered Senior Subordinated Notes are being transferred pursuant
to and in accordance with Rule 144A under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby
further certifies that the Surrendered Senior Subordinated Notes are being
transferred to a Person that the Transferor reasonably believes is purchasing
the Surrendered Senior Subordinated Notes for its own account, or for one or
more accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a "qualified institutional
buyer" within the meaning of Rule 144A, in each case in a transaction meeting
they requirements of Rule 144A;
or
19
<PAGE> 134
the Surrendered Senior Subordinated Notes are being transferred in a
transaction permitted by Rule 144 under the Securities Act;
or
the Surrendered Senior Subordinated Notes are being transferred pursuant
to an effective registration statement under the Securities Act;
or
the Surrendered Senior Subordinated Notes are being transferred pursuant
to an exemption under the Securities Act other than Rule 144A, Rule 144 or Rule
904 and the Transferor further certifies that the Transfer complies with the
transfer restrictions applicable to beneficial interests in Global Notes and
Definitive Senior Subordinated Notes bearing the Private Placement Legend and
the requirements of the exemption claimed, which certification is supported by
(x) if such transfer is in respect of a principal amount of Senior Subordinated
Notes at the time of Transfer of $250,000 or more, a certificate executed by the
Transferee in the form of EXHIBIT C to the Indenture, or (y) if such Transfer is
in respect of a principal amount of Senior Subordinated Notes at the time of
transfer of less than $250,000, (1) a certificate executed in the form of
EXHIBIT C to the Indenture and (2) an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has attached to
this certification), to the effect that (1) such Transfer is in compliance with
the Securities Act and (2) such Transfer complies with any applicable blue sky
securities laws of any state of the United States;
or
such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or Rule
144, and the Transferor hereby further certifies that the Senior Subordinated
Notes are being transferred in compliance with the transfer restrictions
applicable to the Global Notes and in accordance with the requirements of the
exemption claimed, which certification is supported by an Opinion of Counsel,
provided by the transferor or the transferee (a copy of which the Transferor has
attached to this certification) in form reasonably acceptable to the Company and
to the Registrar, to the effect that such transfer is in compliance with the
Securities Act;
and the Surrendered Senior Subordinated Notes are being transferred in
compliance with any applicable blue sky securities laws of any state of the
United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company, the Subsidiary Guarantors and Donaldson,
Lufkin & Jenrette Securities Corporation, the initial purchaser of such Senior
Subordinated Notes being transferred. Terms used in this certificate and not
otherwise defined in the Indenture have the meanings set forth in Regulation S
under the Securities Act.
20
<PAGE> 135
[Insert Name of Transferor]
By:_____________________________
Name:
Title:
Dated:
cc: APCOA, Inc.
Donaldson, Lutkin & Jenrette Securities Corporation
First Chicago Capital Markets, Inc.
21
<PAGE> 136
EXHIBIT C
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
State Street Bank and Trust Company
225 Asylum Street
Hartford, Connecticut 06103
Re: 9__% Senior Subordinated Notes due 2008 of APCOA, Inc.
Reference is hereby made to the Indenture, dated as of March 30, 1998 (the
"Indenture"), among APCOA, Inc., a Delaware corporation (the "Company"), Tower
Parking, Inc., an Ohio corporation ("Tower"), Graelic, Inc., and Ohio
corporation ("Graelic"), APCOA Capital Corporation, a Delaware corporation
("APCOA Capital"), A-1 Auto Park, Inc., a Georgia corporation ("A-1 Auto"),
Metropolitan Parking System, Inc., a Massachusetts corporation ("Metropolitan"),
Events Parking Company, Inc., a Massachusetts corporation ("Events Parking"),
Standard Parking, L.P., a Delaware limited partnership ("SP"), Standard Parking
Corporation, an Illinois corporation ("SPC"), Standard Parking Corporation, IL,
an Illinois corporation ("SPC, IL"), Standard Parking Corporation, MW, an
Illinois corporation ("SPC, MW"), Standard Auto Park, Inc., an Illinois
corporation ("Standard Auto"), Standard/Wabash Parking Corporation, an Illinois
corporation ("S/W"), Standard Parking of Canada, L.P., a Illinois limited
partnership ("SP Canada"), Standard Parking I, L.L.C., a Delaware limited
liability company ("SPI"), Standard Parking II, L.L.C., a Delaware limited
liability company ("SPII"), (the "Subsidiary Guarantors") and State Street Bank
and Trust Company, as trustee (the "Trustee"). Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $__________ aggregate
principal amount of:
(a)__Beneficial interests, or
(b)__Definitive Senior Subordinated Notes,
we confirm that:
1. We understand that any subsequent transfer of the Senior Subordinated
Notes of any interest therein is subject to certain restrictions and conditions
set forth in the Indenture and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Senior Subordinated Notes or any
interest therein except in compliance with, such restrictions and conditions and
the Securities Act of 1933, as amended (the "Securities Act").
22
<PAGE> 137
2. We understand that the offer and sale of the Senior Subordinated Notes
have not been registered under the Securities Act, and that the Senior
Subordinated Notes and any interest therein may not be offered or sold except as
permitted in the following sentence. We agree, on our own behalf and on behalf
of any accounts for which we are acting as hereinafter stated, that if we should
sell the Senior Subordinated Notes or any interest therein, (A) we will do so
only (l)(a) to a person who the Seller reasonably believes is a qualified
institutional buyer (as defined in Rule 144A under the Securities Act) in a
transaction meeting the requirements of 144A, (b) in a transaction meeting the
requirements of Rule 144 under the Securities Act, (c) outside the United States
to a foreign person in a transaction meeting the requirements of Rule 904 of the
Securities Act, or (d) in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel), (2) to the Company or any of its subsidiaries or (3) pursuant to an
effective registration statement and, in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction and (B) we will, and each subsequent holder will be
required to, notify any purchaser from it of the security evidenced hereby of
the resale restrictions set forth in (A) above."
3. We understand that, on any proposed resale of the Senior Subordinated
Notes or beneficial interests, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Senior Subordinated
Notes purchased by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Senior Subordinated
Notes, and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
5. We are acquiring the Senior Subordinated Notes or beneficial interests
therein purchased by us for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each of which we exercise
sole investment discretion.
6. We are not acquiring the Senior Subordinated Notes with a view to any
distribution thereof that would violate the Securities Act or the securities
laws of any State of the United States.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By: ______________________________
Name:
Title:
Dated:
23
<PAGE> 138
EXHIBIT D
Note Guarantee
Subject to Section 11.6 of the Indenture, each Subsidiary Guarantor
hereby, jointly and severally, unconditionally guarantees to each Holder of a
Senior Subordinated Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Senior Subordinated Notes and the
Obligations of the Company under the Senior Subordinated Notes or under the
Indenture, that: (a) the principal of, premium, if any, interest and Liquidated
Damages, if any, on the Senior Subordinated Notes will be promptly paid in full
when due, subject to any applicable grace period, whether at maturity, by
acceleration, redemption or otherwise, and interest on overdue principal,
premium, if any, (to the extent permitted by law) interest on any interest, if
any, and Liquidated Damages, if any, on the Senior Subordinated Notes and all
other payment Obligations of the Company to the Holders or the Trustee under the
Indenture or under the Senior Subordinated Notes will be promptly paid in full
and performed, all in accordance with the terms thereof, and (b) in case of any
extension of time of payment or renewal of any Senior Subordinated Notes or any
of such other payment Obligations, the same will be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
subject to any applicable grace period, whether at stated maturity, by
acceleration, redemption or otherwise. Failing payment when so due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Subsidiary Guarantors will be jointly and severally obligated to pay the same
immediately.
The obligations of the Subsidiary Guarantor to the Holders and to
the Trustee pursuant to this Note Guarantee and the Indenture are expressly set
forth in Article 11 of the Indenture, and reference is hereby made to such
Indenture for the precise terms of this Note Guarantee. The terms of Article 11
of the Indenture are incorporated herein by reference. This Note Guarantee is
subject to release as and to the extent provided in Section 11.4 of the
Indenture.
This is a continuing Guarantee and shall remain in full force and
effect and shall be binding upon each Subsidiary Guarantor and its respective
successors and assigns to the extent set forth in the Indenture until full and
final payment of all of the Company's Obligations under the Senior Subordinated
Notes and the Indenture and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
herein conferred upon that party shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.
This is a Note Guarantee of payment and not a guarantee of collection.
This Note Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Senior Subordinated Note upon
which this Note Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
24
<PAGE> 139
For purposes hereof, each Subsidiary Guarantor's liability shall be
limited to the lesser of (i) the aggregate amount of the Obligations of the
Company under the Senior Subordinated Notes and the Indenture and (ii) the
amount, if any, which would not have (A) rendered such Subsidiary Guarantor
"insolvent" (as such term is defined in the Bankruptcy Law and in the Debtor and
Creditor Law of the State of New York) or (B) left such Subsidiary Guarantor
with unreasonably small capital at the time its Note Guarantee of the Senior
Subordinated Notes was entered into; provided that, it will be a presumption in
any lawsuit or other proceeding in which a Subsidiary Guarantor is a party that
the amount guaranteed pursuant to the Note Guarantee is the amount set forth in
clause (i) above unless any creditor, or representative of creditors of such
Subsidiary Guarantor, or debtor in possession or trustee in bankruptcy of such
Subsidiary Guarantor, otherwise proves in such a lawsuit that the aggregate
liability of the Subsidiary Guarantor is limited to the amount set forth in
clause (ii) above. The Indenture provides that, in making any determination as
to the solvency or sufficiency of capital of a Subsidiary Guarantor in
accordance with the previous sentence, the right of such Subsidiary Guarantors
to contribution from other Subsidiary Guarantors and any other rights such
Subsidiary Guarantors may have, contractual or otherwise, shall be taken into
account.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
Dated as of___________ 1998
APCOA, INC.
By: __________________________
Name:
Title:
TOWER PARKING, INC.
By: __________________________
Name:
Title:
GRAELIC, INC.
By: __________________________
Name:
Title:
25
<PAGE> 140
APCOA CAPITAL CORPORATION
By: __________________________
Name:
Title:
A-1 AUTO PARK, INC.
By: _________________________
Name
Title:
METROPOLITAN PARKING SYSTEM, INC.
By: _________________________
Name:
Title:
EVENTS PARKING, INC.
By: __________________________
Name:
Title:
STANDARD PARKING, L.P.
By: ___________________________
Name:
Title:
STANDARD PARKING CORPORATION
By: ___________________________
Name:
Title:
26
<PAGE> 141
STANDARD PARKING CORPORATION, IL
By: ___________________________
Name:
Title:
STANDARD PARKING CORPORATION, MW
By: ___________________________
Name:
Title:
STANDARD AUTO PARK, INC.
By: ___________________________
Name:
Title:
STANDARD/WABASH PARKING CORPORATION
By: _____________________________
Name:
Title:
STANDARD PARKING OF CANADA
By: _____________________________
Name:
Title:
STANDARD PARKING I, L.L.C.
By: _____________________________
Name:
Title:
27
<PAGE> 142
STANDARD PARKING II, L.L.C.
By: _____________________________
Name:.
Title:
have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
For purposes hereof, each Subsidiary Guarantor's liability shall be
limited to the lesser of (i) the aggregate amount of the Obligations of the
Company under the Senior Subordinated Notes and the Indenture and (ii) the
amount, if any, which would not have (A) rendered such Subsidiary Guarantor
"insolvent" (as such term is defined in the Bankruptcy Law and in the Debtor and
Creditor Law of the State of New York) or (B) left such Subsidiary Guarantor
with unreasonably small capital at the time its Note Guarantee of the Senior
Subordinated Notes was entered into; provided that, it will be a presumption in
any lawsuit or other proceeding in which a Subsidiary Guarantor is a party that
the amount guaranteed pursuant to the Note Guarantee is the amount set forth in
clause (i) above unless any creditor, or representative of creditors of such
Subsidiary Guarantor, or debtor in possession or trustee in bankruptcy of such
Subsidiary Guarantor, otherwise proves in such a lawsuit that the aggregate
liability of the Subsidiary Guarantor is limited to the amount set forth in
clause (ii) above. The Indenture provides that, in making any determination as
to the solvency or sufficiency of capital of a Subsidiary Guarantor in
accordance with the previous sentence, the right of such Subsidiary Guarantors
to contribution from other Subsidiary Guarantors and any other rights such
Subsidiary Guarantors may have, contractual or otherwise, shall be taken into
account.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
Dated as of ___________, 1998
APCOA, INC.
By: __________________________
Name:
Title:
TOWER PARKING, INC.
By: __________________________
Name:
Title:
28
<PAGE> 143
GRAELIC, INC.
By: __________________________
Name:
Title:
APCOA CAPITAL CORPORATION
By: __________________________
Name:
Title:
A-1 AUTO PARK, INC.
By: __________________________
Name
Title:
METROPOLITAN PARKING SYSTEM, INC.
By: __________________________
Name:
Title:
EVENTS PARKING, INC.
By: ___________________________
Name:
Title:
STANDARD PARKING, L.P.
By: __________________________
Name:
Title:
29
<PAGE> 144
STANDARD PARKING CORPORATION
By: ___________________________
Name:
Title:
STANDARD PARKING CORPORATION, IL
By: _____________________________
Name:
Title:
STANDARD PARKING CORPORATION, MW
By: _____________________________
Name:
Title:
STANDARD AUTO PARK, INC
By: _____________________________
Name:
Title:
STANDARD/WABASH PARKING CORPORATION
By: _____________________________
Name:
Title:
STANDARD PARKING OF CANADA
By: _____________________________
Name:
Title:
30
<PAGE> 145
STANDARD PARKING I, L.L.C.
By: _____________________________
Name:
Title:
STANDARD PARKING II, L.L.C.
By: _____________________________
Name:.
Title:
31
<PAGE> 146
Exhibit E
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
___________ between Subsidiary Guarantor (the "New Subsidiary Guarantor"), a
subsidiary of APCOA, Inc., a Delaware corporation (the "Company"), and State
Street Bank and Trust Company, as trustee under the indenture referred to below
(the "Trustee"). Capitalized terms used herein and not defined herein shall have
the meaning ascribed to them in the Indenture (as defined below).
WITNESSETH
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of March 30, 1998, providing
for the issuance of an aggregate principal amount of $110,000,000 of 9__%
Senior Subordinated Notes due 2008 (the "Senior Subordinated Notes");
WHEREAS, Section 11.5 of the Indenture provides that under certain
circumstances the Company may cause, and Section 11.3 of the Indenture provides
that under certain circumstances the Company must cause, certain of its
subsidiaries to execute and deliver to the Trustee a supplemental indenture
pursuant to which such subsidiaries shall unconditionally guarantee all of the
Company's Obligations under the Senior Subordinated Notes pursuant to a Note
Guarantee on the terms and conditions set forth herein; and
WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the New
Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders of the Senior Subordinated Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO NOTE GUARANTEE. The New Subsidiary Guarantor hereby
agrees, jointly and severally with all other Subsidiary Guarantors, to guarantee
the Company's Obligations under the Senior Subordinated Notes and the Indenture
on the terms and subject to the conditions set forth in Article 11 of the
Indenture and to be bound by all other applicable provisions of the Indenture.
3. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, shareholder or agent of any Subsidiary
Guarantor, as such, shall
32
<PAGE> 147
have any liability for any obligations of the Company or any Subsidiary
Guarantor under the Senior Subordinated Notes, any Note Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder by
accepting a Senior Subordinated Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Senior
Subordinated Notes.
4. NEW YORK LAW TO GOVERN. The internal law of the State of New York
shall govern and be used to construe this Supplemental Indenture.
5. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
6. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
7. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the correctness of the recitals of fact
contained herein, all of which recitals are made solely by the New Subsidiary
Guarantor.
33
<PAGE> 148
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: ___________________
[NAME OF NEW SUBSIDIARY GUARANTOR]
By: ______________________
Name:
Title:
34
<PAGE> 1
Exhibit 10.1
EXECUTION COPY
================================================================================
AP HOLDINGS, INC.
------------------------------------------
$70,000,000
11-1/4% SENIOR DISCOUNT NOTES DUE 2008
--------------------------------------
----------------------
REGISTRATION RIGHTS AGREEMENT
DATED AS OF MARCH 30, 1998
--------------------------
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
================================================================================
<PAGE> 2
This Registration Rights Agreement (this "Agreement") is made and
entered into as of March 30, 1998, by and between AP Holdings, Inc., a Delaware
corporation ("AP Holdings") and Donaldson, Lufkin & Jenrette Securities
Corporation (the "Initial Purchaser"), who has agreed to purchase AP Holdings'
11-1/4% Senior Discount Notes due 2008 (the "Senior Discount Notes") pursuant to
the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
March 25, 1998 (the "Purchase Agreement"), by and among AP Holdings and the
Initial Purchaser. In order to induce the Initial Purchaser to purchase the
Senior Discount Notes, AP Holding has agreed to provide the registration rights
set forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchaser set forth in the Purchase
Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Act: The Securities Act of 1933, as amended.
Business Day: Any day except a Saturday, Sunday or other day in the City
of New York, or in the city of the corporate trust office of the Trustee, on
which banks are authorized to close.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Broker-Dealer Transfer Restricted Securities: New Senior Discount Notes
that are acquired by a Broker-Dealer in the Exchange Offer in exchange for
Senior Discount Notes that such Broker-Dealer acquired for its own account as a
result of market-making activities or other trading activities (other than
Senior Discount Notes acquired directly from AP Holdings or any of its
respective affiliates).
Certificated Securities: As defined in the Indenture.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for purposes
of this Agreement upon the occurrence of (a) the filing and effectiveness under
the Act of the Exchange Offer Registration Statement relating to the New Senior
Discount Notes to be issued in the Exchange Offer, (b) the maintenance of such
Registration Statement con-
<PAGE> 3
tinuously effective and the keeping of the Exchange Offer open for a period not
less than the minimum period required pursuant to Section 3(b) hereof and (c)
the delivery by AP Holdings to the Registrar under the Indenture of New Senior
Discount Notes in the same aggregate principal amount as the aggregate principal
amount of Section Discount Notes tendered by Holders thereof pursuant to the
Exchange Offer.
Damages Payment Date: With respect to the Transfer Restricted Securities,
each Interest Payment Date.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by AP Holdings under the Act of the New
Senior Discount Notes pursuant to the Exchange Offer Registration Statement
pursuant to which AP Holdings shall offer the Holders of all outstanding
Transfer Restricted Securities the opportunity to exchange all such outstanding
Transfer Restricted Securities for New Senior Discount Notes in an aggregate
principal amount equal to the aggregate principal amount of the Transfer
Restricted Securities tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement relating
to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchaser proposes
to sell the Senior Discount Notes (i) to certain "qualified institutional
buyers," as such term is defined in Rule 144A under the Act or (ii) outside the
United States in reliance upon Regulation S under the Securities Act to non-U.S.
persons.
Global Note Holder: As defined in the Indenture.
Holders: As defined in Section 2 hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated the Closing Date, among AP Holdings and
State Street Bank and Trust Company, as trustee (the "Trustee"), pursuant to
which the Notes are to be issued, as such Indenture is amended or supplemented
from time to time in accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
Offering Memorandum: As defined in the Purchase Agreement.
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<PAGE> 4
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
Record Holder: With respect to any Damages Payment Date, each Person who
is a Holder of Notes on the record date with respect to the Interest Payment
Date on which such Damages Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of AP Holdings relating
to (a) an offering of New Senior Discount Notes pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities held by such
holders pursuant to the Shelf Registration Statement, in each case, (i) which is
filed pursuant to the provision of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibit and material incorporated by
reference therein.
Restricted Broker-Dealer: Any Broker-Dealer which holds Broker-Dealer
Transfer Restricted Securities.
Notes: The Senior Discount Notes and the New Senior Discount Notes.
New Senior Discount Notes: AP Holdings' 11 1/4% New Senior Discount Notes
due 2008 to be issued pursuant to the Indenture (i) in the Exchange Offer or
(ii) upon the request of any Holder of Senior Discount Notes covered by a Shelf
Registration Statement, in exchange for such Senior Discount Notes.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest to occur of
(a) the date on which such Note is exchanged in the Exchange Offer and entitled
to be resold to the public by the Holder thereof without complying with the
prospectus delivery requirements of the Act, (b) the date on which such Note has
been disposed of in accordance with a Shelf Registration Statement, (c) the date
on which such Note is disposed of by a Broker-Dealer pursuant to the "Plan of
Distribution" contemplated by the Exchange Offer
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<PAGE> 5
Registration Statement (including delivery of Prospectus contained therein) or
(d) the date on which such Note is distributed to the public pursuant to Rule
144 under the Act.
Underwritten Registration or Underwritten Offering: A registration in
which securities of AP Holdings are sold to an underwriter for reoffering to the
public.
2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities (each,
a "Holder") whenever such Person owns Transfer Restricted Securities.
3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable federal
law (after the procedures set forth in Section 6(a)(i) below have been complied
with), AP Holdings shall (i) cause to be filed with the Commission, on or prior
to 30 days after the Closing Date, the Exchange Offer Registration Statement,
(ii) use their respective best efforts to cause such Exchange Offer Registration
Statement to become effective at the earliest possible time, but in no event
later than 120 days after the Closing Date, (iii) in connection with the
foregoing, (A) file all pre-effective amendments to such Exchange Offer
Registration Statement as may be necessary in order to cause such Exchange Offer
Registration Statement to become effective, (B) file, if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to Rule 430A under the Act and (C) cause all necessary filings, if any, in
connection with the registration and qualification of the New Senior Discount
Notes to be made under the Blue Sky laws of such jurisdictions as are necessary
to permit Consummation of the Exchange Offer provided that in no event shall AP
Holdings be obligated to qualify to do business in any jurisdiction where it is
not now so qualified, or take any action which would subject it to the General
Service of Process in any jurisdiction where it is not now so subject, and (iv)
upon the effectiveness of such Exchange Offer Registration Statement, use its
reasonable best efforts to commence and Consummate the Exchange Offer. The
Exchange Offer shall be on the appropriate form permitting registration of the
New Senior Discount Notes to be offered in exchange for the Senior Discount
Notes that are Transfer Restricted Securities and to permit sales of
Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers as
contemplated by Section 3(c) below.
(b) AP Holdings shall use its respective best efforts to cause the
Exchange Offer Registration Statement to be effective continuously, and shall
keep the Exchange Offer open, for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate the
Exchange Offer; provided, however, that in no event shall such period be less
than 20 Business Days. AP Holdings shall cause the Exchange Offer to comply with
all applicable federal and state securities laws. No securities other than the
Notes shall be included in the Exchange Offer Registration Statement. AP
Holdings shall use its best efforts to cause the Exchange Offer to be
Con-
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<PAGE> 6
summated on the earliest practicable date after the Exchange Offer Registration
Statement has become effective, but in no event later than 30 Business Days
thereafter.
(c) AP Holdings shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Restricted Broker-Dealer who holds Senior Discount Notes that
are Transfer Restricted Securities and that were acquired for the account of
such Broker-Dealer as a result of market-making activities or other trading
activities, may exchange such Senior Discount Notes (other than Transfer
Restricted Securities acquired directly from AP Holdings or any affiliate of AP
Holdings) pursuant to the Exchange Offer; however, such Broker-Dealer may be
deemed to be an "underwriter" within the meaning of the Act and must, therefore,
deliver a prospectus meeting the requirements of the Act in connection with the
initial sales of the New Senior Discount Notes received by such Broker-Dealer in
the Exchange Offer, which prospectus delivery requirement may be satisfied by
the delivery by such Broker-Dealer of the Prospectus contained in the Exchange
Offer Registration Statement. Such "Plan of Distribution" section shall also
contain all other information with respect to such sales of Broker-Dealer
Transfer Restricted Securities by Restricted Broker-Dealers that the Commission
may require in order to permit such sales pursuant thereto, but such "Plan of
Distribution" shall not name any such Broker-Dealer or disclose the amount of
Notes held by any such Broker-Dealer except to the extent required by the
Commission.
AP Holdings shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary to
ensure that it is available for sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers, and to ensure that such Registration
Statement conforms with the requirements of this Agreement, the Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of 120 days from the date on which the Exchange Offer is
Consummated.
AP Holdings shall provide sufficient copies of the latest version of such
Prospectus to such Restricted Broker-Dealers promptly upon request, and in no
event later than two days after such request, at any time during such 120-day
period in order to facilitate such sales.
4. SHELF REGISTRATION
(a) Shelf Registration. If (i) AP Holdings is not required to file an
Exchange Offer Registration Statement with respect to the New Senior Discount
Notes because the Exchange Offer is not permitted by applicable law (after the
procedures set forth in Section 6(a)(i) below have been complied with) or (ii)
if any Holder of Transfer Restricted Securities shall notify AP Holdings within
20 Business Days following the Consumma-
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<PAGE> 7
tion of the Exchange Offer that (A) such Holder is prohibited by law or
Commission policy from participating in the Exchange Offer or (B) such Holder
may not resell the New Senior Discount Notes acquired by it in the Exchange
Offer to the public without delivering a prospectus and the Prospectus contained
in the Exchange Offer Registration Statement is not appropriate or available for
such resales by such Holder or (C) such Holder is a Broker-Dealer and holds
Senior Discount Notes acquired directly from AP Holdings or one of its
respective affiliates, then AP Holdings shall (x) cause to be filed on or prior
to the earlier of (1) 45 days after the date on which AP Holdings is notified by
the Commission or otherwise determines that they are not required to file the
Exchange Offer Registration Statement pursuant to clause (i) above and (2) 45
days after the date on which AP Holdings receives the notice specified in clause
(ii) above, a shelf registration statement pursuant to Rule 415 under the Act
(which may be an amendment to the Exchange Offer Registration Statement (in
either event, the "Shelf Registration Statement")), relating to all Transfer
Restricted Securities the Holders of which shall have provided the information
required pursuant to Section 4(b) hereof, and (y) use its best efforts to cause
such Shelf Registration Statement to be declared effective by the Commission at
the earliest possible time, but in no event later than 120 days after the date
on which AP Holdings becomes obligated to file such Shelf Registration
Statement. If, after AP Holdings has filed an Exchange Offer Registration
Statement which satisfies the requirements of Section 3(a) above, AP Holdings is
required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer shall not be permitted under applicable federal law,
then the filing of the Exchange Offer Registration Statement shall be deemed to
satisfy the requirements of clause (x) above. Such an event shall have no effect
on the requirements of clause (y) above, or on the Effectiveness Target Date as
defined in Section 5 below. AP Holdings shall use its best effort to keep the
Shelf Registration Statement discussed in this Section 4(a) continuously
effective, supplemented and amended as required by and subject to the provisions
of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a), and to ensure that it conforms
with the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of at
least two years (as extended pursuant to Section 6(c)(i)) following the date on
which such Shelf Registration Statement first becomes effective under the Act or
such shorter period ending when all of the Transfer Restricted Securities
available for sale thereunder have been sold pursuant thereto.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
AP Holdings in writing, within 20 days after receipt of a request therefor, such
information specified in Item 507 of Regulation S-K under the Act for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted
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<PAGE> 8
Securities shall be entitled to Liquidated Damages pursuant to Section 5 hereof
unless and until such Holder has provided all such information. Each Holder as
to which any Shelf Registration Statement is being effected agrees to furnish
promptly to AP Holdings all information required to be disclosed in order to
make the information previously furnished to AP Holdings by such Holder not
materially misleading.
5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not filed
with the Commission on or prior to the date specified for such filing in this
Agreement, (ii) any such Registration Statement has not been declared effective
by the Commission on or prior to the date specified for such effectiveness in
this Agreement (the "Effectiveness Target Date"), (iii) the Exchange Offer has
not been Consummated within 30 Business Days after the Effectiveness Target Date
with respect to the Exchange Offer Registration Statement or (iv) any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable for
its intended purpose without being succeeded immediately by a post-effective
amendment to such Registration Statement that cures such failure and that is
itself immediately declared effective (each such event referred to in clauses
(i) through (iv), a "Registration Default"), AP Holdings hereby agrees to pay to
each Holder of Transfer Restricted Securities, for the first 90-day period
immediately following the occurrence of such Registration Default, liquidated
damages in an amount equal to $.05 per week per $1,000 principal amount of Notes
constituting Transfer Restricted Securities held by such Holder for each week or
portion thereof that the Registration Default continues. The amount of the
liquidated damages payable to each Holder shall increase by an additional $.05
per week per $1,000 in principal amount of Transfer Restricted Securities with
respect to each subsequent 90-day period until all Registration Defaults have
been cured, up to a maximum amount of liquidated damages of $.50 per week per
$1,000 principal amount of Transfer Restricted Securities held by such Holder.
Notwithstanding anything to the contrary set forth herein, (1) upon filing of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (i) above, (2) upon the effectiveness of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (ii) above, (3) upon Consummation of the
Exchange Offer, in the case of (iii) above, or (4) upon the filing of a
post-effective amendment to the Registration Statement or an additional
Registration Statement that causes the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be declared
effective or made usable in the case of (iv) above, the liquidated damages
payable with respect to the Transfer Restricted Securities as a result of such
clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued liquidated damages shall be paid to the Global Note Holder by
wire transfer of immediately available funds or by federal funds check and to
Holders of Certificated Securities by wire transfer to the accounts specified by
them or by mailing checks
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<PAGE> 9
to their registered addresses if no such accounts have been specified on each
Damages Payment Date. Following the cure of all Registration Defaults relating
to any particular Transfer Restricted Securities, the accrual of liquidated
damages with respect to such Transfer Securities will cease. All obligations of
AP Holdings set forth in the preceding paragraph that are outstanding with
respect to any Transfer Restricted Security at the time such security ceases to
be a Transfer Restricted Security shall survive until such time as all such
obligations with respect to such security shall have been satisfied in full.
6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the Exchange
Offer, AP Holdings shall comply with all applicable provisions of Section 6(c)
below, shall use its best efforts to effect such exchange and to permit the sale
of Broker-Dealer Transfer Restricted Securities being sold in accordance with
the intended method or methods of distribution thereof (which shall be in a
manner consistent with the terms of this Agreement), and shall comply with all
of the following provisions:
(i) If, following the date hereof and prior to Consummation of the
Exchange Offer, there has been published a change in Commission policy
with respect to exchange offers such as the Exchange Offer, such that in
the reasonable judgment of counsel to AP Holdings there is a substantial
question as to whether the Exchange Offer is permitted by applicable
federal law or Commission policy, AP Holdings hereby agrees to seek a
no-action letter or other favorable decision from the Commission allowing
AP Holdings to Consummate an Exchange Offer for such Senior Discount
Notes. AP Holdings hereby agrees to pursue the issuance of such a decision
to the Commission staff level but shall not be required to take
commercially unreasonable action to effect a change of Commission policy.
In connection with the foregoing, AP Holdings hereby agrees, however, but
subject to the proviso set forth above, to take all such other actions as
are reasonably requested by the Commission or otherwise required in
connection with the issuance of such decision, including without
limitation to (A) participate in telephonic conferences with the
Commission, (B) deliver to the Commission staff an analysis prepared by
counsel to AP Holdings setting forth the legal bases, if any, upon which
such counsel has concluded that such an Exchange Offer should be permitted
and (C) diligently pursue a resolution (which need not be favorable) by
the Commission staff of such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of AP Holdings,
prior to the Consummation of the Exchange Offer, a written representation
to AP Holdings (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the effect
that (A) it is not an affiliate of AP Holdings, (B) it is not en-
-8-
<PAGE> 10
gaged in, and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the New
Senior Discount Notes to be issued in the Exchange Offer and (C) it is
acquiring the New Senior Discount Notes in its ordinary course of
business. In addition, all such holders of Transfer Restricted Securities
shall otherwise cooperate in AP Holdings' preparation for the Exchange
Offer. Each Holder hereby acknowledges and agrees that any Broker-Dealer
and any such Holder using the Exchange Offer to participate in a
distribution of the securities to be acquired in the Exchange Offer (1)
could not under Commission policy as in effect on the date of this
Agreement rely on the position of the Commission enunciated in Morgan
Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
Corporation (available May 13, 1988), as interpreted in the Commission's
letter to Shearman & Sterling dated July 2, 1993, and similar no-action
letters (including, if applicable, any no-action letter obtained pursuant
to clause (i) above), and (2) must comply with the registration and
prospectus delivery requirements of the Act in connection with a secondary
resale transaction and that such a secondary resale transaction must be
covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as applicable, of
Regulation S-K if the resales are of New Senior Discount Notes obtained by
such Holder in exchange for Senior Discount Notes acquired by such Holder
directly from AP Holdings or an affiliate thereof.
(iii) To the extent required by the Commission, prior to
effectiveness of the Exchange Offer Registration Statement, AP Holdings
shall provide a supplemental letter to the Commission (A) stating that AP
Holdings is registering the Exchange Offer in reliance on the position of
the Commission enunciated in Exxon Capital Holdings Corporation (available
May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) and,
if applicable, any no-action letter obtained pursuant to clause (i) above,
(B) including a representation that AP Holdings has not entered into any
arrangement or understanding with any Person to distribute the New Senior
Discount Notes to be received in the Exchange Offer and that, to the best
of AP Holdings' information and belief, each Holder participating in the
Exchange Offer is acquiring the New Senior Discount Notes in its ordinary
course of business and has no arrangement or understanding with any Person
to participate in the distribution of the New Senior Discount Notes
received in the Exchange Offer and (C) any other undertaking or
representation required by the Commission as set forth in any no-action
letter obtained pursuant to clause (i) above.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement AP Holdings shall comply with all the provisions of
Section 6(c) below and shall use their respective best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being sold
in accordance with the intended method or
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<PAGE> 11
methods of distribution thereof (as indicated in the information furnished to AP
Holdings pursuant to Section 4(b) hereof), and pursuant thereto AP Holdings will
prepare and file with the Commission a Registration Statement relating to the
registration on any appropriate form under the Act, which form shall be
available for the sale of the Transfer Restricted Securities in accordance with
the intended method or methods of distribution thereof within the time periods
and otherwise in accordance with the provisions hereof.
(c) General Provisions. In connection with any Registration Statement and
any related Prospectus required by this Agreement to permit the sale or resale
of Transfer Restricted Securities (including, without limitation, any Exchange
Offer Registration Statement and the related Prospectus, to the extent that the
same are required to be available to permit sales of Broker-Dealer Transfer
Restricted Securities by Restricted Broker-Dealers), AP Holdings shall:
(i) use their respective best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 or 4 of this Agreement,
as applicable. Upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to contain
a material misstatement or omission or (B) not to be effective and usable
for resale of Transfer Restricted Securities during the period required by
this Agreement, AP Holdings shall file promptly an appropriate amendment
to such Registration Statement, (1) in the case of clause (A), correcting
any such misstatement or omission, and (2) in the case of either clause
(A) or (B), use their respective best efforts to cause such amendment to
be declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter. Notwithstanding the foregoing, at any time after
Consummation of the Exchange Offer, AP Holdings may allow the Shelf
Registration Statement to cease to be effective and usable if (x) the
Board of Directors of AP Holdings determines in good faith that it is in
the best interests of AP Holdings not to disclose the existence of or
facts surrounding any proposed or pending material corporate transaction
involving AP Holdings, and AP Holdings notifies the Holders within two
business days after the Board makes such determination, or (y) the
Prospectus contained in the Shelf Registration Statement contains an
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the applicable
period set forth in Section 3 or 4 hereof, or such shorter period as will
terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold; cause the Pro-
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<PAGE> 12
spectus to be supplemented by any required Prospectus supplement, and as
so supplemented to be filed pursuant to Rule 424 under the Act, and to
comply fully with Rules 424, 430A and 462 as applicable, under the Act in
a timely manner; and comply with the provisions of the Act with respect to
the disposition of all securities covered by such Registration Statement
during the applicable period in accordance with the intended method or
methods of distribution by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, confirm such advice in
writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
Registration Statement or any post-effective amendment thereto, when the
same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to
the Prospectus or for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement under the Act or of the suspension by any
state securities commission of the qualification of the Transfer
Restricted Securities, as applicable, for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the preceding
purposes, (D) of the existence of any fact or the happening of any event
that makes any statement of a material fact made in the Registration
Statement, the Prospectus, any amendment or supplement thereto or any
document incorporated by reference therein untrue, or that requires the
making of any additions to or changes in the Registration Statement in
order to make the statements therein not misleading, or that requires the
making of any additions to or changes in the Prospectus in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. If at any time the Commission shall issue any
stop order suspending the effectiveness of the Registration Statement, or
any state securities commission or other regulatory authority shall issue
an order suspending the qualification or exemption from qualification of
the Transfer Restricted Securities under state securities or Blue Sky
laws, AP Holdings shall use its best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
(iv) furnish to the Initial Purchaser, each selling Holder named in
any Registration Statement or Prospectus and each of the underwriter(s) in
connection with such sale, if any, before filing with the Commission,
copies of any Registration Statement or any Prospectus included therein or
any amendment or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review and comment of such Holders and underwriter(s) in
connection with such sale, if any, for a period of at least five Business
Days, and AP Holdings will not file any such Registration Statement or
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<PAGE> 13
Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus (including all such documents incorporated by
reference) if the selling Holders of the Transfer Restricted Securities
covered by such Registration Statement or the underwriter(s) in connection
with such sale shall not have had an opportunity to participate in the
preparation thereof;
(v) prior to the filing of any document that is to be incorporated
by reference into a Registration Statement or Prospectus, provide copies
of such document to the selling Holders and to the underwriter(s) in
connection with such sale, if any, make AP Holdings' representatives
available for discussion of such document and other customary due
diligence matters, and include such information in such document prior to
the filing thereof as such selling Holders or uinderwriter(s), if any,
reasonably may request;
(vi) make available at reasonable times at AP Holdings principal
place of business for inspection by the selling Holders of Transfer
Restricted Securities, any managing underwriter participating in any
disposition pursuant to such Registration Statement and any attorney or
accountant retained by such selling Holders or any of such underwriter(s),
who shall certify to AP Holdings that they have a current intention to
sell Transfer Restricted Securities pursuant to a Shelf Registration
Statement, all pertinent financial and other pertinent information of AP
Holdings, as reasonably requested, and cause AP Holdings' officers,
directors and employees to respond to such inquiries as shall be
reasonable necessary; in the reasonable judgment of counsel to such
Holders, to conduct a reasonable investigation; provided, however, that
each such party shall be required to maintain in confidence and not to
disclose to any other person any information or records reasonably
designated by AP Holdings in writing as being confidential, until such
time as (A) such information becomes a matter of public record (whether by
virtue of its inclusion in such Registration Statement or otherwise), or
(B) such person shall be required so to disclose such information pursuant
to the subpoena or order of any court or other governmental agency or body
having jurisdiction over the matter (subject to the requirements of such
order, and only after such person shall have given AP Holdings prompt
prior written notice of such requirement), or (C) such information is
required to be set forth in such Registration Statement or the Prospectus
included therein or in an amendment or supplement to such Registration
Statement or an amendment or supplement to such Prospectus in order that
such Registration Statement, Prospectus, amendment or supplement, as the
case may be, does not contain an untrue statement of a material fact or
omit to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(vii) if requested by any selling Holders or the underwriter(s), as
applicable, in connection with such sale, if any, promptly include in any
Registration
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<PAGE> 14
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information that is required by the Act as
such selling Holders and underwriter(s), if any, may reasonably request to
have included therein, and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after AP
Holdings is notified of the matters to be included in such Prospectus
supplement or post-effective amendment;
(viii) furnish to each selling Holder and each of the underwriter(s)
in connection with such sale, if any, without charge, at least one copy of
the Registration Statement, as first filed with the Commission, and of
each amendment thereto, including all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by
reference);
(ix) deliver to each selling Holder and each of the underwriter(s),
if any, without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such
Persons reasonably may request; AP Holdings hereby consents to the use (in
accordance with law) of the Prospectus and any amendment or supplement
thereto by each of the selling Holders and each of the underwriter(s), if
any, in connection with the offering and the sale of the Transfer
Restricted Securities covered by the Prospectus or any amendment or
supplement thereto. Notwithstanding the foregoing, at any time after
Consummation of the Exchange Offer, AP Holdings may allow the Shelf
Registration Statement to cease to be effective and usable if (x) the
Board of Directors of AP Holdings determines in good faith that it is in
the best interests of AP Holdings not to disclose the existence of or
facts surrounding any proposed or pending material corporate transaction
involving AP Holdings, and AP Holdings notifies the Holders within two
business days after the Board makes such determination, or (y) the
Prospectus contained in the Shelf Registration Statement contains an
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(x) and take all such other actions in connection therewith in order
to expedite or facilitate the disposition of the Transfer Restricted
Securities pursuant to any Registration Statement contemplated by this
Agreement as may be reasonably requested by any Holder who holds at least
5% in aggregate principal amount of such class of Transfer Restricted
Securities or underwriter in connection with any sale or resale pursuant
to any Registration Statement contemplated by this Agreement, provided,
that, AP Holdings shall not be required to enter into any such agreement
more than once with respect to all of the Transfer Restricted Securities,
and in the case of a Shelf Registration Statement, may delay entering into
such agreement if the Board of Directors of AP Holdings determines in good
faith that it is in the best interest of AP Holdings not to disclose the
existence of
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<PAGE> 15
or facts surrounding any proposed or pending corporate transaction
involving AP Holdings; and in such connection, whether or not an
underwriting agreement is entered into and whether or not the registration
is an Underwritten Registration, AP Holdings shall:
(A) furnish to each selling Holder who holds at least 5% in
aggregate principal amount of such class of Transfer Restricted Securities
and each underwriter, if any, in such substance and scope as they may
request and as is customarily made in connection with an offering of debt
securities pursuant to a Registration Statement, upon the effectiveness of
the Shelf Registration Statement and to each Restricted Broker-Dealer upon
Consummation of the Exchange Offer:
(1) a certificate, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, signed on behalf of AP
Holdings by (x) the President or any Vice President and (y) a
principal financial or accounting officer of AP Holdings confirming,
as of the date thereof, the matters set forth in paragraphs (a)
through (c) of Section 9 of the Purchase Agreement and such other
similar matters as the Holders, underwriter(s) and/or Restricted
Broker-Dealers may reasonably request;
(2) an opinion, dated the date of Consummation of the Exchange
Offer or the date of effectiveness of the Shelf Registration
Statement, as the case may be, of counsel for AP Holdings, covering
matters customarily covered in opinions requested in Underwritten
Offerings and dated the date of effectiveness of the Shelf
Registration Statement or the date of Consummation of the Exchange
Offer, as the case may be; and
(3) customary comfort letters, dated as of the date of
effectiveness of the Shelf Registration Statement or the date of
Consummation of the Exchange Offer, as the case may be, from AP
Holdings' independent accountants, in the customary form and
covering matters of the type customarily covered in comfort letters
to underwriters in connection with an offering of debt securities
pursuant to a Registration Statement, and affirming the matters set
forth in the comfort letters delivered pursuant to Section 9(f) of
the Purchase Agreement, without exception;
(B) set forth in full or incorporated by reference in the
underwriting agreement, if any, in connection with any sale or resale
pursuant to any Shelf Registration Statement the indemnification
provisions and procedures of Section 8 hereof with respect to all parties
to be indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by the selling Holders, the underwriter(s), if any,
and Restricted Broker-
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<PAGE> 16
Dealers, if any, to evidence compliance with clause (A) above and with any
customary conditions contained in the underwriting agreement or other
agreement entered into by AP Holdings pursuant to this clause (x).
The above shall be done at each closing under such underwriting or
similar agreement, as and to the extent required thereunder, and if at any
time the representations and warranties of AP Holdings contemplated in
(A)(1) above cease to be true and correct, AP Holdings shall so advise the
underwriter(s), if any, selling Holders who hold at least 5% in aggregate
principal amount of such class of Transfer Restricted Securities and each
Restricted Broker-Dealer promptly and if requested by such Persons, shall
confirm such advice in writing;
(xi) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders, the underwriter(s), if any, and their
respective counsel in connection with the registration and qualification
of the Transfer Restricted Securities under the securities or Blue Sky
laws of such jurisdictions as the selling Holders or underwriter(s), if
any, may reasonably request and do any and all other acts or things
reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the
applicable Registration Statement; provided, however, that AP Holdings
shall not be required to register or qualify as a foreign corporation
where it is not now so qualified or to take any action that would subject
it to the service of process in suits or to taxation, other than as to
matters and transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;
(xii) issue, upon the request of any Holder of Senior Discount Notes
covered by any Shelf Registration Statement contemplated by this
Agreement, New Senior Discount Notes, having an aggregate principal amount
equal to the aggregate principal amount of Senior Discount Notes
surrendered to AP Holdings by such Holder in exchange therefor or being
sold by such Holder; such New Senior Discount Notes to be registered in
the name of such Holder or in the name of the purchaser(s) of such Notes,
as the case may be; in return, the Senior Discount Notes held by such
Holder shall be surrendered to AP Holdings for cancellation;
(xiii)in connection with any sale of Transfer Restricted Securities
that will result in such securities no longer being Transfer Restricted
Securities, cooperate with the selling Holders and the underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and to enable such Transfer Restricted Securities to
be in such denominations and registered in such names as such Holders or
the underwriter(s), if any, may request at least two Business Days prior
to such sale of Transfer Restricted Securities;
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<PAGE> 17
(xiv) use their respective best efforts to cause the disposition of
the Transfer Restricted Securities covered by the Registration Statement
to be registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof or
the underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause (xi)
above;
(xv) subject to Section 6(c)(i), if any fact or event contemplated
by Section 6(c)(iii)(D) above shall exist or have occurred, prepare a
supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(xvi) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of a Registration Statement covering
such Transfer Restricted Securities and provide the Trustee under the
Indenture with printed certificates for the Transfer Restricted Securities
which are in a form eligible for deposit with the Depository Trust
Company;
(xvii)cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of
the NASD;
(xviii) otherwise use their respective best efforts to comply with
all applicable rules and regulations of the Commission, and make generally
available to its security holders with regard to any applicable
Registration Statement, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
covering a twelve-month period (A) commencing at the end of any fiscal
year in which Transfer Restricted Securities are sold to underwriters in a
firm or best efforts underwritten offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of AP
Holdings' first fiscal quarter commencing after the effective date of the
Registration Statement;
(xix) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement and, in connection therewith, cooperate with the Trustee
and the Holders of Notes to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the
terms of the TIA; and execute and use their re-
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<PAGE> 18
spective best efforts to cause the Trustee to execute, all documents that
may be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner; and
(xx) provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13 or
Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security or Broker-Dealer Transfer Restricted Securities, as
applicable, that, upon receipt of the notice referred to in Section 6(c)(i) or
any notice from AP Holdings of the existence of any fact of the kind described
in Section 6(c)(iii)(D) hereof, such Holder will immediately discontinue
disposition of Transfer Restricted Securities pursuant to the applicable
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof, or
until it is advised in writing by AP Holdings that the use of the Prospectus may
be resumed, and has received copies of any additional or supplemental filings
that are incorporated by reference in the Prospectus (the "Advice"). If so
directed by AP Holdings, each Holder will deliver to AP Holdings (at AP
Holdings' expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities that was current at
the time of receipt of either such notice. In the event AP Holdings shall give
any such notice, the time period regarding the effectiveness of such
Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall
be extended by the number of days during the period from and including the date
of the giving of such notice pursuant to Section 6(c)(i) or Section 6(c)(iii)(D)
hereof to and including the date when each selling Holder covered by such
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 6(c)(xv) hereof or shall have
received the Advice.
AP Holdings may require each Holder of Transfer Restricted Securities or
Broker-Dealer Transfer Restricted Securities as to which any registration is
being effected to furnish to AP Holdings such information regarding such Holder
and such Holder's intended method of distribution of the applicable Transfer
Restricted Securities as AP Holdings may from time to time reasonably request in
writing, but only to the extent that such information is required in order to
comply with the Act. Each such Holder agrees to notify AP Holdings as promptly
as practicable of (i) any inaccuracy or change in information previously
furnished by such Holder to AP Holdings, or (ii) the occurrence of any event, in
either case, as a result of which any prospectus relating to such registration
contains or would contain an untrue statement of a material fact regarding such
Holder or such Holder's intended method of distribution of the applicable
Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities
or omits to state any material fact re-
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<PAGE> 19
garding such Holder or such Holder's intended method of distribution of the
applicable Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities required to be stated therein or necessary to make the statements
therein not misleading and promptly to furnish to AP Holdings any additional
information required to correct and update any previously furnished information
or required so that such Prospectus shall not contain, with respect to such
Holder or the distribution of the applicable Transfer Restricted Securities or
Broker-Dealer Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Securities an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
7. REGISTRATION EXPENSES
(a) All expenses incident to AP Holdings' performance of or compliance
with this Agreement will be borne by AP Holdings regardless of whether a
Registration Statement becomes effective, including without limitation: (i) all
registration and filing fees and expenses (including filings made by any Initial
Purchaser or Holder with the NASD (and, if applicable, the fees and expenses of
any "qualified independent underwriter") and its counsel that may be required by
the rules and regulations of the NASD); (ii) all fees and expenses of compliance
with federal securities and state Blue Sky or securities laws; (iii) all
expenses of printing (including printing certificates for the New Senior
Discount Notes to be issued in the Exchange Offer and printing of Prospectuses);
(iv) all fees and disbursements of counsel for AP Holdings and, in accordance
with Section 7(b) below, the Holders of Transfer Restricted Securities; (v) all
messenger and delivery services and telephone expenses of AP Holdings; (vi) all
application and filing fees in connection with listing the Notes on a national
securities exchange or automated quotation system pursuant to the requirements
hereof and (vii) all fees and disbursements of independent certified public
accountants of AP Holdings (including the expenses of any special audit and
comfort letters required by or incident to such performance).
(b) AP Holdings will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of any of their respective
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by AP Holdings.
(c) In connection with any Registration Statement required by this
Agreement, as applicable (including, without limitation, the Exchange Offer
Registration Statement and the Shelf Registration Statement), AP Holdings will
reimburse the Initial Purchaser and the Holders of Transfer Restricted
Securities being tendered in the Exchange Offer and/or pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
chosen by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being
prepared.
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<PAGE> 20
8. INDEMNIFICATION
(a) AP Holdings agrees to indemnify and hold harmless the Initial
Purchaser, its directors, its officers and each person, if any, who controls the
Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages,
liabilities or judgments (including, without limitation, any legal or other
expenses reasonably incurred in connection with investigating or defending any
matter, including any action, that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Offering Memorandum (or any
amendment or supplement thereto), the Preliminary Offering Memorandum or any
Rule 144A Information provided by AP Holdings to any holder or prospective
purchaser of Senior Discount Notes pursuant to Section 5(n) of the Purchase
Agreement or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to the Initial Purchaser
furnished in writing to AP Holdings by the Initial Purchaser; provided, however,
that the foregoing indemnity agreement with respect to any Preliminary Offering
Memorandum shall not inure to the benefit of the Initial Purchaser who failed to
deliver a Final Offering Memorandum (as then amended or supplemented, provided
by AP Holdings to the Initial Purchasers in the requisite quantity and on a
timely basis to permit proper delivery on or prior to the Closing Date) to the
person asserting any losses, claims, damages and liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Memorandum, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, if such material
misstatement or omission or alleged material misstatement or omission was cured
in the Final Offering Memorandum.
(b) The Initial Purchaser agrees to indemnify and hold harmless AP
Holdings, and its respective directors and officers and each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) AP Holdings, to the same extent as the foregoing indemnity from AP
Holdings to the Initial Purchaser but only with reference to information
relating to the Initial Purchaser furnished in writing to AP Holdings by the
Initial Purchaser expressly for use in the Preliminary Offering Memorandum or
the Offering Memorandum.
(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party
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<PAGE> 21
shall assume the defense of such action, including the employment of counsel
reasonably satisfactory to the indemnified party and the payment of all fees and
expenses of such counsel, as incurred (except that in the case of any action in
respect of which indemnity may be sought pursuant to both Sections 8(a) and
8(b), the Initial Purchaser shall not be required to assume the defense of such
action pursuant to this Section 8(c), but may employ separate counsel and
participate in the defense thereof, but the fees and expenses of such counsel,
except as provided below, shall be at the expense of the Initial Purchaser). Any
indemnified party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by Donaldson, Lufkin
& Jenrette Securities Corporation, in the case of the parties indemnified
pursuant to Section 8(a), and by AP Holdings, in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall indemnify and hold
harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if the settlement is entered into more than thirty business days after the
indemnifying party shall have received a request from the indemnified party for
reimbursement for the fees and expenses of counsel (in any case where such fees
and expenses are at the expense of the indemnifying party) and, prior to the
date of such settlement, the indemnifying party shall have failed to comply with
such reimbursement request. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement or compromise
of, or consent to the entry of judgment with respect to, any pending or
threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
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<PAGE> 22
(d) To the extent the indemnification provided for in this Section 8 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to herein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by AP
Holdings, on the one hand, and the Initial Purchaser on the other hand from the
offering of the Senior Discount Notes or (ii) if the allocation provided by
clause 8(d)(i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of AP Holdings, on the one hand, and
the Initial Purchaser, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by AP Holdings, on the one hand and the Initial Purchaser, on
the other hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Senior Discount Notes (after underwriting
discounts and commissions, but before deducting expenses) received by AP
Holdings, and the total discounts and commissions received by the Initial
Purchaser bear to the total price to investors of the Senior Discount Notes, in
each case as set forth in the table on the cover page of the Offering
Memorandum. The relative fault of AP Holdings, on the one hand, and the Initial
Purchaser, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by AP Holdings, on the one hand, or the Initial Purchaser, on the other
hand, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
AP Holdings and the Initial Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action, that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, the Initial
Purchaser shall not be required to contribute any amount in excess of the amount
by which the total discounts and commissions received by the Initial Purchaser
exceeds the amount of any damages which the Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
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<PAGE> 23
(e) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
9. RULE 144A
AP Holdings hereby agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which AP
Holdings is not subject to Section 13 or 15(d) of the Securities Exchange Act,
to make available, upon request of any Holder of Transfer Restricted Securities,
to any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities designated by such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Act in order to permit resales
of such Transfer Restricted Securities pursuant to Rule 144A.
10. UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in customary underwriting arrangements entered
into in connection therewith and (b) completes and executes all reasonable
questionnaires, powers of attorney, lock-up letters and other documents required
under the terms of such underwriting arrangements.
11. SELECTION OF UNDERWRITERS
For any Underwritten Offering of Notes, the investment banker or
investment bankers and manager or managers for any Underwritten Offering of
Notes, that will administer such offering will be selected by the Holders of a
majority in aggregate principal amount of the Transfer Restricted Securities
included in such offering provided, however, that such investment bankers and
managers must be reasonably satisfactory to AP Holdings. Such investment bankers
and managers are referred to herein as the "underwriters."
12. MISCELLANEOUS
(a) Remedies. AP Holdings agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by them of the
provisions of this Agreement and hereby agree to waive the defense in any action
for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. AP Holdings will not on or after the date
of this Agreement, enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Except as disclosed in the
Offering Memorandum, AP Holdings has not previously entered into any agreement
granting any registration rights with respect to
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<PAGE> 24
its securities to any Person. The rights granted to the Holders hereunder do not
in any way conflict with and are not inconsistent with the rights granted to the
holders of AP Holdings' securities under any agreement in effect on the date
hereof.
(c) Adjustments Affecting the Notes. AP Holdings will not take any action,
or voluntarily permit any change to occur, with respect to the Notes that would
materially and adversely affect the ability of the Holders to Consummate any
Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 12(d)(i), AP Holdings has obtained the written consent
of the Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, AP Holdings has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities. Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof that relates exclusively to the rights of
Holders whose securities are being tendered pursuant to the Exchange Offer and
that does not affect directly or indirectly the rights of other Holders whose
securities are not being tendered pursuant to such Exchange Offer may be given
by the Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities subject to such Exchange Offer.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture;
With a copy to:
Latham & Watkins
885 Third Avenue
New York, New York 10022
Telecopier No.: (212) 751-4864
Attention: Philip E. Coviello, Jr.
(ii) if to AP Holdings:
AP Holdings, Inc.
800 Superior Avenue
Cleveland, Ohio 44114
Telecopier No.: (216) 523-8080
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<PAGE> 25
Attention: Robert N. Sacks
With a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telecopier No.: (212) 403-2000
Attention: Adam O. Emmerich
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Transfer Restricted Securities; provided, however, that this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities directly from such Holder at a time when such
Holder could not transfer such Transfer Restricted Securities pursuant to a
Shelf Registration Statement. Each Holder of Transfer Restricted Securities
agrees to be bound by and comply with the terms and provisions of this
Agreement.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT OF LAW RULES.
-24-
<PAGE> 26
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such subject matter.
[SIGNATURE PAGE FOLLOWS]
-25-
<PAGE> 27
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
AP HOLDINGS, INC.
By: /s/ Michael J. Celebrezze
-----------------------------
Name: Michael J. Celebrezze
Title: Treasurer
-26-
<PAGE> 28
The foregoing Registration Rights Agreement
is hereby confirmed and accepted as of the
date first above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Timothy White
---------------------
Name: Timothy White
Title: Vice President
-27-
<PAGE> 1
Exhibit 10.2
APCOA, INC.
------------------------------------------------------------------
CREDIT AGREEMENT
dated as of March 30, 1998
------------------------------------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO, as Agent
<PAGE> 2
TABLE OF CONTENTS
Section Page
- ------- ----
INTRODUCTION.................................................................1
ARTICLE I DEFINITIONS......................................................1
1.1 Certain Definitions...............................................1
1.2 Other Definitions; Rules of Construction.........................16
1.3 Accounting Terms and Determinations..............................16
ARTICLE II THE COMMITMENTS AND THE ADVANCES................................17
2.1 Commitments of the Lenders.......................................17
2.2 Termination and Reduction of Commitments.........................19
2.3 Fees.............................................................19
2.4 Disbursement of Advances.........................................20
2.5 Conditions for First Disbursement................................21
2.6 Further Conditions for Disbursement..............................23
2.7 Subsequent Elections as to Borrowings............................24
2.8 Limitation of Requests and Elections.............................24
2.9 Minimum Amounts; Limitation on Number of Borrowings..............24
2.10 Security and Collateral..........................................25
ARTICLE III PAYMENTS AND PREPAYMENTS OF ADVANCES............................25
3.1 Principal Payments...............................................25
3.2 Interest Payments................................................25
3.3 Letter of Credit Reimbursement Payments..........................26
3.4 Payment Method...................................................29
3.5 No Setoff or Deduction...........................................29
3.6 Payment on Non-Business Day; Payment Computations................29
3.7 Additional Costs.................................................30
3.8 Illegality and Impossibility.....................................31
3.9 Indemnification..................................................31
3.10 Substitution of Lender...........................................31
ARTICLE IV REPRESENTATIONS AND WARRANTIES..................................32
4.1 Corporate Existence and Power....................................32
4.2 Corporate Authority..............................................32
4.3 Binding Effect...................................................33
4.4 Subsidiaries.....................................................33
4.5 Litigation.......................................................33
4.6 Financial Condition..............................................33
4.7 Use of Advances..................................................33
4.8 Consents, Etc....................................................34
4.9 Taxes............................................................34
4.10 Title to Properties..............................................34
<PAGE> 3
Section Page
- ------- ----
4.11 ERISA............................................................34
4.12 Disclosure.......................................................34
4.13 Environmental and Safety Matters.................................35
4.14 No Default.......................................................36
4.15 Intellectual Property............................................36
4.16 No Burdensome Restrictions.......................................36
4.17 Labor Matters....................................................37
4.18 Solvency.........................................................37
4.19 Not an Investment Company; Other Regulations.....................37
4.20 Subordinated Debt Documents......................................37
4.21 Preferred Stock Documents........................................38
4.22 Standard Acquisition.............................................38
4.23 Bank Accounts....................................................38
4.24 Facility Leases and Facility Management Agreements...............38
ARTICLE V COVENANTS.......................................................38
5.1 Affirmative Covenants............................................38
5.2 Negative Covenants...............................................41
5.3 Additional Covenants.............................................49
ARTICLE VI DEFAULT.........................................................49
6.1 Events of Default................................................49
6.2 Remedies.........................................................51
6.3 Distribution of Proceeds of Collateral...........................52
6.4 Letter of Credit Liabilities.....................................53
ARTICLE VII THE AGENT AND THE LENDERS.......................................54
7.1 Appointment; Nature of Relationship..............................54
7.2 Powers...........................................................54
7.3 General Immunity.................................................54
7.4 No Responsibility for Loans, Recitals, etc.......................54
7.5 Action on Instructions of Lenders................................55
7.6 Employment of Agents and Counsel.................................55
7.7 Reliance on Documents; Counsel...................................55
7.8 Agent's Reimbursement and Indemnification........................55
7.9 Notice of Default................................................55
7.10 Rights as a Lender...............................................56
7.11 Lender Credit Decision...........................................56
7.12 Successor Agent..................................................56
7.13 Collateral Management............................................56
7.14 Right to Indemnity...............................................57
7.15 Sharing of Payments..............................................57
7.16 Withholding Tax Exemption........................................58
ARTICLE VIII MISCELLANEOUS..................................................58
8.1 Amendments, Etc..................................................58
8.2 Notices..........................................................59
CREDIT AGREEMENT Page ii
<PAGE> 4
Section Page
- ------- ----
8.3 No Waiver By Conduct; Remedies Cumulative........................59
8.4 Reliance on and Survival of Various Provisions...................59
8.5 Expenses; Indemnification........................................59
8.6 Successors and Assigns...........................................61
8.7 Counterparts.....................................................63
8.8 Governing Law....................................................63
8.9 Table of Contents and Headings...................................63
8.10 Construction of Certain Provisions...............................63
8.11 Integration and Severability.....................................63
8.12 Independence of Covenants........................................64
8.13 Interest Rate Limitation.........................................64
8.14 Judgment and Payment.............................................64
8.15 Year 2000 Problem................................................65
8.16 Submission To Jurisdiction; Waivers..............................65
8.17 Acknowledgments..................................................65
8.18 Confidentiality..................................................65
8.19 WAIVER OF JURY TRIAL.............................................66
EXHIBITS
Exhibit A........................... Guaranty
Exhibit B-1 and B-2................. Pledge Agreement
Exhibit C........................... Revolving Credit Note
Exhibit D-1, D-2, D-3, D-4 and D-5.. Security Agreements
Exhibit E........................... Swingline Note
Exhibit F........................... Request for Advance
Exhibit G........................... Opinion of Counsel
Exhibit H........................... Request for Continuation or
Conversion of Advance
Exhibit I........................... Assignment and Acceptance
SCHEDULES
Schedule 1.1-A......................Preferred Stock
Schedule 1.1-B......................Subordinated Note Documents
Schedule 4.4........................Subsidiaries and Joint
Ventures
Schedule 4.5........................Litigation
Schedule 4.7........................Application of Funds
Schedule 4.13.......................Environmental Matters
Schedule 4.15.......................Intellectual Property
Schedule 4.23.......................Bank Accounts
Schedule 4.24.......................Facility Leases and
Management
Agreements
Schedule 5.2(d).....................Indebtedness
Schedule 5.2(e).....................Liens
Schedule 5.2(f).....................Certain Permitted Acquisition
Schedule 5.2(j).....................Investments, Loans and
Advances
CREDIT AGREEMENT Page iii
<PAGE> 5
THIS CREDIT AGREEMENT, dated as of March 30, 1998 (this "Agreement"), is
by and among APCOA, INC., a Delaware corporation (the "Company"), the lenders
party hereto from time to time (collectively, the "Lenders" and individually, a
"Lender"), and THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association, as agent for the Lenders (in such capacity, the "Agent").
INTRODUCTION
The Company desires to obtain a $40,000,000 six year secured revolving
credit facility, including letters of credit, in order to refinance existing
indebtedness, to provide for certain acquisitions and to provide funds and other
financial accommodations for its corporate purposes, and the Lenders are willing
to make such credit facility in favor of the Company on the terms and conditions
herein set forth.
In consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions. As used herein the following terms shall have the
following respective meanings:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Company or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation, partnership, limited
liability company or other business entity, or division thereof, whether through
purchase of assets, merger or otherwise or (ii) directly or indirectly acquires
(in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the Capital Stock of
any Person.
"Adjusted Corporate Base Rate" shall mean the per annum rate equal to the
sum of (a) the Applicable Margin, plus (b) the greater of the Corporate Base
Rate or the Federal Funds Rate plus 1.0%, in each case as in effect from time to
time, which Adjusted Corporate Base Rate shall change simultaneously with any
change in such Corporate Base Rate or Federal Funds Rate, as the case may be.
"Adjusted Corporate Base Rate Loan" shall mean any Loan which bears
interest at the Adjusted Corporate Base Rate.
"Adjusted EBITDA" shall mean without duplication, for any Calculation
Period, the sum of (I) Net Income for such period, exclude to the extent
reflected in determining such Net Income: (i) the income of any Person accrued
prior to the date it becomes a Subsidiary of the Company or is merged into or
consolidated with the Company or any of its Subsidiaries or that Person's assets
are acquired by the Company or any of its Subsidiaries, (ii) the proceeds of any
<PAGE> 6
insurance policy, (iii) gains (but not losses) from the sale, exchange, transfer
or other disposition of property or assets not in the ordinary course of
business of the Company and its Subsidiaries, and related tax effects in
accordance with Generally Accepted Accounting Principles, (iv) any other
extraordinary or non-recurring gains or other gains not from continuing
operations of the Company or its Subsidiaries, and related tax effects in
accordance with Generally Accepted Accounting Principles, (v) the income of any
Person (including with out limitation any Subsidiary or Joint Venture, but
excluding any Wholly Owned Subsidiary) in which any Person other than the
Company or any of its Subsidiaries has a joint interest or partnership interest
or other ownership interest, to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary or Joint Venture not at
the time permitted by operation of the terms of its charter or of any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, except to the extent of the amount of dividends
or other distributions are actually paid in cash to the Company during such
period, (vi) extraordinary non-cash losses and non-recurring non-cash charges
(including non-cash losses resulting from disposition of Facility Leases and
Facility Management Agreements and the write off of intangible assets during
such period), (vii) income taxes, (viii) minority interests, (ix) interest
income, (x) Net Interest Expense, (xi) depreciation and amortization expense,
and (xii) restructuring charges included in operating expenses taken in
connection with or related to Permitted Acquisitions, provided that such
restructuring charges (A) in connection with the Standard Acquisition and the
Acquisitions described on Schedule 5.2(f) shall be consistent with the
restructuring charges identified in the Pro Forma Financial Statements and (B)
for any other Permitted Acquisition shall have been reviewed and reasonably
approved by the Agent, plus (II) the sum of (i) the Pro Forma EBITDA and
Adjusted EBITDA as calculated herein of any Person related to any Permitted
Acquisition consummated during such period as if such Acquisition had occurred
on the first day of the relevant period and (ii) the Standard Cost Savings for
such period, and the identifiable annualized cost savings and synergies in
connection with or related to Permitted Acquisitions, provided that such cost
savings and synergies exceeding $500,000 in any consecutive twelve month period
shall have been reviewed and reasonably approved by the Agent, including without
limitation the reasonable approval by the Agent of the manner in which such cost
savings and synergies are calculated and included in Adjusted EBITDA. It is
acknowledged and agreed that if the Permitted Acquisitions described on Schedule
5.2(f) are not completed as anticipated then Adjusted EBITDA will be adjusted in
a manner acceptable to the Agent.
"Adjusted Total Debt" as of any date, shall mean the difference of (a) the
sum of (i) the other consolidated Indebtedness of the Company and its
Subsidiaries as of such date, plus (ii) the aggregate liquidation preference of
the Preferred Stock and any other preferred Capital Stock of the Company on
which dividends, redemptions or other distributions are mandatorily payable in
cash or cash equivalents and all accrued and unpaid dividends, redemptions and
other distributions on any of the foregoing, provided that, for purposes of
calculating the covenant as of any date contained in Section 5.2(a) only, the
amount of the preferred Stock and preferred Capital Stock of the Company shall
include only such Preferred Stock and preferred Capital Stock upon which
dividends, redemptions or distributions in cash or cash equivalents are or will
become mandatorily payable thereon within one year of such date, plus (iii)
amounts which have been earned under Earnouts, minus (b) the sum of (i) all Cash
Equivalents of the Company and its Subsidiaries at such date plus (ii) all
contingent reimbursement obligations of the Company in respect of outstanding
letters of credit, bankers acceptances or similar instruments, other than
CREDIT AGREEMENT Page 2
<PAGE> 7
letters of credit, bankers acceptances or similar instruments which support or
are otherwise payable with respect to any obligations of the type (without
regard to the Person liable on the primary obligation) described in clauses
(a)(i), (ii) or (iii) of this definition.
"Adjusted Total Debt to Adjusted EBITDA Ratio" shall mean, at any time,
the ratio of (a) Adjusted Total Debt at such time to (b) Adjusted EBITDA, as
calculated as of the four most recently completed fiscal quarters of the
Company, all as determined in accordance with Generally Accepted Accounting
Principles.
"Advance" shall mean any Loan and any Letter of Credit Advance.
"Affiliate", when used with respect to any Person, shall mean any other
Person which, directly or indirectly, controls or is controlled by or is under
common control with such Person. For purposes of this definition "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), with respect to any Person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise. Without limiting the foregoing
definition of Affiliate, any Person shall be deemed to control another Person if
the controlling Person owns or controls 10% or more of any class of voting
securities (or other ownership interest of any kind) of the controlled Person.
"Applicable Lending Office" shall mean, with respect to any Advance made
by any Lender or with respect to such Lender's Commitment, the office of such
Lender or of any Affiliate of such Lender located at the address specified as
the applicable lending office for such Lender set forth next to the name of such
Lender in the signature pages hereof or any other office or Affiliate of such
Lender or of any Affiliate of such Lender hereafter selected and notified to the
Company and the Agent by such Lender.
"Applicable Margin" shall mean, with respect to any Adjusted Corporate
Base Rate Loan, LIBOR Loan, Letter of Credit fee under Section 2.3(b) and
commitment fees under Section 2.3(a), the applicable percentage set forth in the
table below based upon the Adjusted Total Debt to Adjusted EBITDA Ratio, as
adjusted on the sixtieth day after the end of each of the first three fiscal
quarters of each fiscal year of the Company and on the one hundred fifth day
after the end of the last fiscal quarter of each fiscal year of the Company, and
shall remain in effect until the next change to be effected pursuant to this
definition, based upon the Adjusted Total Debt to Adjusted EBITDA Ratio as of
the last day of such fiscal quarter, provided that (a) any change in the
Applicable Margin with respect to any LIBOR Loan during a LIBOR Interest Period
with respect to such LIBOR Loan shall not be effective until after the end of
such LIBOR Interest Period, (b) as of the Effective Date the Applicable Margin
shall be based on an Adjusted Total Debt to Adjusted EBITDA Ratio of greater
than or equal to 6.0:1.0 until adjusted for the first time and (c) if any Event
of Default has occurred and is continuing the Adjusted Total Debt to Adjusted
EBITDA Ratio as of the end of the most recently ended fiscal quarter shall, for
the purposes of this definition, be deemed to be greater than or equal to
6.0:1.0:
CREDIT AGREEMENT Page 3
<PAGE> 8
<TABLE>
<CAPTION>
================================================================================
Applicable Margin for all Advances and Fees
- --------------------------------------------------------------------------------
Adjusted LIBOR Loan and
Adjusted Total Debt to Corporate Base Letter of Credit Commitment
Adjusted EBITDA Ratio Rate Loan Fees Fees
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
>6.0:1.0 125 bps 250 bps 50 bps
- --------------------------------------------------------------------------------
>5.5:1.0 but <6.0:1.0 100 bps 225 bps 50 bps
- --------------------------------------------------------------------------------
>5.0:1.0 but <5.5:1.0 75 bps 200 bps 50 bps
- --------------------------------------------------------------------------------
>4.5:1.0 but <5.0:1.0 50 bps 175 bps 37.5 bps
- --------------------------------------------------------------------------------
<4.5:1.0 25 bps 150 bps 37.5 bps
- --------------------------------------------------------------------------------
</TABLE>
"Assignment and Acceptance" is defined in Section 8.6(c).
"Board of Directors" means the board of directors of the Company, or any
authorized committee of such board of directors.
"Borrowing" shall mean the aggregation of Advances, including each Letter
of Credit issuance, of the Lenders to be made to the Company, or continuations
and conversions of such Loans, made pursuant to Article II on a single date and,
in the case of any Loans, for a single LIBOR Interest Period, which Borrowings
may be classified for purposes of this Agreement by reference to the type of
Loans or the type of Advances comprising the related Borrowing, e.g., a "LIBOR
Borrowing" is a Borrowing comprised of LIBOR Loans and a "Letter of Credit
Borrowing" is an Advance comprised of a single Letter of Credit.
"Business Day" shall mean a day other than a Saturday, Sunday or other day
on which banks in New York, Detroit or Chicago are not open to the public for
carrying on substantially all of their banking functions.
"Calculation Period" shall mean any consecutive four fiscal quarter
period, provided however, for the periods ending on June 30, 1998, September 30,
1998 and December 31, 1998, the Calculation Period shall start on April 1, 1998.
"Capital Expenditures" shall mean, for any period, the additions to
property, plant and equipment and other capital expenditures of the Company and
its Subsidiaries for such period, as the same are (or should be) set forth, in
accordance with Generally Accepted Accounting Principles, in consolidated
financial statements of the Company and its Subsidiaries for such period.
"Capital Lease" of any Person shall mean any lease which, in accordance
with Generally Accepted Accounting Principles, is or should be capitalized on
the books of such Person.
"Capital Stock" shall mean (i) in the case of any corporation, all capital
stock and any securities exchangeable for or convertible into capital stock and
any warrants, rights or other options to purchase or otherwise acquire capital
stock or such securities or any other form of equity securities, (ii) in the
case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distribution of assets of, the issuing
Person.
CREDIT AGREEMENT Page 4
<PAGE> 9
"Cash Equivalent" shall mean (i) cash in Dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than six
months from the date of acquisition, (iii) marketable direct obligations issued
by any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within one year from
the date of acquisition thereof and, at the time of acquisition, having one of
the two highest ratings obtainable from either S&P or Moody's, (iv) certificates
of deposit and eurodollar time deposits with maturities of six months or less
from the date of acquisition, bankers' acceptances with maturities not exceeding
six months and overnight bank deposits, in each case with any Lender or with any
domestic commercial bank having capital and surplus in excess of $250,000,000
and a Keefe Bank Watch Rating of "B" or better, (v) repurchase obligations with
a term of not more than seven days for underlying securities of the types
described in clauses (ii), (iii) and (iv) above entered into with any financial
institution meeting the qualifications specified in clause (iv) above, (vi)
commercial paper having one of the two highest ratings obtained from Moody's or
S&P and in each case maturing within six months after the date of acquisition
and (vii) investments in money market funds which invest substantially all their
assets in securities of the type described in clauses (i) through (vi) above.
"Change of Control" shall mean the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than in a
transaction described in clause (vii) below), in one or a series of related
transactions, of all or substantially all of the assets of Parent and its
Subsidiaries or of the Company and its Subsidiaries, in each case, taken as a
whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange
Act) other than the Principals or their Related Parties, (ii) the adoption of a
plan relating to the liquidation or dissolution of Parent or the Company, (iii)
the consummation of any transaction (including, without limitation, any merger
or consolidation) the result of which is that any "person" (as defined above),
other than the Principals and their Related Parties, becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act, except that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
currently exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, or more than 20% of the Voting Stock of
Parent or the Company (measured by voting power rather than number of shares),
and the Principals or their Related Parties shall fail to own a higher
percentage of the Voting Stock of Holdings or the Company (measured by voting
power rather than number of shares), as the case may be, (iv) the first day on
which a majority of the members of the Board of Directors of the Company are not
Continuing Directors, (v) the occurrence of any "Change of Control" as defined
in the Subordinated Note Indenture or any change of control or similar provision
in any other Subordinated Debt, the Preferred Stock or any other preferred
Capital Stock of the Company, (vi) prior to an IPO, either (A) less than 51% of
the outstanding Voting Stock of the Company shall be owned, directly or
indirectly, beneficially and of record by the Parent and free and clear of any
Liens, or (B) Holberg shall at any time legally or beneficially own less than
51% of the Voting Stock of the Parent, free and clear of any Lien, (vii) the
Parent or the Company consolidates with, or merges with or into, any Person or
sells, assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates with,
or merges with or into, the Parent or the Company, in any such event pursuant to
a transaction in which any of the outstanding Voting Stock of the Parent or the
Company is converted into or exchanged for cash, securities or other property,
other than any such transaction where the
CREDIT AGREEMENT Page 5
<PAGE> 10
Voting Stock of the Parent or the Company outstanding immediately prior to such
transaction is converted into or exchanged for Voting Stock (other than
Disqualified Stock) of the surviving or transferee Person constituting a
majority of the outstanding shares of such Voting Stock of such surviving or
transferee Person (immediately after giving effect to such issuance), or (viii)
the owners of Holberg as of the Effective Date shall at any time legally or
beneficially own less than 51% of the Voting Stock of Holberg, free and clear of
any Lien.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated thereunder.
"C/L/C" shall mean any commercial letter of credit issued hereunder.
"Commitments" shall mean, with respect to each Lender, the commitment of
each such Lender to make Revolving Credit Loans, and to participate in Letter of
Credit Advances, in amounts not exceeding in the aggregate principal or face
amount outstanding at any time the Commitment amount for such Lender set forth
next to the name of such Lender on the signature pages hereof, or, as to any
Lender becoming a party hereto after the Effective Date, as set forth in the
applicable Assignment and Acceptance, in each case as reduced pursuant to
Section 2.2 or modified pursuant to Section 8.6.
"Consolidated" or "consolidated" shall mean, when used with reference to
any financial term in this Agreement, the aggregate for two or more Persons of
the amounts signified by such term for all such Persons determined on a
consolidated basis in accordance with Generally Accepted Accounting Principles.
"Contingent Liabilities" shall mean as to any Person any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, dividends or
other obligations ("primary obligations") of any Person (the "primary obligor")
in any manner, whether directly or indirectly, including, without limitation,
any obligation of such Person, whether or not contingent, (a) to purchase any
such primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligator, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or (d)
otherwise to assure or hold harmless the owner of such primary obligation
against loss in respect thereof, provided however, that the term Contingent
Liabilities shall not include endorsements of instruments for deposit or
collection in the ordinary course of business; provided further, that, for
purposes of calculating the financial covenants contained in Sections 5.2(a)
through (c), Contingent Liabilities shall be only those Contingent Liabilities
that are or should be noted in the financial statements of such Person or the
notes thereto as required under Generally Accepted Accounting Principles or
otherwise described in the definition of Adjusted Total Debt. The amount of any
Contingent Liability shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Liability is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
CREDIT AGREEMENT Page 6
<PAGE> 11
"Continuing Directors" shall mean, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the Effective Date or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Corporate Base Rate" shall mean the per annum rate announced by the Agent
from time to time as its corporate base rate of interest, which Corporate Base
Rate shall change simultaneously with any change in such announced rate.
"Defaulting Lender" shall mean any Lender that fails to make available to
the Agent such Lender's Loans required to be made hereunder or shall have not
made a payment required to be made to the Agent hereunder. Once a Lender becomes
a Defaulting Lender, such Lender shall continue as a Defaulting Lender until
such time as such Defaulting Lender makes available to the Agent the amount of
such Defaulting Lender's Loans and all other amounts required to be paid to the
Agent pursuant to this Agreement.
"Disqualified Stock" shall mean any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, or otherwise has any
distributions or other payments which are mandatory or otherwise required at any
time on or prior to the date that is one year after the Termination Date,
provided that any payment that is required solely due to a customary change of
control provision not more restrictive than the Change of Control default in
this Agreement shall not cause such Capital Stock to be deemed Disqualified
Stock.
"Dollars" and "$" shall mean the lawful money of the United States of
America.
"Domestic Subsidiary" shall mean each present and future Subsidiary of the
Company which is not a Foreign Subsidiary.
"Earnouts" shall mean any payment which may be owing by the Company in
connection with any Acquisition, which payment is contingent upon the earnings
or other financial performance of the assets being acquired pursuant to such
Acquisition.
"Effective Date" shall mean the effective date specified in the final
paragraph of this Agreement.
"Environmental Laws" at any date shall mean all provisions of law,
statutes, ordinances, rules, regulations, judgments, writs, injunctions,
decrees, orders, awards and standards promulgated by the government of the
United States of America or any foreign government or by any state, province,
municipality or other political subdivision thereof or therein or by any court,
CREDIT AGREEMENT Page 7
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agency, instrumentality, regulatory authority or commission of any of the
foregoing concerning the protection of, or regulating the discharge of hazardous
substances into, the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations thereunder.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) which, together with the Company or any Subsidiary of the Company,
would be treated as a single employer under Section 414 of the Code.
"Event of Default" shall mean any of the events or conditions described in
Section 6.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Facility Leases" shall mean agreements for the lease by the Company or
any of its Subsidiaries of real estate utilized as a vehicle parking facility.
"Facility Management Agreements" shall mean agreements (other than
Facility Leases), for the provision by the Company or any of its Subsidiaries of
services for the management or operation of a vehicle parking facility,
including without limitation any such agreement designated as a management
agreement, parking enforcement agreement, operating agreement or license
agreement.
"Federal Funds Rate" shall mean, for any day, an interest rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its discretion.
"First Chicago" shall mean The First National Bank of Chicago, a national
banking association, including any of its branches and affiliates.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of any fiscal
quarter of the Company, the ratio of (a) Adjusted EBITDA, to (b) Fixed Charges,
in each case as calculated for the four consecutive fiscal quarters then ending,
provided that Fixed Charges as calculated for the fiscal quarter ending June 30,
1998 shall be deemed equal to product of Fixed Charges for such fiscal quarter
times four, as calculated for the fiscal quarter ending September 30, 1998 shall
be deemed equal to the product of Fixed Charges for the two consecutive fiscal
quarters then ending times two and as calculated for the fiscal quarter ending
December 31, 1998 shall be deemed equal to product of Fixed Charges for the
three consecutive fiscal quarters then ending times four thirds, all as
determined in accordance with Generally Accepted Accounting Principles.
"Fixed Charges" shall mean, for any period, the sum, without duplication,
of (a) Net Interest Expense, plus (b) all payments of principal and other sums
required to be paid during such period by the Company or its Subsidiaries with
respect to Indebtedness of the Company or
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its Subsidiaries, plus (c) Net Capital Expenditures during such period by the
Company and its Subsidiaries, plus (d) all dividends, distributions and other
obligations paid with cash or cash equivalents with respect to any class of the
Company's or any of its Subsidiary's Capital Stock or any dividend, payment or
distribution paid in cash or cash equivalents in connection with the redemption,
purchase, retirement or other acquisition, directly or indirectly, of any shares
of the Company's or any of its Subsidiary's Capital Stock, other than the
portion of such dividends, distributions or other payments made by any
Subsidiary to the Company, plus (e) all payments pursuant to any Earnouts,
unless such amount has been previously deducted from Net Income, plus (f) all
accrued income taxes paid or payable in cash for such period for the Company or
its Subsidiaries.
"Foreign Subsidiary" shall mean any present or future Subsidiary of the
Company incorporated or formed in any jurisdiction other than any State of the
United States of America or any other political subdivision thereof.
"Generally Accepted Accounting Principles" shall mean generally accepted
accounting principles as in effect from time to time, applied on a basis
consistent (except for changes concurred in by the Company's independent public
accountants) with the most recent audited consolidated financial statements of
the Company and its Subsidiaries delivered to the Lenders.
"Guaranties" shall mean the guaranties entered into by each of the
Guarantors for the benefit of the Agent and the Lenders pursuant to this
Agreement in substantially the form of Exhibit A hereto, as amended or modified
from time to time.
"Guarantor" shall mean the Parent, each present and future Domestic
Subsidiary which is a Wholly Owned Subsidiary of the Company (other than Atrium
Parking, Inc.), each other present and future Subsidiary or Joint Venture of the
Company which is not prohibited from becoming a Guarantor or any other Person
executing a Guaranty at any time.
"Hazardous Material" is defined in Section 4.13.
"Holberg" shall mean Holberg Industries, Inc., a Delaware corporation.
"Indebtedness" of any Person shall mean, as of any date, without
duplication, (a) all obligations of such Person for borrowed money or evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or bankers' acceptances, (b) all
obligations of such Person as lessee under any Capital Lease, (c) all
obligations which are secured by any Lien existing on any asset or property of
such Person whether or not the obligation secured thereby shall have been
assumed by such Person, provided that if such Person shall not have assumed such
obligation, then the amount of such obligation determined pursuant to this
clause (c) shall not exceed the value of such encumbered asset or property, (d)
the unpaid purchase price for goods, property or services acquired by such
Person, except for trade accounts and accrued expenses payable arising in the
ordinary course of business which are not past due within customary payment
terms, (e) all obligations of such Person in respect of any Swap (valued in an
amount equal to the highest termination payment, if any, that would be payable
by such Person upon termination for any reason on the date of determination),
and (f) all Contingent Liabilities of such Person with respect to or relating to
indebtedness,
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obligations and liabilities of others similar in character to those described in
clauses (a) through (e) of this definition.
"Interest Coverage Ratio" shall mean, as of the end of any fiscal quarter,
the ratio of (a) Adjusted EBITDA to (b) Net Interest Expense, in each case as
calculated for the four consecutive fiscal quarters then ending, provided that
Net Interest Expense as calculated for the fiscal quarter ending June 30, 1998
shall be deemed equal to the product of Net Interest Expense for such fiscal
quarter times four, as calculated for the fiscal quarter ending September 30,
1998 shall be deemed equal to the product of Net Interest Expense for the two
consecutive fiscal quarters then ending times two and as calculated for the
fiscal quarter ending December 31, 1998 shall be deemed equal to product of Net
Interest Expense for the three consecutive fiscal quarters then ending times
four thirds, all as determined in accordance with Generally Accepted Accounting
Principles.
"Interest Payment Date" shall mean (a) with respect to any LIBOR Loan, the
last day of each LIBOR Interest Period with respect to such LIBOR Loan, and, in
the case of any LIBOR Interest Period exceeding three months, those days that
occur during such LIBOR Interest Period at intervals of three months after the
first day of such LIBOR Interest Period and (b) in all other cases, the last
Business Day of each March, June, September and December occurring after the
date hereof, commencing with the first such Business Day occurring after the
date of this Agreement.
"IPO" shall mean the sale of Capital Stock (other than Disqualified Stock)
of the Company or the Parent pursuant to (a) a registration statement under the
Securities Act that has been declared effective by the SEC or (b) a public
offering outside the United States and which results, in either case, in an
active trading market for such shares. An active trading market shall be deemed
to exist if such shares are listed on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market System or any major international
trading market exchange.
"Joint Venture" shall mean any corporation, association, trust or other
business entity of which the Company or one or more of its Subsidiaries owns
beneficially at least 25% but less than 100% of the Capital Stock.
"Lender Indebtedness" shall mean (a) the Advances and all other
indebtedness, obligations and liabilities of the Company and of each Guarantor
to the Agent or the Lenders under any Loan Document, and (b) all indebtedness,
obligations and liabilities of the Company and of each Guarantor to any Lender
in respect of any Swaps, in all cases whether now outstanding or hereafter
arising.
"Letter of Credit" shall mean a C/L/C or S/L/C having a stated expiry date
or a date upon which the draft must be reimbursed not later than twelve months
(provided that Letters of Credit which are automatically renewable annually but
may be cancelled by the Agent annually are permissible) after the date of
issuance and not later than one month before the Termination Date, issued by the
Agent on behalf of the Lenders for the account of the Company or a Subsidiary
pursuant to Section 2.1(a) under an application and related documentation
acceptable to the Agent requiring, among other things, immediate reimbursement
by the Company or a Subsidiary
CREDIT AGREEMENT Page 10
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to the Agent in respect of all drafts or other demand for payment honored
thereunder and all expenses paid or incurred by the Agent relative thereto.
"Letter of Credit Advance" shall mean any issuance of a Letter of Credit
under Section 2.4 made pursuant to Section 2.1(a) in which each Lender acquires
a pro rata risk participation.
"Letter of Credit Documents" shall have the meaning ascribed thereto in
Section 3.3(b).
"LIBOR" shall mean, with respect to any LIBOR Loan and the related LIBOR
Interest Period, the per annum rate that is equal to the sum of:
(a) the Applicable Margin, plus
(b) the rate per annum obtained by dividing (i) the per annum rate of
interest at which deposits in Dollars for such LIBOR Interest Period and in an
aggregate amount comparable to the amount of such LIBOR Loan to be made by the
Agent in its capacity as a Lender hereunder are offered to the Agent by other
prime banks in the London interbank market at approximately 11:00 a.m. local
time in London on the second LIBOR Business Day prior to the first day of such
LIBOR Interest Period by (ii) an amount equal to one minus the stated maximum
rate (expressed as a decimal) of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
that is specified on the first day of such LIBOR Interest Period by the Board of
Governors of the Federal Reserve System (or any successor agency thereto) for
determining the maximum reserve requirement with respect to eurocurrency funding
(currently referred to as "Eurocurrency liabilities" in Regulation D of such
Board) maintained by a member bank of such System;
all as conclusively determined by the Agent, such sum to be rounded up, if
necessary, to the nearest whole multiple of one one-hundredth of one percent
(1/100 of 1%).
"LIBOR Business Day" shall mean, with respect to any LIBOR Loan, a day
which is both a Business Day and a day on which dealings in Dollar deposits are
carried out in the London interbank market with respect to such LIBOR Loan.
"LIBOR Interest Period" shall mean, with respect to any LIBOR Loan, the
period commencing on the day such LIBOR Loan is made or converted to a LIBOR
Loan and ending on the date one, two, three or six months thereafter, as the
Company may elect under Section 2.4 or 2.7, and each subsequent period
commencing on the last day of the immediately preceding LIBOR Interest Period
and ending on the date one, two, three or six months thereafter, as the Company
may elect under Section 2.4 or 2.7, provided, however, that (a) any LIBOR
Interest Period which commences on the last LIBOR Business Day of a calendar
month (or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last LIBOR Business Day
of the appropriate subsequent calendar month, (b) each LIBOR Interest Period
which would otherwise end on a day which is not a LIBOR Business Day shall end
on the next succeeding LIBOR Business Day or, if such next succeeding LIBOR
Business Day falls in the next succeeding calendar month, on the next preceding
LIBOR Business Day, and (c) no LIBOR Interest Period which would end after the
Termination Date shall be permitted.
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"LIBOR Loan" shall mean any Loan which bears interest at LIBOR.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest deposit arrangement, option, conditional sale or title
retaining contract, sale and leaseback transaction, financing statement filing,
lessor's or lessee's interest under any capital lease, subordination of any
claim or right, or any other type of lien, charge or encumbrance.
"Loan" shall mean any Revolving Credit Loan and any Swingline Loan. Any
such Loan or portion thereof may also be denominated as an Adjusted Corporate
Base Rate Loan or a LIBOR Loan and such Adjusted Corporate Base Rate Loans and
LIBOR Loans are referred to herein as "types" of Loans.
"Loan Documents" shall mean, collectively, this Agreement, the Notes, the
Security Documents and any other agreement, instrument or document executed in
connection with any of the foregoing at any time.
"Material Adverse Effect" shall mean (i) a material adverse effect on the
property, business, operations, financial condition, liabilities, prospects or
capitalization of the Company and its Subsidiaries, taken as a whole, (ii) a
material adverse effect on the ability of the Company and the Guarantors to
perform their collective obligations under the Loan Documents taken as a whole
or (iii) a material adverse effect on the rights and remedies of the Agent or
the Lenders under the Loan Documents.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean any "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"Net Capital Expenditures" shall mean Capital Expenditures exclusive of
any such Capital Expenditures financed on a non-recourse basis (i.e., on
customary non-recourse terms and with recourse solely to the asset being
financed with such non-recourse debt) by third parties which are not Affiliates
and any Capital Expenditures to complete an Acquisition.
"Net Cash Proceeds" shall mean, (a) in connection with any sale or other
disposition of any asset or any settlement by, or receipt of payment in respect
of, any property insurance claim or condemnation award, the cash proceeds
(including any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such sale, settlement
or payment, net of reasonable and documented attorneys' fees, accountants' fees,
investment banking fees, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any asset which
is the subject of such sale, insurance claim or condemnation award (other than
any Lien in favor of the Agent for the benefit of the Agent and the Lenders) and
other customary fees actually incurred in connection therewith and net of taxes
paid or reasonably estimated to be payable as a result thereof and (b) in
connection with any issuance or sale of any equity securities or debt securities
or instruments or the incurrence of loans, the cash proceeds received from such
issuance or incurrence, net of investment banking fees, reasonable and
documented attorneys' fees, accountants' fees, underwriting discounts and
CREDIT AGREEMENT Page 12
<PAGE> 17
commissions and other reasonable and customary fees and expenses actually
incurred in connection therewith.
"Net Income" shall mean, for any period, the net income (or loss) of the
Company and its Subsidiaries on a consolidated basis for such period taken as a
single accounting period, determined in accordance with Generally Accepted
Accounting Principles.
"Net Interest Expense" shall mean, for any period, total interest and
related expense and payments in cash or cash equivalents with respect to the
Preferred Stock (including, without limitation, that portion of any Capitalized
Lease obligation attributable to interest expense in conformity with Generally
Accepted Accounting Principles, all dividends, redemptions and other
distributions or other cash payments of any kind due, paid or payable on the
Preferred Stock in cash or cash equivalents, amortization of debt discount, all
capitalized interest, the interest portion of any deferred payment obligations,
all commissions, discounts and other fees and charges owed with respect to
letter of credit and bankers acceptance financing, the net costs and net
payments under any interest rate hedging, cap or similar agreement or
arrangement, prepayment charges, agency fees, administrative fees, commitment
fees and capitalized transaction costs allocated to interest expense) paid,
payable or accrued during such period, without duplication for any other period,
with respect to all outstanding Indebtedness and/or Preferred Stock of the
Company and its Subsidiaries, net of any cash interest income of the Company and
its Subsidiaries, all as determined for the Company and its Subsidiaries on a
consolidated basis for such period in accordance with Generally Accepted
Accounting Principles.
"Note" shall mean any Revolving Credit Note or the Swingline Note.
"Overdue Rate" shall mean (a) in respect of principal of Adjusted
Corporate Base Rate Loans, a rate per annum that is equal to the sum of two
percent (2%) per annum plus the Adjusted Corporate Base Rate, (b) in respect of
principal of LIBOR Loans, a rate per annum that is equal to the sum of two
percent (2%) per annum plus the per annum rate in effect thereon until the end
of the then current LIBOR Interest Period for such Loan and, thereafter, a rate
per annum that is equal to the sum of two percent (2%) per annum plus the
Adjusted Corporate Base Rate, and (c) in respect of other amounts payable by the
Company hereunder (other than interest), a per annum rate that is equal to the
sum of two percent (2%) per annum plus the Adjusted Corporate Base Rate.
"Parent" shall mean AP Holdings, Inc., a Delaware corporation.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" shall mean an Acquisition by the Company or a
Guarantor of all of the assets of a Person which meets the requirements set
forth in Section 5.2(f) of this Agreement.
"Permitted Acquisition Documents" shall mean all purchase agreements and
all other agreements and documents executed or delivered pursuant to a Permitted
Acquisitions.
"Permitted Liens" shall mean Liens permitted by Section 5.2(e) hereof.
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"Preferred Stock" shall mean the preferred stock of the Company to be
issued on the Effective Date and described on Schedule 1.1-A hereto.
"Preferred Stock Documents" shall mean all of the agreements, documents
and instruments relating in any way to the Preferred Stock.
"Person" shall include an individual, a corporation, a limited liability
company, an association, a partnership, a trust or estate, a joint stock
company, an unincorporated organization, a joint venture, a trade or business
(whether or not incorporated), a government (foreign or domestic) and any agency
or political subdivision thereof, or any other entity.
"Plan" shall mean any pension plan (other than a Multiemployer Plan)
subject to Title IV of ERISA or to the minimum funding standards of Section 412
of the Code which has been established or maintained by the Company, any
Subsidiary of the Company or any ERISA Affiliate, or by any other Person if the
Company, any Subsidiary of the Company or any ERISA Affiliate could have
liability with respect to such pension plan.
"Pledge Agreements" shall mean each Pledge Agreement entered into by the
Company or any Guarantor for the benefit of the Agent and the Lenders pursuant
to this Agreement substantially in the form attached hereto as Exhibits B-1 and
B-2, as amended or modified from time to time.
"Principals" shall mean Holberg Industries, Inc., John V. Holten or, in
the case of the Company, the Parent.
"Pro Forma EBITDA" shall mean the historical financial results of (i) the
Company and its Subsidiaries, (ii) the entities acquired (net of assets excluded
from such acquisition) by the Company pursuant to the Standard Acquisition
Documents, and (iii) the entities acquired by the Company as identified on
Schedule 5.2(f). For purposes of calculating and determining compliance with the
financial covenants in Section 5.2 (a), (b) and (c) or the Applicable Margin,
Pro Forma EBITDA shall be $11,420,000 for the period ending June 30, 1998,
$7,614,000 for the period ending September 30, 1998, $3,807,000 for the period
ending December 31, 1998 and $0 for any period thereafter.
"Pro Forma Financial Statements" shall mean the pro forma financial
statements and projections prepared by the Company dated March 28, 1998, and
delivered to the Agent prior to the Effective Date.
"Prohibited Transaction" shall mean any transaction involving any Plan
which is proscribed by Section 406 of ERISA or Section 4975 of the Code.
"Real Estate" shall mean all real property at any time owned or leased (as
lessee or sublessee) or managed by the Company or any of its Subsidiaries.
"Reimbursement Agreements" shall mean the letter of credit applications
and reimbursement agreements executed in connection with any Letter of Credit,
as amended or modified from time to time.
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"Related Party" with respect to any Principal shall mean (a) any
controlling stockholder, 80% (or more) owned Subsidiary, or spouse or immediate
family member (in the case of an individual) of such Principal or (b) any trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more controlling
interest of which consist of such Principal and/or such other Persons referred
to in the immediately preceding clause (a).
"Reportable Event" shall mean a reportable event as described in Section
4043(b) of ERISA including without limitation those events as to which the
thirty (30) day notice period is waived under Part 2615 of the regulations
promulgated by the PBGC under ERISA.
"Required Lenders" shall mean Lenders holding not less than 51% of the
Commitments (or 51% of the Advances if the Commitments have been terminated).
"Requirement of Law" shall mean as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other governmental authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Revolving Credit Advance" shall mean any Revolving Credit Loan and any
Letter of Credit Advance.
"Revolving Credit Loan" shall mean any borrowing under Section 2.4
evidenced by the Revolving Credit Notes and made pursuant to Section 2.1(a).
"Revolving Credit Notes" shall mean the promissory notes of the Company
evidencing the Revolving Credit Loans, in substantially the form annexed hereto
as Exhibit C, respectively, as amended or modified from time to time and
together with any promissory note or notes issued in exchange or replacement
therefor, and "Revolving Credit Note" shall mean any one of such Revolving
Credit Notes.
"S&P" means Standard & Poor's Rating Services, a division of The McGraw
Hill Companies, Inc.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security Agreements" shall mean each security agreement entered into by
the Company or any Guarantor for the benefit of the Agent and the Lenders
pursuant to this Agreement substantially in the forms attached hereto as
Exhibits D-1, D-2, D-3, D-4 and D-5, as amended or modified from time to time,
and any other agreement executed by the Company granting a Lien for the benefit
of the Agent and the Lenders in form or substance satisfactory to the Agent, as
amended or modified from time to time.
"Security Documents" shall mean the Pledge Agreements, the Security
Agreements, the Guaranties, the Reimbursement Agreements, and all other
agreements and documents delivered
CREDIT AGREEMENT Page 15
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pursuant to this Agreement or otherwise entered into by any Person to secure or
guaranty the obligations of the Company under this Agreement.
"Seller Note" shall mean any promissory note or other instrument issued
by, or obligation of, the Company or any Guarantor as full or partial payment of
the purchase price for a Permitted Acquisition, provided that the obligations
under all Seller Notes shall be unsecured, other than up to $150,000 aggregate
principal amount of Seller Notes at any time outstanding which may be secured by
a security interest in the assets acquired thereby.
"Senior Discount Notes" shall mean the $70,000,000 11 1/4 Senior Discount
Notes due 2008 issued by the Parent.
"Significant Subsidiaries" shall mean at any date any one or more
Subsidiaries which, if considered in the aggregate and with their Subsidiaries,
(a) for the most recent fiscal quarter of the Company accounted for more than 5%
of the consolidated revenues of the Company and its Subsidiaries or (b) as of
the end of such fiscal quarter, was the owner of more than 5% of the Total
Assets. For purposes of this Agreement, a type of event shall not be deemed to
have occurred with respect to Significant Subsidiaries unless such type of event
has occurred with respect to each of the Subsidiaries required to be included to
constitute "Significant Subsidiaries" as defined in the preceding sentence.
"S/L/C" shall mean any standby letter of credit issued hereunder.
"Standard Acquisition" shall mean the acquisition by the Company pursuant
to the Standard Acquisition Documents.
"Standard Acquisition Documents" shall mean the Combination Agreement by
and among the standard owners party thereto and the Company dated as of January
15, 1999 and all agreements, instruments and documents executed or delivered
pursuant thereto.
"Standard Cost Savings" shall mean the identifiable annualized cost
savings and synergies in connection with the Standard Acquisition and the
Acquisitions identified on Schedule 5.2(f), which shall be consistent with the
annualized cost savings and synergies identified on the Pro Forma Financial
Statements. For purposes of calculating and determining compliance with the
financial covenants in Section 5.2 (a), (b) and (c) or the Applicable Margin,
Standard Cost Savings shall be $8,930,000 for the period ending June 30, 1998,
$7,144,000 for the period ending September 30, 1998, $5,358,000 for the period
ending December 31, 1998, $3,572,000 for the period ending March 31, 1999,
$1,786,00 for the period ending June 30, 1999 and $0 for any period thereafter.
"Subordinated Debt" shall mean, for any Person, any Indebtedness of such
Person which is fully subordinated to all Indebtedness of such Person owing to
the Agent and the Lenders, by written agreements and documents in form and
substance satisfactory to the Required Lenders and which is governed by terms
and provisions, including without limitation maturities, covenants, defaults,
rates and fees, acceptable to the Agent, and shall include, without limitation,
all Indebtedness owing pursuant to the Subordinated Notes.
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"Subordinated Debt Documents" shall mean the Subordinated Note Documents,
and any other agreement or document evidencing or relating to any Subordinated
Debt, whether under the Subordinated Notes or any other Subordinated Debt.
"Subordinated Note Documents" shall mean the Subordinated Note Indenture,
the Subordinated Notes and all agreements, instruments and documents executed in
connection therewith at any time, including without limitation those agreements,
instruments and documents listed on Schedule 1.1-B hereto.
"Subordinated Notes" shall mean the subordinated notes issued by the
Company in the aggregate principal amount of $140,000,000 due 2008 issued
pursuant to the Subordinated Note Indenture.
"Subordinated Note Indenture" shall mean the Senior Subordinated Note
Indenture among the Company and State Street Bank & Trust, as trustee, dated as
of March 30, 1998, as amended or modified from time to time.
"Subsidiary" of any Person shall mean any other Person (whether now
existing or hereafter organized or acquired) in which (other than directors,
qualifying shares required by law) at least a majority of the securities or
other ownership interests of each class having ordinary voting power or
analogous right (other than securities or other ownership interests which have
such power or right only by reason of the happening of a contingency), at the
time as of which any determination is being made, are owned, beneficially and of
record, by such Person or by one or more of the other Subsidiaries of such
Person or by any combination thereof.
"Swaps" means an agreement, device or arrangement providing for payments
which are related to fluctuations of interest rates, exchange rates or forward
rates, including, but not limited to, dollar-denominated or cross-currency
interest rate exchange agreements, forward currency exchange agreements,
interest rate cap or collar protection agreements, forward rate currency or
interest rate options, puts and warrants.
"Swingline Loan" shall mean any loan under Section 2.4 evidenced by the
Swingline Note and made by the Agent to the Company pursuant to Section 2.1(b).
"Swingline Note" shall mean any promissory note of the Company evidencing
the Swingline Loans in substantially the form of Exhibit E hereto, as amended or
modified from time to time and together with any promissory note or notes issued
in exchange or replacement therefor.
"Termination Date" shall mean the earlier to occur of (a) March 30, 2004,
and (b) the date on which the Commitments shall be terminated pursuant to
Section 2.2 or 6.2.
"Total Assets" shall mean, at any time, the consolidated assets of the
Company and its Subsidiaries.
"Unfunded Benefit Liabilities" shall mean, with respect to any Plan as of
any date, the amount of the unfunded benefit liabilities determined in
accordance with Generally Accepted Accounting Principles.
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"Unmatured Event" shall mean any event or condition which might become an
Event of Default with notice or lapse of time or both.
"Voting Stock" shall mean any Capital Stock, the holders of which are at
the time entitled, as such holders, to vote for the election of a majority of
the directors (or persons performing similar functions) of the corporation,
association, trust or other business entity involved, whether or not the right
so to vote exists by reasoning of the happening of a contignency.
"Wholly Owned Subsidiary" shall mean any Subsidiary of the Company of
which 100% of the Voting Stock, exclusive of directors' qualifying shares, is
owned by the Company or by another Wholly Owned Subsidiary of the Company.
1.2 Other Definitions; Rules of Construction. As used herein, the terms
"Agent", "Lenders", "Company", and "this Agreement" shall have the respective
meanings ascribed thereto in the introductory paragraph of this Agreement. Such
terms, together with the other terms defined in Section 1.1, shall include both
the singular and the plural forms thereof and shall be construed accordingly.
Use of the terms "herein", "hereof", and "hereunder" shall be deemed references
to this Agreement in its entirety and not to the Section or clause in which such
term appears. References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Agreement unless otherwise specifically
provided.
1.3 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Lenders hereunder shall (unless otherwise disclosed to the Lenders in writing at
the time of delivery thereof in the manner described in subsection (b) below) be
prepared in accordance with Generally Accepted Accounting Principles; provided
that, if the Company notifies the Agent that it wishes to amend any covenant in
Article V to eliminate the effect of any change in Generally Accepted Accounting
Principles (or if the Agent notifies the Company that the Required Lenders wish
to amend Article V for such purpose), then the Company's compliance with such
covenants shall be determined on the basis of Generally Accepted Accounting
Principles in effect immediately before the relevant change in Generally
Accepted Accounting Principles became effective until either such notice is
withdrawn or such covenant or any such defined term is amended in a manner
satisfactory to the Company and the Required Lenders. Except as otherwise
expressly provided herein, all references to a time of day shall be references
to Chicago, Illinois time.
(b) The Company shall deliver to the Lenders at the same time as the
delivery of any annual or quarterly financial statement under Section 5.1(d)
hereof (i) a description in reasonable detail of any material variation between
the application or other modification of accounting principles employed in the
preparation of such statement and the application or other modification of
accounting principles employed in the preparation of the immediately prior
annual or quarterly financial statements as to which no objection has been made
in accordance with the last sentence of subsection (a) above and (ii) reasonable
estimates of the difference between such statements arising as a consequence
thereof.
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(c) To enable the ready and consistent determination of compliance
with the covenants set forth in Section 5.2 hereof, the Company will not change
the last day of its fiscal year from December 31 of each year, or the last days
of the first three fiscal quarters in each of its fiscal years from March 31,
June 30, and September 30 of each year, respectively.
ARTICLE II
THE COMMITMENTS AND THE ADVANCES
2.1 Commitments of the Lenders.
(a) Revolving Credit Advances. Each Lender agrees, for itself only,
subject to the terms and conditions of this Agreement, to make Revolving Credit
Loans to the Company pursuant to Section 2.4 and to participate in Letter of
Credit Advances to the Company pursuant to Section 3.3, from time to time from
and including the Effective Date to but excluding the Termination Date, not to
exceed in aggregate principal amount at any time outstanding the amount
determined pursuant to Section 2.1(c).
(b) Swingline Loans. (i) The Company may request the Agent to make,
and the Agent may, in its sole discretion, make Swingline Loans to the Company
from time to time on any Business Day during the period from the Effective Date
until the Termination Date in an aggregate principal amount not to exceed at any
time the lesser of (A) $5,000,000 (the "Swingline Facility") and (B) the
aggregate amount of Revolving Credit Advances that could be but is not borrowed
as of such date. Each Lender's Commitment shall be deemed utilized by an amount
equal to such Lender's pro rata share (based on such Lender's Commitment) of
each Swingline Loan for purposes of determining the amount of Revolving Credit
Advances required to be made by such Lender, but no Lender's Commitment,
including First Chicago's, shall be deemed utilized for purposes of determining
commitment fees under Section 2.3(a). Swingline Loans shall bear interest at the
Adjusted Corporate Base Rate. Within the limits of the Swingline Facility, so
long as the Agent, in its sole discretion, elects to make Swingline Loans, the
Company may borrow and reborrow under this Section 2.1(b)(i).
(ii) The Agent may at any time in its sole and absolute discretion
require that any Swingline Loan be refunded by a Revolving Credit Loan which is
an Adjusted Corporate Base Rate Borrowing from the Revolving Lenders, and upon
written notice thereof by the Agent to the Lenders and the Company, the Company
shall be deemed to have requested a Revolving Credit Loan which is an Adjusted
Corporate Base Rate Borrowing in an amount equal to the amount of such Swingline
Loan, and such Adjusted Corporate Base Rate Borrowing shall be made to refund
such Swing Line Loan. Each Lender shall be absolutely and unconditionally
obligated to fund its pro rata share (based on such Lender's Commitment) of such
Adjusted Corporate Base Rate Borrowing or, if applicable, purchase a
participating interest in the Swingline Loans pursuant to Section 2.1(b)(iii)
and such obligation shall not be affected by any circumstance, including,
without limitation, (A) any set-off, counterclaim, recoupment, defense or other
right which such Lender has or may have against the Agent or the Company or any
if its Subsidiaries or anyone else for any reason whatsoever; (B) the occurrence
or continuance of an Unmatured Event or an Event of Default, subject to Section
2.1(b)(iii); (C) any adverse change in the condition (financial or otherwise) of
the Company or any of its Subsidiaries; (D) any breach
CREDIT AGREEMENT Page 19
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of this Agreement or any other agreement by any other Lender, the Company or any
Guarantor; or (E) any other circumstance, happening or event whatsoever, whether
or not similar to any of the foregoing (including without limitation the
Company's failure to satisfy any conditions contained in Article II or any other
provision of this Agreement).
(iii) If, due to any Event of Default (including without limitation
as a result of the occurrence of an Event of Default with respect to the Company
or any of its Subsidiaries pursuant to Section 6.1(h)) Adjusted Corporate Base
Rate Loans may not be made by the Lenders as described in Section 2.1(b)(ii),
then (A) the Company agrees that each Swingline Loan not paid pursuant to
Section 2.1(b)(ii) shall bear interest, payable on demand by the Agent, at the
Overdue Rate, and (B) effective on the date each such Adjusted Corporate Base
Rate Loan would otherwise have been made, each Lender severally agrees that it
shall unconditionally and irrevocably, without regard to the occurrence of any
Unmatured Event or Event of Default or any other circumstances, in lieu of
deemed disbursement of loans, to the extent of such Lender's Commitment,
purchase a participating interest in the Swingline Loans by paying its
participation percentage thereof. Each Lender will immediately transfer to the
Agent, in same day funds, the amount of its participation. After such payment to
the Agent, each Lender shall share on a pro rata basis (calculated by reference
to its Commitment) in any interest which accrues thereon and in all repayments
thereof. If and to the extent that any Lender shall not have so made the amount
of such participating interest available to the Agent, such Lender and the
Company severally agree to pay to the Agent forthwith on demand such amount
together with interest thereon, for each day from the date of demand by the
Agent until the date such amount is paid to the Agent, at (x) in the case of the
Company, the interest rate specified above and (y) in the case of such Lender,
the Federal Funds Rate for the first five days after the date of demand by the
Agent and thereafter at the interest rate specified above.
(c) Limitation on Amount of Advances. Notwithstanding anything in
this Agreement to the contrary, (i) the aggregate principal amount of the
Advances at any time outstanding to the Company shall not exceed the aggregate
amount of the Commitments at such time and (ii) the aggregate principal amount
of Letter of Credit Advances outstanding at any time shall not exceed
$10,000,000.
2.2 Termination and Reduction of Commitments. (a) The Company shall have
the right to terminate or reduce the Commitments at any time and from time to
time, provided that (i) the Company shall give notice of such termination or
reduction to the Agent specifying the amount and effective date thereof, (ii)
each partial reduction thereof shall be in a minimum amount of $5,000,000 and in
an integral multiple of $1,000,000 and shall reduce such Commitments of all of
the Lenders proportionately in accordance with the respective Commitment amounts
for each such Lender, (iii) no such termination or reduction shall be permitted
with respect to any portion of any such Commitments as to which a request for an
Advance pursuant to Section 2.4 is then pending, and (iv) the Commitments may
not be terminated if any Advances are then outstanding and may not be reduced
below the principal amount of Advances then outstanding. The Commitments or any
portion thereof terminated or reduced pursuant to this Section 2.2 may not be
reinstated.
(b) For purposes of this Agreement, a Letter of Credit Advance (i)
shall be deemed outstanding in an amount equal to the sum of the maximum amount
available to be drawn under
CREDIT AGREEMENT Page 20
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the related Letter of Credit on or after the date of determination and on or
before the stated expiry date thereof plus the amount of any draws under such
Letter of Credit that have not been reimbursed as provided in Section 3.3 and
(ii) shall be deemed outstanding at all times on and before such stated expiry
date or such earlier date on which all amounts available to be drawn under such
Letter of Credit have been fully drawn, and thereafter until all related
reimbursement obligations have been paid pursuant to Section 3.3. As provided in
Section 3.3, upon each payment made by the Agent in respect of any draft or
other demand for payment under any Letter of Credit, the amount of any Letter of
Credit outstanding immediately prior to such payment shall be automatically
reduced by the amount of each Revolving Credit Loan deemed advanced in respect
of the related reimbursement obligation of the Company.
2.3 Fees (a) The Company agrees to pay the Agent, for the pro rata benefit
of the Lenders, a commitment fee on the daily average unused amount of the
Commitments, for the period from the Effective Date to but excluding the
Termination Date, at a rate equal to the Applicable Margin. For purposes of this
Section 2.3(a), all Letters of Credit shall be considered usage of the
Commitments, and Swingline Loans shall not be considered usage of the
Commitments. Such accrued commitment fees shall be payable quarterly in arrears
on the last Business Day of each March, June, September and December, commencing
on June 30, 1998, and on the Termination Date.
(b) The Company agrees to pay to the Agent, with respect to Letters
of Credit, a fee computed at the Applicable Margin calculated on the maximum
amount available to be drawn from time to time under a Letter of Credit, which
fee shall be paid annually in advance at the time such Letter of Credit is
issued for the period from and including the date of issuance of such Letter of
Credit to and including the stated expiry date of such Letter of Credit, which
fees shall be for the pro rata benefit of the Lenders; provided that a fee
computed at the rate of 0.25% per annum calculated on the face amount of each
Letter of Credit shall be retained from such fee solely for the account of the
Agent. Such fees are nonrefundable and the Company shall not be entitled to any
rebate of any portion thereof if such Letter of Credit does not remain
outstanding through its stated expiry date or for any other reason. The Company
further agrees to pay to the Agent, on demand, such other customary
administrative fees, charges and expenses of the Agent in respect of the
issuance, negotiation, acceptance, amendment, transfer and payment of such
Letter of Credit or otherwise payable pursuant to the application and related
documentation under which such Letter of Credit is issued.
(c) The Company agrees to pay to the Agent agency fees for its
services as Agent under this Agreement and for other services in such amounts as
may from time to time be agreed to in writing between the Company and the Agent.
2.4 Disbursement of Advances. (a) The Company shall give the Agent notice
of its request for each Advance in substantially the form of Exhibit F hereto
not later than noon Chicago time (i) three LIBOR Business Days prior to the date
such Advance is requested to be made if such Advance is to be made as a LIBOR
Borrowing, (ii) five Business Days prior to the date any Letter of Credit
Advance is requested to be made, or such earlier date as reasonably determined
by the Agent, (iii) on the Business Day such Advance is requested to be made in
the case of any Swingline Loan, and (iv) on the Business Day such Advance is
requested to be made in all other cases, which notice shall specify whether a
LIBOR Borrowing, an Adjusted
CREDIT AGREEMENT Page 21
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Corporate Base Rate Borrowing, a Swingline Loan or a Letter of Credit Advance is
requested and, in the case of each requested LIBOR Borrowing, the LIBOR Interest
Period to be initially applicable to such Borrowing and, in the case of each
Letter of Credit Advance, such information as may be necessary for the issuance
thereof by the Agent. The Agent, reasonably promptly on the same Business Day
such notice is given, shall provide notice of such requested Advance (other than
Swingline Loan) to the relevant Lenders. Subject to the terms and conditions of
this Agreement, the proceeds of each such requested Advance shall be made
available to the Company by depositing the proceeds thereof, in immediately
available funds, in an account maintained and designated by the Company at the
principal office of the Agent. Subject to the terms and conditions of this
Agreement, the Agent shall, on the date such Letter of Credit Advance is
requested to be made, issue the related Letter of Credit on behalf of the
Lenders for the account of the Company. Notwithstanding anything herein to the
contrary, the Agent may decline to issue any requested Letter of Credit on the
basis that the beneficiary, the purpose of issuance or the terms or the
conditions of drawing are unacceptable to it in it reasonable discretion,
provided that the Agent shall not unreasonably decline to issue a Letter of
Credit pursuant to this sentence.
(b) Each Lender, not later than 2:00 p.m. Chicago time on the date
any Borrowing in the form of a Loan for which such Lender has a Commitment is
required to be made, shall make its pro rata share of such Borrowing available
in immediately available funds at the principal office of the Agent for
disbursement to the Company. Unless the Agent shall have received notice from
any Lender prior to the date such Borrowing is requested to be made under this
Section 2.4 that such Lender will not make available to the Agent such Lender's
pro rata portion of such Borrowing, the Agent may assume that such Lender has
made such portion available to the Agent on the date such Borrowing is requested
to be made in accordance with this Section 2.4. If and to the extent such Lender
shall not have so made such pro rata portion available to the Agent, the Agent
may (but shall not be obligated to) make such amount available to the Company,
and such Lender and the Company severally agree to pay to the Agent forthwith on
demand such amount together with interest thereon, for each day from the date
such amount is made available to the Company by the Agent until the date such
amount is repaid to the Agent, at a rate per annum equal to, in the case of the
Company, the interest rate applicable to such Borrowing during such period and,
in the case of any Lender, at the Federal Funds Rate for the first five days and
at the interest rate applicable to such borrowing thereafter. If such Lender
shall pay such amount to the Agent together with interest, such amount so paid
shall constitute a Loan by such Lender as a part of such Borrowing for purposes
of this Agreement. The failure of any Lender to make its pro rata portion of any
such Borrowing available to the Agent shall not relieve any other Lender of its
obligations to make available its pro rata portion of such Borrowing on the date
such Borrowing is requested to be made, but no Lender shall be responsible for
failure of any other Lender to make such pro rata portion available to the Agent
on the date of any such Borrowing.
(c) All Revolving Credit Loans shall be evidenced by the Revolving
Credit Notes and the Swingline Loans shall be evidenced by the Swingline Note
and all such Loans shall be due and payable and bear interest as provided in
Article III. Each Lender and the Agent is hereby authorized by the Company to
record on the schedule attached to the Notes, or in its books and records, the
date, and amount and type of each Loan and the duration of the related LIBOR
Interest Period (if applicable), the amount of each payment or prepayment of
principal
CREDIT AGREEMENT Page 22
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thereon, and the other information provided for on such schedule, which schedule
or books and records, as the case may be, shall constitute prima facie evidence
of the information so recorded, provided, however, that failure of any Lender or
the Agent to record, or any error in recording, any such information shall not
relieve the Company of its obligation to repay the outstanding principal amount
of the Loans, all accrued interest thereon and other amounts payable with
respect thereto in accordance with the terms of the Notes and this Agreement.
Subject to the terms and conditions of this Agreement, the Company may borrow
Revolving Credit Advances and under this Section 2.4 and under Section 3.3,
prepay Revolving Credit Advances pursuant to Section 3.1 and reborrow Revolving
Credit Advances under this Section 2.4.
(d) Nothing in this Agreement shall be construed to require or
authorize any Lender to issue any Letter of Credit, it being recognized that the
Agent has the sole obligation under this Agreement to issue Letters of Credit
for the risk of the Lenders. Upon issuance of a Letter of Credit by the Agent,
each Lender shall automatically acquire a pro rata risk participation interest
in such Letter of Credit Advance based on its respective Commitment. If the
Agent shall honor a draft or other demand for payment presented or made under
any Letter of Credit, the Agent shall provide notice thereof to each Lender on
the date such draft or demand is honored unless the Company or any of its
Subsidiaries shall have satisfied its reimbursement obligation under Section 3.3
by payment to the Agent on such date. Each Lender, on such date, shall make its
pro rata share of the amount paid by the Agent available in immediately
available funds at the principal office of the Agent for the account of the
Agent. If and to the extent such Lender shall not have made any required pro
rata portion available to the Agent, such Lender and the Company,
unconditionally and irrevocably, severally agree to pay to the Agent forthwith
on demand such amount together with interest thereon, for each day from the date
such amount was paid by the Agent until such amount is so made available to the
Agent at a per annum rate equal to the interest rate applicable during such
period to the related Loan disbursed under Section 3.3 in respect of the
reimbursement obligation of the Company. If such Lender shall pay such amount to
the Agent together with such interest, if any, accrued, such amount so paid
shall constitute a Revolving Credit Loan by such Lender as part of the Revolving
Credit Borrowing disbursed in respect of the reimbursement obligation of the
Company under Section 3.3 for purposes of this Agreement. The failure of any
Lender to make its pro rata portion of any such amount paid by the Agent
available to the Agent shall not relieve any other Lender of its obligation to
make available its pro rata portion of such amount, but no Lender shall be
responsible for failure of any other Lender to make such pro rata portion
available to the Agent. Notwithstanding anything herein to the contrary, it is
acknowledged and agreed that Letters of Credit hereunder may be issued for the
account of any of the Subsidiaries of the Company, provided that for all
purposes of this Agreement both the Company and such Subsidiary shall be deemed
the account party thereon and shall be jointly and severally liable for all
obligations in connection therewith and the Company shall have obtained an
agreement from such Subsidiary that such Subsidiary shall be bound by all of the
terms and provisions of this Agreement with respect to Letters of Credit, such
agreement to be in form of substance satisfactory to the Agent.
2.5 Conditions for First Disbursement. The obligation of the Lenders to
make the first Advance hereunder is subject to receipt by each Lender and the
Agent of the following documents and completion of the following matters, in
form and substance satisfactory to each Lender and the Agent:
CREDIT AGREEMENT Page 23
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(a) Charter Documents. Certificates of recent date of the
appropriate authority or official of the Company's and each Guarantor's
respective jurisdiction of organization listing all charter documents of the
Company or each Guarantor, respectively, on file in that office and certifying
as to the good standing and corporate existence of the Company or each
Guarantor, respectively, together with copies of such charter documents of the
Company or each Guarantor certified as of a recent date by such authority or
official and certified as true and correct as of the Effective Date by a duly
authorized officer of the Company or each Guarantor, respectively;
(b) By-Laws and Corporate Authorizations. Copies of the by-laws of
the Company and operating agreement of each Guarantor together with all
authorizing resolutions and evidence of other corporate action taken by the
Company and each Guarantor to authorize the execution, delivery and performance
by the Company and each Guarantor of this Agreement, the Notes and the Security
Documents to which the Company or such Guarantor, respectively, is a party and
the consummation by the Company or such Guarantor, respectively, of the
transactions contemplated hereby, certified as true and correct as of the
Effective Date by a duly authorized officer of the Company or each Guarantor,
respectively;
(c) Incumbency Certificate. Certificates of incumbency of the
Company and each Guarantor containing, and attesting to the genuineness of, the
signatures of those officers or members, as the case may be, authorized to act
on behalf of the Company or each Guarantor in connection with this Agreement,
the Notes and the Security Documents to which the Company and such Guarantor is
a party and the consummation by the Company or such Guarantor of the
transactions contemplated hereby, certified as true and correct as of the
Effective Date by a duly authorized officer of the Company and each Guarantor;
(d) Notes. The Notes duly executed on behalf of the Company for each
Lender;
(e) Security Documents. The Security Documents duly executed on
behalf of the Company and the Guarantors, as the case may be, granting to the
Lenders and the Agent the collateral and security intended to be provided
pursuant to Section 2.10, together with:
(i) Recording, Filing, Etc. Recordation, filing and other
action (including payment of any applicable taxes or fees) in such jurisdictions
as the Lenders or the Agent may deem necessary or appropriate with respect to
the Security Documents, including the filing of financing statements and similar
documents which the Lenders or the Agent may deem necessary or appropriate to
create, preserve or perfect the liens, security interests and other rights
intended to be granted to the Lenders or the Agent thereunder, together with
Uniform Commercial Code record searches in such offices as the Lenders or the
Agent may request;
(ii) Casualty and Other Insurance. Evidence that the casualty
and other insurance required pursuant to Section 5.1(c), hereof or the Security
Documents is in full force and effect;
(f) Legal Opinions. The favorable written opinion of counsel for the
Company and each Guarantor, substantially in the form of Exhibit G attached
hereto;
(g) Consents, Approvals, Etc. Copies of all governmental and
nongovernmental consents, approvals, authorizations, declarations, registrations
or filings, if any, required on the
CREDIT AGREEMENT Page 24
<PAGE> 29
part of the Company or any Guarantor in connection with the execution, delivery
and performance of the Loan Documents or the transactions contemplated hereby or
as a condition to the legality, validity or enforceability of the Loan
Documents, certified as true and correct and in full force and effect as of the
Effective Date by a duly authorized officer of the Company, or if none are
required, a certificate of such officer to that effect;
(h) Subordinated Debt and Preferred Stock. Evidence satisfactory to
the Agent that the Company has incurred Subordinated Debt and issued Preferred
Stock in an aggregate amount equal to or greater than $180,000,000, all in
accordance with the Subordinated Debt Documents and Preferred Stock Documents,
all Subordinated Debt Documents and Preferred Stock Documents shall have been
delivered to the Agent and approved by the Agent and all transactions
contemplated pursuant to the Subordinated Debt Documents and Preferred Stock
Documents shall have been completed;
(i) Standard Acquisition. Evidence satisfactory to the Agent that
the Company is completing the Standard Acquisition simultaneously with the first
Advance hereunder, all in accordance with all laws and regulations and with the
Standard Acquisition Documents, and the Company shall acquire, free and clear of
all Liens (other than Liens permitted by this Agreement), good and marketable
title to all assets being acquired pursuant to the Standard Acquisition;
(j) Payments. Evidence satisfactory to the Agent that all transfers
of funds and payments described on Schedule 4.7 are being accomplished
simultaneously, or at such other time as noted on Schedule 4.7, with the first
Advance hereunder, including without limitation the payment in full of all
indebtedness and other liabilities, and the termination of all commitments to
lend and all Liens relating thereto, as described on Schedule 4.7;
(k) Due Diligence. The Agent shall have received and be satisfied
with all litigation searches, a review of all material contracts and Contingent
Liabilities, and all other due diligence and investigation required by the
Agent;
(l) Certificates. The Agent shall have received, in form and
substance satisfactory to the Agent, a pro forma covenant compliance certificate
as of the Effective Date and as of the end of each of the first four quarters
after the Effective Date; and
(m) Other Conditions. Such other documents and completion of such
other matters as the Agent may reasonably request, including without limitation
copies of all final projections and financial statements and a solvency
certificate executed by the chief financial officer of the Company.
2.6 Further Conditions for Disbursement. The obligation of the Lenders to
make any Advance (including the first Advance), or any continuation or
conversion under Section 2.7, is further subject to the satisfaction of the
following conditions precedent:
(a) The representations and warranties contained in Article IV
hereof and in the Security Documents shall be true and correct in all material
respects on and as of the date such Advance is made (both before and after such
Advance is made) as if such representations and warranties were made on and as
of such date;
CREDIT AGREEMENT Page 25
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(b) No Event of Default or Unmatured Event shall exist or shall have
occurred and be continuing on the date such Advance is made and the making of
such Advance shall not cause an Event of Default or Unmatured Event; and
(c) In addition to all other applicable conditions, in the case of
any Letter of Credit Advance, the Company shall have delivered to the Agent
issuing the related Letter of Credit an application for such Letter of Credit
and other related documentation requested by and acceptable to the Agent
appropriately completed and duly executed on behalf of the Company.
2.7 Subsequent Elections as to Borrowings. The Company may elect (a) to
continue a LIBOR Borrowing of one type, or a portion thereof, as a LIBOR
Borrowing of the then existing type or (b) may elect to convert a LIBOR
Borrowing of one type, or a portion thereof, to a Borrowing of another type or
(c) elect to convert an Adjusted Corporate Base Rate Borrowing, or a portion
thereof, to a LIBOR Borrowing, in each case by giving notice thereof to the
Agent in substantially the form of Exhibit H hereto not later than 11:00 a.m.
Chicago time three LIBOR Business Days prior to the date any such continuation
of or conversion to a LIBOR Borrowing is to be effective and not later than noon
Chicago time on the Business Day date such continuation or conversion is to be
effective in all other cases, provided that an outstanding LIBOR Borrowing may
only be converted on the last day of the then current LIBOR Interest Period with
respect to such Borrowing, and provided, further, if a continuation of a
Borrowing as, or a conversion of a Borrowing to, a LIBOR Borrowing is requested,
such notice shall also specify the LIBOR Interest Period to be applicable
thereto upon such continuation or conversion. The Agent, reasonably promptly on
the Business Day such notice is given, shall provide notice of such election to
the relevant Lenders. If the Company shall not timely deliver such a notice with
respect to any outstanding LIBOR Borrowing, the Company shall be deemed to have
elected to convert such LIBOR Borrowing to an Adjusted Corporate Base Rate
Borrowing on the last day of the then current LIBOR Interest Period with respect
to such Borrowing.
2.8 Limitation of Requests and Elections. Notwithstanding any other
provision of this Agreement to the contrary, if, upon receiving a request for a
LIBOR Borrowing pursuant to Section 2.4, or a request for a continuation of a
LIBOR Borrowing, or a request for a conversion of an Adjusted Corporate Base
Rate Borrowing to a LIBOR Borrowing pursuant to Section 2.7, (a) in the case of
any LIBOR Borrowing, deposits in Dollars for periods comparable to the LIBOR
Interest Period elected are not available to any Lender in the relevant
interbank or market, or (b) applicable interest rate will not adequately and
fairly reflect the cost to any Lender of making, funding or maintaining the
related LIBOR Borrowing or (c) by reason of national or international financial,
political or economic conditions or by reason of any applicable law, treaty,
rule or regulation (whether domestic or foreign) now or hereafter in effect, or
the interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof, or compliance by any
Lender with any guideline, request or directive of such authority (whether or
not having the force of law), including without limitation exchange controls, it
is impracticable, unlawful or impossible for any Lender (i) to make or fund the
relevant LIBOR Borrowing or (ii) to continue such LIBOR Borrowing or (iii) to
convert a Borrowing to such a LIBOR Borrowing, then the Company shall not be
entitled, so long as such circumstances continue, to request a LIBOR Borrowing
pursuant to Section 2.4 or a continuation of or conversion to a LIBOR Borrowing
pursuant to Section 2.7. In the event that such circumstances no longer exist,
the Lenders shall again, subject to the terms and conditions
CREDIT AGREEMENT Page 26
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hereof, provide LIBOR Borrowings pursuant to Section 2.4, and requests for
continuations of and conversions to LIBOR Borrowings of the affected type
pursuant to Section 2.7.
2.9 Minimum Amounts; Limitation on Number of Borrowings. Except for (a)
Advances and conversions thereof which exhaust the entire remaining amount of
the Commitments and (b) payments required pursuant to Section 3.8, each
Borrowing and each continuation or conversion pursuant to Section 2.7 and each
prepayment thereof shall be in a minimum amount of, in the case of LIBOR
Borrowings, $2,000,000 and in integral multiples of $500,000, and in the case of
Adjusted Corporate Base Rate Borrowings, $250,000 and in integral multiples of
$50,000. No more than five LIBOR Interest Periods shall be permitted to exist at
any one time with respect to all Advances outstanding hereunder from time to
time.
2.10 Security and Collateral. To secure the payment when due of the Notes
and all other obligations of the Company under this Agreement to the Lenders and
the Agent, the Company shall execute and deliver, or cause to be executed and
delivered, to the Lenders and the Agent Security Documents granting the
following:
(a) Security interests in all present and future accounts,
inventory, equipment, fixtures and all other personal property of the Company
and each Guarantor;
(b) Mortgage liens on all real property and fixtures of the Company
and each Guarantor;
(c) Pledges of all Capital Stock owned by the Company or any
Guarantor, provided that (i) the amount of Capital Stock of any Foreign
Subsidiary pledged to the Agent shall not exceed 65% of the aggregate Capital
Stock of such Foreign Subsidiary and (ii) the Company shall not be required to
pledge the Capital Stock of APCOA Australia Pty. Ltd. or APCOA Pacific Holding
Pty. Ltd. so long as those entities do not have any material assets or
operations;
(d) Guaranties of all Guarantors; and
(e) All other security and collateral described in the Security
Documents.
Notwithstanding the foregoing, it is acknowledged and agreed that the Company
and the Guarantors shall not be required to grant a lien or security interest on
any assets to the extent such assets are specifically excluded from the
collateral pursuant to the terms of the Security Agreements.
ARTICLE III
PAYMENTS AND PREPAYMENTS OF ADVANCES
3.1 Principal Payments.
(a) Unless earlier payment is required under this Agreement, the
Company shall pay to the Lenders on the Termination Date the entire outstanding
principal amount of the Advances outstanding to it. If the Advances at any time
exceed the amount allowed pursuant to
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Section 2.1(c), the Company shall prepay the Advances by an amount equal to or,
at its option, greater than such excess.
(b) The Company may at any time and from time to time prepay all or
a portion of the Loans, without premium or penalty, provided that (i) the
Company may not prepay any portion of any Loan as to which an election of or a
conversion to a LIBOR Loan is pending pursuant to Section 2.7, and (ii) the
Company shall comply with all requirements of Section 3.9 in connection with any
payment of any LIBOR Loan;
3.2 Interest Payments. The Company shall pay interest to the Lenders on
the unpaid principal amount of each Loan, for the period commencing on the date
such Loan is made until such Loan is paid in full, on each Interest Payment Date
and at maturity (whether at stated maturity, by acceleration or otherwise), and
thereafter on demand, at the following rates per annum:
(a) During such periods that such Loan is an Adjusted Corporate Base
Rate Loan, the Adjusted Corporate Base Rate ____ ;
(b) During such periods that such Loan is a LIBOR Loan, the LIBOR
applicable to such Loan for each related LIBOR Interest Period;
Notwithstanding the foregoing paragraphs (a) and (b), the Company shall pay
interest on demand at the Overdue Rate on the outstanding principal amount of
any Loan and any other amount payable by the Company hereunder (other than
interest) upon and during the continuance of any Event of Default if required by
the Required Lenders, provided that the Company shall automatically pay interest
on demand at the Overdue Rate on the outstanding principal amount of any Loan
and any other amount payable by the Company hereunder (other than interest) if
the Advances are accelerated at any time for any reason.
3.3 Letter of Credit Reimbursement Payments. (a) (i) The Company agrees to
pay to the Agent, not later than 1:00 p.m. Chicago time on the date on which the
Agent shall honor a draft or other demand for payment presented or made under
such Letter of Credit, an amount equal to the amount paid by the Agent in
respect of such draft or other demand under such Letter of Credit and all
reasonable expenses paid or incurred by the Agent relative thereto (the
"Reimbursement Amount"). The Agent shall, on the date of each demand for payment
under any Letter of Credit issued by the Agent, give the Company notice thereof
and of the amount of the Company's reimbursement obligation and liability for
expenses relative thereto; provided that the failure of the Agent to give such
notice shall not affect the reimbursement and other obligations of the Company
under this Section 3.3. Unless the Company shall have made such payment to the
Agent on such day, upon each such payment by the Agent, the Company shall be
deemed to have elected to satisfy its reimbursement obligation by an Adjusted
Corporate Base Rate Borrowing in an amount equal to the amount so paid by the
Agent in respect of such draft or other demand under such Letter of Credit, and
the Agent shall be deemed to have disbursed to the Company, for the account of
the Lenders, the Adjusted Corporate Base Rate Loans comprising such Adjusted
Corporate Base Rate Borrowing, and each Lender shall make its share of each such
Adjusted Corporate Base Rate Borrowing available to the Agent in accordance with
this Agreement. Such Adjusted Corporate Base Rate Loans shall be deemed
disbursed notwithstanding any failure to satisfy any conditions for disbursement
of any Loan and, to the
CREDIT AGREEMENT Page 28
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extent of the Adjusted Corporate Base Rate Loans so disbursed, the reimbursement
obligation of the Company with respect to such Letter of Credit under this
subsection (a)(i) shall be deemed satisfied.
(ii) If, for any reason (including without limitation as a
result of the occurrence of an Event of Default with respect to the Company
pursuant to Section 6.1(h)), Adjusted Corporate Base Rate Loans may not be made
by the Lenders as described in subsection (a)(i) of this Section 3.3, (A) the
Company agrees that each Reimbursement Amount not paid pursuant to the first
sentence of subsection (a)(i) of this Section 3.3 shall bear interest, payable
on demand by the Agent, at the interest rate then applicable to Adjusted
Corporate Base Rate Loans, and (B) effective on the date each such Adjusted
Corporate Base Rate Loan would otherwise have been made with respect to any
Letter of Credit, each Lender severally agrees that it shall unconditionally and
irrevocably, without regard to the occurrence of any Event of Default or
Unmatured Event to the extent of such Lender's pro rata share (based on the
percentage of the aggregate Commitments of all Lenders then constituted by such
Lender's Commitment) purchase a participating interest in each Reimbursement
Amount. Each such Lender will immediately transfer to the Agent, in same day
funds, the amount of its participation. Each such Lender shall share on a pro
rata basis in any interest which accrues thereon and in all repayments thereof.
If and to the extent that any Lender shall not have so made the amount of such
participating interest available to the Agent, such Lender agrees to pay to the
Agent forthwith on demand such amount together with interest thereon, for each
day from the date of demand by the Agent until the date such amount is paid to
the Agent, at the Federal Funds Rate for the first five days after such demand
and at the Overdue Rate thereafter.
(iii) Each Lender shall be obligated, absolutely and
unconditionally, to make Adjusted Corporate Base Rate Loans pursuant to Section
3.3(a)(i) to purchase and fund participation interests in Letters of Credit
pursuant to Section 2.4(d) and 3.3(a)(ii) and the obligation shall not be
affected by any circumstance whatsoever, including, without limitation, (i) any
set off, counterclaim, recoupment, defense or other right which such Lender or
the Company may have against the Agent, the Company or anyone else for any
reason whatsoever, (ii) the occurrence of any Event of Default or Unmatured
Event, (iii) any adverse change in the condition (financial or otherwise) of the
Company or any of their Subsidiaries, (iv) any breach of this Agreement by the
Company, any of its Subsidiaries, the Agent, or any other Lender, or (v) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing, including without limitation any termination or other
limitation on the Commitments or any failure to satisfy any conditions precedent
to any Advance contained herein or any other provision of this Agreement.
(b) The reimbursement obligation of the Company under this Section
3.3 shall be absolute, unconditional and irrevocable and shall remain in full
force and effect until all reimbursement obligations of the Company to the
Lenders hereunder shall have been satisfied, and such obligations of the Company
shall not be affected, modified or impaired upon the happening of any event,
including without limitation, any of the following, whether or not with notice
to, or the consent of, the Company:
CREDIT AGREEMENT Page 29
<PAGE> 34
(i) Any lack of validity or enforceability of any Letter of
Credit or any documentation relating to any Letter of Credit or to any
transaction related in any way to such Letter of Credit (the "Letter of Credit
Documents");
(ii) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest in
collateral or security, with respect to any of the Letter of Credit Documents;
(iii) The existence of any claim, setoff, defense or other
right which the Company may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Persons or entities for whom any such
beneficiary or any such transferee may be acting), the Agent or any Lender or
any other Person or entity, whether in connection with any of the Letter of
Credit Documents, the transactions contemplated herein or therein or any
unrelated transactions;
(iv) Any draft or other statement or document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(v) Payment by the Agent to the beneficiary under any Letter
of Credit against presentation of documents which do not comply with the terms
of the Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit;
(vi) Any failure, omission, delay or lack on the part of the
Agent or any Lender or any party to any of the Letter of Credit Documents to
enforce, assert or exercise any right, power or remedy conferred upon the Agent,
any Lender or any such party under this Agreement or any of the Letter of Credit
Documents, or any other acts or omissions on the part of the Agent, any Lender
or any such party; or
(vii) Any other event or circumstance that would, in the
absence of this clause, result in the release or discharge by operation of law
or otherwise of the Company from the performance or observance of any
obligation, covenant or agreement contained in this Section 3.3.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which the Company has or may have against the
beneficiary of any Letter of Credit shall be available hereunder to the Company
against the Agent or any Lender. Nothing in this Section 3.3 shall limit the
liability, if any, of the Lenders to the Company pursuant to Section 3.3(c).
(c) The Company hereby indemnifies and agrees to hold harmless the
Lenders, the Agent and their respective officers, directors, employees and
agents, harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses of any kind or nature whatsoever which the
Lenders, the Agent or any such Person may incur or which may be claimed against
any of them by reason of or in connection with any Letter of Credit, and neither
any Lender, the Agent nor any of their respective officers, directors, employees
or agents shall be liable or responsible for: (i) the use which may be made of
any Letter of Credit or for any acts or omissions of any beneficiary in
connection therewith; (ii) the validity, sufficiency or genuineness of documents
or of any endorsement thereon, even if such documents should in fact prove to be
CREDIT AGREEMENT Page 30
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in any or all respects invalid, insufficient, fraudulent or forged; (iii)
payment by the Agent to the beneficiary under any Letter of Credit against
presentation of documents which do not comply with the terms of any Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to such Letter of Credit; (iv) any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit; or (v) any other event or
circumstance whatsoever arising in connection with any Letter of Credit;
provided, however, that the Company shall not be required to indemnify the
Lenders, the Agent and such other Persons, and the Agent and the Lenders shall
be severally liable to the Company to the extent, but only to the extent, of any
direct, as opposed to consequential or incidental, damages suffered by the
Company which were caused by (A) the Agent's wrongful dishonor of any Letter of
Credit after the presentation to it by the beneficiary thereunder of a draft or
other demand for payment and other documentation strictly complying with the
terms and conditions of such Letter of Credit, or (B) the payment by the Agent
to the beneficiary under any Letter of Credit against presentation of documents
which do not comply with the terms of the Letter of Credit to the extent, but
only to the extent, that such payment constitutes gross negligence or wilful
misconduct of the Agent; provided that none of the Agent, any Lender or any such
Person shall have the right to be indemnified hereunder for its own gross
negligence or wilful misconduct as determined by a court of competent
jurisdiction. It is understood that in making any payment under a Letter of
Credit the Agent will rely on documents presented to it under such Letter of
Credit as to any and all matters set forth therein without further investigation
and regardless of any notice or information to the contrary, and such reliance
and payment against documents presented under a Letter of Credit substantially
complying with the terms thereof shall not be deemed gross negligence or wilful
misconduct of the Agent in connection with such payment. It is further
acknowledged and agreed that the Company may have rights against the beneficiary
or others in connection with any Letter of Credit with respect to which the
Lenders or the Agent are alleged to be liable and it shall be a precondition of
the assertion of any liability of the Lenders or the Agent under this Section
that the Company shall first have exhausted all remedies in respect of the
alleged loss against such beneficiary and any other parties obligated or liable
in connection with such Letter of Credit and any related transactions.
3.4 Payment Method. (a) All payments to be made by the Company hereunder
will be made in Dollars and in immediately available funds to the Agent for the
account of the Lenders at its address set forth on the signature pages not later
than 1:00 p.m. Chicago time on the date on which such payment shall become due.
Payments received after 1:00 p.m. Chicago time shall be deemed to be payments
made prior to 1:00 p.m. Chicago time on the next succeeding Business Day. The
Company hereby authorizes the Agent to charge its account with the Agent in
order to cause timely payment of principal, interest and fees due under Section
2.3 to be made (subject to sufficient funds being available in such account for
that purpose).
(b) At the time of making each such payment, the Company shall,
subject to the other terms and conditions of this Agreement, specify to the
Agent that Advance or other obligation of the Company hereunder to which such
payment is to be applied. In the event that the Company fails to so specify the
relevant obligation or if an Event of Default shall have occurred and be
continuing, the Agent may apply such payments as it may determine.
CREDIT AGREEMENT Page 31
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(c) On the day such payments are deemed received, the Agent shall
remit to the Lenders their pro rata shares of such payments in immediately
available funds, (i) in the case of payments of principal and interest on any
Borrowing, determined with respect to each such Lender by the ratio which the
outstanding principal balance of its Loan included in such Borrowing bears to
the outstanding principal balance of the Loans of all the Lenders included in
such Borrowing and (ii) in the case of fees paid pursuant to Section 2.3 and
other amounts payable hereunder (other than the Agent's fees payable pursuant to
Section 2.3(e) and amounts payable to any Lender under Section 3.7) determined
with respect to each such Lender by the ratio which the Commitment of such
Lender bears to the Commitments of all the Lenders.
3.5 No Setoff or Deduction. All payments of principal and interest on the
Loans and other amounts payable by the Company hereunder shall be made by the
Company without setoff or counterclaim, and free and clear of, and without
deduction or withholding for, or on account of, any present or future taxes,
levies, imposts, duties, fees, assessments, or other charges of whatever nature,
imposed by any governmental authority, or by any department, agency or other
political subdivision or taxing authority.
3.6 Payment on Non-Business Day; Payment Computations. Except as otherwise
provided in this Agreement to the contrary, whenever any installment of
principal of, or interest on, any Loan or any other amount due hereunder becomes
due and payable on a day which is not a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day and, in the case of any
installment of principal, interest shall be payable thereon at the rate per
annum determined in accordance with this Agreement during such extension.
Computations of interest and other amounts due under this Agreement shall be
made on the basis of a year of 360 days for the actual number of days elapsed,
including the first day but excluding the last day of the relevant period
3.7 Additional Costs. (a) In the event that on or after the date hereof,
the adoption of or any change in any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or not
presently applicable to any Lender or the Agent, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Lender or the
Agent with any guideline, request or directive of any such authority (whether or
not having the force of law), shall (i) directly affect the basis of taxation of
payments to any Lender or the Agent of any amounts payable by the Company under
this Agreement (other than taxes imposed on the overall net income of any Lender
or the Agent, by the jurisdiction, or by any political subdivision or taxing
authority of any such jurisdiction, in which any Lender or the Agent, as the
case may be, has its principal office), or (ii) shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by any Lender or the
Agent, or (iii) shall impose any other condition with respect to this Agreement,
the Commitments, the Notes or the Loans or any Letter of Credit, and the result
of any of the foregoing (i.e., (i), (ii) or (iii)) is to increase the cost to
any Lender or the Agent, as the case may be, of making, funding or maintaining
any LIBOR Loan or any Letter of Credit or to reduce the amount of any sum
receivable by any Lender or the Agent, as the case may be, thereon, then the
Company shall pay to such Lender or the Agent, as the case may be, from time to
time, upon request by such Lender (with a copy of such request to be provided to
the Agent) or the Agent, additional amounts sufficient to compensate such Lender
or the Agent, as the case
CREDIT AGREEMENT Page 32
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may be, for such increased cost or reduced sum receivable to the extent, in the
case of any LIBOR Loan, such Lender or the Agent is not compensated therefor in
the computation of the interest rate applicable to such LIBOR Loan. A statement
as to the amount of such increased cost or reduced sum receivable, prepared in
good faith and in reasonable detail by such Lender or the Agent, as the case may
be, and submitted by such Lender or the Agent, as the case may be, to the
Company, shall be conclusive and binding for all purposes absent manifest error
in computation.
(b) In the event that on or after the date hereof, the adoption of
or any change in any applicable law, treaty, rule or regulation (whether
domestic or foreign) now or hereafter in effect and whether or not presently
applicable to any Lender or the Agent, or any interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any Lender or the Agent with any
guideline, request or directive of any such authority (whether or not having the
force of law), including any risk-based capital guidelines, affects or would
affect the amount of capital required or expected to be maintained by such
Lender or the Agent (or any corporation controlling such Lender or the Agent)
and such Lender or the Agent, as the case may be, determines that the amount of
such capital is increased by or based upon the existence of such Lender's or the
Agent's obligations hereunder and such increase has the effect of reducing the
rate of return on such Lender's or the Agent's (or such controlling
corporation's) capital as a consequence of such obligations hereunder to a level
below that which such Lender or the Agent (or such controlling corporation)
could have achieved but for such circumstances (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by such Lender or
the Agent to be material, then the Company shall pay to such Lender or the
Agent, as the case may be, from time to time, upon request by such Lender (with
a copy of such request to be provided to the Agent) or the Agent, additional
amounts sufficient to compensate such Lender or the Agent (or such controlling
corporation) for any increase in the amount of capital and reduced rate of
return which such Lender or the Agent reasonably determines to be allocable to
the existence of such Lender's or the Agent's obligations hereunder. A statement
as to the amount of such compensation, prepared in good faith and in reasonable
detail by such Lender or the Agent, as the case may be, and submitted by such
Lender or the Agent to the Company, shall be conclusive and binding for all
purposes absent manifest error in computation.
(c) Each Lender will promptly notify the Company and the Agent of
any event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section and will designate
a different Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not in the judgment of
such Lender be otherwise disadvantageous to such Lender or contrary to its
policies.
3.8 Illegality and Impossibility. In the event that on or after the date
hereof, the adoption of or any change in any applicable law, treaty, rule or
regulation (whether domestic or foreign) or any change in any interpretation or
administration of any applicable law, treaty, rule or regulation (whether
domestic or foreign) now or hereafter in effect and whether or not presently
applicable to any Lender or the Agent, by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Lender
with any guideline, request or directive or such authority (whether or not
having the force of law), including without
CREDIT AGREEMENT Page 33
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limitation exchange controls, shall make it unlawful or impossible for any
Lender to maintain any LIBOR Loan under this Agreement, such Lender's
outstanding LIBOR Loans, if any, shall be converted automatically to Adjusted
Corporate Base Loans on the respective last days of the then current LIBOR
Interest Periods with respect to such LIBOR Loans or within such earlier period
as required by law. If any such conversion of a LIBOR Loan occurs on a day which
is not the last day of the then current LIBOR Interest Period with respect
thereto, the Company shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 3.9 as if such conversion were a prepayment.
3.9 Indemnification. If the Company makes any payment of principal with
respect to any LIBOR Loan on any other date than the last day of a LIBOR
Interest Period applicable thereto (whether pursuant to Section 3.8, Section 6.2
or otherwise), or if the Company fails to borrow any LIBOR Loan after notice has
been given to the Lenders in accordance with Section 2.4, or if the Company
fails to make any payment of principal or interest in respect of a LIBOR Loan
when due, the Company shall reimburse each Lender on demand for any resulting
loss or expense incurred by each such Lender, including without limitation any
loss incurred in obtaining, liquidating or employing deposits from third
parties, whether or not such Lender shall have funded or committed to fund such
Loan. A statement as to the amount of such loss or expense, prepared in good
faith and in reasonable detail by such Lender and submitted by such Lender to
the Company, shall be conclusive and binding for all purposes absent manifest
error in computation. Calculation of all amounts payable to such Lender under
this Section 3.9 shall be made as though such Lender shall have actually funded
or committed to fund the relevant LIBOR Loan through the purchase of an
underlying deposit in an amount equal to the amount of such Loan and having a
maturity comparable to the related LIBOR Interest Period and through the
transfer of such deposit from an offshore office of such Lender to a domestic
office of such Lender in the United States of America; provided, however, that
such Lender may fund any LIBOR Loan in any manner it sees fit and the foregoing
assumption shall be utilized only for the purpose of calculation of amounts
payable under this Section 3.9.
3.10 Substitution of Lender. If (i) the obligation of any Lender to make
or maintain LIBOR Loans has been suspended pursuant to Section 3.8 when not all
Lender's obligations have been suspended, (ii) any Lender has demanded
compensation under Section 3.7 or (iii) any Lender is a Defaulting Lender, the
Company shall have the right, if no Unmatured Event or Event of Default then
exists, to replace such Lender (a "Replaced Lender") with one or more other
lenders (collectively, the "Replacement Lender") acceptable to the Agent,
provided that (x) at the time of any replacement pursuant to this Section 3.10,
the Replacement Lender shall enter into one or more Assignment and Acceptances,
pursuant to which the Replacement Lender shall acquire the Commitments and
outstanding Advances and other obligations of the Replaced Lender and, in
connection therewith, shall pay to the Replaced Lender in respect thereof an
amount equal to the sum of (A) the amount of principal of, and all accrued
interest on, all outstanding Loans of the Replaced Lender, (B) the amount of all
accrued, but theretofore unpaid, fees owing to the Replaced Lender under Section
2.3 and (C) the amount which would be payable by the Company to the Replaced
Lender pursuant to Section 3.9 if the Company prepaid at the time of such
replacement all of the Loans of such Replaced Lender outstanding at such time
and (y) all obligations of the Company then owing to the Replaced Lender (other
than those specifically described in clause (x) above in respect of which the
assignment purchase price has been, or is concurrently being, deemed paid) shall
be paid in full to such Replaced Lender
CREDIT AGREEMENT Page 34
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concurrently with such replacement. Upon the execution of the respective
Assignment and Acceptances, the payment of amounts referred to in clauses (x)
and (y) above and, if so requested by the Replacement Lender, delivery to the
Replacement Lender of the appropriate Note or Notes executed by the Company, the
Replacement Lender shall become a Lender hereunder and the Replaced Lender shall
cease to constitute a Lender hereunder. The provisions of this Agreement
(including without limitation Sections 3.9 and 8.5) shall continue to govern the
rights and obligations of a Replaced Lender with respect to any Loans made or
any other actions taken by such lender while it was a Lender. Nothing herein
shall release any Defaulting Lender from any obligation it may have to the
Company, the Agent or any other Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
4.1 Corporate Existence and Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of incorporation or organization, and is duly qualified to do
business, and is in good standing, in all additional jurisdictions where such
qualification is necessary under applicable law, except for those jurisdictions
where the failure to so qualify or be in good standing is not reasonably
expected to result in any Material Adverse Effect. The Company has all requisite
corporate power to own or lease the properties used in its business and to carry
on its business as now being conducted and as proposed to be conducted except
where the failure to have such power is not reasonably expected to result in a
Material Adverse Effect, and to execute and deliver the Loan Documents to which
it is a party and to engage in the transactions contemplated by the Loan
Documents.
4.2 Corporate Authority. The execution, delivery and performance by the
Company and the Guarantors of the Loan Documents to which it is a party have
been duly authorized by all necessary corporate action and are not in
contravention of any law, rule or regulation, or any judgment, decree, writ,
injunction, order or award of any arbitrator, court or governmental authority,
or of the terms of the Company's or any Guarantor's charter or by-laws, or of
any contract or undertaking to which the Company or any Guarantor is a party or
by which the Company or any Guarantor or their respective property may be bound
or affected or result in the imposition of any Lien except for Permitted Liens.
4.3 Binding Effect. The Loan Documents to which the Company or any
Guarantor is a party are the legal, valid and binding obligations of the Company
and the Guarantors, respectively, enforceable against the Company and the
Guarantors in accordance with their respective terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the rights of creditors generally and by general principles of equity.
4.4 Subsidiaries. Schedule 4.4 hereto correctly sets forth the legal name,
jurisdiction of organization and ownership of each Subsidiary and Joint Venture
of the Company. Each such Subsidiary and Joint Venture and each Person becoming
a Subsidiary or Joint Venture of the Company after the date hereof is and will
be a corporation, partnership or limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction
CREDIT AGREEMENT Page 35
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of incorporation or organization and is and will be duly qualified to do
business in each additional jurisdiction where such qualification is or may be
necessary under applicable law, except for those jurisdictions where the failure
to so qualify or be in good standing is not reasonably likely to result in any
Material Adverse Effect. Each Subsidiary and Joint Venture of the Company has
and will have all requisite power to own or lease the properties used in its
business and to carry on its business as now being conducted and as proposed to
be conducted, except where the failure to have such power is not reasonably
likely to result in a Material Adverse Effect. All outstanding shares of Capital
Stock of each class of each Subsidiary and Joint Venture of the Company have
been and will be validly issued and are and will be fully paid and nonassessable
and, except as otherwise indicated in Schedule 4.4 hereto, are and will be
owned, beneficially and of record, by the Company or another Subsidiary of the
Company free and clear of any Liens other than as permitted under this
Agreement.
4.5 Litigation. Except as set forth in Schedule 4.5 hereto, there is no
action, suit or proceeding pending or, to the best of the Company's knowledge,
threatened against or affecting the Company or any of its Subsidiaries or any
Guarantor before or by any court, governmental authority or arbitrator, which if
adversely decided is reasonably expected to result, either individually or
collectively, in any Material Adverse Effect and, to the best of the Company's
knowledge, there is no basis for any such action, suit or proceeding.
4.6 Financial Condition. The consolidated balance sheet of the Company and
its Subsidiaries and the consolidated statements of income, retained earnings
and cash flows of the Company and its Subsidiaries for the fiscal year ended
December 31, 1997 and reported on by Ernst & Young, independent certified public
accountants, copies of which have been furnished to the Lenders, fairly present,
and the financial statements of the Company and its Subsidiaries delivered
pursuant to Section 5.1(d) will fairly present, the consolidated financial
position of the Company and its Subsidiaries as at the respective dates thereof,
and the consolidated results of operations of the Company and its Subsidiaries
for the respective periods indicated, all in accordance with Generally Accepted
Accounting Principles (subject, in the case of said interim statements, to
year-end audit adjustments). The pro forma projections of consolidated financial
results of the Company and its Subsidiaries for each of the fiscal years ending
December 31, 1998 through December 31, 2003 are based on appropriate assumptions
and the best information available. There has been no Material Adverse Effect
since December 31, 1997. There is no material Contingent Liability of the
Company that is not reflected in such financial statements or in the notes
thereto.
4.7 Use of Advances. The Company will use the proceeds of the initial
Advances hereunder as described in Schedule 4.7, and will use all other Advances
for general corporate purposes. Neither the Company nor any of its Subsidiaries
extends or maintains, in the ordinary course of business, credit for the
purpose, whether immediate, incidental, or ultimate, of buying or carrying
margin stock (within the meaning of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of any
Advance will be used for the purpose, whether immediate, incidental, or
ultimate, of buying or carrying any such margin stock or maintaining or
extending credit to others for such purpose.
4.8 Consents, Etc. Except for such consents, approvals, authorizations,
declarations, registrations or filings delivered by the Company pursuant to
Section 2.5(g), if any, each of
CREDIT AGREEMENT Page 36
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which is in full force and effect, no consent, approval or authorization of or
declaration, registration or filing with any governmental authority or any
nongovernmental Person or entity, which, if not obtained, received or made, is
reasonably expected to result in a Material Adverse Effect including without
limitation any creditor, lessor or stockholder of the Company or any of its
Subsidiaries, is required on the part of the Company or any Guarantor in
connection with the execution, delivery and performance of any Loan Document or
the transactions contemplated hereby or as a condition to the legality, validity
or enforceability of any Loan Document.
4.9 Taxes. The Company and its Subsidiaries have filed all tax returns
(federal, state and local) required to be filed and have paid all taxes shown
thereon to be due and required to be paid including interest and penalties, or
have established adequate financial reserves on their respective books and
records for payment thereof except where the failure to so timely file is not
reasonably likely to result in a Material Adverse Effect. Neither the Company
nor any of its Subsidiaries knows of any actual or proposed tax assessment or
any basis therefor, and no extension of time for the assessment of deficiencies
in any federal or state tax has been granted by the Company or any Subsidiary.
4.10 Title to Properties. Except as otherwise disclosed in the latest
balance sheet delivered pursuant to Section 4.6 or 5.1(d) of this Agreement, the
Company or one or more of its Subsidiaries have a valid and indefeasible
ownership interest in all of the properties and assets reflected in said balance
sheet or subsequently acquired by the Company or any Subsidiary. All of such
properties and assets are free and clear of any Lien except for Permitted Liens.
The Security Documents grant a first priority, enforceable and perfected lien
and security interest which is not void or voidable in all assets of the Company
and each Guarantor subject thereto, subject only to Permitted Liens.
4.11 ERISA. The Company, its Subsidiaries, the ERISA Affiliates and the
Plans are in compliance in all material respects with those provisions of ERISA
and of the Code which are applicable with respect to any Plan. No Prohibited
Transaction and no Reportable Event has occurred with respect to any Plan which
could have a Material Adverse Effect. The Company, its Subsidiaries and the
ERISA Affiliates have met the minimum funding requirements under ERISA and the
Code with respect to each of their respective Plans, other than obligations in
the ordinary course of business to make Plan contributions and pay PBGC premiums
which have been paid when due. Assuming the funds provided by each Lender do not
constitute the plan assets of any pension plan, the execution, delivery and
performance of this Loan Documents does not constitute a Prohibited Transaction.
There is no material Unfunded Benefit Liability with respect to any Plan.
4.12 Disclosure. No report or other information furnished in writing by
the Company or any Subsidiary or Guarantor to any Lender or the Agent in
connection with the negotiation or administration of this Agreement contains to
the best of its knowledge any material misstatement of fact or omits to state
any material fact or any fact necessary to make the statements contained therein
not misleading. No Loan Document nor any other document, certificate, or report
or statement or other information furnished to any Lender or the Agent by or on
behalf of the Company or any Subsidiary or Guarantor in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact in order to make the statements contained
herein and therein not misleading. There is no fact known to the
CREDIT AGREEMENT Page 37
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Company which materially and adversely affects, or which may reasonably be
expected in the future may materially and adversely affect, the business,
properties, operations or condition, financial or otherwise, of the Company or
any Subsidiary, which has not been set forth in this Agreement or in the other
documents, certificates, statements, reports and other information furnished in
writing to the Lenders by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated hereby taken as a whole, including
without limitation the offering memorandum for the Subordinated Notes.
4.13 Environmental and Safety Matters.
(a) None of the Company, its Subsidiaries, its Joint Ventures nor
(to the Company's best knowledge (without independent investigation or inquiry)
as to any operator other than the Company and any of its Subsidiaries and Joint
Ventures) any operator of the Real Estate or any operations thereon is or,
during the last three (3) years, has been in violation, or alleged violation, of
any Environmental Laws, which violation would have a Material Adverse Effect;
(b) Except as set forth on Schedule 4.13, neither the Company nor
any of its Subsidiaries or its Joint Ventures has received notice from any third
party including, without limitation: any federal, state or local governmental
authority, (i) that any one of them has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible party under
CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R.
Part 300 Appendix B (1986); (ii) that any hazardous waste, as defined by 42
U.S.C. ss.9601(5), any hazardous substances as defined by 42 U.S.C. ss.9601(14),
any pollutant or contaminant as defined by 42 U.S.C. ss.9601(33) and any toxic
substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous Materials") which any one of
them has generated, transported or disposed of has been found at any site at
which a federal, state or local agency or other third party has conducted or has
ordered that the Company or any of its Subsidiaries or its Joint Ventures
conduct a remedial investigation, removal or other response action pursuant to
any Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or administrative proceeding
(in each case, contingent or otherwise) arising out of any third party's
incurrence of costs, expenses, losses or damages of any kind whatsoever in
connection with the release of Hazardous Materials;
(c) Except as set forth on Schedule 4.13 attached hereto, and to the
best knowledge (without independent investigation or inquiry) of the Company as
to any actions, events or circumstances occurring or created prior to the
ownership, lease or management of any of the Real Estate by the Company or any
of its Subsidiaries or Joint Ventures, and as to any operations conducted on any
of the Real Estate by parties other than the Company or any of its Subsidiaries
or Joint Ventures: (i) no portion of the Real Estate has been used, except in
accordance with applicable Environmental Laws, for the handling, processing,
storage (including without limitation the storage of petroleum products in
vehicles parked on any of the Real Estate and storage of petroleum products in
connection with the operation of vehicle rental agencies on any of the Real
Estate) or disposal of Hazardous Materials; and no underground tank or other
underground storage receptacle for Hazardous Materials is located on any portion
of the Real Estate (including without limitation in connection with the
operation of vehicle rental agencies)
CREDIT AGREEMENT Page 38
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which are not covered by third-party indemnification obligations in favor of the
Company, its Subsidiaries or its Joint Ventures; (ii) in the course of any
activities conducted by the Company, its Subsidiaries or its Joint Ventures or
operators of its properties, no Hazardous Materials have been generated or are
being used on the Real Estate except in accordance with applicable Environmental
Laws, (iii) there have been no releases (i.e. any past or present releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, disposing or dumping) or (to the Company's best knowledge) threatened
releases of Hazardous Materials on, upon, into or from the properties of the
Company, its Subsidiaries or its Joint Ventures, which releases would have a
material adverse effect on the value of any of the Real Estate or adjacent
properties or the environment, (iv) without independent investigation or
inquiry, there have been no releases on, upon, from or into any real property in
the vicinity of any of the Real Estate which, through soil or groundwater
contamination, may have come to be located on, and which would have a material
adverse effect on the value of, the Real Estate; and (v) in addition, any
Hazardous Materials that have been generated on any of the Real Estate have been
transported offsite only by carriers having an identification number issued by
the EPA, treated or disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the Company's
knowledge, operating in compliance with such permits and applicable
Environmental Laws; and
(d) None of the Company, its Subsidiaries, its Joint Ventures nor
any of the other Real Estate is subject to any applicable environmental law
requiring the performance of Hazardous Materials site assessments, or the
removal or remediation of Hazardous Materials, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the transactions set
forth herein and contemplated hereby, or as a condition to the recording of any
Security Document or to the effectiveness of any other transactions contemplated
hereby.
4.14 No Default. Neither the Company nor any Subsidiary or Guarantor is in
default or has received any written notice of default under or with respect to
any of its Contractual Obligations in any respect which is reasonably likely to
result in a Material Adverse Effect. No Unmatured Event or Event of Default has
occurred and is continuing.
4.15 Intellectual Property. Set forth on Schedule 4.15 is a complete and
accurate list of all registered patents, trademarks, trade names, service marks
and copyrights, and all applications therefor and licenses thereof, of the
Company and each of its Subsidiaries showing as of the Effective Date the
jurisdiction in which registered, the registration number and the date of
registration. The Company and each of its Subsidiaries owns, or is licensed to
use, all trademarks, trade names, service marks, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted (the "Intellectual Property") except for those the failure to own or
license which could not reasonably be expected to have a Material Adverse
Effect. No claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Company or any of
its Subsidiaries know of any valid basis for any such claim, the use of such
Intellectual Property by the Company and each of its Subsidiaries does not
infringe on the rights of any Person, and, to the knowledge of the Company, no
Intellectual Property has been infringed, misappropriated or diluted by any
other
CREDIT AGREEMENT Page 39
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Person except for such claims, infringements, misappropriation and dilutions
that, in the aggregate, could not have a Material Adverse Effect.
4.16 No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation applicable to the Company or any Subsidiary or Guarantor could
reasonably be expected to have a Material Adverse Effect in the absence of a
default thereunder.
4.17 Labor Matters. There are no strikes or other labor disputes against
the Company or any Subsidiary pending or, to the knowledge of the Company,
threatened that (individually or in the aggregate) could reasonably be expected
to have a Material Adverse Effect. Hours worked by and payment made to employees
of the Company and its Subsidiaries have not been in violation of the Fair Labor
Standards Act, if applicable, or any other applicable Requirement of Law dealing
with such matters that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect. All payments due from the Company
and each of its Subsidiaries on account of employee health and welfare insurance
that (individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect if not paid have been paid or accrued as a liability on
the books of the Company and its Subsidiaries.
4.18 Solvency. (a) After giving effect to the transactions described
herein and to the incurrence or assumption of all Indebtedness (including
without limitation the Subordinated Debt, all Advances in connection with the
Standard Acquisition and otherwise incurred or assumed on or about the Effective
Date and all other obligations being incurred or assumed) (i) the fair value of
the assets of the Company and its Subsidiaries on a consolidated basis, at a
fair valuation, will exceed the debts and liabilities, subordinated, contingent
or otherwise, of the Company and its Subsidiaries on a consolidated basis; (ii)
the present fair saleable value of the property of the Company and its
Subsidiaries on a consolidated basis will be greater than the amount that will
be required to pay the probable liability of the Company and its Subsidiaries on
a consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (iii) the Company and its Subsidiaries on a consolidated basis will be
able to pay their debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured; and (iv) the Company
and its Subsidiaries on a consolidated basis will not have unreasonably small
capital with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof.
(b) The Company does not intend to, or to permit any of its
Subsidiaries to, and does not believe that it or any of its Subsidiaries will,
incur debts beyond its ability to pay such debts as they mature, taking into
account the timing of and amounts of cash to be received by it or any such
Subsidiary and the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary.
4.19 Not an Investment Company; Other Regulations. Neither the Company nor
any of its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. Neither the Company nor any of its
Subsidiaries is subject to any regulation under any federal or state statute or
regulation which limits its ability to incur Indebtedness.
CREDIT AGREEMENT Page 40
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4.20 Subordinated Debt Documents. All representations and warranties of
the Company contained in any Subordinated Debt Document are true and correct in
all material respects. The Company will be issuing the Subordinated Notes in the
principal amount of $140,000,000 on the Effective Date, and all Subordinated
Note Documents are described on Schedule 1.1-B hereto. All Lender Indebtedness
is "Senior Debt" and "Designated Senior Debt" as defined in the Subordinated
Debt Documents and entitled to the benefits of all subordination provisions
contained in the Subordinated Debt Documents. There is no event of default or
event or condition which could become an event of default with notice or lapse
of time or both, under the Subordinated Debt Documents and each of the
Subordinated Debt Documents is in full force and effect. Other than pursuant to
the Subordinated Notes, there is no obligation pursuant to any Subordinated Debt
Document or other document or agreement evidencing or relating to any
Subordinated Debt outstanding or to be outstanding on the Effective Date which
obligates the Company to pay any principal or interest or redeem any of its
Capital Stock or incur any other monetary obligation.
4.21 Preferred Stock Documents. The Company will be receiving net proceeds
in the approximate amount of $40,000,000 on the Effective Date from its issuance
of the Preferred Stock, and all Preferred Stock Documents, and all payments and
other obligations of the Company with respect to the Preferred Stock, are
described on Schedule 1.1-A hereto.
4.22 Standard Acquisition. Simultaneously with the first Advance
hereunder, the Company will complete the Standard Acquisition in accordance with
the Standard Acquisition Documents and in accordance with all laws and
regulations and will acquire, free and clear of all Liens (other than Permitted
Liens), good and marketable title to all assets being acquired pursuant to the
Standard Acquisition. True and correct copies of all Standard Acquisition
Documents have been delivered to the Agent on or prior to the Effective Date.
4.23 Bank Accounts. Schedule 4.23 sets forth, as of the date of this
Credit Agreement, the account numbers and location of all concentration bank
accounts of the Company or any of its Subsidiaries.
4.24 Facility Leases and Facility Management Agreements. Schedule 4.24
hereto sets forth each Facility Lease and each Facility Management Agreement to
which the Company or one of its Subsidiaries is a party as lessee or manager and
specifies the city and state where the parking facility subject to such lease or
management agreement is located.
ARTICLE V
COVENANTS
5.1 Affirmative Covenants. The Company covenants and agrees that, until
the Termination Date and thereafter until payment in full of the Lender
Indebtedness and the performance of all other obligations of the Company under
this Agreement, unless the requisite Lenders pursuant to Section 8.1 shall
otherwise consent in writing, it shall, and, shall cause each of its
Subsidiaries to:
CREDIT AGREEMENT Page 41
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(a) Preservation of Corporate Existence, Etc. To the extent the
failure to do so is reasonably expected to have a Material Adverse Effect, do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence and its qualification as a foreign corporation or
limited liability company, as the case may be (other than any merger permitted
pursuant to Section 5.2(f) and other than any dissolution or liquidations of any
Subsidiary if the assets of such Subsidiary are transferred to the Company or
any Guarantor in connection with such dissolution or liquidation), in good
standing in each jurisdiction in which such qualification is necessary under
applicable law and the rights, licenses, permits (including those required under
applicable Environmental Laws), franchises, patents, copyrights, trademarks and
trade names material to the conduct of its businesses; provided, however, that
the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any of its
Subsidiaries, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in
any material respect to the Agent or the Lenders; and defend all of the
foregoing against all claims, actions, demands, suits or proceedings at law or
in equity or by or before any governmental instrumentality or other agency or
regulatory authority.
(b) Compliance with Laws, Etc. Comply in all material respects with
all applicable laws, rules, regulations and orders of any governmental authority
whether federal, state, local or foreign (including without limitation ERISA,
the Code and Environmental Laws), in effect from time to time, to the extent the
failure to so comply could reasonably be expected to have a Material Adverse
Effect; and pay and discharge, before any interest or penalty for nonpayment
thereof becomes payable, all taxes, assessments and governmental charges or
levies imposed upon it or upon its income, revenues or property, before the same
shall become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise, which, if unpaid, might give rise to Liens
(other than Permitted Liens) upon such properties or any portion thereof, except
to the extent that payment of any of the foregoing is then being contested in
good faith by appropriate legal proceedings and with respect to which adequate
financial reserves have been established on the books and records of the Company
or such Subsidiary.
(c) Maintenance of Properties; Insurance. Maintain, preserve and
protect all property that is material to the conduct of the business of the
Company or any of its Subsidiaries and keep such property in good repair,
working order and condition (ordinary wear and tear and casualty covered by
insurance excepted) and from time to time make, or cause to be made, all needful
and proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times in accordance with customary and prudent
business practices for similar businesses; and maintain in full force and effect
insurance with responsible and reputable insurance companies or associations in
such amounts, on such terms and covering such risks, including fire and other
risks insured against by extended coverage, as is usually carried by companies
engaged in similar businesses and owning similar properties similarly situated
and maintain in full force and effect public liability insurance, insurance
against claims for personal injury or death or property damage occurring in
connection with any of its activities or any of any properties owned, occupied
or controlled by it, in such amount as it shall reasonably deem
CREDIT AGREEMENT Page 42
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necessary, and maintain such other insurance as may be required by law or as may
reasonably be requested by the Required Lenders for purposes of assuring
compliance with this Section 5.1(c).
(d) Reporting Requirements. Furnish to the Lenders and the Agent the
following:
(i) Promptly and in any event within five Business Days after
becoming aware of the occurrence of (A) any Unmatured Event or Event of Default,
(B) the commencement of any litigation against, by or affecting the Company or
any of its Subsidiaries, which could reasonably be expected to have a Material
Adverse Effect, and any material developments therein, or (C) entering into any
material contract or undertaking that is not entered into in the ordinary course
of business or (D) any development in the business or affairs of the Company or
any of its Subsidiaries which has resulted in or which is likely in the
reasonable judgment of the Company, to result in a Material Adverse Effect, a
statement of the chief financial officer of the Company setting forth details of
such occurrence and the action which the Company or such Subsidiary, as the case
may be, has taken and proposes to take with respect thereto;
(ii) As soon as available and in any event within 45 days
after the end of each fiscal quarter of the Company, the consolidated balance
sheet of the Company and its Subsidiaries as of the end of such quarter, and the
related consolidated statements of income and cash flows for such quarter and
for the period commencing at the end of the previous fiscal year and ending with
the end of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding date or period of the preceding
fiscal year and duly certified (subject to year-end audit adjustments) by the
chief financial officer of the Company as having been prepared in accordance
with Generally Accepted Accounting Principles, together with a certificate of
the chief financial officer of the Company stating (A) that no Unmatured Event
or Event of Default has occurred and is continuing or, if an Unmatured Event or
Event of Default has occurred and is continuing, a statement setting forth the
details thereof and the action which the Company has taken and proposes to take
with respect thereto, and (B) beginning with the certificate delivered for the
quarter ending June 30, 1998 that a computation (which computation shall
accompany such certificate and shall be in detail satisfactory to the Agent)
showing compliance with Section 5.2 (a), (b) and (c) hereof is in conformity
with the terms of this Agreement;
(iii) As soon as available and in any event within 90 days
after the end of each fiscal year of the Company, a copy of the consolidated
balance sheet of the Company and its Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income and cash flows for such
fiscal year, with a customary audit report of Ernst & Young LLP, or any of the
six largest independent certified public accounting firms in the United States,
without qualifications unacceptable to the Agent, together with, a certificate
of the chief financial officer of the Company stating (A) that no Unmatured
Event or Event of Default has occurred and is continuing, a statement setting
forth the details thereof and the action which the Company has taken and
proposes to take with respect thereto, and (B) beginning with the certificate
delivered for the quarter ending June 30, 1998 that a computation (which
computation shall accompany such certificate and shall be in reasonable detail)
showing compliance with Section 5.2 (a), (b) and (c) hereof is in conformity
with the terms of this Agreement;
CREDIT AGREEMENT Page 43
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(iv) Promptly after the sending or filing thereof, copies of
all reports, proxy statements and financial statements which the Company or any
of its Subsidiaries sends to or files with any of their respective security
holders or any securities exchange or the SEC;
(v) Promptly and in any event within 10 Business Days after
receipt, a copy of any management letter or comparable analysis prepared by the
auditors for the Company or any of its Subsidiaries;
(vi) Not later than January 31 of each year of the Company, a
budget and forecast prepared by the Company for the following fiscal year; and
(vii) Promptly, such other information respecting the
business, properties, operations or condition, financial or otherwise, of the
Company or any of their respective Subsidiaries as any Lender or the Agent may
from time to time reasonably request.
(e) Accounting, Access to Records, Books, Etc. Maintain a system of
accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in accordance with
Generally Accepted Accounting Principles and to comply with the requirements of
this Agreement and, upon reasonable prior notice, at any reasonable time and
from time to time, (i) permit any Lender or the Agent, or any agents or
representatives thereof, to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Company and
its Subsidiaries, and to discuss the affairs, finances and accounts of the
Company and its Subsidiaries with their respective directors, officers and
independent auditors, and by this provision the Company does hereby authorize
such Persons to discuss such affairs, finances and accounts with any Lender or
the Agent, (ii) at the expense of the Agent (unless an Event of Default has
occurred and is continuing), permit the Agent or any of its agents or
representatives to conduct a comprehensive field audit of its books, records,
properties and assets, including without limitation all collateral subject to
the Security Documents and site access.
(f) Additional Security and Collateral. Promptly (i) execute and
deliver and cause each Guarantor to execute and deliver, additional Security
Documents, within 30 days after request therefor by the Agent, sufficient to
grant to the Agent for the benefit of the Lenders and the Agent liens and
security interests in any after acquired property, to the extent required under
Section 2.10, and (ii) cause each Person becoming a Domestic Subsidiary and
which meets the definition of a Guarantor from time to time to execute and
deliver to the Lenders and the Agent, within 30 days after such Person becomes a
Subsidiary, a Guaranty and a Security Agreement, sufficient to grant to the
Agent for the benefit of the Lenders and the Agent liens and security interests
in all collateral of the type described in Section 2.10. The Company shall
notify the Lenders and the Agent, within 10 days after the occurrence thereof,
of the acquisition of any property by the Company or any Guarantor that is not
subject to the existing Security Documents, any Person becoming a Subsidiary and
any other event or condition, other than the passage of time, that may require
additional action of any nature in order to preserve the effectiveness and
perfected status of the liens and security interests of the Lenders and the
Agent with respect to such property pursuant to the Security Documents,
including without limitation delivering the originals of all promissory notes
and other instruments payable to the Company or any Guarantor to the Agent and
delivering the originals of all stock certificates or other certificates
evidencing any Capital Stock owned by the Company or any Guarantor at any time.
CREDIT AGREEMENT Page 44
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(g) Further Assurances. Execute and deliver within 30 days after
request therefor by the Agent, all further instruments and documents and take
all further action that the Agent may reasonably request, in order to give
effect to the intent of, and to aid in the exercise and enforcement of the
rights and remedies of the Lenders under, the Loan Documents.
5.2 Negative Covenants. Until the Termination Date and thereafter until
payment in full of the Lender Indebtedness and the performance of all other
obligations of the Company under this Agreement, the Company agrees that, unless
the requisite Lenders pursuant to Section 8.1 shall otherwise consent in
writing, it shall not, and shall not permit any of its Subsidiaries, to:
(a) Adjusted Total Debt to Adjusted EBITDA Ratio. Permit or suffer
the Adjusted Total Debt to Adjusted EBITDA Ratio to be greater than (i) 6.95 to
1.0 at any time from and including the Effective Date to and including June 29,
1999, (ii) 6.50 to 1.0 at any time from and including June 30, 1999 to and
including June 29, 2000 or (iii) 6.00 to 1.0 at any time from and including June
30, 2000 to and including June 29, 2001, or (iv) 5.50 to 1.0 at any time
thereafter.
(b) Interest Coverage Ratio. Permit or suffer the Interest Coverage
Ratio to be less than (i) 1.1 to 1.0 as of the end of any fiscal quarter of the
Company ending on or before March 31, 1999, (ii) 1.25 to 1.0 as of the end of
any fiscal quarter ending on or after June 30, 1999 but on or before March 31,
2000, (iii) 1.50 to 1.0 as of the end of any fiscal quarter of the Company
ending on or after June 30, 2000 but on or before March 31, 2002, or (iv) 1.75
to 1.0 as of the end of any fiscal quarter of the Company ending thereafter.
(c) Fixed Charge Coverage Ratio. Permit or suffer the Fixed Charge
Coverage Ratio to be less than (i) 0.9 to 1.0 as of the end of any fiscal
quarter of the Company ending on or before March 31, 1999, (ii) 1.0 to 1.0 as of
the end of any fiscal quarter ending on or after June 30, 1999 but on or before
March 31, 2000, (iii) 1.05 to 1.0 as of the end of any fiscal quarter of the
Company ending on or after June 30, 2000 but on or before March 31, 2002, or
(iv) 1.10 to 1.0 as of the end of any fiscal quarter of the Company thereafter.
(d) Indebtedness. Create, incur, assume or in any manner become
liable in respect of, or suffer to exist, or permit or suffer any Subsidiary to
create, incur, assume or in any manner become liable in respect of, or suffer to
exist, any Indebtedness other than:
(i) The Lender Indebtedness;
(ii) The Indebtedness described in Schedule 5.2(d) hereto and
renewals, extensions and refinancings thereof, but no increase in the amount
thereof (as such amount is reduced from time to time) and no modifications of
the terms thereof which is less favorable to the Company or more restrictive on
the Company in any material manner shall be permitted;
(iii) Indebtedness of any Guarantor owing to the Company or to
any other Guarantor;
(iv) Subordinated Debt, including the related subordinated
guarantees, pursuant to the Subordinated Debt Documents, provided that (A)
immediately before and after (on a pro forma basis acceptable to the Agent and
supported by such certificates required by the Agent) the incurrence of any such
Subordinated Debt, no Unmatured Event or Event of Default shall exist or
CREDIT AGREEMENT Page 45
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shall have occurred and be continuing and the Company shall be in pro forma
compliance with all financial and other covenants contained herein as of the
date of incurrence of such Subordinated Debt and for the following year and (B)
all agreements, documents and instruments relating to such Subordinated Debt
shall have been delivered to the Agent prior to the incurrence of such
Subordinated Debt;
(v) Trade accounts payable and accrued expenses arising in the
ordinary course which are past due in an amount which is not material in the
aggregate for the Company and its Subsidiaries on a consolidated basis or which
are being contested in good faith by appropriate proceedings and for which
adequate reserves are maintained on the books of the Company;
(vi) Earnouts with respect to Permitted Acquisitions made by
the Company;
(vii) Indebtedness which is non recourse to the Company or its
Subsidiaries other than a Subsidiary formed specifically for such financing and
owning only the assets acquired with such non recourse financing, provided that
the aggregate amount of such non recourse Indebtedness does not exceed
$15,000,000 and such non recourse terms and the other terms of such financing
are acceptable to the Agent;
(viii) Indebtedness incurred to finance insurance premiums in
the ordinary course of business consistent with past practices of the Company;
(ix) Indebtedness of Subsidiaries which are not Guarantors
owing to the Company or a Guarantor not exceeding an aggregate amount equal to
the book value of 3% of Total Assets; and
(x) Indebtedness other than as described in clauses (i)
through (ix) above not exceeding an aggregate amount equal to the book value of
14% of Total Assets, provided that not more than 50% of the Indebtedness
incurred or otherwise outstanding pursuant to this clause (ix) may be secured by
Liens on any assets.
(e) Liens. Create, incur or suffer to exist any Lien on any of the
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired, of the Company or any of
its Subsidiaries, other than:
(i) liens in favor of the Agent for the benefit of the Lenders
and the Agent;
(ii) liens imposed by law, carriers', warehousemen's or
mechanic's liens, operators' or drillers' liens and liens to secure claims for
labor, material or supplies arising in the ordinary course of business, but only
to the extent that payment thereof shall not at time be due or shall be
contested in good faith by appropriate proceedings diligently conducted, with
respect to which appropriate reserves have been set aside and as to which there
has been no seizure of or foreclosure upon assets subject to such liens;
(iii) deposits or pledges to secure payment of workmen's
compensation, unemployment insurance, old age pensions or other social security,
or to secure the performance of bids, tenders, contracts (other than those
relating to borrowed money) or leases or to secure statutory obligations or
surety or appeal bonds, or to secure indemnity, performance or other
CREDIT AGREEMENT Page 46
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similar bonds in the ordinary course of business, or in connection with
contests, to the extent that payment thereof shall not at the time be due or
shall be contested in good faith by appropriate proceedings diligently conducted
and there have been set aside on its books appropriate reserves with respect
thereto;
(iv) liens securing taxes, assessments, levies or other
governmental charges which are not overdue or which, in an amount not exceeding
$1,000,000 in the aggregate, are being contested in good faith by appropriate
proceedings diligently conducted, with respect to which reasonable reserves have
been set aside and as to which there has been no seizure of or foreclosure upon
assets subject to the liens;
(v) liens consisting of encumbrances, easements or
reservations of, or rights of others for, rights-of-way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, zoning restrictions,
restrictions on the use of real property and minor defects and irregularities in
the title thereto, and other similar encumbrances, none of which in the opinion
of the Agent interferes with the use of the property subject thereto by the
Company or such Subsidiary in the ordinary conduct of its business;
(vi) liens existing on the date hereof and listed on Schedule
5.2(e) hereto (including without limitation the existing liens in favor of
existing creditors required to be discharged on the Effective Date (the
"Discharge Liens"), which shall be identified as such on Schedule 5.2(e)),
provided that (A) neither the Indebtedness secured by any such existing liens
nor the property subject thereto shall increase, and (B) the Discharge Liens
shall be discharged and terminated on or before the Effective Date;
(vii) liens on the daily revenues in favor of Persons other
than the Company or its Affiliates who are parties to the Facility Leases and
Facility Management Agreements for the amounts due to them pursuant thereto;
(viii) purported liens in the ordinary course of business on
fixtures to the extent applicable law permits a mortgagee to claim an interest
therein, provided that such purported liens do not secure any Indebtedness of
the Company of any of its Affiliates;
(ix) any Lien created to secure payment of a portion of the
purchase price of, or existing at the time of acquisition of, any tangible fixed
asset acquired by the Company or any of its Subsidiaries may be created or
suffer to exist upon such tangible fixed asset if the outstanding principal
amount of the Indebtedness secured by such Lien does not exceed the purchase
price paid by the Company or such Subsidiary for such tangible fixed asset
provided that (A) such Lien does not encumber any other asset at any time owned
by the Company or such Subsidiary, (B) not more than one such Lien shall
encumber such tangible fixed asset at any one time and (C) the aggregate amount
of Indebtedness secured by all such Liens is permitted under the terms of this
Agreement;
(x) liens on unearned insurance premiums to secure
Indebtedness referred to in Section 5.2(d)(viii);
(xi) liens arising by applicable law in respect of employees'
wages, salaries or commissions not overdue;
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(xii) liens arising out of judgments or awards not exceeding
$1,000,000 in the aggregate against the Borrower or its Subsidiaries with
respect to which the Borrower or such Subsidiary shall be in good faith
prosecuting an appeal or a proceeding or review and the enforcement of such lien
is stayed pending such appeal or review; and
(xiii) liens securing obligations under Seller Notes in an
aggregate principal amount not exceeding $150,000 at any time outstanding, on
capital stock or assets of any business acquired in Permitted Acquisitions for
which such Seller Notes represented full or partial consideration.
(f) Merger; Acquisitions; Etc. Make any Acquisition; nor merge or
consolidate or amalgamate with any other Person or take any other action having
a similar effect, nor enter into any joint venture or similar arrangement with
any other Person, provided, however, that this Section 5.2(f) shall not prohibit
(i) any merger of any Subsidiary with or into another Subsidiary or any merger
of any Subsidiary into the Company, provided that (A) there is no Unmatured
Event or Event of Default either before or after such merger, (B) if any such
merger involves the Company or a Guarantor, the Company shall be the surviving
corporation and (C) any such merger involves the Company or any Guarantor, the
net worth of the Company or such Guarantor involved in such merger immediately
after the merger would be equal to or greater than its net worth immediately
preceding such merger, (ii) any Acquisition identified on Schedule 5.2(f)
hereto, provided that such Acquisition is completed on substantially the terms
described on such Schedule, there is no Unmatured Event or Event of Default
either before or after any such Acquisition and the Agent shall complete a
satisfactory review of final projections (including opening balance sheet and
sources and uses of funds statement) and such other due diligence with respect
to any such Acquisition, or (iii) any other Acquisition if (A) immediately
before and after (on a pro forma basis acceptable to the Agent and supported by
such certificates or opinions as may be reasonably required by the Agent) such
Acquisition: (w) no Unmatured Event or Event of Default shall exist or shall
have occurred and be continuing, (x) the representations and warranties
contained in the Loan Documents shall be true and correct in all material
respects as if made on the date such Acquisition is consummated, (y) the
aggregate amount of Cash Equivalents on hand of the Company plus the amount that
the Company is able to borrow in Revolving Credit Loans after giving effect to
such Acquisition is and will be at least $5,000,000 above the amount of working
capital required for the Company over such twelve month period of time, as
demonstrated to the Agent's reasonable satisfaction by such pro forma financial
statements and projections as required by the Agent, and (z) the Adjusted Total
Debt to Adjusted EBITDA Ratio is at least 0.25 below the level required under
this Agreement or, if the Adjusted Total Debt to Adjusted EBITDA Ratio is not at
least 0.25 below the level then required under this Agreement at the time of
such Acquisition, the Acquisition on such a pro forma basis does not increase
the Adjusted Total Debt to Adjusted EBITDA Ratio, (B) prior to the consummation
of such Acquisition, the Company shall have provided to the Lenders a
certificate of the chief financial officer of the Company (attaching pro forma
financial statements and projections including computations to demonstrate
compliance and projected compliance with all covenants and conditions
hereunder), stating that such Acquisition complies with this Section 5.2(f),
customary legal opinions reasonably acceptable to the Agent if requested by the
Agent, evidence that such Acquisition is in material compliance with all
applicable laws and regulations (other than such non-compliance which could not
reasonably be expected to have a Material Adverse Effect) and that any other
conditions under this Agreement relating to such transaction
CREDIT AGREEMENT Page 48
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have been satisfied, all in form and substance satisfactory to the Agent, (C)
the target of such Acquisition is in the same line of business as the Company,
(D) such Acquisition is not hostile and shall have been approved by the board of
directors or similar governing body of the target of such Acquisition and (E)
prior to the consummation of any such Acquisition, other than such Acquisitions
for which the total consideration paid or payable is less than $3,000,000 and
which do not result in any identifiable cost savings and synergies in excess of
$500,000 in any fiscal year of the Company, the Agent shall have completed such
reasonable due diligence and reviewed such agreements and documents with respect
to such Acquisition as reasonably required by the Agent, and the Agent shall be
satisfied with such due diligence and such review.
(g) Disposition of Assets; Etc. Sell, lease, license, transfer,
assign or otherwise dispose of all or any portion of its business, assets,
rights, revenues or property, real, personal or mixed, tangible or intangible,
whether in one or a series of transactions, other than inventory sold in the
ordinary course of business upon customary credit terms and sales of scrap or
obsolete material or equipment which are not material in the aggregate, and
shall not permit or suffer any Subsidiary to do any of the foregoing; provided,
however, that this Section 5.2(g) shall not prohibit any such sale, lease,
license, transfer, assignment or other disposition if (i) the aggregate book
value (disregarding any write-downs of such book value other than ordinary
depreciation and amortization) of all of the business, assets, rights, revenues
and property disposed of after the Effective Date of this Agreement (other than
in reliance on clauses (ii) through (vi) below) shall be less than 10% of the
Total Assets at such time and if, immediately before and after such transaction,
no Unmatured Event or Event of Default shall exist or shall have occurred and be
continuing, (ii) sales of equipment as to which proceeds are used within 180
days to purchase equipment of at least equivalent value to those sold and if,
immediately after such transaction, no Unmatured Event or Event of Default shall
exist or shall have occurred and be continuing, (iii) sales as to which proceeds
are used to make optional prepayments on Advances, provided that such
prepayments on the Advances shall also permanently reduce the Commitments by the
amount of such payments, (iv) transfers of assets, including without limitation
Capital Stock, between Guarantors or between the Company and Guarantors, or (v)
investments which consist of transfers of assets instead of cash and which are
permitted by Section 5.2(j) or (vi) such transfer of assets as pursuant to a
loan or advance permitted pursuant to Section 5.2(j); provided, however, in the
case of any of the foregoing permitted sales, leases, licenses, transfers,
assignments or other dispositions (each an "Asset Sale") described in clauses
(i)-(iv) the Company shall not, and shall not permit any of its Subsidiaries to,
consummate an Asset Sale unless (A) the Company (or the Subsidiary, as the case
may be) receives consideration at the time of such Asset Sale at least equal to
the fair market value (evidenced by a resolution of the Board of Directors set
forth in an officer's certificate delivered to the Agent) of the assets and (B)
at least 80% of the consideration therefor received by the Company or such
Subsidiary is in the form of cash; provided that the amount of (x) any
liabilities (as shown on the Company's or such Subsidiary's most recent balance
sheet) of the Company or any Subsidiary that are assumed by the transferee of
any such assets such that the Company or such Subsidiary have no further
liability and (y) any securities, notes or other obligations received by the
Company or any such Subsidiary from such transferee that are converted by the
Company or such Subsidiary into cash (to the extent of the cash received), shall
be deemed to be cash for purposes of this provision and the definition of Net
Cash Proceeds, and the Agent promptly shall obtain a first priority security
interest in any non cash consideration for any Asset Sale.
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(h) Nature of Business. Make or suffer any substantial change in the
nature of its business from that engaged in on the Effective Date or engage in
any other businesses other than those in which it is engaged on the Effective
Date.
(i) Dividends and Other Restricted Payments. Make, pay, declare or
authorize any dividend, payment or other distribution in respect of any class of
its Capital Stock or any dividend, payment or distribution in connection with
the redemption, purchase, retirement or other acquisition, directly or
indirectly, of any shares of its Capital Stock other than such dividends,
payments or other distributions (i) to the extent payable solely in shares of
Capital Stock (other than Disqualified Stock) of the Company, (ii) payable on or
before the Effective Date in an amount not to exceed $8,000,000 to redeem
preferred stock of the Company held by Holberg; (iii) payable upon the exercise
of put rights granted to the sellers in the Standard Acquisition, provided that
both before and after such transaction (on a pro forma basis acceptable to the
Agent and supported by such certificates as may be reasonably required by the
Agent), no Unmatured Event or Event of Default shall exist or shall have
occurred and be continuing or caused thereby, the representations and warranties
contained in the Loan Documents shall be true and correct in all material
respects and the Company shall be in compliance and projected compliance with
all covenants and conditions in this Agreement; and (iv) commencing not less
than five and one-half years after the Effective Date, paid in cash on account
of the Preferred Stock in an aggregate amount not to exceed $8,500,000 per year
or the amount required by the Parent to make mandatory, scheduled payments (but
not any payments pursuant to any acceleration or other modification of the
payments scheduled to be due on the Senior Discount Notes) on the Senior
Discount Notes, provided that both before and after such payment (on a pro forma
basis acceptable to the Agent and supported by such certificates as may be
reasonably required by the Agent), no Unmatured Event or Event of Default shall
exist or shall have occurred and be continuing or caused thereby, the
representations and warranties contained in the Loan Documents shall be true and
correct in all material respects and the Company shall be in compliance and
projected compliance with all covenants and conditions in this Agreement. The
Company will not issue Disqualified Stock, other than the Preferred Stock.
(j) Investments, Loans and Advances. Purchase or otherwise acquire
any Capital Stock of or other ownership interest in, or debt securities of or
other evidences of Indebtedness of, any other Person; nor make any loan or
advance of any of its funds or property or make any other extension of credit
to, or make any other investment or contribution or acquire any interest
whatsoever in, any other Person; nor incur any Contingent Liability except to
the extent permitted under Section 5.2(d); nor permit any Subsidiary to do any
of the foregoing; other than (i) extensions of trade credit made in the ordinary
course of business on customary credit terms and commission, travel and similar
advances made to officers and employees in the ordinary course of business,
provided that advances to officers and employees for purposes other than
commission, relocation and travel shall not exceed $250,000 in aggregate amount
(ii) investments in Cash Equivalents, (iii) Acquisitions permitted pursuant to
Section 5.2(f), (iv) investments, loans and advances in and to any Guarantor, or
any person becoming a Guarantor as a result thereof, (v) those investments,
loans, advances and other transactions described in Schedule 5.2(j) hereto,
having the same terms as existing on the date of this Agreement, but no
extension or renewal thereof shall be permitted, (vi) loans and advances to
Holberg Industries, Inc. in an aggregate outstanding amount at any time not to
exceed $10,000,000, provided that immediately before and after such loan or
advance: (A) no Unmatured Event or Event of Default
CREDIT AGREEMENT Page 50
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shall exist or shall have occurred and be continuing, (B) the representations
and warranties contained in the Loan Documents shall be true and correct in all
material respects as if made on the date such loan or advance is made, (C) the
aggregate amount of Cash Equivalents on hand of the Company plus the amount that
the Company is able to borrow in Revolving Credit Loans after giving effect to
such loan or advance is and will be at least $5,000,000 above the amount of
working capital required for the Company over such twelve month period of time,
as demonstrated to the Agent's reasonable satisfaction by such pro forma
financial statements and projections as required by the Agent, and (D) the
Adjusted Total Debt to Adjusted EBITDA Ratio is at least 0.25 below the level
required under this Agreement, and provided, further, such loan or advance shall
be evidenced by a promissory note and that all such loans and advances shall be
immediately due and payable upon the occurrence of any Event of Default, (vii)
acquire and own stock, obligations or securities received in settlement of debts
owing to the Company or its Subsidiaries or as consideration for Asset Sales
otherwise permitted under Section 5.2(g); (viii) make or permit to remain
outstanding travel and other like advances to officers and employees of the
Company or a Subsidiary in the ordinary course of business and consistent with
past practices, (ix) investments, loans and advances to Joint Ventures in an
aggregate amount not to exceed three percent (3%) of Total Assets, and (x) other
loans, advances or investments in an aggregate amount not to exceed three
percent (3%) of Total Assets.
(k) Transactions with Affiliates. Make any payment to, or sell,
lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliates (each of the foregoing, an
"Affiliate Transaction") unless (i) such Affiliate Transaction is on terms that
are no less favorable to the Company or the relevant Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Subsidiary with an unrelated Person and (ii) the Company delivers to the Agent
(x) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $1,000,000, a
resolution of the Board of Directors set forth in an officers' certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (y) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5,000,000, an opinion as to the fairness
to the Lenders of such Affiliate Transaction from a financial point of view
issued by an accounting, appraisal or investment banking firm of national
standing, provided that (A) any loan, advance or investment permitted by Section
5.2 (j) shall not be subject to clause (ii) above and (B) the following do not
constitute Affiliate Transactions: (1) transactions between or among the Company
and/or the Guarantors, (2) any management fee permitted to be paid under Section
5.2(p), (3) payments to Holberg from time to time of customary investment
banking and advisory fees consistent with past practice in connection with the
Standard Acquisition and other financing and corporate transactions, provided
that such fees paid to Holberg do not exceed the usual and customary fees for
similar services and do not exceed the amounts set forth in the Pro Forma
Financial Statements in the case of the Standard Acquisition and the other
Acquisition and the other Acquisitions described on Schedule 5.2(f), (4) the
Company's lease on behalf of Holberg of a plane under arrangements consistent
with past practices, (5) on or about the Effective Date, the Company's
cancellation and forgiveness of an approximately $4,600,000 advance previously
made to Holberg, (6) reimbursement to Holberg of expenses Holberg has paid on
behalf of the Company, (7) the
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Company's payment of the fees and expenses associated with the Parent's issuance
of the Senior Discount Notes, (8) the insurance arrangements between the Company
and its Subsidiaries than those that are in effect on the date hereof provided
such arrangements are conducted in the ordinary course of business consistent
with past practices and (9) payments under the tax sharing agreement among
Holberg and other members of the affiliated group of corporations of which it is
the common parent consistent with past practices and in compliance with the
Code.
(l) Inconsistent Agreements. Enter into any agreement or permit or
suffer any Subsidiary to enter into any agreement containing any provision which
would be violated or breached by this Agreement or any of the transactions
contemplated hereby or by performance by the Company or any of its Subsidiaries
of its obligations in connection therewith.
(m) Negative Pledge Limitation. Enter into any agreement (other than
the Subordinated Note Indenture, the terms of the Security Documents and any
other agreement entered into in connection with any Joint Venture in the
ordinary course of the Company's business prohibiting liens or security
interests on the Capital Stock of such Joint Venture and the assets of such
Joint Venture consistent with the terms of the Security Documents), including
without limitation any amendments to existing agreements, with any Person other
than the Lenders pursuant hereto which prohibits or limits the ability of the
Company or any Subsidiary to create, incur, assume or suffer to exist any Lien
upon any of its assets, rights, revenues or property, real, personal or mixed,
tangible or intangible, whether now owned or hereafter acquired.
(n) Subsidiary Dividends. Permit any of its Wholly-Owned
Subsidiaries directly or indirectly to create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction which by its
terms materially restricts the ability of any such Subsidiary to (i) pay
dividends or make any other distributions on such Subsidiary's capital stock,
(ii) pay any Indebtedness owed to the Company or any of its other Subsidiaries,
(iii) make any loans or advances to the Company or any of such other
Subsidiaries or (iv) transfer any material portion of its assets to the Company
or any of such other Subsidiaries.
(o) Payments and Modification of Debt. Make, or permit any
Subsidiary to make, any optional payment, defeasance (whether a covenant
defeasance, legal defeasance or other defeasance), prepayment or redemption of
any of its or any of its Subsidiaries' Subordinated Debt or other Indebtedness
or amend or modify, or consent or agree to any amendment or modification of, any
instrument or agreement under which any of its Subordinated Debt is issued or
created or otherwise related thereto, or enter into any agreement or arrangement
providing for any defeasance of any kind of any of its Subordinated Debt, or
designate any Indebtedness (other than the Lender Indebtedness) as Designated
Senior Debt under the Subordinated Debt Documents, provided that the Company may
prepay Seller Notes if immediately before and after (on a pro form basis
acceptable to the Agent and supported by such certificates or opinions as may be
reasonably required by the Agent) such prepayment: (i) no Unmatured Event or
Event of Default shall exist or shall have occurred and be continuing, (ii) the
representations and warranties contained in the Loan Documents shall be true and
correct in all material respects as if made on the date such prepayment is made,
(iii) the aggregate amount of Cash Equivalents on hand of the Company plus the
amount that the Company is able to borrow in Revolving Credit Loans after giving
effect to such prepayment is and will be at least $5,000,000 above the amount
CREDIT AGREEMENT Page 52
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of working capital required for the Company over such twelve month period of
time, as demonstrated to the Agent's reasonable satisfaction by such pro forma
financial statements and projections as required by the Agent, and (iv) the
Adjusted Total Debt to Adjusted EBITDA Ratio is at least 0.25 below the level
required under this Agreement.
(p) Management Fees. Pay, or permit any Subsidiary to pay, directly
or indirectly, any management, consulting, investment banking, advisory or other
fees or payments under any leases or any other payments (including, without
limitation, any amounts paid or payable by the Company or any of its
Subsidiaries to the Parent in respect of overhead expense allocations among
members of the affiliate corporate group) to the Parent or any Affiliates
thereof, except that the Company or any Subsidiary may pay such amounts which in
the aggregate do not exceed in any fiscal year an amount equal to the lesser of
$2,000,000 or an amount equal to 50% of the amount of Adjusted EBITDA in excess
of the amount of Adjusted EBITDA required to comply with Sections 5.2(a), (b)
and (c), provided that (i) such payments do not violate any other terms and
provisions of this Agreement (other than Section 5.2(k)), (ii) the aggregate
amount of Cash Equivalents on hand of the Company plus the amount that the
Company is able to borrow in Revolving Credit Loans after giving effect to such
payment is and will be at least $5,000,000 above the amount of working capital
required for the Company over such twelve month period of time, as demonstrated
to the Agent's reasonable satisfaction by such pro forma financial statements
and projections as required by the Agent, (iii) the pro forma Adjusted Total
Debt to Adjusted EBITDA Ratio is at least 0.25 below the level required under
this Agreement after giving effect to such payment and (iv) no Unmatured Event
or Event of Default exists or would be caused by such payment.
(q) Net Capital Expenditures. Make, or permit any Subsidiary to
make, Net Capital Expenditures that exceed in the aggregate for the Company and
its Subsidiaries (a) $5,000,000 in any fiscal year or (b) $8,000,000 in any
consecutive two fiscal years, plus, in each case, the amount by which the
allowed Net Capital Expenditures for the most recently ended fiscal year
exceeded the actual Net Capital Expenditures for such fiscal year.
5.3 Additional Covenants. If at any time the Company shall enter into or
be a party to any instrument or agreement with respect to any Indebtedness which
in the aggregate, together with any related Indebtedness, exceeds $250,000,
including all such instruments or agreements in existence as of the date hereof
and all such instruments or agreements entered into after the date hereof,
relating to or amending any terms or conditions applicable to any of such
Indebtedness which includes covenants, terms, conditions or defaults not
substantially provided for in this Agreement or more favorable to the lender or
lenders thereunder than those provided for in this Agreement, then the Company
shall promptly so advise the Agent and the Lenders. Thereupon, if the Agent
shall request, upon notice to the Company, the Agent and the Lenders shall enter
into an amendment to this Agreement or an additional agreement (as the Agent may
request), providing for substantially the same covenants, terms, conditions and
defaults as those provided for in such instrument or agreement to the extent
required and as may be selected by the Agent. In addition to the foregoing, any
covenants, terms, conditions or defaults in the Subordinated Debt Documents not
substantially provided for in this Agreement or more favorable to the holders of
Subordinated Debt issued in connection therewith are hereby incorporated by
reference into this Agreement to the same extent as if set forth fully herein,
and no subsequent
CREDIT AGREEMENT Page 53
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amendment, waiver, termination or modification thereof shall effect any such
covenants, terms, conditions or defaults as incorporated herein.
ARTICLE VI
DEFAULT
6.1 Events of Default. The occurrence of any one of the following events
or conditions shall be deemed an "Event of Default" hereunder unless waived by
the requisite Lenders pursuant to Section 8.1:
(a) Nonpayment. The Company shall fail to pay when due any principal
of the Notes, or any reimbursement obligation under Section 3.3 (whether by
deemed disbursement of a Revolving Credit Loan or otherwise), or, within 5 days
after becoming due, any interest on the Notes or any fees or any other amount
payable hereunder;
(b) Misrepresentation. Any representation or warranty made by the
Company or any Guarantor in any Loan Document or any other certificate, report,
financial statement or other document furnished by or on behalf of the Company
or any Guarantor in connection with this Agreement, shall prove to have been
incorrect in any material respect when made or deemed made;
(c) Certain Covenants. The Company or any Guarantor shall fail to
perform r observe any term, covenant or agreement contained in Section 5.2 or
5.3 hereof;
(d) Other Defaults. The Company or any Guarantor shall fail to
perform or observe any other term, covenant or agreement contained in any Loan
Document (other than those described in Sections 6.1(a) or 6.1(c), and any such
failure shall remain unremedied for 20 calendar days after written notice
thereof shall have been given to the Company by the Agent (or such longer or
shorter period of time as may be specified in such Loan Document);
(e) Other Indebtedness. The Company or any of its Subsidiaries or
any Guarantor shall fail to pay any part of the principal of, the premium, if
any, or the interest on, or any other payment of money due under any of its
Indebtedness (other than Indebtedness hereunder), beyond any period of grace
provided with respect thereto, which individually or together with other such
Indebtedness as to which any such failure exists has an aggregate outstanding
principal amount in excess of $1,000,000; or the Company or any of its
Subsidiaries or any Guarantor shall fail to perform or observe any other term,
covenant or agreement contained in any agreement, document or instrument
evidencing or securing any such Indebtedness having such aggregate outstanding
principal amount, or under which any such Indebtedness was issued or created,
beyond any period of grace, if any, provided with respect thereto if the effect
of such failure is either (i) to cause, or permit the holders of such
Indebtedness (or a trustee on behalf of such holders) to cause, any payment in
respect of such Indebtedness to become due prior to its due date or (ii) to
permit the holders of such Indebtedness (or a trustee on behalf of such holders)
to elect a majority of the board of directors of the Company or Holdings;
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(f) Judgments. One or more judgments or orders for the payment of
money (not fully paid or covered without dispute by insurance) in an aggregate
amount of $1,000,000 in any fiscal year shall be rendered against the Company or
any of its Subsidiaries or any Guarantor, or any other judgment or order
(whether or not for the payment of money) shall be rendered against or shall
affect the Company or any of its Subsidiaries or any Guarantor which causes or
could reasonably be expected to cause a Material Adverse Effect, and either (i)
such judgment or order shall have remained unsatisfied and the Company or such
Subsidiary or Guarantor shall not have taken action necessary to stay
enforcement thereof by reason of pending appeal or otherwise, prior to the
expiration of the applicable period of limitations for taking such action or, if
such action shall have been taken, a final order denying such stay shall have
been rendered, or (ii) enforcement proceedings shall have been commenced by any
creditor upon any such judgment or order;
(g) ERISA. The occurrence of a Reportable Event that results in
liability of the Company, any Subsidiary or Guarantor or any ERISA Affiliate to
the PBGC or to any Plan and such Reportable Event is not corrected within thirty
(30) days after the occurrence thereof; or the occurrence of any Reportable
Event which could constitute grounds for termination of any Plan by the PBGC or
for the appointment by the appropriate United States District Court of a trustee
to administer any Plan and such Reportable Event is not corrected within thirty
(30) days after the occurrence thereof; or the filing by the Company, any
Subsidiary or Guarantor or any ERISA Affiliate of a notice of intent to
terminate a Plan or the institution of other proceedings to terminate a Plan; or
the Company, any Subsidiary or Guarantor or any ERISA Affiliate shall fail to
pay when due any liability to the PBGC or to a Plan; or the PBGC shall have
instituted proceedings to terminate, or to cause a trustee to be appointed to
administer, any Plan; or any Person engages in a Prohibited Transaction with
respect to any Plan which results in liability of the Company, any Subsidiary or
Guarantor, or any ERISA Affiliate there shall occur a complete or partial
withdrawal from, or a default within the meaning of Section 4219(c)(5) of ERISA
with respect to one or more Multiemployer Plans which could cause the Company,
any Subsidiary or Guarantor or any ERISA Affiliate to incur a current payment
obligation; the Company, any Subsidiary or Guarantor or any ERISA Affiliate
shall fail to make a required installment or other payment to any Plan within
the meaning of Section 302(f) of ERISA or Section 412(n) of the Code that
results in or could result in liability of the Company, any Subsidiary of the
Company or any ERISA Affiliate to the PBGC or any Plan; or the withdrawal of the
Company, any of its Subsidiaries or any ERISA Affiliate from a Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA; or the Company, any of its Subsidiaries or any ERISA
Affiliate becomes an employer with respect to any Multiemployer Plan without the
prior written consent of the Required Lenders; provided, however, that the
aggregate liability caused by any of the foregoing exceeds $1,000,000;
(h) Insolvency, Etc. The Company, Significant Subsidiaries or any
Guarantor shall be dissolved or liquidated or any judgment, order or decree
therefor shall be entered (other than dissolutions or liquidations of
Subsidiaries permitted by Section 5.1(a)), or shall generally not pay its debts
as they become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors, or
shall institute, or there shall be instituted against the Company, Significant
Subsidiaries or any Guarantor, any proceeding or case seeking to adjudicate it a
bankrupt or insolvent or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its
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debts under any law relating to bankruptcy, insolvency or reorganization or
relief or protection of debtors or seeking the entry of an order for relief, or
the appointment of a receiver, trustee, custodian or other similar official for
it or for any substantial part of its assets, rights, revenues or property, and,
if such proceeding is instituted against the Company or such Significant
Subsidiaries or such Guarantor and is being contested by the Company or such
Significant Subsidiaries or such Guarantor, as the case may be, in good faith by
appropriate proceedings, such proceeding shall remain undismissed or unstayed
for a period of 60 days; or the Company or such Significant Subsidiaries or such
Guarantor shall take any action (corporate or other) to authorize or further any
of the actions described above in this subsection;
(i) Other Documents. Any material provision of any Loan Document or
any Subordinated Debt Document shall at any time for any reason cease to be
valid and binding and enforceable against any obligor thereunder, or the
validity, binding effect or enforceability thereof shall be contested by any
Person or any obligor, shall deny that it has any or further liability or
obligation thereunder, or any Loan Document or any Subordinated Debt Document
shall be terminated, invalidated or set aside, or be declared ineffective or
inoperative or in any way cease to give or provide to the Lenders and the Agent
the benefits purported to be created thereby in any material manner;
(j) Orders, Permits, Etc. The Company or any of its Subsidiaries
shall be enjoined, restrained or any way prevented by the order of any court or
any administrative or regulatory agency from conducting any material part of its
business and such order shall continue in effect for more than thirty (30) days,
or there shall occur the loss, suspension or revocation of, or failure to renew,
any license or permit now held or hereafter acquired by the Company or any of
its Subsidiaries if such loss, suspension, revocation or failure to renew would
have a Material Adverse Effect; or
(k) Control. Any Change of Control shall occur.
6.2 Remedies.
(a) Upon the occurrence and during the continuance of any Event of
Default, by notice to the Company (i) the Agent may, and upon being directed to
do so by the Required Lenders shall, terminate the Commitments or (ii) the Agent
may, and upon being directed to do so by the Required Lenders, shall declare the
outstanding principal of, and accrued interest on, the Notes, all unpaid
reimbursement obligations in respect of drawings under Letters of Credit and all
other amounts owing under this Agreement to be immediately due and payable, or
(iii) the Agent may, and upon being directed to do so by the Required Lenders,
shall demand immediate delivery of cash collateral, and the Company agrees to
deliver such cash collateral upon demand, in an amount equal to the maximum
amount that may be available to be drawn at any time prior to the stated expiry
of all outstanding Letters of Credit, or any one or more of the foregoing,
whereupon the Commitments shall terminate forthwith and all such amounts,
including such cash collateral, shall become immediately due and payable, as the
case may be, provided that in the case of any event or condition described in
Section 6.1(h), the Commitments shall automatically terminate forthwith and all
such amounts, including such cash collateral, shall automatically become
immediately due and payable without notice; in all cases without demand,
presentment, protest, diligence, notice of dishonor or other formality, all of
which are hereby expressly waived. Such cash collateral delivered in respect of
outstanding Letters of Credit shall
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be deposited in a special cash collateral account to be held by the Agent as
collateral security for the payment and performance of the Company's obligations
under this Agreement to the Lenders and the Agent.
(b) The Agent may and, upon being directed to do so by the Required
Lenders, shall, in addition to the remedies provided in Section 6.2(a), exercise
and enforce any and all other rights and remedies available to it or the
Lenders, whether arising under this Agreement or any other Loan Document or
under applicable law, in any manner deemed appropriate by the Agent, including
suit in equity, action at law, or other appropriate proceedings, whether for the
specific performance (to the extent permitted by law) of any covenant or
agreement contained in any other Loan Document or in aid of the exercise of any
power granted in any other Loan Document.
(c) Upon the occurrence and during the continuance of any Event of
Default, each Lender may, subject to Section 7.10, at any time and from time to
time, without notice to the Company (any requirement for such notice being
expressly waived by the Company) set off and apply against any and all of the
obligations of the Company now or hereafter existing under this Agreement,
whether owing to such Lender or any other Lender or the Agent, any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender or any Affiliate of
such Lender to or for the credit or the account of the Company and any property
of the Company from time to time in possession of such Lender, irrespective of
whether or not such Lender shall have made any demand hereunder and although
such obligations may be contingent and unmatured The Company hereby grants to
the Lenders and the Agent a lien on and security interest in all such deposits,
indebtedness and property as collateral security for the payment and performance
of the obligations of the Company under this Agreement. The rights of such
Lender under this Section 6.2(c) are in addition to other rights and remedies
(including, without limitation, other rights of setoff) which such Lender may
have.
6.3 Distribution of Proceeds of Collateral. All proceeds of any
realization on the collateral pursuant to the Security Documents and any
payments received by the Agent or any Lender pursuant to the Guaranties
subsequent to and during the continuance of any Event of Default, shall be
allocated and distributed by the Agent as follows:
(a) First, to the payment of all reasonable costs and expenses,
including without limitation all reasonable attorneys' fees, of the Agent in
connection with the enforcement of the Security Documents and otherwise
administering this Agreement;
(b) Second, to the payment of all fees required to be paid under any
Loan Document including commitment fees, owing to the Lenders and Agent pursuant
to the Lender Indebtedness on a pro rata basis in accordance with the Lender
Indebtedness consisting of fees owing to the Lenders and Agent under the Lender
Indebtedness, for application to payment of such liabilities;
(c) Third, to the Lenders and Agent on a pro rata basis in
accordance with the Lender Indebtedness consisting of interest owing to the
Lenders and Agent under the Lender Indebtedness, and obligations and liabilities
relating to Swaps owing to the Lenders and the Agent under the Lender
Indebtedness for application to payment of such liabilities;
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(d) Fourth, to the Lenders and the Agent on a pro rata basis in
accordance with the Lender Indebtedness consisting of principal (including
without limitation any cash collateral for any outstanding letters of credit),
for application to payment of such liabilities;
(e) Fifth, to the payment of any and all other amounts owing to the
Lenders and the Agent on a pro rata basis in accordance with the total amount of
such Indebtedness owing to each of the Lenders and the Agent, for application to
payment of such liabilities; and
(f) Sixth, to the Company, its Subsidiaries or such other Person as
may be legally entitled thereto.
Notwithstanding the foregoing, no payments of principal, interest or fees
delivered to the Agent for the account of any Defaulting Lender shall be
delivered by the Agent to such Defaulting Lender. Instead, such payments shall,
for so long as such Defaulting Lender shall be a Defaulting Lender, be held by
the Agent, and the Agent is hereby authorized and directed by all parties hereto
to hold such funds in escrow and apply such funds as follows:
(i) First, if applicable to any payments due from such Defaulting
Lender to the Agent, and
(ii) Second, to Loans required to be made by such Defaulting Lender
on any borrowing date to the extent such Defaulting Lender
fails to make such Loans.
Notwithstanding the foregoing, upon the termination of all Commitments and the
payment and performance of all of the Advances and other obligations owing
hereunder (other than those owing to a Defaulting Lender), any funds then held
in escrow by the Agent pursuant to the preceding sentence shall be distributed
to each Defaulting Lender, pro rata in proportion to amounts that would be due
to each Defaulting Lender but for the fact that it is a Defaulting Lender.
6.4 Letter of Credit Liabilities. For the purposes of payments and
distributions under Section 6.3, the full amount of Lender Indebtedness on
account of any letter of credit then outstanding but not drawn upon shall be
deemed to be then due and owing. Amounts distributable to the Lenders or Agent
on account of such Lender Indebtedness under such letters of credit shall be
deposited in a separate collateral account in the name of and under the control
of the Agent and held by the Agent first as security for such letter of credit
Lender Indebtedness and then as security for all other Lender Indebtedness and
the amount so deposited shall be applied to the letter of credit Lender
Indebtedness at such times and to the extent that such letter of credit Lender
Indebtedness become absolute liabilities and if and to the extent that the
letter of credit Lender Indebtedness fail to become absolute Lender Indebtedness
because of the expiration or termination of the underlying letters of credit
without being drawn upon then such amounts shall be applied to the remaining
Lender Indebtedness in the order provided in Section 6.3. The Company hereby
grants to the Agent, for the benefit of the Lenders and Agent, a lien and
security interest in all such funds deposited in such separate collateral
account, as security for all the Lender Indebtedness as set forth above.
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ARTICLE VII
THE AGENT AND THE LENDERS
7.1 Appointment; Nature of Relationship. First Chicago is hereby appointed
by the Lenders as the Agent hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
VII. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the representative of the
Lenders with only those duties as are expressly set forth in this Agreement and
the other Loan Documents. In its capacity as the Lenders' contractual
representative, the Agent (i) does not hereby assume any fiduciary duties to any
of the Lenders, (ii) is a "representative" of the Lenders within the meaning of
Section 9-105 of the Uniform Commercial Code and (iii) is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders hereby agrees to assert no claim against the Agent on any agency theory
or any other theory of liability for breach of fiduciary duty, all of which
claims each Lender hereby waives.
7.2 Powers. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
7.3 General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Company or any of its
Subsidiaries, the Lenders or any Lender for any action taken or omitted to be
taken by it or them hereunder or under any other Loan Document or in connection
herewith or therewith except for its or their own gross negligence or willful
misconduct.
7.4 No Responsibility for Loans, Recitals, etc. Neither the Agent nor any
of its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into, or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (iii) the satisfaction of any condition specified in Article II, except
receipt of items required to be delivered to the Agent; (iv) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; or (v) the
value, sufficiency, creation, perfection or priority of any interest in any
collateral security. The Agent shall have no duty to disclose to the Lenders
information that is not required to be furnished by the Company or any
Subsidiary to the Agent at such time, but is voluntarily furnished by the
Company or any Subsidiary to the Agent (either in its capacity as Agent or in
its individual capacity).
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7.5 Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders or the Required Lenders, as the case may be, and such
instructions and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders and on all holders of Notes. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders or the Required Lenders, as the case may be. The Agent
shall be fully justified in failing or refusing to take any action hereunder and
under any other Loan Document unless it shall first be indemnified to its
satisfaction by the Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take any such
action.
7.6 Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
7.7 Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
7.8 Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Company for which the Agent is entitled to reimbursement by
the Company under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents and
(iii) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby, or
the enforcement of any of the terms thereof or of any such other documents,
provided that no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the Agent. The
obligations of the Lenders under this Section 7.8 shall survive payment of the
Lender Indebtedness and termination of this Agreement.
7.9 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Unmatured Event or Event of Default hereunder
unless the Agent has received written notice from a Lender or the Company
referring to this Agreement describing such Default or Unmatured Default and
stating that such notice is a "notice of default". In the
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event that the Agent receives such a notice, the Agent shall give prompt notice
thereof to the Lenders.
7.10 Rights as a Lender. In the event the Agent is a Lender, the Agent
shall have the same rights and powers hereunder and under any other Loan
Document as any Lender and may exercise the same as though it were not the
Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is a
Lender, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Company or any of its Subsidiaries in which the Company or such
Subsidiary is not restricted hereby from engaging with any other Person. The
Agent, in its individual capacity, is not, subject to Section 8.6, obligated to
remain a Lender.
7.11 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Company and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
7.12 Successor Agent. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Company, such resignation to be effective
upon the appointment of a successor Agent or, if no successor Agent has been
appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. Upon any such resignation, the Required Lenders shall have
the right to appoint, on behalf of the Company and the Lenders, a successor
Agent. If no successor Agent shall have been so appointed by the Required
Lenders within thirty days after the resigning Agent's giving notice of its
intention to resign, then the resigning Agent may appoint, on behalf of the
Company and the Lenders, a successor Agent. If the Agent has resigned and no
successor Agent has been appointed, the Lenders may perform all the duties of
the Agent hereunder and the Company shall make all payments in respect of the
Lender Indebtedness to the applicable Lender and for all other purposes shall
deal directly with the Lenders. No successor Agent shall be deemed to be
appointed hereunder until such successor Agent has accepted the appointment. Any
such successor Agent shall be a commercial bank having capital and retained
earnings of at least $50,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning Agent. Upon the effectiveness of the resignation of the Agent,
the resigning Agent shall be discharged from its duties and obligations
hereunder and under the Loan Documents. After the effectiveness of the
resignation of an Agent, the provisions of this Article VII shall continue in
effect for the benefit of such Agent in respect of any actions taken or omitted
to be taken by it while it was acting as the Agent hereunder and under the other
Loan Documents.
7.13 Collateral Management. The Agent is hereby authorized on behalf of
all of the Lenders, without the necessity of any further consent from any
Lender, from time to time prior to
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an Event of Default, to take any action with respect to the collateral or the
Security Documents which may be necessary (i) to perfect and maintain perfected
the security interest in and liens upon the collateral granted pursuant to the
Security Documents; and (ii) to release portions of the collateral from the
security interests and liens imposed by the Security Documents in connection
with any dispositions of such portions of the collateral permitted hereby. In
the event that the Company or the Guarantors desire to sell or otherwise dispose
of any assets and such sale or disposition is permitted hereby, the Agent shall,
upon timely notice from the Company, release such portions of the collateral
from the security interests and liens imposed by the Security Documents as may
be specified by the Company or the Guarantors in order for the Borrower or the
Guarantors to consummate such proposed sale or disposition, provided that at or
prior to the time of such proposed sale or disposition no Unmatured Event or
Event of Default shall have occurred and be continuing, including, without
limitation, any Unmatured Event or Event of Default that would arise upon
consummation of such sale or disposition. For purposes of the preceding
sentence, the Company shall give timely notice if, not less than two Business
Days prior to the date of such proposed sale or disposition, it shall furnish to
the Agent an officers' certificate setting forth in reasonable detail the
circumstances of such proposed sale or disposition.
7.14 Right to Indemnity. The Agent shall be fully justified in failing or
refusing to take any action hereunder unless it shall first be indemnified to
its satisfaction by the Lenders pro rata against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.
7.15 Sharing of Payments. The Lenders agree among themselves that, in the
event that any Lender shall obtain payment in respect of any Advance or any
other obligation owing to the Lenders under this Agreement through the exercise
of a right of set-off, banker's lien, counterclaim or otherwise in excess of its
ratable share of payments received by all of the Lenders on account of the
Advances and other obligations (or if no Advances are outstanding, ratably
according to the respective amounts of the Commitments), such Lender shall
promptly purchase from the other Lenders participations in such Advances and
other obligations in such amounts, and make such other adjustments from time to
time, as shall be equitable to the end that all of the Lenders share such
payment in accordance with such ratable shares. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of set-off, banker's lien, counterclaim or otherwise as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of
participations theretofore sold, return its share of that benefit to each Lender
whose payment shall have been rescinded or otherwise restored. The Company
agrees that any Lender so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including set-off,
banker's lien or counterclaim, with respect to such participation as fully as if
such Lender were a holder of such Advance or other obligation in the amount of
such participation. The Lenders further agree among themselves that, in the
event that amounts received by the Lenders and the Agent hereunder are
insufficient to pay all such obligations or insufficient to pay all such
obligations when due, the fees and other amounts owing to the Agent in such
capacity shall be paid therefrom before payment of obligations owing to the
Lenders under this Agreement. Except as otherwise expressly provided in this
Agreement, if any Lender or Agent shall fail to remit to the Agent or any other
Lender an amount payable by such Lender or Agent to the Agent or such other
Lender pursuant to this Agreement on the date
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when such amount is due, such payments shall be made together with interest
thereon for each date from the date such amount is due until the date such
amount is paid to the Agent or such other Lender at a rate per annum equal to
the rate at which borrowings are available to the payee in its overnight federal
funds market. It is further understood and agreed among the Lenders and the
Agent that if the Agent shall engage in any other transactions with the Company
and shall have the benefit of any collateral or security therefor which does not
expressly secure the obligations arising under this Agreement except by virtue
of a so-called dragnet clause or comparable provision, the Agent shall be
entitled to apply any proceeds of such collateral or security first in respect
of the obligations arising in connection with such other transaction before
application to the obligations arising under this Agreement.
7.16 Withholding Tax Exemption. Each Lender that is not organized and
incorporated under the laws of the United States or any State thereof agrees to
file with the Agent and the Company, in duplicate, (a) on or before the later of
(i) the Effective Date and (ii) the date such Lender becomes a Lender under this
Agreement and (b) thereafter, for each taxable year of such Lender (in the case
of a Form 4224) or for each third taxable year of such Lender (in the case of
any other form) during which interest or fees arising under this Agreement and
the Notes are received, unless not legally able to do so as a result of a change
in United States income tax enacted, or treaty promulgated, after the date
specified in the preceding clause (a), on or prior to the immediately following
due date of any payment by the Company hereunder, a properly completed and
executed copy of either Internal Revenue Service Form 4224 or Internal Revenue
Service Form 1001 and Internal Revenue Service Form W-8 or Internal Revenue
Service Form W-9 and any additional form necessary for claiming complete
exemption from United States withholding taxes (or such other form as is
required to claim complete exemption from Unites States withholding taxes), if
and as provided by the Code or other pronouncements of the United States
Internal Revenue Service, and such Lender warrants to the Company that the form
so filed will be true and complete; provided that such Lender's failure to
complete and execute such Form 4224 or Form 1001, or Form W-8 or Form W-9, as
the case may be, and any such additional form (or any successor form or forms)
shall not relieve the Company of any of its obligations under this Agreement,
except as otherwise provided in this Section 7.16.
ARTICLE VIII
MISCELLANEOUS
8.1 Amendments, Etc. (a) No amendment, modification, termination or waiver of
any provision of this Agreement nor any consent to any departure therefrom shall
be effective unless the same shall be in writing and signed by the Required
Lenders and, to the extent any rights, obligations or duties of the Agent may be
affected thereby, the Agent, provided, however, that no such amendment,
modification, termination, waiver or consent shall, without the consent of the
Agent and all of the Lenders, (i) authorize or permit the extension of time for,
or any reduction of the amount of, any payment of the principal of, or interest
on, the Notes or any Letter of Credit reimbursement obligation, or any fees or
other amount payable hereunder, (ii) amend or terminate the respective
Commitments of any Lender set forth on the signature pages hereof or modify the
provisions of this Section regarding the taking of any action under this Section
or the
CREDIT AGREEMENT Page 63
<PAGE> 68
provisions of Section 7.10 or the definition of Required Lenders, or (iii)
release all or substantially all of the collateral or release any material
Guarantor.
(b) Any such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
(c) Notwithstanding anything herein to the contrary, no Defaulting
Lender shall be entitled to vote (whether to consent or to withhold its consent)
with respect to any amendment, modification, termination or waiver of any
provision of this Agreement or any departure therefrom or any direction from the
Lenders to the Agent, and, for purposes of determining the Required Lenders at
any time, the Commitments and the Advances of each Defaulting Lenders shall be
disregarded.
8.2 Notices. (a) Except as otherwise provided in Section 8.2(c) hereof,
all notices and other communications hereunder shall be in writing and shall be
delivered or sent to the Company, the Agent and the Lenders at the respective
addresses and numbers for notices set forth on the signature pages hereof, or to
such other address as may be designated by the Company, the Agent or any Lender
by notice to the other parties hereto. All notices and other communications
shall be deemed to have been given at the time of actual delivery thereof to
such address, or if sent by certified or registered mail, postage prepaid, to
such address, on the third day after the date of mailing, or in the case of
telex notice, upon receipt of the appropriate answerback, or, in the case of
facsimile notice, upon receipt of a confirmation mechanically produced by the
facsimile machine, provided, however, that notices to the Agent shall not be
effective until received.
(b) Notices by the Company to the Agent with respect to terminations
or reductions of the Commitments pursuant to Section 2.2, requests for Advances
pursuant to Section 2.4, requests for continuations or conversions of Loans
pursuant to Section 2.7 and notices of prepayment pursuant to Section 3.1 shall
be irrevocable and binding on the Company.
(c) Any notice to be given by the Company to the Agent pursuant to
Sections 2.4, 2.7 or 3.1 and any notice to be given by the Agent or any Lender
hereunder, may be given by telephone, and all such notices given by the Company
must be immediately confirmed in writing in the manner provided in Section
8.2(a). Any such notice given by telephone shall be deemed effective upon
receipt thereof by the party to whom such telephonic notice is to be given.
8.3 No Waiver By Conduct; Remedies Cumulative. No course of dealing on the
part of the Agent or any Lender, nor any delay or failure on the part of the
Agent or any Lender in exercising any right, power or privilege hereunder shall
operate as a waiver of such right, power or privilege or otherwise prejudice the
Agent's or such Lender's rights and remedies hereunder; nor shall any single or
partial exercise thereof preclude any further exercise thereof or the exercise
of any other right, power or privilege. No right or remedy conferred upon or
reserved to the Agent or any Lender under any Loan Document is intended to be
exclusive of any other right or remedy, and every right and remedy shall be
cumulative and in addition to every other right or remedy granted thereunder or
now or hereafter existing under any applicable law. Every right and remedy
granted by any Loan Document or by applicable law to the Agent or any Lender may
be exercised from time to time and as often as may be deemed expedient by the
Agent or any Lender.
CREDIT AGREEMENT Page 64
<PAGE> 69
8.4 Reliance on and Survival of Various Provisions. All terms, covenants,
agreements, representations and warranties of the Company and any Guarantor made
herein or in any other Loan Document or in any certificate, report, financial
statement or other document furnished by or on behalf of the Company and any
Guarantor in connection with the negotiation and modification of this Agreement
shall be deemed to have been relied upon by the Lenders, notwithstanding any
investigation heretofore or hereafter made by any Lender or on such Lender's
behalf, and those covenants and agreements of the Company set forth in Section
3.7, 3.9 and 8.5 hereof shall survive the repayment in full of the Advances and
the termination of the Commitments.
8.5 Expenses; Indemnification. (a) The Company agrees to pay, or reimburse
the Agent for the payment of, on demand, (i) the reasonable fees and expenses of
counsel to the Agent, including without limitation the fees and expenses of
Dickinson Wright PLLC and any other counsel retained by the Agent in connection
with the preparation, execution, delivery and administration of the Loan
Documents and the consummation of the transactions contemplated hereby, and in
connection with advising the Agent as to its rights and responsibilities with
respect thereto, and in connection with any amendments, waivers or consents in
connection therewith, and (ii) all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing or
recording of the Loan Security Documents and the consummation of the
transactions contemplated hereby, and any and all liabilities with respect to or
resulting from any delay in paying or omitting to pay such taxes or fees, and
(iii) all reasonable costs and expenses of the Agent (including reasonable fees
and expenses of counsel and whether incurred through negotiations, legal
proceedings or otherwise) in connection with any Unmatured Event or Event of
Default or the enforcement of, or the exercise or preservation of any rights
under, any Loan Document or in connection with any refinancing or restructuring
of the credit arrangements provided under this Agreement and (iv) all reasonable
costs and expenses of the Agent (including reasonable fees and expenses of
counsel) in connection with any action or proceeding relating to a court order,
injunction or other process or decree restraining or seeking to restrain the
Agent from paying any amount under, or otherwise relating in any way to, any
Letter of Credit and any and all costs and expenses which any of them may incur
relative to any payment under any Letter of Credit.
(b) The Company agrees to indemnify each Lender, the Agent and each
of their respective officers, directors, employees and agents (collectively, the
"Indemnified Parties") and hold each Indemnified Party harmless from and against
any and all liabilities, losses, damages, costs and expenses of any kind,
including, without limitation, the reasonable fees and disbursements of counsel,
which may be incurred by any Indemnified Party in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnified Party shall be designated a party thereto) (collectively, the
"Indemnified Liabilities") at any time relating to (whether before or after the
execution of this Agreement) any of the following:
(i) any actual or proposed use of the Advances hereunder by
the Company or any of its Subsidiaries or any transaction financed or to be
financed in whole or in part, directly or indirectly, with the proceeds of any
Advance;
CREDIT AGREEMENT Page 65
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(ii) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties (including any action
brought by or on behalf of the Company as the result of any determination by any
Lender not to make any Advance);
(iii) any investigation, litigation or proceeding related to
any other Acquisition or proposed Acquisition by the Company or any of its
Subsidiaries of all or any portion of the stock or assets of any Person or to
the issuance of, or any other matter relating to, any Subordinated Debt, whether
or not any Indemnified Party is a party thereto;
(iv) any investigation, litigation or proceeding related to
any environmental cleanup, audit, compliance or other matter relating to any
release by the Company or any of its Subsidiaries of any Hazardous Material or
any violations of Environmental Laws; or
(v) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real property
owned or operated by the Company or any Subsidiary thereof of any Hazardous
Material (including any losses, liabilities, damages, injuries, costs, expenses
or claims asserted or arising under any Environmental Law), regardless of
whether caused by, or within the control of, the Company or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the activities of the Indemnified
Party on the property of the Company conducted subsequent to a foreclosure on
such property by any Indemnified Party or by reason of the relevant Indemnified
Party's gross negligence or willful misconduct or breach of this Agreement, and
if and to the extent that the foregoing undertaking may be unenforceable for any
reason, the Company hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. The Company shall be obligated to indemnify
the Indemnified Parties for all Indemnified Liabilities subject to and pursuant
to the foregoing provisions, regardless of whether the Company or any of its
Subsidiaries had knowledge of the facts and circumstances giving rise to such
Indemnified Liability.
Provided that no Indemnified Party shall have the right to be indemnified
hereunder for its own gross negligence or willful misconduct as determined by a
court of competent jurisdiction.
8.6 Successors and Assigns. (a) This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, provided that the Company may not, without the prior consent of all the
Lenders, assign its rights or obligations under any Loan Document and the
Lenders shall not be obligated to make any Advance hereunder to any entity other
than the Company.
(b) Any Lender may sell a participation interest to any financial
institution or institutions, and such financial institution or institutions may
further sell, a participation interest (undivided or divided) in, the Advances
and such Lender's rights and benefits under the Loan Documents, and to the
extent of that participation, such participant or participants shall have the
same rights and benefits against the Company under Section 6.2(c) as it or they
would have had if participation of such participant or participants were the
Lender making the Advances to the Company hereunder, provided, however, that (i)
such Lender's obligations under this Agreement shall remain unmodified and fully
effective and enforceable against such Lender, (ii) such
CREDIT AGREEMENT Page 66
<PAGE> 71
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder of
its Notes for all purposes of this Agreement, (iv) the Company, the Agent and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, (v)
such Lender shall not grant to its participant any rights to consent or withhold
consent to any action taken by such Lender or the Agent under this Agreement
other than action requiring the consent of all of the Lenders hereunder and (iv)
such participation shall in no event be less than $5,000,000. The Agent from
time to time in its sole discretion may appoint agents for the purpose of
servicing and administering this Agreement and the transactions contemplated
hereby and enforcing or exercising any rights or remedies of the Agent provided
under the Loan Documents or otherwise. In furtherance of such agency, the Agent
may from time to time direct that the Company provide notices, reports and other
documents contemplated by this Agreement (or duplicates thereof) to such agent.
The Company hereby consents to the appointment of such agent and agrees to
provide all such notices, reports and other documents and to otherwise deal with
such agent acting on behalf of the Agent in the same manner as would be required
if dealing with the Agent itself.
(c) Each Lender may, with the prior written consent of the Company,
which consent from the Company shall not be unreasonably withheld and may not be
withheld if any Event of Default has occurred and is continuing or if such
assignment is to an Affiliate of a Lender, or to another Lender, and the prior
written consent of the Agent, assign to one or more banks or other entities all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and the Note or Notes held by it); provided, however, that (i) each such
assignment shall be of a uniform, and not a varying, percentage of all rights
and obligations, (ii) except in the case of an assignment of all of a Lender's
rights and obligations under this Agreement, (A) unless such assignment is to
another Lender, the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000, and in integral multiples of $1,000,000 thereafter, or
such lesser amount as the Company and the Agent may consent to and (B) after
giving effect to each such assignment, the amount of the Commitment of the
assigning Lender shall in no event be less than $5,000,000, and (iii) the
parties to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance in the
form of Exhibit I hereto (an "Assignment and Acceptance"), together with any
Note or Notes subject to such assignment and a processing and recordation fee of
$3,500. Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in such Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
CREDIT AGREEMENT Page 67
<PAGE> 72
(d) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Company
or the performance or observance by the Company of any of its obligations under
this Agreement or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section 4.6 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance under the Agent,
such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers and discretion under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vi) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Lender.
(e) The Agent shall maintain at its address designated on the
signature pages hereof a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Advances owing
to, each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Company, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Company or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Company. Within five Business Days after its receipt of such
notice, the Company, at its own expense, shall execute and deliver to the Agent
in exchange for the surrendered Note or Notes a new Note or Notes to the order
of such assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained a
Commitment hereunder, a new Note to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit I hereto.
CREDIT AGREEMENT Page 68
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(g) The Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.6, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Company, provided that assignee or
participant agrees to keep all non public information confidential to the same
extent required by this Agreement.
(h) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in, or assign, all or any
portion of its rights under this Agreement (including, without limitation, the
Loans owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Lender in accordance with Regulation A of the Board of Governors of the
Federal Reserve System; provided that such creation of a security interest or
assignment shall not release such Lender from its obligations under this
Agreement.
8.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.8 Governing Law. This Agreement is a contract made under, and shall be
governed by and construed in accordance with, the law of the State of Illinois
in the same manner applicable to contracts made and to be performed entirely
within such State and without giving effect to choice of law principles of such
State.
8.9 Table of Contents and Headings. The table of contents and the headings
of the various subdivisions hereof are for the convenience of reference only and
shall in no way modify any of the terms or provisions hereof.
8.10 Construction of Certain Provisions. If any provision of this
Agreement refers to any action to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such Person, whether or not expressly
specified in such provision.
8.11 Integration and Severability. This Agreement embodies the entire
agreement and understanding between the Company and the Agent and the Lenders,
and supersedes all prior agreements and understandings, relating to the subject
matter hereof. In case any one or more of the obligations of the Company under
any Loan Document shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
obligations of the Company shall not in any way be affected or impaired thereby,
and such invalidity, illegality or unenforceability in one jurisdiction shall
not affect the validity, legality or enforceability of the obligations of the
Company under any Loan Document in any other jurisdiction.
8.12 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any such covenant, the fact that it would be permitted by an exception to, or
would be otherwise within the limitations of, another covenant shall not avoid
the occurrence of an Unmatured Event or an Event of Default or any event or
condition which with notice or lapse of time, or both, could become such an
Unmatured Event or an Event of Default if such action is taken or such condition
exists.
CREDIT AGREEMENT Page 69
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8.13 Interest Rate Limitation. Notwithstanding any provision of any Loan
Document, in no event shall the amount of interest paid or agreed to be paid by
the Company exceed an amount computed at the highest rate of interest
permissible under applicable law. If, from any circumstances whatsoever,
fulfillment of any provision of any Loan Document at the time performance of
such provision shall be due, shall involve exceeding the interest rate
limitation validly prescribed by law which a court of competent jurisdiction may
deem applicable hereto, then, ipso facto, the obligations to be fulfilled shall
be reduced to an amount computed at the highest rate of interest permissible
under applicable law, and if for any reason whatsoever the Lender shall ever
receive as interest an amount which would be deemed unlawful under such
applicable law such interest shall be automatically applied to the payment of
principal of the Advances outstanding hereunder (whether or not then due and
payable) and not to the payment of interest, or shall be refunded to the Company
if such principal and all other obligations of the Company to the Lenders have
been paid in full.
8.14 Judgment and Payment. (a) If, for the purpose of obtaining judgment
in any court, it is necessary to convert a sum owing hereunder by the Company in
one currency into another currency, the Company agrees, to the fullest extent
that it may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures in the relevant jurisdiction
the relevant Lender could purchase the first currency with such other currency
for the first currency on the Business Day immediately preceding the day on
which the final judgment is given.
(b) The obligations of the Company in respect of any sum due in
Dollars to any party hereto or any holder of the obligations owing hereunder
(the "Applicable Creditor") shall, notwithstanding any payment obligation or
judgment in a currency (the "Payment Currency") other than Dollars, be
discharged only to the extent that, on the Business Day following receipt by the
Applicable Creditor of any sum adjudged to be so due in the Payment Currency,
the Applicable Creditor may in accordance with normal banking procedures in the
relevant jurisdiction purchase Dollars with the Payment Currency; if the amount
of Dollars so purchased is less than the sum originally due to the Applicable
Creditor in Dollars, the Company agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Applicable Creditor against
such loss. The obligations of the Company contained in this Section 8.14 shall
survive the termination of this Agreement and the payment of all other amounts
owing hereunder.
8.15 Year 2000 Problem. The Company and its Subsidiaries have reviewed the
areas within their business and operations which could be adversely affected by,
and have developed or are developing a program to address on a timely basis, the
"Year 2000 Problem" (that is, the risk that computer applications used by the
Company and its Subsidiaries may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999). Based on such review and program, the Company reasonably
believes that the "Year 2000 Problem" will not have a Material Adverse Effect.
8.16 Submission To Jurisdiction; Waivers. The Company hereby irrevocably
and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and
CREDIT AGREEMENT Page 70
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enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of any United States federal or Illinois state court sitting in
Chicago, Illinois and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to the Company at the
address specified in Section 8.2, or at such other address of which the Agent
shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred to in
this subsection any special, exemplary, punitive or consequential damages.
8.17 Acknowledgments. The Company hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) none of the Agent or any Lender has any fiduciary relationship
with or duty to the Company arising out of or in connection with this Agreement
or any of the other Loan Documents, and the relationship between the Agent and
the Lenders, on the one hand, and the Company, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Company and the Lenders.
8.18 Confidentiality. Each Lender agrees to hold any non public
confidential information which it may receive from the Company pursuant to this
Agreement in confidence except for disclosure: (i) to its Affiliates and to
other Lenders and their respective Affiliates, (ii) to legal counsel,
accountants, and other professional advisors to that Lender or to a potential
participant or assignee, (iii) to regulatory officials, (iv) to any Person as
requested pursuant to or as required by law, regulation, or legal process, (v)
to any Person in connection with any legal proceeding to which that Lender is a
party, and (vi) permitted by this Agreement.
8.19 WAIVER OF JURY TRIAL. THE LENDERS AND THE AGENT AND THE COMPANY,
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY
CREDIT AGREEMENT Page 71
<PAGE> 76
LITIGATION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT OR ANY RELATED
INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF EITHER OF THEM. NEITHER ANY LENDER, THE AGENT NOR THE
COMPANY SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION
IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY
TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO
HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY ANY PARTY HERETO EXCEPT BY
A WRITTEN INSTRUMENT EXECUTED BY SUCH PARTY.
CREDIT AGREEMENT Page 72
<PAGE> 77
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the 30th day of March, 1998, which shall be the
Effective Date of this Agreement.
Address for Notices: APCOA, INC.
800 Superior Avenue
Cleveland, Ohio 44114
Attention: General Counsel By: /s/ Michael J. Celebrezze
Facsimile No.: 212-765-8214 -------------------------------
Its:
----------------------------
CREDIT AGREEMENT Page 73
<PAGE> 78
Address for Notices: THE FIRST NATIONAL BANK OF CHICAGO,
611 Woodward Avenue as Agent and as a Lender
Detroit, Michigan 48226
Attention: _____________ By: /s/
Facsimile No.: (313) _____ ----------------------------------
Its: AUTHORIZED AGENT
Commitment: $40,000,000 -------------------------------
CREDIT AGREEMENT Page 74
<PAGE> 79
[OTHER LENDERS]
CHICAGO 7-3134 327282
CREDIT AGREEMENT Page 75
<PAGE> 1
STOCKHOLDERS' AGREEMENT
By and Among
AP HOLDINGS, INC.,
HOLBERG INDUSTRIES, INC.,
DELAWARE NORTH COMPANIES, INC.
And
THE MANAGEMENT INVESTORS
Of
APCOA, INC.
Dated as of April 14, 1989
<PAGE> 2
TABLE OF CONTENTS
PAGE
STOCKHOLDERS' AGREEMENT ................................................... 1
1. Corporate Governance ................................................ 3
1.1 Board of Directors ........................................ 3
1.2 Action by Stockholders .................................... 8
2. Transfers of Common Stock ........................................... 9
2.1 Legends; Shares of Common Stock Subject to this
Agreement ................................................. 9
2.2 Certain Restrictions ...................................... 10
2.3 Transfer to Other Stockholders or to Transferees;
Right of First Offer ...................................... 14
2.4 Sales of Control .......................................... 19
2.5 Merger Transactions ....................................... 23
2.6 Repurchase of Common Stock Held by Management Investors ... 23
2.7 Certain Registration Rights ............................... 24
3. Transfer Of Shares Upon Death Or Disability ......................... 29
3.1 Put to AP in Event of Death, Retirement or
Disability ................................................ 29
3.2 Call in Event of Death, Retirement or
Disability .............................................. 30
3.3 Purchase Price ............................................ 31
3.4 Certain Definitions ....................................... 32
4. Transfer Upon Termination Of Employment ............................. 39
4.1 Put to AP in Event of Termination ......................... 39
<PAGE> 3
PAGE
4.2 Call in Event of Termination .............................. 40
4.3 Purchase Price ............................................ 42
4.4 Sale of the Company ....................................... 45
4.5 Continuation of Employment ................................ 46
5. Residual Rights of Management Investors to
Purchase Shares .................................................... 46
6. Involuntary Transfer Of Shares ...................................... 51
6.1 Certain Involuntary Transfers; Seller's Notice ............ 51
6.2 Right to Repurchase ....................................... 51
6.3 Terms of Purchase ......................................... 52
7. Reservation Of Shares Purchased By AP ............................... 52
8. Closing ............................................................. 52
8.1 Closing ................................................... 52
8.2 Deliveries at Closing; Method of Payment of
Purchase Price ............................................ 53
9. Miscellaneous ....................................................... 54
9.1 Endorsement of Stock Certificates ................................... 54
9.2 Term ...................................................... 55
9.3 Injunctive Relief ......................................... 56
9.4 Notices ................................................... 56
9.5 Administration ............................................ 57
9.6 Successors and Assigns .................................... 57
9.7 Governing Law ............................................. 58
9.8 Headings .................................................. 58
-ii-
<PAGE> 4
PAGE
9.9 Entire Agreement; Amendment ............................... 58
9.10 Inspection ................................................ 61
9.11 Counterparts .............................................. 61
9.12 Gender; Number ............................................ 61
9.13 Further Assurances ........................................ 62
-iii-
<PAGE> 5
STOCKHOLDERS' AGREEMENT
AGREEMENT dated as of April 14, 1989 by and among AP Holdings, Inc.,
a Delaware corporation ("AP"), Holberg Industries, Inc., a Delaware corporation
("Holberg"), Delaware North Companies, Inc., a Delaware corporation ("DNC") and
each of the individuals listed on Schedule A hereto (each such individual is
hereinafter referred to as a "Management Investor" and all such individuals are
sometimes hereinafter collectively referred to as the "Management Investors").
Each of the parties hereto (other than AP) and any other person who shall
hereafter become a party to or agree to be bound by the terms of this Agreement
is sometimes hereinafter referred to as a "Stockholder" and all of such parties
are sometimes hereinafter referred to as the "Stockholders." Any Management
Investor and his or her transferees hereunder are sometimes referred to as
"Management Stockholder(s)." This Agreement shall become effective (the
"Effective Date") on the date of, and simultaneously with, the Closing of the
transactions under the Subscription Agreement (as hereinafter defined).
As of the Effective Date, AP will have an authorized capital stock
consisting of 20,000 shares of Common
<PAGE> 6
Stock, $.01 par value ("AP Common Stock") and 10,000 shares of Preferred Stock,
$.0l par value ("AP Preferred Stock").
AP and each of the Stockholders who are parties to this Agreement
have entered into a Subscription Agreement, dated as of the date hereof (the
"Subscription Agreement"), pursuant to which such Stockholders have subscribed
for shares of AP Common Stock. As of the closing of the transactions
contemplated in the Subscription Agreement, the holdings of Holberg, DNC and the
Management Investors as a group will be substantially as follows:
<TABLE>
<CAPTION>
Number
Stockholder of Shares Percentage
- ----------- --------- ----------
<S> <C> <C>
Holberg 7,326 83.25
DNC 880 10.0
Management Investors 594 6.75
------ ------
8,800 100.0%
====== ======
</TABLE>
AP, APA Acquisition, Inc., a Delaware corporation ("Acquisition")
and wholly owned subsidiary of AP, DNC and APCOA, Inc., a Delaware corporation
("APCOA") and wholly owned subsidiary of DNC, have entered into a Stock Purchase
Agreement dated as of January 27, 1989 (the "Purchase Agreement") providing for
the acquisition (the "Purchase") of the common stock of APCOA from DNC by
Acquisition and AP. APCOA will be owned 97% by Acquisition and 3% by AP after
the Purchase.
- 2 -
<PAGE> 7
The parties hereto deem it in their best interests and in the best
interests of AP and APCOA to provide consistent and uniform management for AP
and APCOA and desire to enter into this Agreement in order to effectuate that
purpose.
The parties hereto also desire to restrict the sale, assignment,
transfer, encumbrance or other disposition of the AP Common Stock, including
issued and outstanding shares of AP Common Stock as well as shares of AP Common
Stock which may be issued hereafter, or which may become issuable pursuant to
the exercise of options granted hereafter, and to provide for certain rights and
obligations in respect thereto as hereinafter provided.
Accordingly, in consideration of the premises and of the terms and
conditions herein contained, the parties hereto mutually agree as follows:
1. Corporate Governance.
1.1. Board of Directors.
(a) Number of Directors. AP shall be governed by a Board of
Directors initially consisting of four members. Such number may be increased or
decreased by Holberg
- 3 -
<PAGE> 8
as provided herein and in AP's Certificate of Incorporation and By-laws.
(b) Nomination of Directors. The following procedures shall govern
the nomination of directors of AP:
(i) The Management Investors shall be entitled to nominate one
director (the "Management Director").
(ii) DNC shall be entitled to nominate one director (the "DNC
Director") so long as it and any of its Permitted Transferees (as
hereinafter defined) continue to hold in the aggregate at least 50%
of the shares of AP Common Stock as it owns on the date hereof.
(iii) Holberg shall be entitled to nominate three directors
(the "Holberg Directors") as well as any additional directors to
fill directorships created by an increase in the size of the Board
of Directors.
(c) Initial Board of Directors. The initial Board of Directors of AP
shall consist of the following members.
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<PAGE> 9
<TABLE>
<CAPTION>
Name of Director Type of Nominee
---------------- ---------------
<S> <C>
G. Walter Stuelpe Management
John V. Holten Holberg
Gunnar E. Klintberg Holberg
Clifford Kaeser DNC
</TABLE>
each of whom shall hold his office until his successor shall have been elected
and qualified.
(d) Removal of Directors. Except as otherwise provided in this
Section 1.1(d) or in Section 1.1(e), each Stockholder agrees not to take any
action to remove, with or without cause, any director of AP. Notwithstanding the
foregoing,
(i) if any director would no longer be entitled to be
nominated as a director pursuant to Section 1.1(b), such director
shall immediately resign or be subject to removal by a vote of the
Stockholders, and
(ii) Holberg, DNC and the Management Investors shall at all
times have the right to recommend the removal, with or without
cause, of the Holberg Directors, the DNC Director and the Management
Director, respectively.
- 5 -
<PAGE> 10
If a director shall fail to resign as required by clause (i) above
or if any of Holberg, DNC or the Management Investors shall determine to
recommend the removal of any directors as provided by clause (ii) above, then
the Stockholders shall immediately cause a special meeting of stockholders to be
called, or shall act by written consent without a meeting, for the purpose of
removing such director, and each Stockholder agrees to vote all his shares
entitled to vote at such meeting, or to execute a written consent in respect of
all shares, as the case may be, in favor of such removal.
(e) Vacancies. At any time a vacancy is created on the Board of
Directors by the death, removal or resignation of any one of the directors, no
action shall be taken (except as provided in this Section 1.1(e)) by the Board
of Directors until such time as the Board is reconstituted with the appropriate
number of directors. If a vacancy is created on the Board of Directors by reason
of the death, removal (in accordance with Section 1.1(d) above) or resignation
of any one of the directors, the remaining directors shall meet within 30 days
after the date such vacancy occurs for the purpose of electing a director to
fill such vacancy in accordance with the nomination procedures set forth in
Section 1.1(b) above. If the remaining directors fail to
- 6 -
<PAGE> 11
nominate a director to fill any such vacancy within such 30-day period or if
the remaining directors fill such vacancy otherwise than in accordance with the
nomination procedures set forth in Section 1.1(b) above, the Stockholders shall
immediately cause a special meeting of stockholders to be called, or shall act
by written consent without a meeting, for the purpose of filling such vacancy
and each Stockholder agrees to vote all his shares entitled to vote at such
meeting, or to execute a written consent in respect of all such shares, as the
case may be, in favor of removing, if necessary, any director elected to fill
such vacancy otherwise than in accordance with Section 1.1(b) above and filling
such vacancy in accordance with the nomination procedures in Section 1.1(b)
above. If the party entitled to nominate a director to fill any such vacancy
shall fail to nominate a director, such vacancy shall be filled by the vote of a
majority of the shares of AP Common Stock then outstanding.
(f) Covenant to Vote. Each of the Stockholders agrees to vote, in
person or by proxy, all of the shares of AP Common Stock owned by such
Stockholder, at any annual or special meeting of stockholders of AP called for
the purpose of voting on the election of directors or by consensual action of
stockholders without a meeting with respect to the election of directors, in
favor of the election of the di-
- 7 -
<PAGE> 12
rectors nominated in accordance with Section 1.1(b) above. Each Stockholder
shall vote the shares of AP Common Stock owned by such Stockholder and shall
take all other actions necessary to ensure that AP's Certificate of
Incorporation and By-laws do not at any time conflict with the provisions of
this Agreement.
(g) Management Investors Governance Procedures. Except as otherwise
provided hereby, any actions to be taken or recommendations to be made hereunder
by the Management Investors as a group shall be determined by the majority vote
of the shares of AP Common Stock owned by the Management Investors as of the
time of such action or recommendation, with each share having one vote. For this
purpose, each Management Investor will be deemed to own shares of AP Common
Stock owned by his Permitted Transferees and shall be deemed not to own any
shares of AP Common Stock which he may acquire upon exercise of any option.
1.2. Action by Stockholders. The Stockholders, by their execution of
this Agreement, hereby approve and adopt the AP Holdings, Inc. Management Stock
Option Plan (effective April 15, 1989), a copy of which is attached hereto as
Exhibit A.
- 8 -
<PAGE> 13
2. Transfers of Common Stock.
2.1. Legends; Shares of Common Stock Subject to this Agreement.
Unless otherwise expressly provided herein, no Stockholder shall sell, assign,
pledge, encumber or otherwise transfer any shares of AP Common Stock to any
person (regardless of the manner in which such Stockholder initially acquired
such shares of AP Common Stock) nor shall AP issue, sell or otherwise transfer
any shares of AP Common Stock to any person (all persons acquiring shares from a
Stockholder or from AP, regardless of the method of transfer, shall be referred
to collectively as "Transferees" and individually as a "Transferee") unless (i)
such shares bear legends as provided in Section 9.1 and (ii) such Transferee
shall have executed and delivered to AP, as a condition precedent to any
acquisition of shares of AP Common Stock, an instrument in form and substance
satisfactory to AP confirming that such Transferee takes such shares subject to
all the terms and conditions of this Agreement; provided that the provisions of
this Section 2.1 shall not apply in respect of a sale of shares included in a
registered public offering under the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations promulgated thereunder. AP
shall not transfer upon its books any shares
- 9 -
<PAGE> 14
of AP Common Stock to any person except in accordance with this Agreement.
2.2. Certain Restrictions. (a) Notwithstanding anything to the
contrary set forth herein: (i) no Stockholder or Stockholder's Transferee shall
directly or indirectly sell, assign, pledge, encumber or otherwise transfer any
shares of AP Common Stock, unless any such sale, assignment, pledge, encumbrance
or other transfer shall have been effected in accordance with the terms of this
Agreement; and (ii) no Management Investor or Management Investor's Transferee
shall, except as provided in Sections 2.2(d) and (e), 2.4, 2.6, 2.7, 3, 4 and 5,
directly or indirectly sell, assign, pledge, encumber or otherwise transfer any
shares of AP Common Stock for a period of five years following the date of
consummation of the Purchase.
(b) No Stockholder shall sell, assign, pledge, encumber or otherwise
transfer any shares of AP Common Stock at any time if such action would
constitute a violation of any state securities or blue sky laws or a breach of
the conditions to any exemption from registration of the AP Common Stock under
any such laws or a breach of any undertaking or agreement of such Stockholder
entered into pursuant to such laws or in connection with obtaining an exemption
- 10 -
<PAGE> 15
thereunder. Each Stockholder agrees that any shares of AP Common Stock to be
purchased by such Stockholder shall bear appropriate legends restricting the
sale or other transfer of such stock in accordance with applicable state
securities or blue sky laws.
(c) No Stockholder shall grant any proxy or enter into or agree to
be bound by any voting trust with respect to the AP Common Stock nor shall any
Stockholder enter into any stockholder agreements or arrangements of any kind
with any person with respect to the AP Common Stock inconsistent with the
provisions of this Agreement (whether or not such agreements and arrangements
are with other Stockholders or holders of AP Common Stock who are not parties to
this Agreement), including but not limited to, agreements or arrangements with
respect to the acquisition, disposition or voting of shares of AP Common Stock,
nor shall any Stockholder act, for any reason, as a member of a group or in
concert with any other persons in connection with the acquisition, disposition
or voting of shares of AP Common Stock in any manner which is inconsistent with
the provisions of this Agreement. Actions taken by the Board of Directors or any
Stockholder in connection with the possible acquisition of AP as contemplated by
this Agreement shall not be deemed prohibited hereunder.
- 11 -
<PAGE> 16
(d) None of the restrictions contained in this Agreement with
respect to transfers of shares of AP Common Stock (other than those set forth in
Sections 2.1, 2.2(a)(i), 2.2(b) and 2.4) shall apply: (i) to any transfer or
assignment for nominal consideration or to any gift by (x) any Management
Investor to any spouse, child, parent or grandchild of such Management Investor
or (y) by any of such relatives to such Management Investor or to any one or
more of such relatives, or by any Management Investor or any such relatives to a
trust of which there are no principal beneficiaries other than one or more of
such relatives; (ii) to any transfer to a legal representative in the event any
Stockholder becomes mentally incompetent; (iii) to any transfer by will or the
laws of descent; and (iv) with respect to a corporate or partnership
Stockholder, to any affiliate (as such term is defined in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) thereof (it
being understood with respect to any affiliate that the later sale or other
disposition of such affiliate would constitute an indirect transfer of AP Common
Stock by such affiliate's controlling person, which transfer may only be made
pursuant to the terms of this Agreement); provided that in each of cases (i)
through (iv) each Transferee, donee or distributee (a "Permitted Transferee")
- 12 -
<PAGE> 17
agrees to take subject to and to comply with the provisions of Section 2.1 and,
in the case of a transfer of AP Common Stock by a corporate or partnership
Stockholder to an affiliate, or by one affiliate to another affiliate of the
same controlling person, such affiliate shall agree to have its shares of common
stock or instrument reflecting its partnership interest legended to note the
restrictions on transfer contained in this Agreement as if they were shares of
AP Common Stock.
(e) A Stockholder shall be entitled to pledge such Stockholder's
shares of AP Common Stock to a commercial bank, savings and loan institution or
any other lending institution as security for any indebtedness of such
Stockholder or AP to such lender; provided that, prior to any such pledge, the
pledgee shall deliver to the Company its written agreement, in form and
substance satisfactory to the Company, that such pledgee shall assume and be
bound by all the terms of this Agreement.
(f) No Management Stockholder shall sell, assign, pledge, encumber
or otherwise transfer any shares of AP Common Stock at any time to any person or
entity directly or indirectly engaged in (or affiliated with any entity directly
or indirectly engaged in) the business of owning or
- 13 -
<PAGE> 18
operating parking lots or garages, unless such sale would result in a change of
control subject to Section 2.4, in which event such a sale may be effected only
in accordance with Section 2.4; provided that any such transfer to any
institutional investor holding securities of such an entity as a passive
investment therein and any such transfers pursuant to a registered public
offering under the Securities Act shall not be prohibited by this Section
2.2(f).
(g) The provisions of Section 2.3 of this Agreement shall not apply
to transfers of shares by any Transferee unaffiliated with any Stockholder,
which shares were acquired pursuant to the terms of this Agreement from a
Stockholder or from a subsequent Transferee of such Stockholder; provided that
any such Transferee agrees to take such shares, and any transfer of such shares
by such Transferee shall be, subject to all the other provisions of this
Agreement.
2.3. Transfer to Other Stockholders or to Transferees; Right of
First Offer. (a) Subject to Section 2.2(a) hereof, except as provided in
Sections 2.2(d), (e) and (g), any Management Stockholder (the "Selling
Stockholder") who desires to sell or otherwise transfer any shares of AP Common
Stock shall first give written notice (a
- 14 -
<PAGE> 19
"Seller's Notice") to AP, Holberg and the remaining Management Investors stating
the Selling Stockholder's desire to make such transfer, the number of shares of
AP Common Stock to be transferred (the "Offered Shares") and the price and terms
pursuant to which the Selling Stockholder proposes to sell the Offered Shares
(the "First Offer Terms").
(b) Upon receipt of the Seller's Notice (the "First Offer"), AP
shall have the irrevocable and exclusive option to buy up to all of the Offered
Shares upon the First Offer Terms; provided that AP shall not have the right to
purchase any of the Offered Shares unless either: (i) AP purchases all such
Offered Shares; or (ii) if AP elects to purchase less than all the Offered
Shares, Holberg elects to purchase all the remaining Offered Shares pursuant to
Section 2.3(c); or (iii) the Selling Stockholder consents to the purchase of
less than all of the Offered Shares. AP's option under this Section 2.3(b) shall
be exercisable by a written notice to the Selling Stockholder, with copies to
Holberg and the remaining Management Investors, given within 15 days from the
date of the Seller's Notice.
(c) If AP does not exercise its option to purchase Offered Shares or
if AP elects to purchase less than all the Offered Shares, then Holberg shall
have the irrevo-
- 15 -
<PAGE> 20
cable and exclusive option, subject to Section 2.4, to purchase all but not less
than all the Offered Shares not purchased by AP. The option of Holberg under
this Section 2.3(c) shall be exercisable by written notice to the Selling
Stockholder, with copies to AP and the remaining Management Investors, given
within 30 days from the date of the Seller's Notice.
(d) If AP and Holberg shall not exercise their options to purchase
the Offered Shares upon the First Offer Terms or do not purchase all shares
offered by the Selling Stockholder, then the remaining Management Investors
shall have the irrevocable and exclusive option to buy all but not less than all
of the Offered Shares upon the First Offer Terms. The option of the remaining
Management Investors under this Section 2.3(d) shall be exercisable by a written
notice to the Selling Stockholder given within 45 days from the date of the
Seller's Notice. The remaining Management Investors shall be free to reallocate
among themselves the right to purchase the Offered Shares described in this
Section 2.3(d). In the event that the remaining Management Investors cannot
agree on such allocation, the Offered Shares shall be purchased, if at all, by
the remaining Management Investors, pro rata in proportion to their respective
owner-
- 16 -
<PAGE> 21
ship interests (including the interests of their Permitted Transferees) in AP at
the time of the Seller's Notice.
(e) If the Seller's Notice shall be duly given, and if AP, Holberg
and the remaining Management Investors shall not exercise their options to
purchase the Offered Shares upon the First Offer Terms or do not purchase all
shares offered by the Selling Stockholder, then the Selling Stockholder shall be
free, for a period of 90 days from the earlier of (i) the 30th day following the
date of the Seller's Notice or (ii) the date the Selling Stockholder shall have
received written notice from AP, Holberg and the remaining Management Investors
stating their intention not to exercise the options granted under Section
2.3(b), (c) and (d), to sell the Offered Shares to any third party Transferee
upon terms equal or superior to the First Offer Terms; provided that the
Transferee complies with the provisions of Section 2.1 of this Agreement.
(f) If a Transferee's proposed terms of purchase for the Offered
Shares are not equal or superior to the First Offer Terms, the Selling
Stockholder shall not sell or otherwise transfer any of the Offered Shares
unless the Selling Stockholder shall first reoffer the Offered Shares at such
lesser price and/or upon such inferior terms to AP,
- 17 -
<PAGE> 22
Holberg and the remaining Management Investors by giving written notice (the
"Reoffer Notice") thereto, stating the Selling Stockholder's intention to make
such transfer upon such terms (the "Reoffer Terms"). AP, Holberg and the
remaining Management Investors shall then have the irrevocable and exclusive
option to purchase up to all of the Offered Shares upon the Reoffer Terms,
exercisable in the same order of priority, proportions and manner as provided in
Sections 2.3(b), (c) and (d). If AP, Holberg or the remaining Management
Investors do not then purchase all the Offered Shares, such Offered Shares may
be sold by the Selling Stockholder within 30 days following the earlier of (i)
the 30th day from the date of the Reoffer Notice or (ii) the date on which the
Selling Stockholder shall have received written notice from AP, Holberg and the
remaining Management Investors stating their intention not to exercise the
option granted in this Section 2.3(f), upon terms equal or superior to the
Reoffer Terms; provided that the Transferee complies with the provisions of
Section 2.1 of this Agreement.
(g) If AP, Holberg or the remaining Management Investors do not
exercise their option to purchase the Offered Shares upon the First Offer Terms
or upon the Reoffer Terms, and the Selling Stockholder shall not have sold the
Offered Shares to any Transferee for any reason before the
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<PAGE> 23
expiration of the 30-day period described in Section 2.3(f)in the event of a
Reoffer or, if no Reoffer Notice is given, the 90-day period described in
Section 2.3(e), then the Selling Stockholder shall not sell any shares of AP
Common Stock for a period of three months from the last day of such 30- or
90-day period, as the case may be and any such sale shall once again be subject
to the provisions of this Section 2.3.
2.4. Sales of Control. (a) If any person or group of persons, as
defined in Section 13(d)(3) of the Exchange Act, including for the purposes of
this Section 2.4 as part of such person's group, Transferees pursuant to
Sections 2.2(d) and (e), would become the beneficial owner, directly or
indirectly, of 50% or more of the outstanding shares of AP Common Stock (such
person or group of persons, but not to include Holberg or its affiliates or
associates, being referred to herein as a "Control Person") as the result of a
sale or other transfer of AP Common Stock by any Stockholder or Stockholders or
by AP (based on one or more pending transfers or offers to purchase or to sell
shares, whether or not the transfers will close or the offers will expire
concurrently), including a sale or transfer of shares of AP Common Stock to AP
which would result in any person or group of persons becoming a Control Person
after such sale
- 19 -
<PAGE> 24
or transfer, no shares of AP Common Stock shall be sold or otherwise
transferred, notwithstanding compliance by the Selling Stockholder or
Stockholders with the other provisions of this Agreement and notwithstanding the
fact that a particular sale or transfer may not be the sale or transfer that
would make a person or group of persons a Control Person, unless the Control
Person shall offer, in writing to each Stockholder (other than DNC and its
transferees), to purchase all shares of AP Common Stock from all Stockholders
who desire to sell, upon the same terms as such Control Person has offered to
purchase shares to be sold by the Selling Stockholder or Stockholders or upon
the same terms as such proposed sale or transfer of shares to AP (the "Offering
Terms"); provided that two or more Stockholders owning in the aggregate 50% or
more of the outstanding shares of AP Common Stock shall not be deemed to be a
group of persons for the purposes of this Section 2.4 solely because such
Stockholders are parties to this Agreement.
(b) The Selling Stockholder or Stockholders or AP, as the case may
be, shall promptly notify the Control Person that the proposed sale or transfer
will be subject to the provisions of this Section 2.4. Within 30 days
thereafter, the Control Person shall give written notice to each Stockholder
(other than DNC and its transferees) of its of-
- 20 -
<PAGE> 25
fer to purchase all the shares of AP Common Stock each Stockholder desires to
sell, such offer being referred to herein as the "Control Offer." Each
Stockholder (other than DNC or its transferees) shall have 30 days from the
receipt of such Control Offer in which to accept such Control Offer. No
Stockholder shall sell his shares to a Control Person or to AP and AP shall not
sell any shares to a Control Person or purchase any shares from any person or
group of persons if such sale or purchase would result in any person or group of
persons becoming a Control Person (based on one or more pending transfers or
offers to purchase or to sell shares, whether or not the transfers will close or
the offers expire concurrently), except in response to an offer made in
compliance with this Section 2.4.
(c) If, during the 30-day period specified in the second sentence of
paragraph 2.4(b) above, AP or any Stockholder shall receive any offer from any
person or group of persons other than the Control Person, or from the Control
Person, to purchase all of the shares of AP Common Stock held by Stockholders
desiring to sell shares on terms superior to the Offering Terms offered to all
Stockholders by the Control Person pursuant to its initial (or any subsequent)
Control Offer or by any offeror other than the Control Person which makes an
offer subsequent to that of the
- 21 -
<PAGE> 26
Control Person, such offer shall be transmitted to all Stockholders (other than
DNC and its transferees) and, to be valid hereunder, must state that it is open
until the 30th day from the date of the Control Offer (or if there are less than
five business days remaining in such period, for five business days). Unless all
the Stockholders (other than DNC and its transferees) desiring to sell their
shares otherwise agree, no shares may be sold or otherwise transferred to any
offeror (or purchased by AP if such purchase would result in any person or group
of persons becoming a Control Person) upon terms not equal or superior to the
best terms offered by an offeror (including the Control Person); and no shares
may be sold or otherwise transferred to any such offeror (or purchased by AP if
such purchase would result in any person or group of persons becoming a Control
Person) unless all shares desired to be sold are accepted in writing for
purchase.
(d) If any offer hereunder is made less than five business days
prior to the end of the 30th day after the date of the Control Offer, such
period shall be deemed extended until the expiration of five business days from
the date such offer is made. If, after the expiration of all offers made under
this Section 2.4 in response to a Control Offer, no sale or transfer has
occurred as a result of which
- 22 -
<PAGE> 27
any person or group of persons has become a Control Person, then, if any
subsequent sale or transfer is proposed and such sale or transfer would result
in any person or group of persons becoming a Control Person (based on one or
more pending transfers or offers to sell shares, whether or not the transfers
will close or the offers expire concurrently), the provisions of this Section
2.4 shall again apply.
2.5. Merger Transactions. Notwithstanding anything contained herein
to the contrary, AP may enter into any agreement to consolidate with or merge
with or into any other corporation if such agreement is approved by the vote of
both the Board of Directors and the holders of at least 66-2/3% of the
outstanding shares of AP Common Stock; and, in such event, Sections 2.2, 2.3 and
2.4 of this Agreement shall not be applicable and all shares of AP Common Stock
may be transferred for such consideration as approved by such vote of the Board
of Directors and the Stockholders, provided that the AP Common Stock owned by
DNC may be so transferred only in accordance with the provisions of a Put/Call
Agreement, dated as of the date hereof, between DNC and AP (the "Put/Call
Agreement").
2.6. Repurchase of Common Stock Held by Management Investors.
Notwithstanding any other provision of this
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<PAGE> 28
Agreement, a Management Investor and/or such Management Investor's Permitted
Transferees may (but shall not be obligated to) sell to AP, and AP may (but
shall not be obligated to) purchase from a Management Investor and/or such
Management Investor's Permitted Transferees, shares of AP Common Stock held by
such Management Investor and/or such Management Investor's Permitted Transferees
upon such terms (including price) as they may mutually agree in writing.
2.7. Certain Registration Rights. (a) In the event that AP shall
file a registration statement under the Securities Act in connection with the
proposed offer and sale for cash of shares of AP Common Stock (i) by it, in the
case of a primary registration, or (ii) by any party to this Agreement, in the
case of a secondary registration, other than in each case a registration on Form
S-4 or Form S-8 promulgated under the Securities Act or any successor or similar
form, AP will give written notice of its determination to DNC and each
Management Investor and each of their Permitted Transferees (each one
individually, a "Holder", and collectively, the "Holders"). Upon the written
request of a Holder given to AP within 30 days after the mailing of any such
notice by AP, AP will cause all shares of AP Common Stock which such Holder has
requested to have registered to be included in such registration statement;
provided, that
- 24 -
<PAGE> 29
if the managing underwriter, in the case of any underwritten public offering,
determines and advises in writing that in its opinion the number of shares of AP
Common Stock to be registered by AP in a primary registration, or on behalf of
either any other party to this Agreement or all other Holders in a permitted
secondary registration exceeds the number of shares of AP Common Stock which can
be sold in such offering (the "Salable Shares"), then AP will include in such
registration (i) first, the shares of AP Common Stock AP proposes to sell, in
the case of a primary registration, and (ii) second, the shares of AP Common
Stock to be sold by any person other than AP (including shares requested to be
included in such registration pursuant to this Section 2.7(a)), reduced pro rata
among such persons so that the total number of shares of AP Common Stock
registered for sale will not exceed the Salable Shares.
(b) In the event any Holder requests that shares of AP Common Stock
be registered and sold pursuant to Section 2.7(a) above, AP and the other
parties to this Agreement shall use their respective best efforts to cause such
shares of AP Common Stock to be registered and sold as part of the offering
which AP notified such holders of pursuant to Section 2.7(a) above, including,
without limitation, filing all documents which are necessary or appropriate with
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<PAGE> 30
the Securities and Exchange Commission and with any state securities commissions
or authorities. AP shall select the underwriter of any such offering. All costs
and expenses of registering any Holder's shares for sale pursuant to Section
2.7(a) above shall be borne by AP.
(c) AP will indemnify and hold harmless each Holder participating in
a registration pursuant to this Section 2.7 from and against any and all loss,
damage, liability, cost and expense to which such Holder may become subject
under the Securities Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement or alleged
untrue statement of any material fact contained in such registration statement,
any prospectus contained therein or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading; provided, however, that AP will not be liable in any such case to
the extent that any such loss, damage, liability, cost or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in strict conformity
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<PAGE> 31
with written information furnished by such Holder specifically for use in the
preparation thereof.
(d) Each Holder participating in a registration pursuant to this
Section 2.7 will indemnify and hold harmless the other Holders, AP, and AP's
officers, directors and each person, if any, who controls AP within the meaning
of the Securities Act, from and against any and all loss, damage, liability,
cost or expense to which such other Holders or AP or such officer, director or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, damages, liabilities, costs or expenses are caused by
any untrue statement or alleged untrue statement of any material fact contained
therein or any amendment or supplement thereto, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was so made in reliance upon
and in strict conformity with written information furnished by such Holder
specifically for use in the preparation thereof.
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<PAGE> 32
(e) Promptly after receipt by an indemnified party pursuant to the
provisions of Section 2.7(c) or (d) of notice of the commencement of any action
involving the subject matter of the foregoing indemnity provision, such
indemnified party will, if a claim therefor is to be made against the
indemnifying party pursuant to the provisions of Section 2.7(c) or (d), promptly
notify the indemnifying party of the commencement thereof; but the omission to
so notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than hereunder. In the event such
action is brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party shall have the right
to participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party; provided, however, that if the
defendants in any action include both the indemnified party and the indemnifying
party and there is a conflict of interest which would prevent counsel for the
indemnifying party from also representing the indemnified party, the indemnified
party shall have the right to select separate counsel to participate in the
defense of such action on behalf of such indemnified party. After no-
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<PAGE> 33
tice from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party pursuant to the provisions of Section 2.7(c) or (d) for any
legal or other expense subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation, unless (i) the indemnified party shall have employed counsel in
accordance with the provisions of the preceding sentence, (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after the notice of the
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party.
3. Transfer Of Shares Upon Death Or Disability.
3.1. Put to AP in Event of Death, Retirement or Disability. Subject
to any financing agreements entered into in connection with the Purchase or any
other instruments or agreements of APCOA or AP from time to time in effect
restricting (including indirectly through restrictions of dividend payments by
APCOA) or otherwise governing the repurchase or retirement of shares of AP's
capital stock (the "Loan Agreements") and to applicable law, unless a call
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<PAGE> 34
pursuant to Section 3.2 shall have been exercised by AP, upon the death,
Retirement or Complete Disability of any Management Investor, at the option of
such Management Investor, such Management Investor's estate, heirs or personal
representative, and/or such Management Investor's Permitted Transferees
(collectively, the "Holders" of such Management Investor's shares) and within 30
days of receipt by AP of a Seller's Notice from such Holders, which notice must
be given within twelve months from the appointment of a personal representative
or three months from the date of such Management Investor's Retirement or six
months from the date of his Complete Disability, AP shall purchase from such
Holders all the shares of AP Common Stock held by such Holders specified in such
Seller's Notice at a purchase price determined in accordance with Section 3.3.
AP shall be under no obligation to purchase such shares unless it shall have
received a Seller's Notice from such Holders in accordance with this Section
3.1.
3.2. Call in Event of Death, Retirement or Disability. Unless a put
granted in Section 3.1 shall have been exercised with respect to all the shares
of AP Common Stock held by the Holders of any Management Investor's shares, AP
shall have an exclusive and irrevocable option, for a period of three months
following the appointment of a
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<PAGE> 35
personal representative or from the date of any such Management Investor's
Retirement or Complete Disability, to purchase up to all the shares of AP Common
Stock held by such Holders at the price determined in accordance with Section
3.3; provided that AP may not, without the consent of any such Holder, purchase
less than all the shares held by any such Holder.
3.3. Purchase Price. (a) The purchase price per share for the shares
of AP Common Stock purchased pursuant to Section 3.1 or 3.2 above shall be the
greatest of (i) Investment Price, (ii) Adjusted Book Value and (iii) CCO Value
(as such terms are hereinafter defined). Adjusted Book Value and CCO Value shall
be determined by AP using accounting principles then in effect and as applied by
AP and shall be accompanied by a letter from AP's independent accountants
stating that the calculations made by AP have been made in accordance with the
applicable provisions of this Agreement. AP may satisfy its obligations to
purchase shares upon the exercise of any put or call granted pursuant to Section
3.1 or 3.2 hereof with cash in an amount not less than the Investment Price and
with Notes (as hereinafter defined) for any amount in excess of the Investment
Price; provided, however, that if any portion of the cash purchase price payable
for any shares purchased pursuant to Section 3.1 or 3.2
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<PAGE> 36
above may not be paid as a result of direct or indirect restrictions imposed by
the Loan Agreements or by applicable law, such portion shall, subject to the
Loan Agreements and to applicable law, be payable by the delivery of Notes in
the principal amount of such portion; provided, however, that, notwithstanding
any direct or indirect restrictions imposed by the Loan Agreements or by
applicable law, AP and the other parties to this Agreement shall use their
respective best efforts to enable AP to pay the full amount of the cash purchase
price payable for any shares purchased pursuant to Section 3.1 or 3.2 above,
including, without limitation, taking necessary measures to create sufficient
surplus and/or to obtain the consent of any parties to the Loan Agreements, and,
in any event, AP shall pay that portion of the cash purchase price payable for
any shares purchased pursuant to Section 3.1 or 3.2 above which was not paid as
a result of direct or indirect restrictions imposed by the Loan Agreements or by
applicable law as soon as AP may pay such amount in cash without violating the
terms of any Loan Agreements or any applicable law.
3.4. Certain Definitions. As used in Sections 3 and 4 of this
Agreement, the following terms shall have the meanings set forth below:
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<PAGE> 37
(a) "CCO" shall mean the cash contribution from operations for the four
fiscal quarters (for which financial statements are then available) immediately
preceding the date of exercise of any put or call pursuant to Section 3 or 4 of
this Agreement, as certified by AP's independent public accountants for the four
fiscal year quarters which constitute any fiscal year and as determined for any
other period in a manner consistent with that used in making such determination
for AP's most recently ended fiscal year.
(b) "CCO Value" shall mean CCO times 6.84, minus the amount of debt
reflected in AP's most recent quarterly or year-end consolidated financial
statements, divided by the number of fully diluted shares. "Debt" referred to in
the preceding sentence shall mean all indebtedness of any kind, and shall
include, without limitation, (i) current maturities, any outstanding preferred
stock and accrued dividends (excluding current year) thereon and any outstanding
subordinated debt, but shall exclude (ii) trade payables, accrued current
expenses, accrued current taxes, and accrued current interest charges, all of
which are in the ordinary course of business, and shall also exclude
indebtedness incurred in connection with the purchase of real
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<PAGE> 38
estate if such purchase is unrelated to the business currently conducted by
APCOA. Also for purposes of the preceding calculation, fully diluted shares
shall be equal to the weighted average number of shares of AP Common Stock
outstanding plus common share equivalents, computed in accordance with the
methodology prescribed in Accounting Principles Board Opinion No. 15 plus vested
management options to purchase AP Common Stock, plus the AP Common Stock that
DNC will have the right to purchase under its warrant (the "DNC Warrant"),
provided that such warrant shall only be considered outstanding if the fair
market value of the AP Common Stock subject thereto exceeds the exercise price
thereof. In addition, fully diluted shares as referred to in the preceding
sentence shall exclude any shares of AP Common Stock which would otherwise be
included under Accounting Principles Board Opinion No. 15 but which were
purchased by AP either pursuant to the terms of this Agreement or from DNC but
only if and to the extent indebtedness was incurred by AP in connection with the
purchase of such AP Common Stock.
(c) "Note" shall mean a subordinated promissory note of AP substantially
in the form of Exhibit B to this Agreement.
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<PAGE> 39
(d) "Investment Price" shall mean the price per share of AP Common Stock
that such Management Investor paid for such shares.
(e) "Adjusted Book Value" shall mean the book value per share of AP Common
Stock, calculated by dividing (A) the sum of (x) stockholders' equity reflected
in AP's most recent quarterly or year-end consolidated financial statements,
plus (y) the amount, if any, of the adjustment to stockholders' equity required
to reflect aggregate projected losses set forth on Schedule B to this Agreement
through the date of the most recently completed fiscal year for which financial
statements are available, plus (z) the total proceeds to be realized by AP upon
the exercise of all outstanding dilutive stock options were such options
exercised on the date of valuation and the DNC Warrant by (B) shares of AP
Common Stock outstanding plus the AP Common Stock subject to the DNC Warrant
(provided that such warrant shall only be considered outstanding if the fair
market value of the AP Common Stock subject thereto exceeds the exercise price
thereof), plus total outstanding dilutive stock options. For purposes of this
calculation, stock options shall be considered dilutive if the exercise price
per share is less than per
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<PAGE> 40
share Adjusted Book Value calculated without regard to outstanding stock
options.
(f) "Retirement" shall mean the earlier of either (i) a Management
Investor's attainment of "early retirement age" or "normal retirement age," as
such terms are defined in any tax-qualified retirement plan sponsored by AP or
any affiliate (as such term is defined for this purpose only in Section 414(b)
of the Code) or AP in which the Management Investor participates, or (ii) the
Management Investor's attainment of age 65.
(g) "Complete Disability" shall mean any physical or mental impairment or
disability which prevents a Management Investor from performing the duties of
his occupation for a period of at least 120 days and which is expected to be of
permanent duration. A determination of whether a Management Investor is disabled
shall be made by two licensed physicians, one appointed by the Board of
Directors of AP and one appointed by the Management Investor. In the event the
two physicians are unable to agree with respect to whether the Management
Investor is disabled, the determination of whether the Management Investor is
disabled shall be made by a
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<PAGE> 41
third duly licensed physician chosen by the two physicians previously appointed.
(h) "Cause" shall mean either (i) a material failure by a Management
Investor for some reason other than illness, injury or disability to perform his
obligations as an employee of AP (including any obligations under any written
employment agreement to which the Management Investor is a party), provided that
the Management Investor shall have first received written notice from APCOA or
AP stating with specificity the nature of such failure and the Management
Investor shall not have corrected the failure cited in such notice within 30
days after his receipt thereof; or (ii) the Management Investor's commission of
either any felony involving moral turpitude or any crime in the conduct of his
official duties as an employee of APCOA or AP which is materially adverse to the
welfare of APCOA or AP; or (iii) the Management Investor's commission of any
material act of fraud against APCOA or AP or material misuse of his position for
personal gain or that of any third party; or (iv) the Management Investor's
taking any action (other than an error in judgment made in the ordinary course
of his duties as an employee of APCOA or AP) which is materially adverse to the
welfare
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<PAGE> 42
of APCOA or AP, including, but not limited to, any material breach of any
covenants in any written employment agreement to which the Management Investor
is a party which concern noncompetition and nondisclosure of confidential
information.
(i) "Good Reason" shall mean, without the Management Investor's express
written consent, the occurrence of either or both of the following:
1. a change in the duties and responsibilities of his position such that a
substantial reduction occurs from the duties and responsibilities that were in
effect either as of the date of this Agreement or, if later, immediately prior
to the change in responsibilities; and
2. a reduction by the Company, of 15% or more, in his base salary as in
effect on the date hereof, or as the same shall be increased from time to time,
except a reduction consistent with salary reductions of all personnel on the
exempt payroll.
(j) "Termination" shall mean, when used to refer to the employment of a
Management Investor, such Inves-
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<PAGE> 43
tor's ceasing to be regularly employed by AP or a subsidiary or affiliate of AP.
4. Transfer Upon Termination Of Employment.
4.1. Put to AP in Event of Termination. Subject to the direct or
indirect restrictions imposed by the Loan Agreements and to applicable law,
unless a call granted pursuant to Section 4.2 shall have been exercised by AP,
upon the termination of employment of any Management Investor for any reason
other than death, Retirement or Complete Disability, at the option of any
terminated Management Investor and/or such Management Investor's Permitted
Transferees, and within three months of receipt by AP of a Seller's Notice from
such Management Investor and/or such Management Investor's Permitted
Transferees, AP shall purchase up to all the shares of AP Common Stock held by
such Management Investor and/or such Management Investor's Permitted
Transferees, at a purchase price determined in accordance with Section 4.3(a),
in the event of a Termination by AP or its affiliates without Cause, or a
voluntary Termination by such Management Investor with Good Reason, or a
voluntary Termination by such Management Investor without Good Reason (but only
on or after the third anniversary of the date of this Agreement), or in
accordance with Section 4.3(b), in the event of a Termination by AP or its
affiliates with Cause or
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<PAGE> 44
a voluntary Termination by the Management Investor without Good Reason (but only
if such Termination occurs prior to the third anniversary of the of this
Agreement). AP shall be under no obligation to purchase such shares unless it
shall have received a Seller's Notice in accordance with this Section 4.1, which
Notice must be sent within 30 days from the date of termination.
4.2. Call in Event of Termination. Unless a put granted under
Section 4.1 shall have been exercised with respect to all the shares of AP
Common Stock held by any terminated Management Investor and/or such Management
Investor's Permitted Transferees, AP shall have an exclusive and irrevocable
option, for a period of 30 days following the termination of employment of any
Management Investor as set forth in Section 4.1, to purchase up to all of the
shares of AP Common Stock owned by such terminated Management Investor and/or
such Management Investor's Permitted Transferees, at a purchase price determined
in accordance with Section 4.3(a), in the event of a Termination by AP or its
affiliates without Cause, or a voluntary Termination by such Management Investor
with Good Reason, or a voluntary Termination by such Management Investor without
Good Reason (but only or after the third anniversary of the date of this
Agreement), or in accordance with Section 4.3(b), in the
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<PAGE> 45
event of a Termination by AP or its affiliates with Cause, or a voluntary
Termination by the Management Investor without Good Reason (but only if such
Termination occurs prior to the third anniversary of the date of this
Agreement); provided that AP may not, without the consent of such Management
Investor and/or such Management Investor's Permitted Transferees, purchase less
than all of the shares of AP Common Stock owned by such Management Investor
and/or such Management Investor's Permitted Transferees; provided further, that,
in the event a Management Investor's employment is terminated, if by AP or the
Company, without Cause, or if by the Management Investor, for Good Reason, then
if the purchase price for any share of AP Common Stock (assuming such share was
sold to AP pursuant to this Section 4.2), determined in accordance with Section
4.3 at the end of the four calendar quarters which immediately follow the date
any shares of AP Common Stock are actually sold to AP pursuant to this Section
4.2, would exceed the purchase price paid for any share actually sold to AP
pursuant to this Section 4.3, the purchase price for any such share shall be
increased by the amount of such excess, and such increase shall be paid to the
seller of any such shares as soon as practicable following the end of such
twelve-month period in the same manner as provided in Section 4.3.
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<PAGE> 46
4.3 Purchase Price. (a) The purchase price per share for any shares
of AP Common Stock shall be equal to the greater of (i) Investment Price, (ii)
Adjusted Book Value and (iii) CCO Value.
(b) The purchase price per share for any shares of AP Common Stock
shall be, in the event of a termination with Cause, equal to the lowest of (i)
Investment Price, (ii) Adjusted Book Value, and (iii) CCO Value, and, in the
event of a voluntary Termination without Good Reason, Investment Price.
(c) For purposes of Section 4.3(a) and 4.3(b), Adjusted Book Value
and CCO Value shall be determined by AP using accounting principles then in
effect and as applied by AP and shall be accompanied by a letter from AP's
independent accountants stating that the calculations made by AP have been made
in accordance with the applicable provisions of this Agreement. AP may satisfy
its obligations to purchase shares upon the exercise of any put or call granted
pursuant to Section 4.1 or 4.2 hereof with cash in an amount not less than the
Investment Price and with Notes for any amount in excess of the Investment
Price; provided, however, that, in the event of a Management Investor's
involuntary termination of employment, if by AP or APCOA, without Cause,
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<PAGE> 47
or if by the Management Investor, with Good Reason, AP shall satisfy its
obligations to purchase shares upon the exercise of any put or call granted
pursuant to Section 4.1 or Section 4.2 hereof with cash except to the extent
that cash may not be paid as a result of restrictions imposed by the Loan
Agreements or by applicable law. Notwithstanding any other provision of this
Section 4.3, if any portion of the cash purchase price payable for any shares
purchased pursuant to Section 4.1 or 4.2 may not be paid as a result of
restrictions imposed by the Loan Agreements or by applicable law, such portion
shall, subject to the Loan Agreements and to applicable law, be payable by the
delivery of Notes in the principal amount of such portion; provided, however,
that, notwithstanding any restrictions imposed by the Loan Agreements or by
applicable law, AP and the other parties to this Agreement shall use their
respective best efforts to enable AP to pay the full amount of the cash purchase
price payable for any shares purchased pursuant to Section 4.1 or 4.2 above,
including, without limitation, taking necessary measures to create sufficient
surplus and/or to obtain the consent of any parties to the Loan Agreement, and,
in any event, AP shall pay that portion of the cash purchase price payable for
any shares purchased pursuant to Section 4.1 or 4.2 above which was not paid as
a result of restrictions im-
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<PAGE> 48
posed by the Loan Agreements or by applicable law as soon as AP may pay such
amount in cash without violating the terms of any Loan Agreements or any
applicable law.
Notwithstanding anything in the foregoing to the contrary, in the
event that a Management Investor voluntarily terminates his employment with AP
or an AP affiliate without Good Reason and is paid the purchase price specified
in Section 4.3(a) hereof, and a Sale of the Company or a merger involving AP or
an AP affiliate occurs within three months after such termination of employment,
and the Board of Directors of AP determines in good faith that such Termination
was in anticipation of such Sale of the Company or merger, then the per share
purchase price paid to such Management Investor for his shares of AP Common
Stock, if greater than the per share consideration (as determined by the Board
of Directors in good faith) paid to stockholders in such Sale of the Company or
merger, shall be reduced to be equal to the per share consideration paid in such
Sale of the Company or merger, and any documents or instruments (including,
without limitation, any Note) which were executed in connection with the prior
sale of shares of AP Common Stock by such Management Investor shall be deemed
amended to give effect to the decision of the Board of Directors in such regard.
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<PAGE> 49
4.4. Sale of the Company. (a) Each of the parties to this Agreement
acknowledges that, at the time of a sale by a Management Investor and/or his
Permitted Transferees of shares of AP Common Stock pursuant to Section 3 or 4 of
this Agreement, there may be proposed or pending a transaction or series of
transactions involving the sale of 50% or more of the outstanding shares of AP
Common Stock (either to an entity, person or group of persons acting in concert
or pursuant to a public offering registered under the Securities Act) or the
redemption or repurchase of all the shares of AP Common Stock in connection with
a sale of all or substantially all the assets of AP, or the winding up,
dissolution or liquidation of AP (any such transaction or series of transactions
being hereinafter referred to as a "Sale of the Company"), and that AP may have
valid business reasons not to, and in any event may not be required to, disclose
any such proposed or pending Sale of the Company to such Management Investor
and/or his Permitted Transferees at the time of any such sale.
(b) If, within 270 days from the date of a sale of shares of AP
Common Stock to AP by a Management Investor and/or his Permitted Transferees
pursuant to Section 3 or 4, other than such a sale from a Management Investor
whose employment was terminated for Cause or who voluntarily re-
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<PAGE> 50
signed without Good Reason, a transaction involving a Sale of the Company is
effected then AP and/or the purchaser of such shares of AP Common Stock shall
pay to such Management Investor and/or his Permitted Transferees the excess, if
any, of the amount per share realized by AP's stockholders (other than DNC) upon
such Sale of the Company over the purchase price per share paid by AP to such
Management Investor and/or his Permitted Transferees pursuant to Section 3 or 4,
less the interest paid on any Notes paid as consideration for such shares for
the period from the date of purchase pursuant to Section 3 or 4 to the date of
such Sale of the Company, for each share purchased by AP pursuant to Section 3
or 4 from such Management Investor and/or such Permitted Transferees.
4.5. Continuation of Employment. Neither this Agreement nor the
ownership of AP Common Stock by a Management Investor shall confer upon any
Management Investor any right to continue in the employ of APCOA or limit in any
respect the right of APCOA to terminate his employment at any time.
5. Residual Rights of Management Investors to Purchase Shares.
5.1. (a) With respect to
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<PAGE> 51
(i) any issuance by AP of AP Common Stock (the "Shares to be
Issued"), other than pursuant to management stock
options or pursuant to exercise of the DNC Warrant; or
(ii) any issuance by AP of any security (the Securities")
convertible into AP Common Stock but only if any part of
the new issue is to be purchased by Holberg or any
affiliate of Holberg;
to any individual, corporation, partnership, association, trust or other entity
or organization, including any government or political subdivision or an agency
or instrumentality thereof (a "Person"), AP shall notify each Management
Investor in writing of the proposed issuance, the number of Shares to be Issued
or amount of Securities to be issued, the date on or about which such issuance
is to be consummated and the price and other terms and conditions thereof, at
least 45 days prior to the proposed date for such issuance. For a period of 30
days after a Management Investor's receipt of the notice referred to in the
preceding sentence, such Management Investor shall have the option to purchase,
upon the same price, terms and conditions as such Shares to be Issued or
Securities are proposed to be issued to any Person, that number of such Shares
to be Issued or amount of Securities as may be necessary to increase the number
of shares of AP Common Stock owned by such Management Investor on a
fully-diluted basis (assuming that all management op-
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<PAGE> 52
tions were fully vested and exercised, that DNC's warrants to purchase AP Common
Stock were exercised and, in the case of Securities, assuming conversion of such
Securities into AP Common Stock) to provide that the percentage of all of the
fully-diluted shares of AP Common Stock owned by such Management Investor
immediately after the date of issuance to such Person is not less than the
percentage of all of the fully-diluted shares of AP Common Stock owned by such
Management Investor immediately prior to the date of issuance to such Person. If
a Management Investor exercises his purchase option under this Section 5, he
shall purchase such Shares to be Issued or Securities at the time of
consummation of the issuance of Shares to be Issued or Securities to such
Person.
(b) In the event that, pursuant to Section 2 or 3 or 4 hereof, AP
and/or Holberg shall purchase any shares of AP Common Stock from any Management
Investor or such Management Investor's Permitted Transferees ("Reacquired
Shares"), AP shall make such shares available for purchase within the
twelve-month period following the date AP and/or Holberg shall have purchased
such shares and on the terms set forth below to new or promoted AP or APCOA
management employees (other than the Chief Executive Officer of APCOA) who are
selected by the Chief Executive Officers of APCOA
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<PAGE> 53
after consultation with the Board of Directors of AP. In addition, Holberg shall
make available for purchase by an APCOA management employee 66 shares (the
"Extra Shares") of AP Common Stock purchased by it pursuant to the Subscription
Agreement within the twelve-month period following the initial subscription of
shares thereunder. Holberg shall transfer to AP as a capital contribution such
number of shares of AP Common Stock as shall be necessary to give effect to the
provisions of this Section 5.1(b). Such Reacquired Shares may be purchased by
any such AP or APCOA management employee at the same price and upon the same
terms (including any later adjustment to the price required by Section 4.2 or
4.4 hereof) as the prior purchase by AP and/or Holberg pursuant to Section 2 or
3 or 4 hereof. Such Extra Shares may be purchased by any such AP or APCOA
management employee at the same per share price paid by Holberg for such shares
pursuant to the Subscription Agreement.
(c) To the extent that any Reacquired Shares or Extra Shares are not
sold, within the periods and to the persons required by Section 5.1(b) above,
the remaining Management Investors shall have the option to purchase any such
shares from AP for a period of 30 days following the expiration of such
twelve--month period. The option to purchase such shares granted to the
remaining Management Investors
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<PAGE> 54
pursuant to this Section 5.1(c) shall be exercisable (i) as to Reacquired
Shares, at the same price and upon the same terms as the prior purchase
(including any later adjustment to the price required by Section 4.2 or 4.4
hereof) by AP and/or Holberg pursuant to Section 2 or 3 or 4 hereof and (ii) as
to Extra Shares, at the same per share price paid by Holberg for such shares
pursuant to the Subscription Agreement, and shall be allocated among the
remaining Management Investors in such manner as they may determine. In the
event that the remaining Management Investors cannot agree on such allocation,
the option to purchase such shares granted by this Section 5.1(c) shall be
allocated among the remaining Management Investors pro rata in accordance with
their respective ownership interests (including the interests of their Permitted
Transferees) in AP at the expiration of such twelve-month period. Holberg shall
transfer to AP as a capital contribution such number of shares of AP Common
Stock as shall be necessary to give effect to the provisions of this Section
5.1(b). The option may be exercised by the delivery of written notice to AP at
any time within the 30-day period described above.
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<PAGE> 55
6. Involuntary Transfer Of Shares.
6.1. Certain Involuntary Transfers; Seller's Notice. If a
Stockholder shall involuntarily transfer directly or indirectly any or all of
his shares, for any reason other than as a result of those events specified in
Section 3 or 4, such Stockholder shall give written notice within 30 days of
such involuntary transfer to AP and the other Stockholders, with a copy to the
Transferee, stating the fact that the involuntary transfer occurred, the reason
therefor, the date of the transfer, the name and address of the Transferee and
the number of Shares acquired by the Transferee.
6.2. Right to Repurchase. For a period of 60 days from the date of
receipt of the Seller's Notice or, failing receipt of such notice, 60 days from
the date AP sends written notice to the Transferee that the transfer is deemed
to be an involuntary transfer subject to repurchase under this Agreement, AP and
Holberg shall have the irrevocable and exclusive option to buy all of the
Offered Shares, exercisable in the same order of priority, proportion and manner
as provided in Sections 2.3(a), (b) and (c), and the provisions of Sections
2.3(a), (b) and (c) shall be followed
- 51 -
<PAGE> 56
in their entirety except that the terms of purchase shall be as provided in
Section 6.3.
6.3. Terms of Purchase. The terms of purchase for shares purchased
pursuant to Section 6.2 shall be determined pursuant to Section 4.3 as though
such shares were being purchased pursuant to Section 4.1 or 4.2.
7. Reservation Of Shares Purchased By AP.
Subject to Section 5 hereof, any shares of AP Common Stock purchased
by AP from a Management Investor or such Management Investor's personal
representative, estate or heirs or Permitted Transferees pursuant to this
Agreement shall be retired and cancelled.
8. Closing.
8.1. Closing. Any Selling Stockholder and the parties hereto who are
purchasing any of the Offered Shares pursuant to this Agreement shall mutually
determine a closing date (the "Closing Date") which shall not be more than five
business days, subject to any applicable regulatory waiting periods, after the
date upon which a purchaser shall have the right to purchase shares in
accordance with this Agreement. The closing shall be held at 11:00 a.m., local
- 52 -
<PAGE> 57
time, at the offices of AP, or at such other time or place as the parties may
agree.
8.2. Deliveries at Closing; Method of Payment of Purchase Price. On
the Closing Date, any Selling Stockholder shall deliver certificates with
appropriate transfer tax stamps affixed and with stock powers endorsed in blank,
representing the shares of AP Common Stock to be purchased by the persons
exercising their options hereunder each of whom shall deliver to such
Stockholder, by means of certified check payable in New York Clearing House
funds, his portion of the purchase price which is payable in cash and his
portion of the other consideration, if any, to be paid in exchange for such
shares. In addition, if the person selling shares is the personal representative
of a deceased Stockholder, the personal representative shall also deliver to the
purchaser or purchasers (i) copies of letters testamentary or letters of
administration evidencing his appointment and qualification, (ii) a certificate
issued by the Internal Revenue Service pursuant to Section 6325 of the Internal
Revenue Code of 1986, as amended (the "Code"), discharging the shares being sold
from liens imposed by the Code and (iii) an estate tax waiver issued by the
state of the decedent's domicile.
- 53 -
<PAGE> 58
9. Miscellaneous.
9.1. Endorsement of Stock Certificates. A copy of this Agreement
shall be filed with the Secretary of AP and kept with the records of AP. Each of
the Stockholders hereby agrees that each outstanding certificate representing
shares of AP Common Stock (other than those shares which, following the
termination of this Agreement pursuant to Section 9.2 below, have not been
registered under the Securities Act, which shares shall bear only the
endorsement set forth in paragraph (a) below) shall bear endorsements reading
substantially as followings:
(a) "The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be transferred, sold or otherwise disposed of except
pursuant to an effective registration statement or pursuant to
an exemption from registration, under the Act."
(b) "The shares represented by this certificate are subject to
certain rights of the Corporation and the Stockholders of the
Corporation to repurchase such shares and certain rights of
the registered holder to sell such shares to the Corporation
on the terms and conditions set forth in a Stockholders'
Agreement dated as of April 14, 1989, a copy of which may be
obtained from the Corporation or from the holder of this
certificate. No transfer of such shares will be made on the
books of the Corporation unless accompanied by evidence of
compliance with the terms of such Agreement."
- 54 -
<PAGE> 59
Such certificate shall bear any additional endorsement which may be required for
compliance with state securities or blue sky laws or as may be required under
the Subscription Agreement. If, for any reason, any shares of AP Common Stock
are no longer subject to the restrictions and provisions of this Agreement, AP
shall promptly issue a new certificate for such shares without the restrictive
endorsement set forth in paragraph (b) above upon the request of the record
owner of the shares and the surrender to AP of a certificate bearing such
endorsement.
9.2. Term. The provisions of this Agreement, other than Article 1,
shall terminate on the date of the first to occur of any of the following
events: (i) the closing of the sale of 25% or more of the shares of AP Common
Stock to the public in an underwritten initial public offering pursuant to a
Registration Statement under the Securities Act of 1933; or (ii) the closing of
the sale of shares of AP Common Stock to any person or group of persons as a
result of which any person or group of persons (other than Holberg) owns,
beneficially or of record, 50% or more of the outstanding shares of AP Common
Stock; or (ii) 10 years from the date of this Agreement.
- 55 -
<PAGE> 60
9.3. Injunctive Relief. It is hereby agreed and acknowledged that it
will be impossible to measure in money the damages that would be suffered if the
parties fail to comply with any of the obligations herein imposed on them and
that in the event of any such failure, an aggrieved person will be irreparably
damaged and will not have an adequate remedy at law. Any such person shall,
therefore, be entitled to injunctive relief, including specific performance, to
enforce such obligations, and if any action should be brought in equity to
enforce any of the provisions of this Agreement, none of the parties hereto
shall raise the defense that there is an adequate remedy at law.
9.4. Notices. All notices, statements, instructions or other
documents required to be given hereunder, shall be in writing and shall be given
either personally, or by mailing the same in a sealed envelope, first-class
mail, postage prepaid and either certified or registered, return receipt
requested, addressed to AP at its principal offices and to the other parties at
their addresses reflected in the stock records of AP, except that such notices
to DNC shall be given to Delaware North Companies, Incorporated, 700 Delaware
Avenue, Buffalo, New York 14209, attention: Law Department. Each Stockholder, by
written notice given to AP in accordance with this Section 9.4 may change the
address
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<PAGE> 61
to which notices, statements, instructions or other documents are to be sent to
such Stockholder. All notices, statements, instructions and other documents
hereunder that are mailed shall be deemed to have been given on the date of
mailing. Whenever pursuant to this Agreement any notice is required to be given
by any Stockholder to any other Stockholder, such Stockholder may request from
AP a list of addresses of all Stockholders of AP, which list shall be promptly
furnished to such Stockholder.
9.5. Administration. In the event of any First Offer, Reoffer, or
Control Offer, or the occurrence of any event with entitles any Stockholder to
exercise any put or call granted herein, AP shall administer and coordinate the
exercise of such put or call, including the determination, where applicable, of
each participating Stockholder's proportionate share.
9.6. Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties, and their respective successors
and assigns. If any Transferee of any Stockholder shall acquire any shares of AP
Common Stock in any manner, whether by operation of law or otherwise, such
shares shall be held subject to all of the terms of this Agreement, and by
taking and holding
- 57 -
<PAGE> 62
such shares such person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement.
9.7. Governing Law. Regardless of the place of execution, this
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware applicable to agreements made and to be wholly performed in
such State.
9.8. Headings. Paragraph headings inserted herein for convenience
only and do not form a part of this Agreement.
9.9. Entire Agreement; Amendment. This Agreement contains the entire
agreement among the parties hereto with respect to the transactions contemplated
herein, supersedes all prior written agreements and negotiations and oral
understandings, if any, and may not be amended, supplemented or discharged
except by performance or by an instrument in writing signed by AP, DNC, Holberg
and the Chief Executive Officer of APCOA, as authorized representative of the
Management Investors, or such other authorized representative as the Management
Investor shall designate in writing, and by any Stockholder or Transferee
holding at least 5% of the outstanding shares of AP Common Stock. In the event
of the
- 58 -
<PAGE> 63
amendment or modification of this Agreement in accordance with its terms, the
Stockholders shall cause the Board of Directors of AP to meet within 30 days
following such amendment, modification or termination or as soon thereafter as
is practicable for the purpose of amending the Certificate of Incorporation and
By-Laws of AP, as may be required as a result of such amendment or modification,
and proposing such amendments to the stockholders of AP entitled to vote
thereon, and such action shall be the first action to be taken at such meeting.
In the event that any Stockholder or AP shall be required, as a result of the
enactment, amendment or modification, subsequent to the date hereof, of any
applicable law or regulation, or by the order of any governmental authority, to
take any action which is inconsistent with or which would constitute a violation
or breach of any terms of this Agreement, then the Stockholders and AP shall use
their best efforts to negotiate an appropriate amendment or modification of, or
waiver of compliance with, such terms.
9.10. Inspection. So long as this Agreement shall be in effect, this
Agreement shall be made available for inspection by any stockholder of AP at the
principal offices of AP.
- 59 -
<PAGE> 64
9.11. 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.
9.12. Gender; Number. The use of the feminine, masculine or neuter
pronoun herein shall not be restrictive as to gender and shall be interpreted in
all cases as the context may require. The use of the singular or plural herein
shall not be restrictive as to number and shall be interpreted in all cases as
the context may require.
9.13. Further Assurances. The parties to this Agreement shall
execute and deliver to the appropriate persons any other documents and
instruments in addition to those provided for herein that may be necessary or
appropriate to give effect to the provisions of this Agreement.
- 60 -
<PAGE> 65
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be duly executed on the date first written above.
AP HOLDINGS, INC.
By /s/ John V. Holten
---------------------------
John V. Holten
HOLBERG INDUSTRIES, INC.
By /s/ John V. Holten
---------------------------
John V. Holten
By /s/ G. Walter Stuelpe, Jr.
---------------------------
G. Walter Stuelpe, Jr.
By /s/ James v. LaRocco
---------------------------
James V. LaRocco
By /s/ Michael J. Machi
---------------------------
Michael J. Machi
By /s/ John F. Becka
---------------------------
John F. Becka
By /s/ Ronald A. Kinney
---------------------------
Ronald A. Kinney
By /s/ Robert J. Hill
---------------------------
Robert J. Hill
By /s/ Kenneth J. Levine
---------------------------
Kenneth J. Levine
By /s/ Robert N. Sacks
---------------------------
Robert N. Sacks
By /s/ William J. Girgash
---------------------------
William J. Girgash
- 61 -
<PAGE> 66
By /s/ Michael J. Celebrezze
---------------------------
Michael J. Celebrezze
DELAWARE NORTH COMPANIES, INC.
By /s/
---------------------------
- 62 -
<PAGE> 1
STOCKHOLDERS' AGREEMENT
AGREEMENT dated as of April 14, 1989 by and among AP Holdings, Inc.,
a Delaware corporation ("AP"), Holberg Industries, Inc., a Delaware corporation
("Holberg"), Delaware North Companies, Inc., a Delaware corporation ("DNC") and
each of the individuals listed on Schedule A hereto (each such individual is
hereinafter referred to as a "Management Investor" and all such individuals are
sometimes hereinafter collectively referred to as the "Management Investors").
Each of the parties hereto (other than AP) and any other person who shall
hereafter become a party to or agree to be bound by the terms of this Agreement
is sometimes hereinafter referred to as a "Stockholder" and all of such parties
are sometimes hereinafter referred to as the "Stockholders." Any Management
Investor and his or her transferees hereunder are sometimes referred to as
"Management Stockholder(s)." This Agreement shall become effective (the
"Effective Date") on the date of, and simultaneously with, the Closing of the
transactions under the Subscription Agreement (as hereinafter defined).
As of the Effective Date, AP will have an authorized capital stock
consisting of 20,000 shares of Common
<PAGE> 2
Stock, $.01 par value ("AP Common Stock") and 10,000 shares of Preferred Stock,
$.0l par value ("AP Preferred Stock").
AP and each of the Stockholders who are parties to this Agreement
have entered into a Subscription Agreement, dated as of the date hereof (the
"Subscription Agreement"), pursuant to which such Stockholders have subscribed
for shares of AP Common Stock. As of the closing of the transactions
contemplated in the Subscription Agreement, the holdings of Holberg, DNC and the
Management Investors as a group will be substantially as follows:
<TABLE>
<CAPTION>
Number
Stockholder of Shares Percentage
- ----------- --------- ----------
<S> <C> <C>
Holberg 7,326 83.25
DNC 880 10.0
Management Investors 594 6.75
------ ------
8,800 100.0%
====== ======
</TABLE>
AP, APA Acquisition, Inc., a Delaware corporation ("Acquisition")
and wholly owned subsidiary of AP, DNC and APCOA, Inc., a Delaware corporation
("APCOA") and wholly owned subsidiary of DNC, have entered into a Stock Purchase
Agreement dated as of January 27, 1989 (the "Purchase Agreement") providing for
the acquisition (the "Purchase") of the common stock of APCOA from DNC by
Acquisition and AP. APCOA will be owned 97% by Acquisition and 3% by AP after
the Purchase.
- 2 -
<PAGE> 3
The parties hereto deem it in their best interests and in the best
interests of AP and APCOA to provide consistent and uniform management for AP
and APCOA and desire to enter into this Agreement in order to effectuate that
purpose.
The parties hereto also desire to restrict the sale, assignment,
transfer, encumbrance or other disposition of the AP Common Stock, including
issued and outstanding shares of AP Common Stock as well as shares of AP Common
Stock which may be issued hereafter, or which may become issuable pursuant to
the exercise of options granted hereafter, and to provide for certain rights and
obligations in respect thereto as hereinafter provided.
Accordingly, in consideration of the premises and of the terms and
conditions herein contained, the parties hereto mutually agree as follows:
1. Corporate Governance.
1.1. Board of Directors.
(a) Number of Directors. AP shall be governed by a Board of
Directors initially consisting of four members. Such number may be increased or
decreased by Holberg
- 3 -
<PAGE> 4
as provided herein and in AP's Certificate of Incorporation and By-laws.
(b) Nomination of Directors. The following procedures shall govern
the nomination of directors of AP:
(i) The Management Investors shall be entitled to nominate one
director (the "Management Director").
(ii) DNC shall be entitled to nominate one director (the "DNC
Director") so long as it and any of its Permitted Transferees (as
hereinafter defined) continue to hold in the aggregate at least 50%
of the shares of AP Common Stock as it owns on the date hereof.
(iii) Holberg shall be entitled to nominate three directors
(the "Holberg Directors") as well as any additional directors to
fill directorships created by an increase in the size of the Board
of Directors.
(c) Initial Board of Directors. The initial Board of Directors of AP
shall consist of the following members.
- 4 -
<PAGE> 5
<TABLE>
<CAPTION>
Name of Director Type of Nominee
---------------- ---------------
<S> <C>
G. Walter Stuelpe Management
John V. Holten Holberg
Gunnar E. Klintberg Holberg
Clifford Kaeser DNC
</TABLE>
each of whom shall hold his office until his successor shall have been elected
and qualified.
(d) Removal of Directors. Except as otherwise provided in this
Section 1.1(d) or in Section 1.1(e), each Stockholder agrees not to take any
action to remove, with or without cause, any director of AP. Notwithstanding the
foregoing,
(i) if any director would no longer be entitled to be
nominated as a director pursuant to Section 1.1(b), such director
shall immediately resign or be subject to removal by a vote of the
Stockholders, and
(ii) Holberg, DNC and the Management Investors shall at all
times have the right to recommend the removal, with or without
cause, of the Holberg Directors, the DNC Director and the Management
Director, respectively.
- 5 -
<PAGE> 6
If a director shall fail to resign as required by clause (i) above
or if any of Holberg, DNC or the Management Investors shall determine to
recommend the removal of any directors as provided by clause (ii) above, then
the Stockholders shall immediately cause a special meeting of stockholders to be
called, or shall act by written consent without a meeting, for the purpose of
removing such director, and each Stockholder agrees to vote all his shares
entitled to vote at such meeting, or to execute a written consent in respect of
all shares, as the case may be, in favor of such removal.
(e) Vacancies. At any time a vacancy is created on the Board of
Directors by the death, removal or resignation of any one of the directors, no
action shall be taken (except as provided in this Section 1.1(e)) by the Board
of Directors until such time as the Board is reconstituted with the appropriate
number of directors. If a vacancy is created on the Board of Directors by reason
of the death, removal (in accordance with Section 1.1(d) above) or resignation
of any one of the directors, the remaining directors shall meet within 30 days
after the date such vacancy occurs for the purpose of electing a director to
fill such vacancy in accordance with the nomination procedures set forth in
Section 1.1(b) above. If the remaining directors fail to
- 6 -
<PAGE> 7
nominate a director to fill any such vacancy within such 30-day period or if
the remaining directors fill such vacancy otherwise than in accordance with the
nomination procedures set forth in Section 1.1(b) above, the Stockholders shall
immediately cause a special meeting of stockholders to be called, or shall act
by written consent without a meeting, for the purpose of filling such vacancy
and each Stockholder agrees to vote all his shares entitled to vote at such
meeting, or to execute a written consent in respect of all such shares, as the
case may be, in favor of removing, if necessary, any director elected to fill
such vacancy otherwise than in accordance with Section 1.1(b) above and filling
such vacancy in accordance with the nomination procedures in Section 1.1(b)
above. If the party entitled to nominate a director to fill any such vacancy
shall fail to nominate a director, such vacancy shall be filled by the vote of a
majority of the shares of AP Common Stock then outstanding.
(f) Covenant to Vote. Each of the Stockholders agrees to vote, in
person or by proxy, all of the shares of AP Common Stock owned by such
Stockholder, at any annual or special meeting of stockholders of AP called for
the purpose of voting on the election of directors or by consensual action of
stockholders without a meeting with respect to the election of directors, in
favor of the election of the di-
- 7 -
<PAGE> 8
rectors nominated in accordance with Section 1.1(b) above. Each Stockholder
shall vote the shares of AP Common Stock owned by such Stockholder and shall
take all other actions necessary to ensure that AP's Certificate of
Incorporation and By-laws do not at any time conflict with the provisions of
this Agreement.
(g) Management Investors Governance Procedures. Except as otherwise
provided hereby, any actions to be taken or recommendations to be made hereunder
by the Management Investors as a group shall be determined by the majority vote
of the shares of AP Common Stock owned by the Management Investors as of the
time of such action or recommendation, with each share having one vote. For this
purpose, each Management Investor will be deemed to own shares of AP Common
Stock owned by his Permitted Transferees and shall be deemed not to own any
shares of AP Common Stock which he may acquire upon exercise of any option.
1.2. Action by Stockholders. The Stockholders, by their execution of
this Agreement, hereby approve and adopt the AP Holdings, Inc. Management Stock
Option Plan (effective April 15, 1989), a copy of which is attached hereto as
Exhibit A.
- 8 -
<PAGE> 9
2. Transfers of Common Stock.
2.1. Legends; Shares of Common Stock Subject to this Agreement.
Unless otherwise expressly provided herein, no Stockholder shall sell, assign,
pledge, encumber or otherwise transfer any shares of AP Common Stock to any
person (regardless of the manner in which such Stockholder initially acquired
such shares of AP Common Stock) nor shall AP issue, sell or otherwise transfer
any shares of AP Common Stock to any person (all persons acquiring shares from a
Stockholder or from AP, regardless of the method of transfer, shall be referred
to collectively as "Transferees" and individually as a "Transferee") unless (i)
such shares bear legends as provided in Section 9.1 and (ii) such Transferee
shall have executed and delivered to AP, as a condition precedent to any
acquisition of shares of AP Common Stock, an instrument in form and substance
satisfactory to AP confirming that such Transferee takes such shares subject to
all the terms and conditions of this Agreement; provided that the provisions of
this Section 2.1 shall not apply in respect of a sale of shares included in a
registered public offering under the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations promulgated thereunder. AP
shall not transfer upon its books any shares
- 9 -
<PAGE> 10
of AP Common Stock to any person except in accordance with this Agreement.
2.2. Certain Restrictions. (a) Notwithstanding anything to the
contrary set forth herein: (i) no Stockholder or Stockholder's Transferee shall
directly or indirectly sell, assign, pledge, encumber or otherwise transfer any
shares of AP Common Stock, unless any such sale, assignment, pledge, encumbrance
or other transfer shall have been effected in accordance with the terms of this
Agreement; and (ii) no Management Investor or Management Investor's Transferee
shall, except as provided in Sections 2.2(d) and (e), 2.4, 2.6, 2.7, 3, 4 and 5,
directly or indirectly sell, assign, pledge, encumber or otherwise transfer any
shares of AP Common Stock for a period of five years following the date of
consummation of the Purchase.
(b) No Stockholder shall sell, assign, pledge, encumber or otherwise
transfer any shares of AP Common Stock at any time if such action would
constitute a violation of any state securities or blue sky laws or a breach of
the conditions to any exemption from registration of the AP Common Stock under
any such laws or a breach of any undertaking or agreement of such Stockholder
entered into pursuant to such laws or in connection with obtaining an exemption
- 10 -
<PAGE> 11
thereunder. Each Stockholder agrees that any shares of AP Common Stock to be
purchased by such Stockholder shall bear appropriate legends restricting the
sale or other transfer of such stock in accordance with applicable state
securities or blue sky laws.
(c) No Stockholder shall grant any proxy or enter into or agree to
be bound by any voting trust with respect to the AP Common Stock nor shall any
Stockholder enter into any stockholder agreements or arrangements of any kind
with any person with respect to the AP Common Stock inconsistent with the
provisions of this Agreement (whether or not such agreements and arrangements
are with other Stockholders or holders of AP Common Stock who are not parties to
this Agreement), including but not limited to, agreements or arrangements with
respect to the acquisition, disposition or voting of shares of AP Common Stock,
nor shall any Stockholder act, for any reason, as a member of a group or in
concert with any other persons in connection with the acquisition, disposition
or voting of shares of AP Common Stock in any manner which is inconsistent with
the provisions of this Agreement. Actions taken by the Board of Directors or any
Stockholder in connection with the possible acquisition of AP as contemplated by
this Agreement shall not be deemed prohibited hereunder.
- 11 -
<PAGE> 12
(d) None of the restrictions contained in this Agreement with
respect to transfers of shares of AP Common Stock (other than those set forth in
Sections 2.1, 2.2(a)(i), 2.2(b) and 2.4) shall apply: (i) to any transfer or
assignment for nominal consideration or to any gift by (x) any Management
Investor to any spouse, child, parent or grandchild of such Management Investor
or (y) by any of such relatives to such Management Investor or to any one or
more of such relatives, or by any Management Investor or any such relatives to a
trust of which there are no principal beneficiaries other than one or more of
such relatives; (ii) to any transfer to a legal representative in the event any
Stockholder becomes mentally incompetent; (iii) to any transfer by will or the
laws of descent; and (iv) with respect to a corporate or partnership
Stockholder, to any affiliate (as such term is defined in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) thereof (it
being understood with respect to any affiliate that the later sale or other
disposition of such affiliate would constitute an indirect transfer of AP Common
Stock by such affiliate's controlling person, which transfer may only be made
pursuant to the terms of this Agreement); provided that in each of cases (i)
through (iv) each Transferee, donee or distributee (a "Permitted Transferee")
- 12 -
<PAGE> 13
agrees to take subject to and to comply with the provisions of Section 2.1 and,
in the case of a transfer of AP Common Stock by a corporate or partnership
Stockholder to an affiliate, or by one affiliate to another affiliate of the
same controlling person, such affiliate shall agree to have its shares of common
stock or instrument reflecting its partnership interest legended to note the
restrictions on transfer contained in this Agreement as if they were shares of
AP Common Stock.
(e) A Stockholder shall be entitled to pledge such Stockholder's
shares of AP Common Stock to a commercial bank, savings and loan institution or
any other lending institution as security for any indebtedness of such
Stockholder or AP to such lender; provided that, prior to any such pledge, the
pledgee shall deliver to the Company its written agreement, in form and
substance satisfactory to the Company, that such pledgee shall assume and be
bound by all the terms of this Agreement.
(f) No Management Stockholder shall sell, assign, pledge, encumber
or otherwise transfer any shares of AP Common Stock at any time to any person or
entity directly or indirectly engaged in (or affiliated with any entity directly
or indirectly engaged in) the business of owning or
- 13 -
<PAGE> 14
operating parking lots or garages, unless such sale would result in a change of
control subject to Section 2.4, in which event such a sale may be effected only
in accordance with Section 2.4; provided that any such transfer to any
institutional investor holding securities of such an entity as a passive
investment therein and any such transfers pursuant to a registered public
offering under the Securities Act shall not be prohibited by this Section
2.2(f).
(g) The provisions of Section 2.3 of this Agreement shall not apply
to transfers of shares by any Transferee unaffiliated with any Stockholder,
which shares were acquired pursuant to the terms of this Agreement from a
Stockholder or from a subsequent Transferee of such Stockholder; provided that
any such Transferee agrees to take such shares, and any transfer of such shares
by such Transferee shall be, subject to all the other provisions of this
Agreement.
2.3. Transfer to Other Stockholders or to Transferees; Right of
First Offer. (a) Subject to Section 2.2(a) hereof, except as provided in
Sections 2.2(d), (e) and (g), any Management Stockholder (the "Selling
Stockholder") who desires to sell or otherwise transfer any shares of AP Common
Stock shall first give written notice (a
- 14 -
<PAGE> 15
"Seller's Notice") to AP, Holberg and the remaining Management Investors stating
the Selling Stockholder's desire to make such transfer, the number of shares of
AP Common Stock to be transferred (the "Offered Shares") and the price and terms
pursuant to which the Selling Stockholder proposes to sell the Offered Shares
(the "First Offer Terms").
(b) Upon receipt of the Seller's Notice (the "First Offer"), AP
shall have the irrevocable and exclusive option to buy up to all of the Offered
Shares upon the First Offer Terms; provided that AP shall not have the right to
purchase any of the Offered Shares unless either: (i) AP purchases all such
Offered Shares; or (ii) if AP elects to purchase less than all the Offered
Shares, Holberg elects to purchase all the remaining Offered Shares pursuant to
Section 2.3(c); or (iii) the Selling Stockholder consents to the purchase of
less than all of the Offered Shares. AP's option under this Section 2.3(b) shall
be exercisable by a written notice to the Selling Stockholder, with copies to
Holberg and the remaining Management Investors, given within 15 days from the
date of the Seller's Notice.
(c) If AP does not exercise its option to purchase Offered Shares or
if AP elects to purchase less than all the Offered Shares, then Holberg shall
have the irrevo-
- 15 -
<PAGE> 16
cable and exclusive option, subject to Section 2.4, to purchase all but not less
than all the Offered Shares not purchased by AP. The option of Holberg under
this Section 2.3(c) shall be exercisable by written notice to the Selling
Stockholder, with copies to AP and the remaining Management Investors, given
within 30 days from the date of the Seller's Notice.
(d) If AP and Holberg shall not exercise their options to purchase
the Offered Shares upon the First Offer Terms or do not purchase all shares
offered by the Selling Stockholder, then the remaining Management Investors
shall have the irrevocable and exclusive option to buy all but not less than all
of the Offered Shares upon the First Offer Terms. The option of the remaining
Management Investors under this Section 2.3(d) shall be exercisable by a written
notice to the Selling Stockholder given within 45 days from the date of the
Seller's Notice. The remaining Management Investors shall be free to reallocate
among themselves the right to purchase the Offered Shares described in this
Section 2.3(d). In the event that the remaining Management Investors cannot
agree on such allocation, the Offered Shares shall be purchased, if at all, by
the remaining Management Investors, pro rata in proportion to their respective
owner-
- 16 -
<PAGE> 17
ship interests (including the interests of their Permitted Transferees) in AP at
the time of the Seller's Notice.
(e) If the Seller's Notice shall be duly given, and if AP, Holberg
and the remaining Management Investors shall not exercise their options to
purchase the Offered Shares upon the First Offer Terms or do not purchase all
shares offered by the Selling Stockholder, then the Selling Stockholder shall be
free, for a period of 90 days from the earlier of (i) the 30th day following the
date of the Seller's Notice or (ii) the date the Selling Stockholder shall have
received written notice from AP, Holberg and the remaining Management Investors
stating their intention not to exercise the options granted under Section
2.3(b), (c) and (d), to sell the Offered Shares to any third party Transferee
upon terms equal or superior to the First Offer Terms; provided that the
Transferee complies with the provisions of Section 2.1 of this Agreement.
(f) If a Transferee's proposed terms of purchase for the Offered
Shares are not equal or superior to the First Offer Terms, the Selling
Stockholder shall not sell or otherwise transfer any of the Offered Shares
unless the Selling Stockholder shall first reoffer the Offered Shares at such
lesser price and/or upon such inferior terms to AP,
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<PAGE> 18
Holberg and the remaining Management Investors by giving written notice (the
"Reoffer Notice") thereto, stating the Selling Stockholder's intention to make
such transfer upon such terms (the "Reoffer Terms"). AP, Holberg and the
remaining Management Investors shall then have the irrevocable and exclusive
option to purchase up to all of the Offered Shares upon the Reoffer Terms,
exercisable in the same order of priority, proportions and manner as provided in
Sections 2.3(b), (c) and (d). If AP, Holberg or the remaining Management
Investors do not then purchase all the Offered Shares, such Offered Shares may
be sold by the Selling Stockholder within 30 days following the earlier of (i)
the 30th day from the date of the Reoffer Notice or (ii) the date on which the
Selling Stockholder shall have received written notice from AP, Holberg and the
remaining Management Investors stating their intention not to exercise the
option granted in this Section 2.3(f), upon terms equal or superior to the
Reoffer Terms; provided that the Transferee complies with the provisions of
Section 2.1 of this Agreement.
(g) If AP, Holberg or the remaining Management Investors do not
exercise their option to purchase the Offered Shares upon the First Offer Terms
or upon the Reoffer Terms, and the Selling Stockholder shall not have sold the
Offered Shares to any Transferee for any reason before the
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<PAGE> 19
expiration of the 30-day period described in Section 2.3(f)in the event of a
Reoffer or, if no Reoffer Notice is given, the 90-day period described in
Section 2.3(e), then the Selling Stockholder shall not sell any shares of AP
Common Stock for a period of three months from the last day of such 30- or
90-day period, as the case may be and any such sale shall once again be subject
to the provisions of this Section 2.3.
2.4. Sales of Control. (a) If any person or group of persons, as
defined in Section 13(d)(3) of the Exchange Act, including for the purposes of
this Section 2.4 as part of such person's group, Transferees pursuant to
Sections 2.2(d) and (e), would become the beneficial owner, directly or
indirectly, of 50% or more of the outstanding shares of AP Common Stock (such
person or group of persons, but not to include Holberg or its affiliates or
associates, being referred to herein as a "Control Person") as the result of a
sale or other transfer of AP Common Stock by any Stockholder or Stockholders or
by AP (based on one or more pending transfers or offers to purchase or to sell
shares, whether or not the transfers will close or the offers will expire
concurrently), including a sale or transfer of shares of AP Common Stock to AP
which would result in any person or group of persons becoming a Control Person
after such sale
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<PAGE> 20
or transfer, no shares of AP Common Stock shall be sold or otherwise
transferred, notwithstanding compliance by the Selling Stockholder or
Stockholders with the other provisions of this Agreement and notwithstanding the
fact that a particular sale or transfer may not be the sale or transfer that
would make a person or group of persons a Control Person, unless the Control
Person shall offer, in writing to each Stockholder (other than DNC and its
transferees), to purchase all shares of AP Common Stock from all Stockholders
who desire to sell, upon the same terms as such Control Person has offered to
purchase shares to be sold by the Selling Stockholder or Stockholders or upon
the same terms as such proposed sale or transfer of shares to AP (the "Offering
Terms"); provided that two or more Stockholders owning in the aggregate 50% or
more of the outstanding shares of AP Common Stock shall not be deemed to be a
group of persons for the purposes of this Section 2.4 solely because such
Stockholders are parties to this Agreement.
(b) The Selling Stockholder or Stockholders or AP, as the case may
be, shall promptly notify the Control Person that the proposed sale or transfer
will be subject to the provisions of this Section 2.4. Within 30 days
thereafter, the Control Person shall give written notice to each Stockholder
(other than DNC and its transferees) of its of-
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<PAGE> 21
fer to purchase all the shares of AP Common Stock each Stockholder desires to
sell, such offer being referred to herein as the "Control Offer." Each
Stockholder (other than DNC or its transferees) shall have 30 days from the
receipt of such Control Offer in which to accept such Control Offer. No
Stockholder shall sell his shares to a Control Person or to AP and AP shall not
sell any shares to a Control Person or purchase any shares from any person or
group of persons if such sale or purchase would result in any person or group of
persons becoming a Control Person (based on one or more pending transfers or
offers to purchase or to sell shares, whether or not the transfers will close or
the offers expire concurrently), except in response to an offer made in
compliance with this Section 2.4.
(c) If, during the 30-day period specified in the second sentence of
paragraph 2.4(b) above, AP or any Stockholder shall receive any offer from any
person or group of persons other than the Control Person, or from the Control
Person, to purchase all of the shares of AP Common Stock held by Stockholders
desiring to sell shares on terms superior to the Offering Terms offered to all
Stockholders by the Control Person pursuant to its initial (or any subsequent)
Control Offer or by any offeror other than the Control Person which makes an
offer subsequent to that of the
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<PAGE> 22
Control Person, such offer shall be transmitted to all Stockholders (other than
DNC and its transferees) and, to be valid hereunder, must state that it is open
until the 30th day from the date of the Control Offer (or if there are less than
five business days remaining in such period, for five business days). Unless all
the Stockholders (other than DNC and its transferees) desiring to sell their
shares otherwise agree, no shares may be sold or otherwise transferred to any
offeror (or purchased by AP if such purchase would result in any person or group
of persons becoming a Control Person) upon terms not equal or superior to the
best terms offered by an offeror (including the Control Person); and no shares
may be sold or otherwise transferred to any such offeror (or purchased by AP if
such purchase would result in any person or group of persons becoming a Control
Person) unless all shares desired to be sold are accepted in writing for
purchase.
(d) If any offer hereunder is made less than five business days
prior to the end of the 30th day after the date of the Control Offer, such
period shall be deemed extended until the expiration of five business days from
the date such offer is made. If, after the expiration of all offers made under
this Section 2.4 in response to a Control Offer, no sale or transfer has
occurred as a result of which
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<PAGE> 23
any person or group of persons has become a Control Person, then, if any
subsequent sale or transfer is proposed and such sale or transfer would result
in any person or group of persons becoming a Control Person (based on one or
more pending transfers or offers to sell shares, whether or not the transfers
will close or the offers expire concurrently), the provisions of this Section
2.4 shall again apply.
2.5. Merger Transactions. Notwithstanding anything contained herein
to the contrary, AP may enter into any agreement to consolidate with or merge
with or into any other corporation if such agreement is approved by the vote of
both the Board of Directors and the holders of at least 66-2/3% of the
outstanding shares of AP Common Stock; and, in such event, Sections 2.2, 2.3 and
2.4 of this Agreement shall not be applicable and all shares of AP Common Stock
may be transferred for such consideration as approved by such vote of the Board
of Directors and the Stockholders, provided that the AP Common Stock owned by
DNC may be so transferred only in accordance with the provisions of a Put/Call
Agreement, dated as of the date hereof, between DNC and AP (the "Put/Call
Agreement").
2.6. Repurchase of Common Stock Held by Management Investors.
Notwithstanding any other provision of this
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<PAGE> 24
Agreement, a Management Investor and/or such Management Investor's Permitted
Transferees may (but shall not be obligated to) sell to AP, and AP may (but
shall not be obligated to) purchase from a Management Investor and/or such
Management Investor's Permitted Transferees, shares of AP Common Stock held by
such Management Investor and/or such Management Investor's Permitted Transferees
upon such terms (including price) as they may mutually agree in writing.
2.7. Certain Registration Rights. (a) In the event that AP shall
file a registration statement under the Securities Act in connection with the
proposed offer and sale for cash of shares of AP Common Stock (i) by it, in the
case of a primary registration, or (ii) by any party to this Agreement, in the
case of a secondary registration, other than in each case a registration on Form
S-4 or Form S-8 promulgated under the Securities Act or any successor or similar
form, AP will give written notice of its determination to DNC and each
Management Investor and each of their Permitted Transferees (each one
individually, a "Holder", and collectively, the "Holders"). Upon the written
request of a Holder given to AP within 30 days after the mailing of any such
notice by AP, AP will cause all shares of AP Common Stock which such Holder has
requested to have registered to be included in such registration statement;
provided, that
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<PAGE> 25
if the managing underwriter, in the case of any underwritten public offering,
determines and advises in writing that in its opinion the number of shares of AP
Common Stock to be registered by AP in a primary registration, or on behalf of
either any other party to this Agreement or all other Holders in a permitted
secondary registration exceeds the number of shares of AP Common Stock which can
be sold in such offering (the "Salable Shares"), then AP will include in such
registration (i) first, the shares of AP Common Stock AP proposes to sell, in
the case of a primary registration, and (ii) second, the shares of AP Common
Stock to be sold by any person other than AP (including shares requested to be
included in such registration pursuant to this Section 2.7(a)), reduced pro rata
among such persons so that the total number of shares of AP Common Stock
registered for sale will not exceed the Salable Shares.
(b) In the event any Holder requests that shares of AP Common Stock
be registered and sold pursuant to Section 2.7(a) above, AP and the other
parties to this Agreement shall use their respective best efforts to cause such
shares of AP Common Stock to be registered and sold as part of the offering
which AP notified such holders of pursuant to Section 2.7(a) above, including,
without limitation, filing all documents which are necessary or appropriate with
- 25 -
<PAGE> 26
the Securities and Exchange Commission and with any state securities commissions
or authorities. AP shall select the underwriter of any such offering. All costs
and expenses of registering any Holder's shares for sale pursuant to Section
2.7(a) above shall be borne by AP.
(c) AP will indemnify and hold harmless each Holder participating in
a registration pursuant to this Section 2.7 from and against any and all loss,
damage, liability, cost and expense to which such Holder may become subject
under the Securities Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement or alleged
untrue statement of any material fact contained in such registration statement,
any prospectus contained therein or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading; provided, however, that AP will not be liable in any such case to
the extent that any such loss, damage, liability, cost or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in strict conformity
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<PAGE> 27
with written information furnished by such Holder specifically for use in the
preparation thereof.
(d) Each Holder participating in a registration pursuant to this
Section 2.7 will indemnify and hold harmless the other Holders, AP, and AP's
officers, directors and each person, if any, who controls AP within the meaning
of the Securities Act, from and against any and all loss, damage, liability,
cost or expense to which such other Holders or AP or such officer, director or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, damages, liabilities, costs or expenses are caused by
any untrue statement or alleged untrue statement of any material fact contained
therein or any amendment or supplement thereto, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was so made in reliance upon
and in strict conformity with written information furnished by such Holder
specifically for use in the preparation thereof.
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<PAGE> 28
(e) Promptly after receipt by an indemnified party pursuant to the
provisions of Section 2.7(c) or (d) of notice of the commencement of any action
involving the subject matter of the foregoing indemnity provision, such
indemnified party will, if a claim therefor is to be made against the
indemnifying party pursuant to the provisions of Section 2.7(c) or (d), promptly
notify the indemnifying party of the commencement thereof; but the omission to
so notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than hereunder. In the event such
action is brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party shall have the right
to participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party; provided, however, that if the
defendants in any action include both the indemnified party and the indemnifying
party and there is a conflict of interest which would prevent counsel for the
indemnifying party from also representing the indemnified party, the indemnified
party shall have the right to select separate counsel to participate in the
defense of such action on behalf of such indemnified party. After no-
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<PAGE> 29
tice from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party pursuant to the provisions of Section 2.7(c) or (d) for any
legal or other expense subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation, unless (i) the indemnified party shall have employed counsel in
accordance with the provisions of the preceding sentence, (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after the notice of the
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party.
3. Transfer Of Shares Upon Death Or Disability.
3.1. Put to AP in Event of Death, Retirement or Disability. Subject
to any financing agreements entered into in connection with the Purchase or any
other instruments or agreements of APCOA or AP from time to time in effect
restricting (including indirectly through restrictions of dividend payments by
APCOA) or otherwise governing the repurchase or retirement of shares of AP's
capital stock (the "Loan Agreements") and to applicable law, unless a call
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<PAGE> 30
pursuant to Section 3.2 shall have been exercised by AP, upon the death,
Retirement or Complete Disability of any Management Investor, at the option of
such Management Investor, such Management Investor's estate, heirs or personal
representative, and/or such Management Investor's Permitted Transferees
(collectively, the "Holders" of such Management Investor's shares) and within 30
days of receipt by AP of a Seller's Notice from such Holders, which notice must
be given within twelve months from the appointment of a personal representative
or three months from the date of such Management Investor's Retirement or six
months from the date of his Complete Disability, AP shall purchase from such
Holders all the shares of AP Common Stock held by such Holders specified in such
Seller's Notice at a purchase price determined in accordance with Section 3.3.
AP shall be under no obligation to purchase such shares unless it shall have
received a Seller's Notice from such Holders in accordance with this Section
3.1.
3.2. Call in Event of Death, Retirement or Disability. Unless a put
granted in Section 3.1 shall have been exercised with respect to all the shares
of AP Common Stock held by the Holders of any Management Investor's shares, AP
shall have an exclusive and irrevocable option, for a period of three months
following the appointment of a
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<PAGE> 31
personal representative or from the date of any such Management Investor's
Retirement or Complete Disability, to purchase up to all the shares of AP Common
Stock held by such Holders at the price determined in accordance with Section
3.3; provided that AP may not, without the consent of any such Holder, purchase
less than all the shares held by any such Holder.
3.3. Purchase Price. (a) The purchase price per share for the shares
of AP Common Stock purchased pursuant to Section 3.1 or 3.2 above shall be the
greatest of (i) Investment Price, (ii) Adjusted Book Value and (iii) CCO Value
(as such terms are hereinafter defined). Adjusted Book Value and CCO Value shall
be determined by AP using accounting principles then in effect and as applied by
AP and shall be accompanied by a letter from AP's independent accountants
stating that the calculations made by AP have been made in accordance with the
applicable provisions of this Agreement. AP may satisfy its obligations to
purchase shares upon the exercise of any put or call granted pursuant to Section
3.1 or 3.2 hereof with cash in an amount not less than the Investment Price and
with Notes (as hereinafter defined) for any amount in excess of the Investment
Price; provided, however, that if any portion of the cash purchase price payable
for any shares purchased pursuant to Section 3.1 or 3.2
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<PAGE> 32
above may not be paid as a result of direct or indirect restrictions imposed by
the Loan Agreements or by applicable law, such portion shall, subject to the
Loan Agreements and to applicable law, be payable by the delivery of Notes in
the principal amount of such portion; provided, however, that, notwithstanding
any direct or indirect restrictions imposed by the Loan Agreements or by
applicable law, AP and the other parties to this Agreement shall use their
respective best efforts to enable AP to pay the full amount of the cash purchase
price payable for any shares purchased pursuant to Section 3.1 or 3.2 above,
including, without limitation, taking necessary measures to create sufficient
surplus and/or to obtain the consent of any parties to the Loan Agreements, and,
in any event, AP shall pay that portion of the cash purchase price payable for
any shares purchased pursuant to Section 3.1 or 3.2 above which was not paid as
a result of direct or indirect restrictions imposed by the Loan Agreements or by
applicable law as soon as AP may pay such amount in cash without violating the
terms of any Loan Agreements or any applicable law.
3.4. Certain Definitions. As used in Sections 3 and 4 of this
Agreement, the following terms shall have the meanings set forth below:
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<PAGE> 33
(a) "CCO" shall mean the cash contribution from operations for the four
fiscal quarters (for which financial statements are then available) immediately
preceding the date of exercise of any put or call pursuant to Section 3 or 4 of
this Agreement, as certified by AP's independent public accountants for the four
fiscal year quarters which constitute any fiscal year and as determined for any
other period in a manner consistent with that used in making such determination
for AP's most recently ended fiscal year.
(b) "CCO Value" shall mean CCO times 6.84, minus the amount of debt
reflected in AP's most recent quarterly or year-end consolidated financial
statements, divided by the number of fully diluted shares. "Debt" referred to in
the preceding sentence shall mean all indebtedness of any kind, and shall
include, without limitation, (i) current maturities, any outstanding preferred
stock and accrued dividends (excluding current year) thereon and any outstanding
subordinated debt, but shall exclude (ii) trade payables, accrued current
expenses, accrued current taxes, and accrued current interest charges, all of
which are in the ordinary course of business, and shall also exclude
indebtedness incurred in connection with the purchase of real
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<PAGE> 34
estate if such purchase is unrelated to the business currently conducted by
APCOA. Also for purposes of the preceding calculation, fully diluted shares
shall be equal to the weighted average number of shares of AP Common Stock
outstanding plus common share equivalents, computed in accordance with the
methodology prescribed in Accounting Principles Board Opinion No. 15 plus vested
management options to purchase AP Common Stock, plus the AP Common Stock that
DNC will have the right to purchase under its warrant (the "DNC Warrant"),
provided that such warrant shall only be considered outstanding if the fair
market value of the AP Common Stock subject thereto exceeds the exercise price
thereof. In addition, fully diluted shares as referred to in the preceding
sentence shall exclude any shares of AP Common Stock which would otherwise be
included under Accounting Principles Board Opinion No. 15 but which were
purchased by AP either pursuant to the terms of this Agreement or from DNC but
only if and to the extent indebtedness was incurred by AP in connection with the
purchase of such AP Common Stock.
(c) "Note" shall mean a subordinated promissory note of AP substantially
in the form of Exhibit B to this Agreement.
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<PAGE> 35
(d) "Investment Price" shall mean the price per share of AP Common Stock
that such Management Investor paid for such shares.
(e) "Adjusted Book Value" shall mean the book value per share of AP Common
Stock, calculated by dividing (A) the sum of (x) stockholders' equity reflected
in AP's most recent quarterly or year-end consolidated financial statements,
plus (y) the amount, if any, of the adjustment to stockholders' equity required
to reflect aggregate projected losses set forth on Schedule B to this Agreement
through the date of the most recently completed fiscal year for which financial
statements are available, plus (z) the total proceeds to be realized by AP upon
the exercise of all outstanding dilutive stock options were such options
exercised on the date of valuation and the DNC Warrant by (B) shares of AP
Common Stock outstanding plus the AP Common Stock subject to the DNC Warrant
(provided that such warrant shall only be considered outstanding if the fair
market value of the AP Common Stock subject thereto exceeds the exercise price
thereof), plus total outstanding dilutive stock options. For purposes of this
calculation, stock options shall be considered dilutive if the exercise price
per share is less than per
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<PAGE> 36
share Adjusted Book Value calculated without regard to outstanding stock
options.
(f) "Retirement" shall mean the earlier of either (i) a Management
Investor's attainment of "early retirement age" or "normal retirement age," as
such terms are defined in any tax-qualified retirement plan sponsored by AP or
any affiliate (as such term is defined for this purpose only in Section 414(b)
of the Code) or AP in which the Management Investor participates, or (ii) the
Management Investor's attainment of age 65.
(g) "Complete Disability" shall mean any physical or mental impairment or
disability which prevents a Management Investor from performing the duties of
his occupation for a period of at least 120 days and which is expected to be of
permanent duration. A determination of whether a Management Investor is disabled
shall be made by two licensed physicians, one appointed by the Board of
Directors of AP and one appointed by the Management Investor. In the event the
two physicians are unable to agree with respect to whether the Management
Investor is disabled, the determination of whether the Management Investor is
disabled shall be made by a
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<PAGE> 37
third duly licensed physician chosen by the two physicians previously appointed.
(h) "Cause" shall mean either (i) a material failure by a Management
Investor for some reason other than illness, injury or disability to perform his
obligations as an employee of AP (including any obligations under any written
employment agreement to which the Management Investor is a party), provided that
the Management Investor shall have first received written notice from APCOA or
AP stating with specificity the nature of such failure and the Management
Investor shall not have corrected the failure cited in such notice within 30
days after his receipt thereof; or (ii) the Management Investor's commission of
either any felony involving moral turpitude or any crime in the conduct of his
official duties as an employee of APCOA or AP which is materially adverse to the
welfare of APCOA or AP; or (iii) the Management Investor's commission of any
material act of fraud against APCOA or AP or material misuse of his position for
personal gain or that of any third party; or (iv) the Management Investor's
taking any action (other than an error in judgment made in the ordinary course
of his duties as an employee of APCOA or AP) which is materially adverse to the
welfare
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<PAGE> 38
of APCOA or AP, including, but not limited to, any material breach of any
covenants in any written employment agreement to which the Management Investor
is a party which concern noncompetition and nondisclosure of confidential
information.
(i) "Good Reason" shall mean, without the Management Investor's express
written consent, the occurrence of either or both of the following:
1. a change in the duties and responsibilities of his position such that a
substantial reduction occurs from the duties and responsibilities that were in
effect either as of the date of this Agreement or, if later, immediately prior
to the change in responsibilities; and
2. a reduction by the Company, of 15% or more, in his base salary as in
effect on the date hereof, or as the same shall be increased from time to time,
except a reduction consistent with salary reductions of all personnel on the
exempt payroll.
(j) "Termination" shall mean, when used to refer to the employment of a
Management Investor, such Inves-
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<PAGE> 39
tor's ceasing to be regularly employed by AP or a subsidiary or affiliate of AP.
4. Transfer Upon Termination Of Employment.
4.1. Put to AP in Event of Termination. Subject to the direct or
indirect restrictions imposed by the Loan Agreements and to applicable law,
unless a call granted pursuant to Section 4.2 shall have been exercised by AP,
upon the termination of employment of any Management Investor for any reason
other than death, Retirement or Complete Disability, at the option of any
terminated Management Investor and/or such Management Investor's Permitted
Transferees, and within three months of receipt by AP of a Seller's Notice from
such Management Investor and/or such Management Investor's Permitted
Transferees, AP shall purchase up to all the shares of AP Common Stock held by
such Management Investor and/or such Management Investor's Permitted
Transferees, at a purchase price determined in accordance with Section 4.3(a),
in the event of a Termination by AP or its affiliates without Cause, or a
voluntary Termination by such Management Investor with Good Reason, or a
voluntary Termination by such Management Investor without Good Reason (but only
on or after the third anniversary of the date of this Agreement), or in
accordance with Section 4.3(b), in the event of a Termination by AP or its
affiliates with Cause or
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<PAGE> 40
a voluntary Termination by the Management Investor without Good Reason (but only
if such Termination occurs prior to the third anniversary of the of this
Agreement). AP shall be under no obligation to purchase such shares unless it
shall have received a Seller's Notice in accordance with this Section 4.1, which
Notice must be sent within 30 days from the date of termination.
4.2. Call in Event of Termination. Unless a put granted under
Section 4.1 shall have been exercised with respect to all the shares of AP
Common Stock held by any terminated Management Investor and/or such Management
Investor's Permitted Transferees, AP shall have an exclusive and irrevocable
option, for a period of 30 days following the termination of employment of any
Management Investor as set forth in Section 4.1, to purchase up to all of the
shares of AP Common Stock owned by such terminated Management Investor and/or
such Management Investor's Permitted Transferees, at a purchase price determined
in accordance with Section 4.3(a), in the event of a Termination by AP or its
affiliates without Cause, or a voluntary Termination by such Management Investor
with Good Reason, or a voluntary Termination by such Management Investor without
Good Reason (but only or after the third anniversary of the date of this
Agreement), or in accordance with Section 4.3(b), in the
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<PAGE> 41
event of a Termination by AP or its affiliates with Cause, or a voluntary
Termination by the Management Investor without Good Reason (but only if such
Termination occurs prior to the third anniversary of the date of this
Agreement); provided that AP may not, without the consent of such Management
Investor and/or such Management Investor's Permitted Transferees, purchase less
than all of the shares of AP Common Stock owned by such Management Investor
and/or such Management Investor's Permitted Transferees; provided further, that,
in the event a Management Investor's employment is terminated, if by AP or the
Company, without Cause, or if by the Management Investor, for Good Reason, then
if the purchase price for any share of AP Common Stock (assuming such share was
sold to AP pursuant to this Section 4.2), determined in accordance with Section
4.3 at the end of the four calendar quarters which immediately follow the date
any shares of AP Common Stock are actually sold to AP pursuant to this Section
4.2, would exceed the purchase price paid for any share actually sold to AP
pursuant to this Section 4.3, the purchase price for any such share shall be
increased by the amount of such excess, and such increase shall be paid to the
seller of any such shares as soon as practicable following the end of such
twelve-month period in the same manner as provided in Section 4.3.
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<PAGE> 42
4.3 Purchase Price. (a) The purchase price per share for any shares
of AP Common Stock shall be equal to the greater of (i) Investment Price, (ii)
Adjusted Book Value and (iii) CCO Value.
(b) The purchase price per share for any shares of AP Common Stock
shall be, in the event of a termination with Cause, equal to the lowest of (i)
Investment Price, (ii) Adjusted Book Value, and (iii) CCO Value, and, in the
event of a voluntary Termination without Good Reason, Investment Price.
(c) For purposes of Section 4.3(a) and 4.3(b), Adjusted Book Value
and CCO Value shall be determined by AP using accounting principles then in
effect and as applied by AP and shall be accompanied by a letter from AP's
independent accountants stating that the calculations made by AP have been made
in accordance with the applicable provisions of this Agreement. AP may satisfy
its obligations to purchase shares upon the exercise of any put or call granted
pursuant to Section 4.1 or 4.2 hereof with cash in an amount not less than the
Investment Price and with Notes for any amount in excess of the Investment
Price; provided, however, that, in the event of a Management Investor's
involuntary termination of employment, if by AP or APCOA, without Cause,
- 42 -
<PAGE> 43
or if by the Management Investor, with Good Reason, AP shall satisfy its
obligations to purchase shares upon the exercise of any put or call granted
pursuant to Section 4.1 or Section 4.2 hereof with cash except to the extent
that cash may not be paid as a result of restrictions imposed by the Loan
Agreements or by applicable law. Notwithstanding any other provision of this
Section 4.3, if any portion of the cash purchase price payable for any shares
purchased pursuant to Section 4.1 or 4.2 may not be paid as a result of
restrictions imposed by the Loan Agreements or by applicable law, such portion
shall, subject to the Loan Agreements and to applicable law, be payable by the
delivery of Notes in the principal amount of such portion; provided, however,
that, notwithstanding any restrictions imposed by the Loan Agreements or by
applicable law, AP and the other parties to this Agreement shall use their
respective best efforts to enable AP to pay the full amount of the cash purchase
price payable for any shares purchased pursuant to Section 4.1 or 4.2 above,
including, without limitation, taking necessary measures to create sufficient
surplus and/or to obtain the consent of any parties to the Loan Agreement, and,
in any event, AP shall pay that portion of the cash purchase price payable for
any shares purchased pursuant to Section 4.1 or 4.2 above which was not paid as
a result of restrictions im-
- 43 -
<PAGE> 44
posed by the Loan Agreements or by applicable law as soon as AP may pay such
amount in cash without violating the terms of any Loan Agreements or any
applicable law.
Notwithstanding anything in the foregoing to the contrary, in the
event that a Management Investor voluntarily terminates his employment with AP
or an AP affiliate without Good Reason and is paid the purchase price specified
in Section 4.3(a) hereof, and a Sale of the Company or a merger involving AP or
an AP affiliate occurs within three months after such termination of employment,
and the Board of Directors of AP determines in good faith that such Termination
was in anticipation of such Sale of the Company or merger, then the per share
purchase price paid to such Management Investor for his shares of AP Common
Stock, if greater than the per share consideration (as determined by the Board
of Directors in good faith) paid to stockholders in such Sale of the Company or
merger, shall be reduced to be equal to the per share consideration paid in such
Sale of the Company or merger, and any documents or instruments (including,
without limitation, any Note) which were executed in connection with the prior
sale of shares of AP Common Stock by such Management Investor shall be deemed
amended to give effect to the decision of the Board of Directors in such regard.
- 44 -
<PAGE> 45
4.4. Sale of the Company. (a) Each of the parties to this Agreement
acknowledges that, at the time of a sale by a Management Investor and/or his
Permitted Transferees of shares of AP Common Stock pursuant to Section 3 or 4 of
this Agreement, there may be proposed or pending a transaction or series of
transactions involving the sale of 50% or more of the outstanding shares of AP
Common Stock (either to an entity, person or group of persons acting in concert
or pursuant to a public offering registered under the Securities Act) or the
redemption or repurchase of all the shares of AP Common Stock in connection with
a sale of all or substantially all the assets of AP, or the winding up,
dissolution or liquidation of AP (any such transaction or series of transactions
being hereinafter referred to as a "Sale of the Company"), and that AP may have
valid business reasons not to, and in any event may not be required to, disclose
any such proposed or pending Sale of the Company to such Management Investor
and/or his Permitted Transferees at the time of any such sale.
(b) If, within 270 days from the date of a sale of shares of AP
Common Stock to AP by a Management Investor and/or his Permitted Transferees
pursuant to Section 3 or 4, other than such a sale from a Management Investor
whose employment was terminated for Cause or who voluntarily re-
- 45 -
<PAGE> 46
signed without Good Reason, a transaction involving a Sale of the Company is
effected then AP and/or the purchaser of such shares of AP Common Stock shall
pay to such Management Investor and/or his Permitted Transferees the excess, if
any, of the amount per share realized by AP's stockholders (other than DNC) upon
such Sale of the Company over the purchase price per share paid by AP to such
Management Investor and/or his Permitted Transferees pursuant to Section 3 or 4,
less the interest paid on any Notes paid as consideration for such shares for
the period from the date of purchase pursuant to Section 3 or 4 to the date of
such Sale of the Company, for each share purchased by AP pursuant to Section 3
or 4 from such Management Investor and/or such Permitted Transferees.
4.5. Continuation of Employment. Neither this Agreement nor the
ownership of AP Common Stock by a Management Investor shall confer upon any
Management Investor any right to continue in the employ of APCOA or limit in any
respect the right of APCOA to terminate his employment at any time.
5. Residual Rights of Management Investors to Purchase Shares.
5.1. (a) With respect to
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<PAGE> 47
(i) any issuance by AP of AP Common Stock (the "Shares to be
Issued"), other than pursuant to management stock
options or pursuant to exercise of the DNC Warrant; or
(ii) any issuance by AP of any security (the Securities")
convertible into AP Common Stock but only if any part of
the new issue is to be purchased by Holberg or any
affiliate of Holberg;
to any individual, corporation, partnership, association, trust or other entity
or organization, including any government or political subdivision or an agency
or instrumentality thereof (a "Person"), AP shall notify each Management
Investor in writing of the proposed issuance, the number of Shares to be Issued
or amount of Securities to be issued, the date on or about which such issuance
is to be consummated and the price and other terms and conditions thereof, at
least 45 days prior to the proposed date for such issuance. For a period of 30
days after a Management Investor's receipt of the notice referred to in the
preceding sentence, such Management Investor shall have the option to purchase,
upon the same price, terms and conditions as such Shares to be Issued or
Securities are proposed to be issued to any Person, that number of such Shares
to be Issued or amount of Securities as may be necessary to increase the number
of shares of AP Common Stock owned by such Management Investor on a
fully-diluted basis (assuming that all management op-
- 47 -
<PAGE> 48
tions were fully vested and exercised, that DNC's warrants to purchase AP Common
Stock were exercised and, in the case of Securities, assuming conversion of such
Securities into AP Common Stock) to provide that the percentage of all of the
fully-diluted shares of AP Common Stock owned by such Management Investor
immediately after the date of issuance to such Person is not less than the
percentage of all of the fully-diluted shares of AP Common Stock owned by such
Management Investor immediately prior to the date of issuance to such Person. If
a Management Investor exercises his purchase option under this Section 5, he
shall purchase such Shares to be Issued or Securities at the time of
consummation of the issuance of Shares to be Issued or Securities to such
Person.
(b) In the event that, pursuant to Section 2 or 3 or 4 hereof, AP
and/or Holberg shall purchase any shares of AP Common Stock from any Management
Investor or such Management Investor's Permitted Transferees ("Reacquired
Shares"), AP shall make such shares available for purchase within the
twelve-month period following the date AP and/or Holberg shall have purchased
such shares and on the terms set forth below to new or promoted AP or APCOA
management employees (other than the Chief Executive Officer of APCOA) who are
selected by the Chief Executive Officers of APCOA
- 48 -
<PAGE> 49
after consultation with the Board of Directors of AP. In addition, Holberg shall
make available for purchase by an APCOA management employee 66 shares (the
"Extra Shares") of AP Common Stock purchased by it pursuant to the Subscription
Agreement within the twelve-month period following the initial subscription of
shares thereunder. Holberg shall transfer to AP as a capital contribution such
number of shares of AP Common Stock as shall be necessary to give effect to the
provisions of this Section 5.1(b). Such Reacquired Shares may be purchased by
any such AP or APCOA management employee at the same price and upon the same
terms (including any later adjustment to the price required by Section 4.2 or
4.4 hereof) as the prior purchase by AP and/or Holberg pursuant to Section 2 or
3 or 4 hereof. Such Extra Shares may be purchased by any such AP or APCOA
management employee at the same per share price paid by Holberg for such shares
pursuant to the Subscription Agreement.
(c) To the extent that any Reacquired Shares or Extra Shares are not
sold, within the periods and to the persons required by Section 5.1(b) above,
the remaining Management Investors shall have the option to purchase any such
shares from AP for a period of 30 days following the expiration of such
twelve--month period. The option to purchase such shares granted to the
remaining Management Investors
- 49 -
<PAGE> 50
pursuant to this Section 5.1(c) shall be exercisable (i) as to Reacquired
Shares, at the same price and upon the same terms as the prior purchase
(including any later adjustment to the price required by Section 4.2 or 4.4
hereof) by AP and/or Holberg pursuant to Section 2 or 3 or 4 hereof and (ii) as
to Extra Shares, at the same per share price paid by Holberg for such shares
pursuant to the Subscription Agreement, and shall be allocated among the
remaining Management Investors in such manner as they may determine. In the
event that the remaining Management Investors cannot agree on such allocation,
the option to purchase such shares granted by this Section 5.1(c) shall be
allocated among the remaining Management Investors pro rata in accordance with
their respective ownership interests (including the interests of their Permitted
Transferees) in AP at the expiration of such twelve-month period. Holberg shall
transfer to AP as a capital contribution such number of shares of AP Common
Stock as shall be necessary to give effect to the provisions of this Section
5.1(b). The option may be exercised by the delivery of written notice to AP at
any time within the 30-day period described above.
- 50 -
<PAGE> 51
6. Involuntary Transfer Of Shares.
6.1. Certain Involuntary Transfers; Seller's Notice. If a
Stockholder shall involuntarily transfer directly or indirectly any or all of
his shares, for any reason other than as a result of those events specified in
Section 3 or 4, such Stockholder shall give written notice within 30 days of
such involuntary transfer to AP and the other Stockholders, with a copy to the
Transferee, stating the fact that the involuntary transfer occurred, the reason
therefor, the date of the transfer, the name and address of the Transferee and
the number of Shares acquired by the Transferee.
6.2. Right to Repurchase. For a period of 60 days from the date of
receipt of the Seller's Notice or, failing receipt of such notice, 60 days from
the date AP sends written notice to the Transferee that the transfer is deemed
to be an involuntary transfer subject to repurchase under this Agreement, AP and
Holberg shall have the irrevocable and exclusive option to buy all of the
Offered Shares, exercisable in the same order of priority, proportion and manner
as provided in Sections 2.3(a), (b) and (c), and the provisions of Sections
2.3(a), (b) and (c) shall be followed
- 51 -
<PAGE> 52
in their entirety except that the terms of purchase shall be as provided in
Section 6.3.
6.3. Terms of Purchase. The terms of purchase for shares purchased
pursuant to Section 6.2 shall be determined pursuant to Section 4.3 as though
such shares were being purchased pursuant to Section 4.1 or 4.2.
7. Reservation Of Shares Purchased By AP.
Subject to Section 5 hereof, any shares of AP Common Stock purchased
by AP from a Management Investor or such Management Investor's personal
representative, estate or heirs or Permitted Transferees pursuant to this
Agreement shall be retired and cancelled.
8. Closing.
8.1. Closing. Any Selling Stockholder and the parties hereto who are
purchasing any of the Offered Shares pursuant to this Agreement shall mutually
determine a closing date (the "Closing Date") which shall not be more than five
business days, subject to any applicable regulatory waiting periods, after the
date upon which a purchaser shall have the right to purchase shares in
accordance with this Agreement. The closing shall be held at 11:00 a.m., local
- 52 -
<PAGE> 53
time, at the offices of AP, or at such other time or place as the parties may
agree.
8.2. Deliveries at Closing; Method of Payment of Purchase Price. On
the Closing Date, any Selling Stockholder shall deliver certificates with
appropriate transfer tax stamps affixed and with stock powers endorsed in blank,
representing the shares of AP Common Stock to be purchased by the persons
exercising their options hereunder each of whom shall deliver to such
Stockholder, by means of certified check payable in New York Clearing House
funds, his portion of the purchase price which is payable in cash and his
portion of the other consideration, if any, to be paid in exchange for such
shares. In addition, if the person selling shares is the personal representative
of a deceased Stockholder, the personal representative shall also deliver to the
purchaser or purchasers (i) copies of letters testamentary or letters of
administration evidencing his appointment and qualification, (ii) a certificate
issued by the Internal Revenue Service pursuant to Section 6325 of the Internal
Revenue Code of 1986, as amended (the "Code"), discharging the shares being sold
from liens imposed by the Code and (iii) an estate tax waiver issued by the
state of the decedent's domicile.
- 53 -
<PAGE> 54
9. Miscellaneous.
9.1. Endorsement of Stock Certificates. A copy of this Agreement
shall be filed with the Secretary of AP and kept with the records of AP. Each of
the Stockholders hereby agrees that each outstanding certificate representing
shares of AP Common Stock (other than those shares which, following the
termination of this Agreement pursuant to Section 9.2 below, have not been
registered under the Securities Act, which shares shall bear only the
endorsement set forth in paragraph (a) below) shall bear endorsements reading
substantially as followings:
(a) "The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be transferred, sold or otherwise disposed of except
pursuant to an effective registration statement or pursuant to
an exemption from registration, under the Act."
(b) "The shares represented by this certificate are subject to
certain rights of the Corporation and the Stockholders of the
Corporation to repurchase such shares and certain rights of
the registered holder to sell such shares to the Corporation
on the terms and conditions set forth in a Stockholders'
Agreement dated as of April 14, 1989, a copy of which may be
obtained from the Corporation or from the holder of this
certificate. No transfer of such shares will be made on the
books of the Corporation unless accompanied by evidence of
compliance with the terms of such Agreement."
- 54 -
<PAGE> 55
Such certificate shall bear any additional endorsement which may be required for
compliance with state securities or blue sky laws or as may be required under
the Subscription Agreement. If, for any reason, any shares of AP Common Stock
are no longer subject to the restrictions and provisions of this Agreement, AP
shall promptly issue a new certificate for such shares without the restrictive
endorsement set forth in paragraph (b) above upon the request of the record
owner of the shares and the surrender to AP of a certificate bearing such
endorsement.
9.2. Term. The provisions of this Agreement, other than Article 1,
shall terminate on the date of the first to occur of any of the following
events: (i) the closing of the sale of 25% or more of the shares of AP Common
Stock to the public in an underwritten initial public offering pursuant to a
Registration Statement under the Securities Act of 1933; or (ii) the closing of
the sale of shares of AP Common Stock to any person or group of persons as a
result of which any person or group of persons (other than Holberg) owns,
beneficially or of record, 50% or more of the outstanding shares of AP Common
Stock; or (ii) 10 years from the date of this Agreement.
- 55 -
<PAGE> 56
9.3. Injunctive Relief. It is hereby agreed and acknowledged that it
will be impossible to measure in money the damages that would be suffered if the
parties fail to comply with any of the obligations herein imposed on them and
that in the event of any such failure, an aggrieved person will be irreparably
damaged and will not have an adequate remedy at law. Any such person shall,
therefore, be entitled to injunctive relief, including specific performance, to
enforce such obligations, and if any action should be brought in equity to
enforce any of the provisions of this Agreement, none of the parties hereto
shall raise the defense that there is an adequate remedy at law.
9.4. Notices. All notices, statements, instructions or other
documents required to be given hereunder, shall be in writing and shall be given
either personally, or by mailing the same in a sealed envelope, first-class
mail, postage prepaid and either certified or registered, return receipt
requested, addressed to AP at its principal offices and to the other parties at
their addresses reflected in the stock records of AP, except that such notices
to DNC shall be given to Delaware North Companies, Incorporated, 700 Delaware
Avenue, Buffalo, New York 14209, attention: Law Department. Each Stockholder, by
written notice given to AP in accordance with this Section 9.4 may change the
address
- 56 -
<PAGE> 57
to which notices, statements, instructions or other documents are to be sent to
such Stockholder. All notices, statements, instructions and other documents
hereunder that are mailed shall be deemed to have been given on the date of
mailing. Whenever pursuant to this Agreement any notice is required to be given
by any Stockholder to any other Stockholder, such Stockholder may request from
AP a list of addresses of all Stockholders of AP, which list shall be promptly
furnished to such Stockholder.
9.5. Administration. In the event of any First Offer, Reoffer, or
Control Offer, or the occurrence of any event with entitles any Stockholder to
exercise any put or call granted herein, AP shall administer and coordinate the
exercise of such put or call, including the determination, where applicable, of
each participating Stockholder's proportionate share.
9.6. Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties, and their respective successors
and assigns. If any Transferee of any Stockholder shall acquire any shares of AP
Common Stock in any manner, whether by operation of law or otherwise, such
shares shall be held subject to all of the terms of this Agreement, and by
taking and holding
- 57 -
<PAGE> 58
such shares such person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement.
9.7. Governing Law. Regardless of the place of execution, this
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware applicable to agreements made and to be wholly performed in
such State.
9.8. Headings. Paragraph headings inserted herein for convenience
only and do not form a part of this Agreement.
9.9. Entire Agreement; Amendment. This Agreement contains the entire
agreement among the parties hereto with respect to the transactions contemplated
herein, supersedes all prior written agreements and negotiations and oral
understandings, if any, and may not be amended, supplemented or discharged
except by performance or by an instrument in writing signed by AP, DNC, Holberg
and the Chief Executive Officer of APCOA, as authorized representative of the
Management Investors, or such other authorized representative as the Management
Investor shall designate in writing, and by any Stockholder or Transferee
holding at least 5% of the outstanding shares of AP Common Stock. In the event
of the
- 58 -
<PAGE> 59
amendment or modification of this Agreement in accordance with its terms, the
Stockholders shall cause the Board of Directors of AP to meet within 30 days
following such amendment, modification or termination or as soon thereafter as
is practicable for the purpose of amending the Certificate of Incorporation and
By-Laws of AP, as may be required as a result of such amendment or modification,
and proposing such amendments to the stockholders of AP entitled to vote
thereon, and such action shall be the first action to be taken at such meeting.
In the event that any Stockholder or AP shall be required, as a result of the
enactment, amendment or modification, subsequent to the date hereof, of any
applicable law or regulation, or by the order of any governmental authority, to
take any action which is inconsistent with or which would constitute a violation
or breach of any terms of this Agreement, then the Stockholders and AP shall use
their best efforts to negotiate an appropriate amendment or modification of, or
waiver of compliance with, such terms.
9.10. Inspection. So long as this Agreement shall be in effect, this
Agreement shall be made available for inspection by any stockholder of AP at the
principal offices of AP.
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<PAGE> 60
9.11. 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.
9.12. Gender; Number. The use of the feminine, masculine or neuter
pronoun herein shall not be restrictive as to gender and shall be interpreted in
all cases as the context may require. The use of the singular or plural herein
shall not be restrictive as to number and shall be interpreted in all cases as
the context may require.
9.13. Further Assurances. The parties to this Agreement shall
execute and deliver to the appropriate persons any other documents and
instruments in addition to those provided for herein that may be necessary or
appropriate to give effect to the provisions of this Agreement.
- 60 -
<PAGE> 61
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be duly executed on the date first written above.
AP HOLDINGS, INC.
By /s/ John V. Holten
---------------------------
John V. Holten
HOLBERG INDUSTRIES, INC.
By /s/ John V. Holten
---------------------------
John V. Holten
By /s/ G. Walter Stuelpe, Jr.
---------------------------
G. Walter Stuelpe, Jr.
By /s/ James v. LaRocco
---------------------------
James V. LaRocco
By /s/ Michael J. Machi
---------------------------
Michael J. Machi
By /s/ John F. Becka
---------------------------
John F. Becka
By /s/ Ronald A. Kinney
---------------------------
Ronald A. Kinney
By /s/ Robert J. Hill
---------------------------
Robert J. Hill
By /s/ Kenneth J. Levine
---------------------------
Kenneth J. Levine
By /s/ Robert N. Sacks
---------------------------
Robert N. Sacks
By /s/ William J. Girgash
---------------------------
William J. Girgash
- 61 -
<PAGE> 62
By /s/ Michael J. Celebrezze
---------------------------
Michael J. Celebrezze
DELAWARE NORTH COMPANIES, INC.
By /s/
---------------------------
- 62 -
<PAGE> 1
Exhibit 10.5
TAX SHARING AGREEMENT
Agreement effective as of the first day of the 1989 consolidated
return year by and among Holberg Industries, Inc. ("Parent") and each of the
undersigned ("Subsidiaries"):
AP Holdings Inc. ("APH")
APA Acquisition, Inc. ("APA")
APCOA, Inc. ("APCOA")
WHEREAS, the parties (hereinafter, together with any other members
of the affiliated group, sometimes referred to as "Members"; or in the singular
"Member") hereto are part of an affiliated group ("Affiliated Group") as defined
by the Internal Revenue Code of 1986, as amended ("Code"), Section 1504; and
WHEREAS, such Affiliated Group may elect to file a consolidated
federal income tax return in accordance with Code Section 1501 and, if so, will
be required to file consolidated income tax returns for years subsequent to such
first year of consolidated filing; and
WHEREAS, it is the intent and desire of the parties hereto that a
method be established for allocating federal income tax liability among Members
of the Affiliated Group; and to provide for the allocation and distribution of
any refund arising from a carryback of net operating losses or tax credits or
capital losses from subsequent taxable years.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the parties hereto agree as follows:
1. A U.S. consolidated federal income tax return may be filed by Parent
for the taxable year ended December 31, l989, and for each subsequent taxable
year in respect of which this Agreement is in effect and for which the
Affiliated Group is required or permitted to file a consolidated federal income
tax return. The Parent, and each Subsidiary shall execute and file such
consents, elections, and other documents that may be required or appropriate for
the proper filling of such returns.
<PAGE> 2
2. The member of the Affiliated Group agree to determine and allocate
their tax liability in the following manner:
(a) Each Member shall pay to Parent the amount of federal income tax that
it would be required to pay on a separate return basis for the year in question;
provided, however that the amount that any Member shall be obligated to pay
Parent for a taxable year shall not exceed the tax liabilities of such Member on
a separate return basis for all taxable years to which this Agreement applies,
and for which such Member joined in the filing of a consolidated return of the
Affiliated Group (including the current taxable years, computed as if it had
actually filed separate returns for all such years and taking into account any
net operating loss carryforward a Member would have had if it had filed a
separate return for all such years. The amount of any excess tax liability which
would be allocated to a Member of the Affiliated Group but for the proviso above
shall be borne by Parent.
(b) The "net operating loss" of a Member is the deduction which such
Member would have had available if it actually filed a separate return for all
years and thus would not include any portion of a Member's net operating loss
sustained in a prior or subsequent year which had been absorbed by the Member in
computing separate return liabilities for prior or subsequent years.
Notwithstanding the preceding sentence, no benefit under this Agreement shall be
granted a Member unless the net operating loss is availed of in reducing the
consolidated federal income tax liability. The rules stated in the previous
sentences regarding carryover net operating losses will also apply in the
computation of other carryover items such as general business credits, foreign
tax credits, capital losses and charitable contribution deductions.
(c) In calculating any benefit from a carryback or carryover of net
operating losses, adjustments shall be made to such prior or subsequent year's
separate return tax liability as required under Sections 172(b) (2) and 172(d).
For purposes of this calculation, the election under Section 172(b) (3) shall be
made on a separate company basis.
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<PAGE> 3
3. The provisions of this Agreement shall be administered by the President
of Parent.
4. Each Member shall pay the Parent its allocated consolidated federal
income tax liability under Section 2(a) of this Agreement and, subject to
Section 2, shall be entitled to any refund of taxes generated by it.
5. The President of Parent shall have the right to assess Members their
share of estimated tax payments to be made on the projected consolidated federal
income tax liability for each year. Payment to the Parent shall be made after
such assessment. Such Member will receive credit for such prepayments in the
year-end computation under Section 2 of this Agreement.
6. If part or all of an unused consolidated net operating loss or tax
credit is allocated to a Member of the Affiliated Group pursuant to Regulations
Section 1.1502-79, and it is carried back or forward to a year in which such
Member filed a separate income tax return or a consolidated federal income tax
return with another affiliated group, any refund or reduction in tax liability
arising from the carryback or carryover shall be retained by such Member.
7. If the consolidated federal income tax liability is adjusted for any
taxable period, whether by means of an amended return, claim for refund, or tax
audit by the Internal Revenue Service, the liability of each Member shall be
recomputed under Section 2 of this Agreement to give effect to such adjustments.
In the case of a refund, the Parent shall make payment to each Member for its
share of the refund, determined in the same manner in Section 2 of this
Agreement, within ten days after the refund is received by the Parent, and in
the case of an increase in tax liability, each Member shall pay to the Parent
its allocable share of such increased tax liability after receiving notice of
such liability from the Parent. If any interest is to be paid or received as a
result of a consolidated federal income tax deficiency or refund, such interest
shall be allocated to the Members in the ratio each Member's change in
consolidated federal income tax liability bears to the total change in tax
liability. Any penalty shall be allocated upon such basis as the President of
Parent deems just and proper in view of all applicable circumstances.
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<PAGE> 4
8. This Agreement shall apply to the taxable year specified in the
preamble of this Agreement, and all subsequent taxable years, unless the Members
agree in writing to terminate the Agreement. Notwithstanding such termination,
this Agreement shall continue in effect with respect to any payment or refunds
due for all taxable periods prior to termination.
9. The Agreement shall not be assignable to any Member without the prior
written consent of the others.
10. All material including, but not limited to, returns, supporting
schedules, work papers, correspondence, and other documents relating to the
consolidated federal income tax returns filed for a taxable year during which
this Agreement was in effect shall be made available to any Member to the
Agreement during regular business hours.
11. This Agreement supersedes the Tax Sharing Agreement among the parties
dated April 14, 1989.
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<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused their names to be
subscribed and executed by their respective authorized officers on the dates
indicated, effective as of the date first written above.
HOLBERG INDUSTRIES, INC.
By: /s/ John V. Holten Date: April 28, 1989
----------------------------------- --------------
AP HOLDINGS, INC.
By: /s/ W Suelpe Date: April 28, 1989
----------------------------------- --------------
APA ACQUISITION, INC..
By: /s/ W Suelpe Date: April 28, 1989
----------------------------------- --------------
APCOA, INC..
By: /s/ W Suelpe Date: April 28, 1989
----------------------------------- --------------
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<PAGE> 6
AMENDMENT NO. 1
TO
TAX SHARING AGREEMENT
AMENDMENT NO. 1 dated as of March 30, 1998 (this "Amendment") to the
Tax Sharing Agreement effective as of the first day of the 1989 consolidated
return year by and among Holberg Industries, Inc. ("Parent"), AP Holdings, Inc.,
a Delaware corporation, APA Acquisition, Inc., a Delaware corporation, and
APCOA, Inc., a Delaware corporation (the "Tax Sharing Agreement"). Capitalized
terms used but not defined in this Amendment shall have the meanings ascribed to
them in the Tax Sharing Agreement.
WHEREAS, the parties hereto desire to amend the Tax Sharing
Agreement to provide for the eventuality of the possible deconsolidation of one
or more of the Members from the Affiliated Group.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the parties hereto agree as follows:
The Tax Sharing Agreement is hereby amended to add a new Section 12
thereto, reading in its entirety as follows:
"12. In the event that any Member (the "Departing Member") ceases to
be a Member during any federal taxable year of the Affiliated Group beginning on
or after January 1, 1997, the following provisions shall govern the relationship
between the Departing Member and the other Members with respect to United States
federal income taxes:
(a) Except as set forth in this Section 12, this Agreement shall
terminate as to the Departing Member and no further payments shall be due from
or to such Departing Member under this Agreement with respect to any taxable
year.
(b) The Departing Member shall join in the United States
consolidated federal income tax return for the taxable year of the Parent (the
"Deconsolidation Year") that includes the date on which the Departing Member
ceased to be a Member (the "Deconsolidation Date"). Parent and the Departing
Member shall execute and file such consents, elections, and other documents as
may be necessary for the Departing Member to join in such return for such the
Deconsolidation Year.
(c) Within 60 days after the Deconsolidation Date, the Departing
Member shall pay to the Parent the amount (if any) of federal income tax that it
would be required to pay on a separate return basis for the portion of the
Deconsolidation Year ending on the Deconsolidation Date. In computing the amount
of federal income tax that the Departing Member would be required to so pay, the
provisions of Section 2 of this Agreement shall govern.
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(d) If, after the Deconsolidation Date, the consolidated federal
income tax liability of the Affiliated Group is adjusted for the Deconsolidation
Year or any prior consolidated return year of the Affiliated Group, whether by
means of an amended return, claim for refund, or tax audit by the Internal
Revenue Service, the liability of Parent or the Departing Member, as the case
may be, shall be recomputed under Section 2 of this Agreement and this Section
12 to give effect to such adjustments. A payment shall be made by Parent or the
Departing Member, as appropriate, reflecting such recomputation within 10 days
after the receipt by Parent of a refund or the receipt by the Departing Member
of notice from the Parent of an increase in tax liability. Interest and
penalties relating to any adjustment described in this Section 12(d) shall be
allocated between the Departing Member and other Members in a manner consistent
with Section 7 of this Agreement."
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IN WITNESS WHEREOF, the parties hereto have caused their names to be
subscribed and executed by their respective authorized officers as of the date
first written above.
HOLBERG INDUSTRIES, INC.
By: /s/ A. Petter Ostberg
----------------------------
Name: A. Petter Ostberg
Title: Senior Vice President,
Chief Financial Officer
and Treasurer
AP HOLDINGS, INC.
By: /s/ Michael J. Celebrezze
----------------------------
Name: Michael J. Celebrezze
Title: Treasurer
APA ACQUISITION, INC.
By: /s/ Michael J. Celebrezze
----------------------------
Name: Michael J. Celebrezze
Title: Treasurer
APCOA, INC
By: /s/ Michael J. Celebrezze
----------------------------
Name: Michael J. Celebrezze
Title: Treasurer
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<PAGE> 1
Exhibit 10.6
EXECUTION COPY
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT by and between APCOA, Inc., a Delaware
corporation (the "Company"), and Myron C. Warshauer (the "Executive"), dated as
of the 30th day of March, 1998.
WHEREAS, the Executive is employed as chief executive officer of
Standard Parking, L.P., a Delaware limited partnership ("Standard"); and
WHEREAS, pursuant to that certain Combination Agreement (the
"Transaction Agreement") dated as of January 15, 1998, by and among the
Executive, Stanley Warshauer, Steven A. Warshauer, Dosher Partners, L.P., a
Delaware limited partnership, SP Parking Associates, an Illinois general
partnership, SP Associates, an Illinois general partnership (collectively,
"Standard Owners"), and APCOA, Inc., a Delaware corporation ("APCOA"), the
operations of APCOA and Standard will be combined (the "Transaction"); and
WHEREAS, APCOA desires to ensure that the Company will continue to
receive the benefit of the Executive's services after the Transaction, on the
terms and conditions set forth below in this agreement, and the Executive
desires to render such services;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
1. Employment Period. The Company shall employ the Executive, and
the Executive shall serve the Company, on the terms and conditions set forth in
this Agreement, for the period beginning on the Closing Date (as defined in the
Transaction Agreement) and ending on the Executive's 65th birthday (the
"Employment Period"), unless such employment is sooner terminated as set forth
below.
2. Position and Duties. During the Employment Period, the Executive
shall serve as the Chief Executive Officer of the Company, responsible for all
day-to-day operations of the Company, including overall supervision and control
of, and responsibility for, the operation and direction of the business, under
the supervision and direction of the Chairman of the Board of Directors of the
Company (the "Board"). In addition, during the Employment Period, the Executive
shall be appointed as a member of the Board and each committee of the Board,
other than such committees that do not customarily include employee directors.
During the Employment Period, all parking business of the Company and its
affiliates will be conducted through, or under the control of, the Company.
During the Employment Period, and excluding any periods of vacation and sick
leave to which the Executive is entitled, the Executive shall devote full
attention and time during normal business hours to the business and affairs of
the Company and, to the extent necessary to discharge the responsibilities
assigned to the Executive under this Agreement, use the Executive's reasonable
best efforts to carry out such responsibilities faithfully. Notwithstanding the
foregoing provisions of this Section 2, during the Employment Period, the
<PAGE> 2
Executive may engage in activities other than those required under this
Agreement, such as activities involving professional, charitable, educational,
religious and similar types of organizations, speaking engagements, membership
on the boards of directors of other organizations (both public and private, for
profit and not-for-profit), investment activities (including management of the
investments listed on Schedule A hereto (hereinafter, the "Permitted
Investments")) and similar activities, but only to the extent that such other
activities do not materially inhibit or prohibit the performance of the
Executive's duties under this Agreement or violate the provisions of Section 6
of this Agreement.
3. Compensation. (a) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary") of
$600,000, payable in accordance with the normal payroll practices for executives
of the Company as in effect from time to time, but in no event less often than
monthly.
(b) Incentive Stock Options. Within 120 days after the Closing Date,
the Company shall establish a stock option or phantom stock option plan (the
"Option Plan") providing for grants of actual or phantom options with respect to
stock of the Company, pursuant to which it shall grant to the Executive options
with respect to 0.316258 shares of the common stock of the Company, on customary
terms and conditions as provided in the Option Plan. Such options shall be
granted upon the establishment of the Option Plan, with a per-share exercise
price based upon the "Price" as defined in the Stockholders Agreement,
determined as of the date hereof. All such options shall have a term of 10 years
from the date of grant.
(c) Other Benefits. In addition to the foregoing, during the
Employment Period, the Executive shall be entitled to the benefits (the "Listed
Benefits") listed in a letter dated January 15, 1998 from the Executive to the
Chairman of the Board of the Company and countersigned by the Chairman.
4. Termination of Employment. (a) Death or Disability. In the event
of the Executive's death during the Employment Period, the Executive's
employment with the Company shall terminate automatically. The Company, in its
discretion, shall have the right to terminate the Executive's employment because
of the Executive's Disability during the Employment Period. "Disability" means
that (i) the Executive has been unable, after reasonable accommodation by the
Company, for a period of 180 consecutive days, or for periods aggregating 180
business days in any period of twelve months, to perform a material portion of
the Executive's duties under this Agreement, as a result of physical or mental
illness or injury, and (ii) a physician selected by the Company or its insurers
has determined that the Executive's incapacity is total and permanent. A
termination of the Executive's employment by the Company for Disability shall be
communicated to the Executive by written notice, and shall be effective on the
30th day after receipt of such notice by the Executive (the "Disability
Effective Date"), unless the Executive returns to full-time performance of the
Executive's duties before the Disability Effective Date.
(b) By the Company. In addition to termination for Disability, the
Company may terminate the Executive's employment during the Employment Period
for Cause or without Cause. "Cause" means (i) illegal conduct or gross
misconduct by the Executive of a significant
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<PAGE> 3
nature, that in either case results in material damage to the business or
reputation of the Company, or (ii) any willful and continued failure by the
Executive to perform his duties under this Agreement, which failure is not
remedied within 10 business days after the Company gives written notice thereof
to the Executive. A termination by the Company shall be effective when the
Company gives written notice to the Executive of such termination, or such later
date as may be specified in such notice; provided, that a termination for Cause
described in clause (ii) of the preceding sentence shall not be effective before
the close of the 10th business day after the date on which such notice is given.
(c) Termination by the Executive. The Executive may terminate his
employment voluntarily upon written notice to the Company, which termination
shall be effective upon the giving of such notice. In addition, if any of the
events listed in the next sentence occurs without the consent of the Executive,
the Executive may terminate his employment for "Good Reason" by giving written
notice to the Company within 60 days after the occurrence thereof to that
effect, unless the Company shall have cured such event within 10 business days
after receiving notice thereof. The events referred to in the preceding sentence
are: (i) the relocation of the Executive's principal place of business outside
of the central business district and northern suburbs of Chicago; (ii) a
material reduction in the Executive's responsibilities; (iii) the assignment to
the Executive of duties inconsistent with his position as set forth in Section 2
of this Agreement; (iv) a change in the Executive's title from that required by
Section 2 of this Agreement; (v) a removal of the Executive from the Board or
any committee thereof described in Section 2 (it being understood that an
inability of the Executive to vote or otherwise function as a member of the
Board or any such committee by reason of a conflict of interest shall not be
considered removal from the Board or such committee); (vi) a requirement that
the Executive report to anyone other than the Chairman of the Board; or (vii)
any material breach by the Company of any other term of this Agreement;
provided, that no such event shall be deemed to have occurred as a result of the
engagement by the Company of additional officers, including a Vice Chairman, so
long as such officers report to the Executive or have no responsibility with
respect to the operations of the Company. A termination for Good Reason shall be
effective at the close of business on the tenth business day after the Executive
gives the Company written notice thereof.
(d) Date of Termination. The "Date of Termination" means the date of
the Executive's death, the Disability Effective Date, or the date on which the
termination of the Executive's employment by the Company or the Executive is
effective (as set forth above), as the case may be.
5. Obligations of the Company upon Termination. (a) By the Company
(Other Than for Cause, Death or Disability) or by the Executive for Good Reason.
If, during the Employment Period, the Company terminates the Executive's
employment, other than for Cause, death or Disability, or the Executive
terminates his employment for Good Reason, the Company shall (i) pay the
Executive, promptly after such termination, a lump sum amount equal to the
aggregate Annual Base Salary that he would have received for the remainder of
the Employment Period, reduced to present value using as a discount rate the
"applicable federal rate," as defined in Section 1274(d) of the Internal Revenue
Code of 1986, as amended (the "Code"), and (ii) continue to provide for the same
period welfare benefits to the Executive and/or the Executive's
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<PAGE> 4
family, at least as favorable as those that would have been provided to them
under Section 3(c) of this Agreement if the Executive's employment had continued
until the end of the Employment Period; provided, that during any period when
the Executive is eligible to receive such benefits under another
employer-provided plan, the benefits provided by the Company under this Section
5(a) may be made secondary to those provided under such other plan. The payments
provided pursuant to this Section 5(a) are intended as liquidated damages for a
termination of the Executive's employment by the Company other than for Cause or
Disability and shall be the sole and exclusive remedy therefor.
(b) Disability. In the event the Executive's employment is
terminated by reason of the Executive's Disability during the Employment Period
in accordance with Section 4(a) hereof, the Company shall pay to the Executive
or the Executive's legal representative, as applicable, (i) the Executive's
Annual Base Salary for the duration of the Employment Period in effect on the
Date of Termination, and (ii) any other vested benefits to which the Executive
is entitled, in each case to the extent not yet paid.
(c) Cause; Voluntary Termination. If the Executive's employment is
terminated by the Company for Cause or the Executive voluntarily terminates his
employment during the Employment Period (other than for Good Reason), the
Company shall pay the Executive (i) the Annual Base Salary through the Date of
Termination and (ii) any other vested benefits to which the Executive is
entitled, in each case to the extent not yet paid, and the Company shall have no
further obligations under this Agreement (except as specifically set forth in
Section 5(d) below).
(d) Additional Post-Employment Benefits. In addition to the above
compensation and benefits, following a termination of the Executive's employment
for any reason other than by the Company for Cause, the Executive shall be
entitled to receive from the Company beginning on the Date of Termination in the
case of a voluntary termination by the Executive, and on the Executive's 65th
birthday, in all other cases, and ending on the first to occur of the
Executive's 75th birthday and the Executive's death (such ending date, the
"Cutoff Date"), the following benefits: (i) $200,000 per annum, as adjusted to
reflect the change, if any, in the Consumer Price Index for All Urban Consumers
from the date of this Agreement through the date such payments begin and
annually thereafter; (ii) an executive office and secretarial services at a
mutually convenient location; and (iii) the Listed Benefits. In addition, the
Executive and, following the Executive's death, the Executive's surviving spouse
(if any) shall be entitled to receive medical and dental coverage from the
Company for the remainder of their lives, at a cost to the Company not to exceed
$10,000 (as adjusted pursuant to the next sentence) per year while they are both
alive, and $5,000 per year (as adjusted pursuant to the next sentence) while
only one of them survives. The dollar amounts set forth in the preceding
sentence shall be increased by 10 percent as of each anniversary of the Closing
Date, and the preceding sentence shall be deemed automatically amended
accordingly. If the cost of such medical and dental coverage exceeds such dollar
limits (as so adjusted), the Company shall continue to provide such coverage if
the Executive (or his surviving spouse) so requests and pays the amount of such
excess cost to the Company. In consideration of the foregoing, the Executive
agrees to make himself available from the date of termination of his employment
through the Cutoff Date for such consulting
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<PAGE> 5
services as may reasonably be requested by the Board from time to time, such
services to be of a type consistent with the Executive's expertise and
experience and to be rendered at mutually agreeable times and places, not to
exceed 24 hours per month.
6. Confidential Information; Noncompetition. (a) The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies and their respective businesses that the Executive obtains or obtained
during the Executive's employment by the Company, Standard or any of their
respective affiliated companies and their respective businesses that is not
public knowledge (other than as a result of the Executive's violation of this
paragraph (a) of Section 6) ("Confidential Information"). The Executive shall
not communicate, divulge or disseminate Confidential Information at any time
during or after the Executive's employment with the Company, except in the
course of the performance of his duties hereunder or with the prior written
consent of the Company or as otherwise required by law or legal process.
(b) During the Noncompetition Period (as defined below), the
Executive shall not, without the prior written consent of the Board, engage in
or become associated with a Competitive Activity. For purposes of this paragraph
(b) of Section 6: (i) the "Noncompetition Period" means the period beginning on
the Closing Date and ending on the Executive's 75th birthday); (ii) a
"Competitive Activity" means any business or other endeavor that engages in
construction, ownership, leasing, design and/or management of parking lots,
parking garages, or other parking facilities or consulting with respect thereto;
and (iii) the Executive shall be considered to have become "associated with a
Competitive Activity" if he becomes directly or indirectly involved as an owner,
employee, officer, director, independent contractor, agent, partner, advisor, or
in any other capacity calling for the rendition of the Executive's personal
services, with any individual, partnership, corporation or other organization
that is engaged in a Competitive Activity. Notwithstanding the foregoing, the
Executive may make and retain investments during the Employment Period in not
more than five percent of the equity of any entity engaged in a Competitive
Activity, if such equity is listed on a national securities exchange or
regularly traded in an over-the-counter market.
(c) (i) Notwithstanding the foregoing, so long as the Executive
complies with this Section 6(c), it shall not be considered a violation of the
provisions of Section 6(b) above for the Executive (x) to own or sell the
Permitted Investments at any time during the Noncompetition Period, or (y) to
own or sell any interest in any other real estate ("Other Real Estate") at any
time after the Employment Period for the remainder of the Noncompetition Period.
The Executive shall provide to the Board reasonable advance written notice of
his disposition of any Permitted Investment and of his acquisition or
disposition of any interest in Other Real Estate. In addition, if any Permitted
Investment or Other Real Estate includes a parking facility (a "Parking
Facility"), then the Executive shall follow the procedures set forth in
subsections (ii) and (iii) below. In the case of a Parking Facility in a
Permitted Investment or in Other Real Estate that, in either case, is managed or
leased by the Company at any time, the Executive shall follow such procedures
with respect to any extension or renewal of any such management agreement or
lease. In the case of a Parking Facility in Other Real Estate that is not being
managed or leased by the
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<PAGE> 6
Company at the time the Executive acquires an interest in the Other Real Estate,
the Executive shall follow such procedures at the time he acquires the interest.
(ii) In the case of any Permitted Investment or Other Real Estate
controlled by the Executive or his Affiliates (as defined in Section 6(d)
below), the Executive shall initiate negotiations with the Company in an attempt
to determine mutually agreeable terms upon which the Company will manage or
lease the Parking Facility, failing which the Company shall have a right of
first refusal with respect to any management agreement or lease that may be
negotiated with any independent third-party parking operator (which right of
first refusal shall be exercised by the Company, if at all, by giving written
notice to the Executive within seven (7) days of the Company's receipt of
written notification from the Executive containing a copy of the proposed
management contract or lease).
(iii) In the case of any Permitted Investment or Other Real Estate
not controlled by Executive, Executive shall use reasonable and good-faith
efforts to cause the controlling person or entity to initiate negotiations with
the Company in an attempt to determine mutually agreeable terms pursuant to
which the Company would manage or lease the Parking Facility.
(iv) In any negotiations pursuant to subsection (ii) or (iii) above,
the Company shall be represented by a neutral expert appointed by the Board.
(v) Notwithstanding anything to the contrary contained herein, it is
agreed that for all purposes of Sections 6(b) and (c), the Theatre District
SelfPark ("TDSP") shall not be considered as either a Permitted Investment or
Other Real Estate, it being the intent of the parties to treat said Parking
Facility as if the Executive had no equity or ownership interest of any kind or
nature whatsoever therein. The parties further agree as follows:
(1) Standard/Tremont Parking Corporation ("Tremont"), an
Illinois corporation that is the lessee and operator of TDSP, and of which
the Executive owns half of the issued and outstanding shares, shall not at
any time be permitted to lease, manage or in any other manner operate any
parking facility other than TDSP.
(2) If at any time during the term of Tremont's lease of TDSP,
Tremont should desire to sublease its interest therein to any third party,
the Executive shall adhere to the procedures set forth in subsections (ii)
or (iii) above, as the case may be, with respect to such intended
sublease.
(3) The Executive shall provide to the Board reasonable
advance written notice of his disposition of all or any portion of his
interest in TDSP or of his acquisition of any additional interest in TDSP.
(d) For purposes of Section 6(c), an "Affiliate" of the Executive
shall mean any member of the Executive's family (including without limitation
his grandparents and all their descendants (whether natural or adoptive) and his
present and former spouses), any trust a principal beneficiary of which is the
Executive or any such member of the Executive's family, and any person that
directly, or through one or more intermediaries, is controlled by the Executive
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and/or one or more of such members of the Executive's family and/or one or more
such trusts; and a person shall be considered to "control" any other person with
respect to which the first person possesses, directly or indirectly, the power
to direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by
contract, by the terms of any trust agreement, or otherwise).
7. Successors. (a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean both
the Company as defined above and any such successor that assumes and agrees to
perform this Agreement, by operation of law or otherwise.
8. Miscellaneous. (a) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Illinois without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified except by a written agreement executed
by the parties hereto or their respective successors and legal representatives.
(b) All notices and other communications under this Agreement shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
Myron C. Warshauer
1401 Waverly
Highland Park, Illinois 60035
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<PAGE> 8
with a copy to:
Michael K. Wolf
800 Bluff Street
Glencoe, Illinois 60022
If to the Company:
c/o Holberg Industries, Inc.
545 Steamboat Road
Greenwich, Connecticut 06830
Attention: Chief Financial Officer
Telecopy Number: (203) 661-5756
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Adam O. Emmerich, Esq.
Telecopy Number: (212) 403-2000
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 8. Notices and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.
(d) Notwithstanding any other provision of this Agreement, the
Company may withhold from amounts payable under this Agreement all federal,
state, local and foreign taxes that are required to be withheld by applicable
laws or regulations.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement.
(f) The Executive and the Company acknowledge that this Agreement
supersedes any other agreement, whether written or oral, between them concerning
the subject matter hereof, including, but not limited to, the Summary of Terms
of Employment Agreement.
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<PAGE> 9
(g) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.
(h) The Executive shall not be required to mitigate the amount of
any payment provided for in this Agreement by seeking other employment or
otherwise. The Company shall not be entitled to set off against the amounts
payable to the Executive under this Agreement any amounts earned by the
Executive in other employment after termination of his employment with the
Company, or any amounts which might have been earned by the Executive in other
employment had he sought such other employment.
(i) The Company shall indemnify the Executive and hold him harmless
from liability for acts or decisions made by him while performing services for
the Company and its affiliates to the greatest extent permitted by applicable
law, except in the event of the Executive's gross negligence or willful
misconduct. The Company shall use its reasonable efforts to obtain coverage for
the Executive under any insurance obtained during the Employment Period insuring
officers and directors of the Company against any such liability. To the
greatest extent permitted by applicable law, the Company shall, upon receipt of
any undertaking that may be required by applicable law, pay as incurred all
expenses, including reasonable attorneys' fees and costs of court approved
settlements, actually incurred by the Executive in connection with the defense
of or settlement of any action, suit or proceeding and in connection with any
appeal thereon, which has been brought against the Executive by reason of the
Executive's service as an officer, director or agent of the Company or its
affiliates, except in the event of the Executive's gross negligence or willful
misconduct.
(j) In the event that in the opinion of tax counsel selected and
compensated by the Executive ("Executive's Tax Counsel"), a payment or benefit
received or to be received by the Executive following his termination (whether
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with the Company or any person affiliated with the Company)
(collectively, with the payments provided for in the foregoing provisions of
this Section, the "Post-Termination Payments") would be subject (in whole or
part) to the excise tax (the "Excise Tax") imposed by Section 4999 of the Code,
and (b) as a result of the Excise Tax, the net amount of Post-Termination
Payments retained by the Executive (taking into account the Excise Tax) would be
less than the net amount of Post-Termination Payments retained by the Executive
if the Post-Termination Payments were reduced or eliminated as described in this
Section, then the Post-Termination Payments shall be reduced or eliminated until
no portion of the Post-Termination Payments is subject to the Excise Tax, or the
Post-Termination Payments are reduced to zero. For purposes of this limitation,
(i) no portion of the Post-Termination Payments, the receipt or enjoyment of
which the Executive shall have waived in writing prior to the date of payment,
shall be taken into account, (ii) no portion of the Post-Termination Payments
shall be taken into account which, in the opinion of Executive's Tax Counsel,
does not constitute a "parachute payment" within the meaning of Section
280G(b)(2) of the Code, (iii) the Post-Termination Payments shall be reduced
only to the extent necessary so that the Post-Termination Payments (other than
those referred to in clauses (i) and (ii)) in their entirety constitute
reasonable compensation for services actually rendered within the meaning of
Section 280G(b)(4) of
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the Code or are otherwise not subject to the Excise Tax, in the opinion of
Executive's Tax Counsel, and (iv) the value of any non-cash benefit and all
referred payments and benefits included in the Post-Termination Payments shall
be determined by the mutual agreement of the Company and the Executive in
accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization of its Board of Directors, the Company
has caused this Agreement to be executed in its name on its behalf, all as of
the day and year first above written.
/s/ Myron C. Warshauer
----------------------------------
Myron C. Warshauer
APCOA, INC.
By: /s/ Michael J. Celebrezze
----------------------------------
Name: Michael J. Celebrezze
Title: Chief Financial Officer
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SCHEDULE A
Permitted Investments
Ownership interests, direct or indirect, in the following parking facilities:
o Buckingham Plaza Condominium in Chicago
o 61 W. Kinzie Street and 401 N. Clark Street in Chicago
o 2 East Oak Street in Chicago.
o Clark-Fullerton Car Park located at 2427 N. Clark Street in Chicago
o 203 North LaSalle Street Self Park and the Theatre District Self Park in
Chicago
o Equity interests as shareholders of Standard/Tremont Parking Corporation, an
Illinois corporation that is the lessee of the Theatre District Self-Park
parking facility in Chicago.
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<PAGE> 1
Exhibit 10.7
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is executed this 12th day of December , 1994, by and
between APCOA, Inc., a Delaware corporation with offices at 25550 Chagrin
Boulevard, Beachwood, Ohio 44122 (the "Company"), and G. Walter Stuelpe, Jr. of
Shaker Heights, Ohio (the "Executive").
WITNESSETH:
WHEREAS, the Company is engaged in the business of leasing and
managing open-air parking lots and indoor garages and ramps for the purpose of
parking motor vehicles on a leasehold, license, concession or management fee
basis throughout the United States under agreement with municipalities, owners
of properties, and/or otherwise, whether directly or through a subsidiary (the
"Business of the Company"); and
WHEREAS, the Executive has been employed by the Company in a
management capacity for several years and, during the course of his employment,
the Executive has become an experienced and valuable employee and is
knowledgeable with respect to the Business of the Company, its trade secrets,
customers, market areas, sources of supply and manner of doing business; and
WHEREAS, the Company desires to continue to employ the Executive and
the Executive desires to continue to work for the Company upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises hereto and the
agreements and covenants hereinafter contained, the parties hereto, intending to
be legally bound, mutually agree as follows:
1. Employment and Duties.
The Company hereby employs the Executive to serve as its President
and Chief Executive Officer, and the Executive hereby accepts employment by the
Company upon the terms and conditions hereinafter set forth. In his capacity as
the Company's President and Chief
<PAGE> 2
Executive Officer, the Executive shall have overall responsibility for the
conduct of the Business of the Company. The Executive shall report to the
Company's Board of Directors (the "Board"). The Executive shall devote such
time, attention and energies to the Business of the Company as required to
discharge his obligations hereunder in a diligent and competent manner and shall
not, during the term of this Agreement, engage in any other business activities
that will materially interfere with the Executive's employment pursuant to this
Agreement.
2. Term.
(a) The term of this Agreement shall be for a period of four (4)
years commencing on January 1, 1994, and ending on December
31, 1997. Unless terminated as set forth below in Section 4,
this Agreement shall remain in effect for so long as the
Executive is employed by the Company.
(b) If this Agreement has not been terminated as set forth below
in Section 4 by December 31, 1995, and neither party hereto
has given notice to the other party by December 31, 1995, of
the desire to have this Agreement terminate at the end of its
original term (December 31, 1997), this Agreement shall
continue in full force and effect for an additional one (1)
year period following the end of its original term on December
31, 1997, and the same procedure mutatis mutandis shall apply
in any later years and to any extended term of this Agreement.
3. Compensation and Other Benefits.
For the services to be rendered by him pursuant to this Agreement,
the Company agrees to provide the Executive, so long as he shall be employed by
the Company, the following compensation and benefits:
(a) The Executive acknowledges receipt of a bonus in the amount of
$125,000 for calendar year 1993. Such bonus is in lieu of any
other bonus payable to the Executive under any agreement for
calendar year 1993.
(b) Annual base salary at the rate set forth on Exhibit A
("Salary"), payable not less often than monthly in equal
installments at the end each month.
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<PAGE> 3
(c) A bonus for each calendar year, starting with 1994, in an
amount determined pursuant to the formula set forth in Exhibit
B.
(d) The benefits provided under the plans, arrangements and
policies described in Exhibit C attached hereto.
(e) Such other benefits are provided the Company's senior
executives generally under the Company's plans, arrangements,
and policies as they may exist from time to time except to the
extent comparable or greater benefits are provided to the
Executive under Section 3(d) above (the plans, arrangements,
and policies referred to in this Section 3(e) and Section(d)
above shall be hereinafter referred to as the "Employee
Plans"); and
(f) Five (5) weeks of vacation annually during which time the
Executive's compensation will be paid in full and all other
benefits under this Agreement will continue to be provided to
him.
(g) The Company will reimburse the Executive for all expenses he
incurs in maintaining and operating the automobile described
on Exhibit C. Consistent with the Company's past practices,
the Company will reimburse the Executive for all reasonable
business expenses incurred by the Executive relating to the
conduct of the Business of the Company. Any such expense
reimbursement shall be conditioned upon the Executive
presenting to the Company an itemized account of such expenses
will supporting documents. Reimbursable expenses shall include
reasonable and necessary expenses for entertainment, travel,
meals and hotel accommodations.
(h) Directors and officers liability insurance coverage but only
if and to the same extent such coverage is provided to any
other officer or director of the Company, and indemnification
by the Company to the full extent permitted by law against
liability claims arising out of his activities as an employee
or director of the Company.
(i) Such other emoluments as the Board may from, time to time,
grant.
4. Termination of Agreement.
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<PAGE> 4
(a) This Agreement shall terminate upon the death of the Executive
while he is employed by the Company, and in such event:
(i) the Beneficiary shall be entitled to receive the amount
of the Executive's Salary prorated through the date of
the Executive's death;
(ii) the Beneficiary shall be entitled to receive an amount
equal to the Executive's Salary at the time of his
death, payable in twelve (12) equal monthly installments
commencing on the first day of the month next following
the Executive's death;
(iii) the Beneficiary shall be entitled to receive a bonus for
the calendar year in which the Executive dies in the
amount determined pursuant to Section 3(c) multiplied by
a fraction, the numerator of which shall be the numbers
of days the Executive was employed by the Company during
the calendar year, and the denominator of which shall be
the number of days in the calendar year, payable in
accordance with Section 3(c);
(iv) the Beneficiary shall be entitled to any accrued but
unpaid bonus for any prior calendar year as determined
pursuant to and payable in accordance with Section 3(c);
(v) the Beneficiary shall be entitled to receive any accrued
but unpaid expense reimbursements; and
(vi) such persons as may be entitled thereto shall receive
such benefits as may be provided under terms of the
Employee Plans.
In addition to the benefits otherwise provided above under
this Section 4(a), for a period of twelve (12) months
following the Executive's death, the Executive's surviving
spouse and those persons who were the Executive's dependents
at the time of the Executive's death shall be entitled to
receive the benefits under the Employee Plans they would have
been entitled to receive had the Executive continued to live
during such twelve (12) month period.
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<PAGE> 5
(b) This Agreement shall terminate in the event the Executive's
employment with the Company terminates because of disability
(as defined below). In such event, the Executive shall be
entitled to receive:
(i) the amount of the Executive's Salary prorated through
the date of his termination of employment;
(ii) an amount equal to the Executive's Salary at the time of
his termination of employment, payable in twelve (12)
equal monthly installments commencing on the first day
of the month next following the Executive's termination
of employment;
(iii) a bonus for the calendar year in which the Executive's
termination of employment occurs in the amount
determined pursuant to Section 39c) multiplied by a
fraction, the numerator of which shall be the numbers of
days the Executive was employed by the Company during
the calendar year, and the denominator of which shall be
the number of days in the calendar year, payable in
accordance with Section 3(c);
(iv) any accrued but unpaid bonus for any prior calendar year
as determined pursuant to and payable in accordance with
Section 3(c);
(v) accrued but unpaid expense reimbursements; and
(vi) such benefits as may be provided under terms of the
Employee Plans.
For purposes of this Agreement, "disability" shall mean any
physical or mental impairment or disability which prevents the
Executive from performing his duties under this Agreement for
a period of at least one hundred twenty (120) days and which
is expected to be of permanent duration. A determination of
whether the Executive is disabled shall be made by two
licensed physicians, one appointed by the Board of Directors
and one appointed by the Executive. In the event the two
physicians are unable to agree with respect to whether the
Executive is disabled, the determination of whether the
Executive is disabled shall be made by a
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<PAGE> 6
third duly licensed physician chosen by the two physicians
previously appointed.
(c) This Agreement shall terminate thirty (30) days following the
date the Executive receives notice from the Company that it
desires to terminate his employment with the Company. In the
event that this Agreement is terminated pursuant to the
preceding sentence without Cause (as defined in Section 4(g)
below), the Executive shall be entitled to receive;
(i) regular periodic payments of his Salary through the date
this Agreement was scheduled to terminate under Section
2 hereof as though the Executive continued to be
employed by the Company, reduced by any salary or bonus
he receives during such period with respect to
performing any of the acts described in the second
sentence of Section 6(a) hereof;
(ii) to the extent not provided by a successor employer, all
benefits provided under the Employee Plans for a period
of twelve (12) months following the date this Agreement
terminates as though the Executive continued to be
employed by the Company;
(iii) a bonus for the calendar year in which this Agreement
terminates in an amount equal to the amount determined
pursuant to Section 3(c) multiplied by a fraction, the
numerator of which shall be the numbers of days the
Executive was employed by the Company during the
calendar year, and the denominator of which shall be the
number of days in the calendar year, payable in
accordance with Section 3(c);
(iv) any accrued but unpaid bonus for any prior calendar year
as determined pursuant to and payable in accordance with
Section 3(c);
(v) accrued but unpaid expense reimbursements; and
(vi) such benefits as may be provided under terms of the
Employee Plans.
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<PAGE> 7
In the event this Agreement is terminated pursuant to the
first sentence of this Section 4(c) because the Company
discharges the Executive for Cause, the Executive shall be
entitled to receive;
(i) the amount of his Salary prorated through the date this
Agreement terminates;
(ii) any accrued but unpaid bonus for any calendar year which
ended prior to the date this Agreement terminates as
determined pursuant to and payable in accordance with
Section 3(c);
(iii) accrued but unpaid expense reimbursements; and
(iv) such benefits as may be provided under terms of the
Employee Plans.
(d) This Agreement shall terminate upon the Executive's voluntary
termination of his employment with the Company (for some
reason other than the Executive's death or disability). In the
event this Agreement is terminated pursuant to the preceding
sentence, the Executive shall be entitled to receive:
(i) the amount of his Salary prorated through the date this
Agreement terminates;
(ii) any accrued but unpaid bonus for any calendar year which
ended prior to the date this Agreement terminates as
determined pursuant to and payable in accordance with
Section 3(c);
(iii) accrued but unpaid expense reimbursements; and
(iv) such benefits as may be provided under terms of the
Employee Plans.
(e) If during the term of this Agreement, without the Executive's
consent, either;
(i) the Executive's duties with the Company are materially
reduced; or
(ii) his Salary is reduced; or
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<PAGE> 8
(iii) the Company fails to continue the Executive as a
participant in any Employee Plan in which he is
participating without otherwise compensating him for
such loss of benefits;
and the Executive terminates his employment with the Company
in response thereto, then this Agreement shall be deemed to be
terminated pursuant to Section 4(c) without Cause.
(f) In the event the Executive's employment with the Company
terminates within six (6) months following a Change of Control
(as defined below) for any reason other than the Executive's
death or disability, this Agreement shall be deemed to be
terminated pursuant to Section 4(c) without Cause; provided,
however, that the payments described in Section 4(c)(i) shall
continue for a minimum period of twenty-four (24) months
following the termination of this Agreement. "Change of
Control" shall mean either:
(i) the acquisition of beneficial ownership of fifty percent
(50%) or more of the value of the Company's issued and
outstanding shares of common stock of all classes by a
person or group of persons under common control, whether
or not such acquisition is approved by the Board; or
(ii) a change in the membership of the board at any time
during any twelve (12) month period such that, following
such change, at least one-half (1/2) of the members of
the Board were not members of the Board at the start of
such twelve (12) month period but only if the election
of such new members of the Board was not approved by at
least two-thirds (2/3) of the Directors who were either
sitting at the beginning of such twelve (12) month
period or elected to the Board during such twelve (12)
month period with the approval of two-thirds (2/3) of
the Director who were sitting at the beginning of such
twelve (12) month period.
(g) "Cause" as used in this Agreement shall mean that either
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<PAGE> 9
(i) the Executive materially failed for some reason other
than illness, injury, or disability to perform his
obligations hereunder provided that the Executive shall
have first received written notice from the Company
stating with specificity the nature of such failure and
the Executive shall not have corrected the failure cited
in such notice within thirty (30) days after his receipt
thereof; or
(ii) the Executive has: (a) committed either any felony
involving moral turpitude or any crime in the conduct of
his official duties which is materially adverse to the
welfare of the Company; or (b) committed any material
act of fraud against the Company, its parent or
affiliates, or materially misused his position for his
personal gain or that of any third party; or (c) taken
any action (other than an error in judgment made in the
ordinary course of his duties) materially adverse to the
welfare of the Company including, but not limited to,
any material breach of the covenants and conditions
contained in Sections 5 and 6 hereof.
(h) Notwithstanding the preceding provisions of this Section 4,
the amounts payable pursuant to Section 4(a)(ii), or Section
4(b)(ii), or Section 4(c)(i) shall, at the election of the
payee thereof, be paid in a single actuarially-equivalent
lump-sum amount (determined using a discount rate equal to the
rate for immediate annuities then promulgated by the Pension
Benefit Guaranty Corporation and without discount for
mortality); provided, however, that such election shall be
made before the first payment is made pursuant to the
applicable Section. Any amount payable pursuant to this
Section 4(h) shall be paid on the date the first payment was
otherwise due under the applicable Section.
(i) In the event that following the termination of this Agreement
the Executive is entitled to receive any payments pursuant to
this Agreement and the Executive dies, any such payments shall
be made to the Beneficiary. The Executive shall be free to
amend, alter or change his
-9-
<PAGE> 10
beneficiary designation form (Exhibit D); provided; however,
that any such amendment, alteration or change shall be made by
filing a new form with the Secretary of the Company. In the
event the Executive fails to designate a beneficiary,
following the death of the Executive all payments of the
amounts specified by this Agreement which would have been paid
to the Beneficiary pursuant to this Agreement shall instead be
paid to the Executive's spouse, if she survives the Executive,
or, if she does not survive the Executive, to the Executive's
estate.
5. Confidentiality and Disclosure of Information.
(a) The Executive, during his tenure as an officer and employee of
the Company, has had and will have access to, and has gained
and will gain knowledge with respect to the Company's trade
secrets, as they may exist from time to time, and confidential
information concerning its financial statements, operations,
sales and marketing activities and procedures, bidding
techniques, design and construction techniques, customer
lists, list of owners of parking facilities, and credit and
financial data concerning such persons (in the aggregate
referred to hereinafter as "Secret and Confidential
Information"). The Executive acknowledges that the Secret and
Confidential Information constitutes a valuable, special and
unique asset of the Company as to which the Company has the
right to retain and hereby does retain all of its proprietary
interests. However, access to and knowledge of the Secret and
Confidential Information is essential to the performance of
the Executive's duties hereunder. In recognition of this fact,
the Executive agrees that he will not, during or after his
employment with the Company, disclose any of the Secret and
Confidential Information to any person, firm, corporation,
association or other entity for any reason or purpose
whatsoever (except as necessary in the performance of his
duties hereunder) or made use of any of the Secret and
Confidential Information for his own purposes or those of
another but only if with respect to any such disclosure or use
there is a reasonable possibility that
-10-
<PAGE> 11
such disclosure or use could have a materially adverse effect
upon the Company. The provisions contained in this Section
5(a) shall also apply to information obtained by the
Executive, in the course of his employment by the Company,
with respect to the Company's subsidiary and affiliated
companies.
(b) The Executive shall promptly disclose, grant and assign to the
Company for its sole use and benefit any and all inventions,
improvements, technical information and suggestions relating
to the Business of the Company (in the aggregate referred to
as the "Creations") which the Executive has or may conceive,
develop or acquire during his employment (whether or not
during the usual working hours) together with all patent
applications, letters patent, copyrights and reissues thereof
that may, at any time be granted for or upon any of the
Creations. At all times during and after his employment, the
Executive shall promptly execute any and all documents
requested to vest title to any and all of the Creations in the
Company and to enable it to obtain and maintain the entire
right and title thereto throughout the world and render to the
Company, at its expense, any and all assistance required to
protect its legal rights thereto.
6. Restrictive Covenant.
The Executive recognizes that, in entering into this Agreement, the
Company is relying on his extensive experience, knowledge, ability and contacts
in the Business of the Company. For this reason, subject to the next sentence,
the Executive covenants and agrees that during the period of his employment by
the Company and either:
(a) if this Agreement terminates pursuant to either Section 4(b),
or 4(c) with Cause, or 4(d) hereof, for a period of two (2)
years immediately following the termination of this Agreement;
or
(b) if this Agreement terminates pursuant to Section 4(c) without
Cause, for a period immediately following the termination of
this Agreement which ends on the date the Executive receives
the last payment of Salary under Section 4(c)(i);
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<PAGE> 12
as the case may be, he shall not have any direct or indirect ownership or other
financial interest in and will not, directly or indirectly, engage in, or in any
manner become interested in (as principal, agent, consultant, advisor, officer,
director, employee or otherwise), any business which competes with the Business
of the Company in the geographic market in which the Company is then operating
nor will he solicit business directly or indirectly on behalf of such competing
business. The preceding sentence shall not apply to any transaction or
arrangement involving the Executive to which the Company consents in writing.
Nothing herein shall preclude the Executive from being a member of or serving as
an officer or director of any trade association or from owning, of record or
beneficially, in the aggregate up to five percent (5%) of any issue of
securities of a publicly traded company.
7. Remedies.
It is recognized by the Executive that a special and confidential
relationship exists between the Company and the Executive because of his
knowledge, expertise and judgment, and the dependence of the Company on his
knowledge, expertise and judgment. The Executive agrees that the remedy at law
for any breach or threatened breach of the covenants set forth in Sections 5 and
6 will be inadequate and that any breach or attempted breach would cause such
immediate and permanent damage as would be irreparable and the exact amount of
which would be impossible to ascertain. The Executive further agrees that in the
event of any such breach or threatened breach by the Executive, in addition to
any and all other legal and equitable remedies available, the Company may have
any of such actions enjoined by any court authorized by law to take such action.
8. Binding Effect; Non-Assignability.
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the Company. The performance of the Executive
hereunder is personal and nonassignable.
9. Invalidity.
(a) The territorial, time and other limitations contained in
Sections 5 and 6 are reasonable and properly required for the
adequate protection of the
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<PAGE> 13
Business of the Company, and in the event that any one or more
of such territorial, time or other limitation is found to be
unreasonable or otherwise invalid in any jurisdiction, in
whole or in part, the parties acknowledge and agree that such
limitation shall remain valid in all other jurisdictions.
(b) If any provision, term, clause or part thereof in this
Agreement is invalid, it shall not affect the remainder of
said provision, term or clause of this Agreement, but said
remainder shall be binding and effective against both parties
hereto.
10. Arbitration.
Any disputes between the parties with respect to the meaning or
interpretation of this Agreement or the amounts of any payments hereunder which
cannot be settled amicably by the parties hereto shall be settled by arbitration
in Cleveland, Ohio, in accordance with the rules of arbitration of the American
Arbitration Association.
11. Affiliates.
Any services the Executive performs for an Affiliate (as defined
below) shall be deemed performed for the Company hereunder. Any transfer of the
Executive's employment from the Company to an Affiliate, or from an Affiliate to
the Company, or from an Affiliate to another Affiliate shall be deemed not to
constitute a termination of the Executive's employment with the Company and
shall not terminate this Agreement. For purposes of this Agreement, the term
"Affiliate" shall mean a corporation or unincorporated trade or business that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with the Company.
12. Miscellaneous.
(a) This Agreement embodies the entire agreement between the
parties hereto concerning the subject matter hereof. This
Agreement may not be changed except by a writing signed by the
party against whom enforcement thereof is sought.
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<PAGE> 14
(b) This Agreement has been executed in the State of Ohio and
shall be governed and interpreted in accordance with the laws
of the State of Ohio.
(c) All notices given hereunder shall be mailed postage paid to
the address of the receiving party as first indicated above or
to such other place as such party may from time to time
designate by written notice hereafter.
(d) The use of the feminine, masculine or neuter pronoun herein
shall not be restrictive as to gender and shall be interpreted
in all cases as the context may require. The use of the
singular or plural herein shall not be restrictive as to
number and shall be interpreted in all cases as the context
may require.
(e) The section headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound, have executed this Agreement this 12th day of December, 1994.
ATTEST: APCOA, INC.
(the "Company")
By:
- ------------------------------------ -------------------------------
WITNESS:
- ------------------------------------ -------------------------------
G. Walter Stuelpe, Jr.
(the "Executive")
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<PAGE> 15
EXHIBIT A
EXECUTIVE'S BASE SALARY
<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL SALARY
------------- -------------
<C> <S>
1994 $375,000
1995 and later years Salary for the prior calendar year
increased by the greater of either (a)
3% or (b) the percentage increase in the
Consumer Price Index for Urban Wage
Earners and Clerical Workers for the
prior calendar year, as published
by the Bureau of Labor Statistics.
</TABLE>
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<PAGE> 16
EXHIBIT B
For any calendar year after 1993 the Executive's bonus under Section 3(c)
of the Agreement shall be an amount determined pursuant to the following
formula:
8% of (EBITDACB for the calendar year minus X),
but not less than zero.
For this purpose, (a) EBITDACB for any calendar year shall be the sum of
the amount determined in accordance with the definition of "EBITDAC" set forth
in ss.1.1 of that certain Revolving Credit Agreement As of February 24, 1994 By
and Among APCOA, Inc., the First National Bank of Boston and Other Banks Listed
on Schedule 1 [thereto], and the First National Bank of Boston as Agent for the
Banks (the "Revolving Credit Agreement") plus all bank charges (other than
interest) incurred by the Company for such calendar year, and (b) X equals 15%
of the Company's Average Invested Capital (as defined below) for the calendar
year.
"Average Invested Capital" for any calendar year is one-half of the sum of
the amounts of Invested Capital (as defined below) determined as of the last day
of such calendar year and the last day of the immediately preceding calendar
year.
"Invested Capital" for any calendar year equals (a) plus (b) minus (c)
plus or minus (d) below where:
(a) equals the sum of:
(i) the principal amount of the Company's cash borrowings
under the Revolving Credit Agreement;
(ii) the principal amount owed by the Company under that
certain Note Agreement with Prudential Insurance Company
of America dated March 31, 1994;
(iii) the principal amount of the Company's borrowings under
any other senior or subordinated credit facility
(including, without limitation, any facility which
replaces a facility described in (i) or (ii) above);
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<PAGE> 17
(iv) the preferred stock of AP Holdings, Inc. and APCOA, Inc.
issued and outstanding as of October 31, 1994, excluding
accrued dividends thereon;
(v) the common stock of AP Holdings, Inc. issued and
outstanding and owned by Holberg Industries, Inc. as of
April 14, 1989; and
(vi) the additional paid-in capital of AP Holdings, Inc. as
of April 14, 1989 relating to the common stock then
owned by Holberg Industries, Inc.; and
(b) equals the sum of:
(i) the Company's cumulative amortization charges for all
periods from January 1, 1994 through the end of the
calendar year; and
(ii) the Company's cumulative net profit, if any, for all
periods from January 1, 1994 through the end of the
calendar year; and
(c) equals the sum of:
(i) the Company's cash and cash equivalents; and
(ii) the Company's cumulative net loss, if any, for all
periods from January 1, 1994 through the end of the
calendar year; and
(d) equals the net receivable or payable balance of the Company
generated in connection with advances to or from, or
transactions with, other entities which are under common
control with the Company;
all determined in accordance with the Company's regular financial accounting
procedures consistently applied.
An example showing the calculations required under the formula, and using
estimated Company data for calendar years 1994 and 1995 for that purpose, is
attached.
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<PAGE> 18
ANALYSIS OF EXHIBIT B
EXPECTATIONS OF JVH
<TABLE>
<CAPTION>
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
Funded Debt 24.9 23.0 21.0
Preferred Stock 15.0 15.0 15.0
Paid in Capital 2.8 2.8 2.8
---- ---- -----
42.7 40.8 38.8
Deduct: Cash 2.2 2.0 2.0
Intercompany 0.5 0.5
---- ---- -----
40.5 38.3 36.3
Add: Net Profit &
Amortization 2.2 (2.2 + 2.6) 4.8
---- ---------------
40.5 41.1
Avg. for the Year 40.5 40.8
15% Capital Cost 6.08 6.12
EBITDAC 6.7 7.5 8.2
---- -----
Excess 1.42 2.08
Incentive at 8% 113.6 166.4
</TABLE>
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<PAGE> 19
EXHIBIT C
G.W. STUELPE, JR. - BENEFITS AND PERQUISITES
o Provident Executive Health Insurance, providing comprehensive medical,
dental and vision coverages with no out-of-pocket expense.
o Group Term Life Insurance providing a flat term benefit with no cash value
or loan provisions. Matching Group Accidental Death and Dismemberment
coverage.
o Business travel Accident Insurance providing coverage for accidents
occurring during the course of business.
o Personal Accident Insurance offering full 24-hour accident protection, on
or off the job.
o Group Long-Term Disability Insurance.
o Individual Long-Term Disability Insurance supplementing the Group
coverage.
o 401(k) Savings and Retirement/401(k) Wraparound Plans allowing for
tax-sheltered long-term savings.
o Continued coverage under the Supplemental Pension Plan as amended
effective September 1, 1993.
o Continued participation in the Apcoa, Inc. Retirement Plan for Key
Executive Officers, as adopted by the Company on April 14, 1989.
o The Executive will be provided with a leased automobile chosen by the
Executive; provided, that the Company's lease payments shall not exceed
$780 per month.
o The Company shall pay all initiation fees, periodic dues and capital
charges with respect to the Executive's maintaining a membership in one
country club in the Cleveland area chosen by the Executive.
o The Company shall pay all initiation fees, periodic dues, and capital
charges relating to the Executive's maintaining membership in two
business/luncheon clubs of the Executive's choice in the Cleveland area.
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<PAGE> 20
EXHIBIT D
DESIGNATION OF BENEFICIARY
On __________, 1994, I, the undersigned, entered into an Executive
Employment Agreement with APCOA, Inc. Pursuant to the terms of said Agreement, I
have the right to designate a beneficiary to receive, in the event of my death,
certain payments pursuant to said Agreement. I therefore, exercise this right
and designate _______________ to receive any such payments if (s)he survives me,
but if __________________ does not survive me, I designate ____________________.
Any and all previous designations of beneficiary made by me are hereby revoked
and I hereby reserve the right to revoke this designation of beneficiary.
-------------------------------------
Dated: G. Walter Stuelpe, Jr.
----------------------------
Receipt of this Designation of Beneficiary form is acknowledged by
the undersigned Secretary of APCOA, Inc.
APCOA, INC.
By:
----------------------------------
, Secretary
Dated:
----------------------------
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<PAGE> 21
MEMORANDUM
DATE: July 12, 1996
TO: J. Holten
FROM: W. Stuelpe
SUBJECT: Sand Hills
KeyCorp, along with its senior officers and most of the heads of companies in
Cleveland (including our major clients), are involved with a new project called
"Sand Hills Golf Club". It will open in 1996 and they would like to add my name
to the roster of business leaders that are on board.
It would cost $4,000 now, with an additional $10,500 when they call.
Obviously, it is hard to say no.
If you agree, please approve and return.
APPROVED:
- ---------------------------
John V. Holten
Date:
----------------------
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<PAGE> 22
DATE: December 16, 1994
TO: John Holten
FROM: Walter Stuelpe
CC:
SUBJECT: CONFIDENTIAL
This is just a brief note to say thank you for finalizing my new Employment
Agreement. Even though it took longer than either of us expected, I consider
this an indication of your continued support.
Separately, I would like to ask that you approve a membership in a club in
Columbus Ohio known as Double Eagle. A 21 year client of APCOA's, and a major
business leader in Columbus, Jim Petropoulos, "strongly" suggested that I join
this exclusive club for the top 10 businessmen in Columbus and 100 business
leaders from around the country. It is a great opportunity to cultivate business
in Columbus as well as entertain clients at a very unique and exclusive facility
(especially John Burns of Sterling who very much would like to be a member).
Because it is an out-of-town membership, the cost is only $10,000 - comparable
to a business or university club (which is provided for in Exhibit C of my
contract). Therefore, I am requesting your approval to substitute Double Eagle
for a second business club - as set out in the agreement.
Once again, thanks for your commitment and please know that I agree with your
business strategy for 1998 and will make every effort to implement it.
Enclosure
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<PAGE> 23
EXHIBIT C
It is agreed that Walter Stuelpe may substitute membership in Double Eagle
for a business club as provided for in Exhibit C of his employment agreement.
APPROVED:
---------------------------
John V. Holten
-23-
<PAGE> 24
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is executed this 14th day of April , 1989, by and
between APCOA, Inc., a Delaware corporation with offices at 25550 Chagrin
Boulevard, Beachwood, Ohio 44122 (the "Company"), and G. Walter Stuelpe,
Jr. of Shaker Heights, Ohio (the "Executive").
WITNESSETH:
WHEREAS, the Company is engaged in the business of leasing and
managing open-air parking lots and indoor garages and ramps for the purpose of
parking motor vehicles on a leasehold, license, concession or management fee
basis throughout the United States under agreement with municipalities, owners
of properties, and/or otherwise, whether directly or through a subsidiary (the
"Business of the Company"); and
WHEREAS, the Executive has been employed by the Company in a
management capacity for several years and, during the course of his employment,
the Executive has become an experienced and valuable employee and is
knowledgeable with respect to the Business of the Company, its trade secrets,
customers, market areas, sources of supply and manner of doing business; and
WHEREAS, the Company desires to continue to employ the Executive and
the Executive desires to continue to work for the Company upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises hereto and the
agreements and covenants hereinafter contained, the parties hereto, intending to
be legally bound, mutually agree as follows:
1. Employment and Duties.
The Company hereby employs the Executive to serve as its President
and Chief Executive Officer, and the Executive hereby accepts employment by the
Company upon the
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<PAGE> 25
terms and conditions hereinafter set forth. In his capacity as the Company's
President and Chief Executive Officer, the Executive shall have overall
responsibility for the conduct of the Business of the Company. The Executive
shall report to the Company's Board of Directors. The Executive shall devote his
entire time, attention and energies to the Business of the Company, and, except
as otherwise contemplated, shall not, during the term of this Agreement, engage
in any other business activities that will interfere with the Executive's
employment pursuant to this Agreement.
2. Term.
(a) The term of this Agreement shall be for a period of five (5)
years commencing on March 1, 1989, and ending on February 28,
1994. Unless terminated as set forth below in Section 4, this
Agreement shall remain in effect for so long as the Executive
is employed by the Company.
(b) If this Agreement has not been terminated as set forth below
in Section 4 prior to January 1, 1994, and neither party
hereto has given notice to the other party by January 1, 1994,
of its desire to have this Agreement terminate at the end of
its original term (February 28, 1994), this Agreement shall
continue in full force and effect for an additional one year
period following the end of its original term on February 28,
1994, and the same procedure shall apply mutatis mutandis to
any extended term of this Agreement with respect to periods
ending on the last day of February in any year after 1994.
3. Compensation and Other Benefits.
For the services to be rendered by him pursuant to this Agreement,
the Company agrees to provide the Executive, so long as he shall be employed by
the Company, the following compensation and benefits:
(a) A bonus of $50,000 payable in a single lump-sum no later than
six (6) months after the date of this Agreement.
Notwithstanding any other terms of this Agreement, such bonus
shall be payable to the Executive (or, if the
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<PAGE> 26
Executive dies before payment is made, to a beneficiary
designated by the Executive on a form prescribed by the
Company (see Exhibit E attached hereto), the "Beneficiary") in
all events and shall be in addition to all other amounts
payable under this Agreement.
(b) Annual salary at the rate set forth on Exhibit A ("Salary"),
payable not less often than monthly in equal installments at
the end of each month.
(c) A bonus for each fiscal year in an amount determined pursuant
to the provisions of Exhibit B hereof.
(d) Group health and welfare coverage, other fringe benefits such
as are enjoyed by senior executives of the Company generally,
and the fringe benefits set forth in Exhibit C hereof.
(e) Five (5) weeks of vacation annually during which time the
Executive's compensation will be paid in full and all other
benefits under this Agreement will continue to be provided to
him
(f) The Company will furnish the Executive with an automobile and
will reimburse the Executive for all associated maintenance
and operating expenses. The Company will reimburse the
Executive for all reasonable business expenses incurred by the
Executive relating to the conduct of the Business of the
Company. Any such expense reimbursement shall be conditioned
upon the Executive presenting to the Company an itemized
account of such expenses with supporting documents.
Reimbursable expenses shall include reasonable and necessary
expenses for entertainment, travel, meals and hotel
accommodations.
(g) Benefits provided under the APCOA, Inc. Retirement Plan For
Key Executive Officers (a copy of which is attached hereto as
Exhibit D).
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<PAGE> 27
Except as otherwise provided herein, the Company's obligation to provide any
benefits to the Executive under the APCOA, Inc. Retirement Plan For Key
Executive Officers shall be in addition to, and not in lieu of, any obligations
the Company may have to provide the Executive with remuneration and other
benefits under this Agreement.
4. Termination of Agreement.
(a) This Agreement shall terminate upon the death of the
Executive. Upon the Executive's death, the Executive's
Beneficiary shall be entitled to receive:
(i) the amount of the Executive's Salary through the date of
his death;
(ii) the amount determined under Section 3(c) hereof for the
Company's fiscal year in which the Executive's death
occurs, equitably prorated to reflect the fact that the
Executive performed services for only a part of such
fiscal year; and
(iii) an amount equal to the annual Salary which the Company
was paying to the Executive at the time of his death,
payable in twelve (12) equal monthly installments
commencing on the first day of the month next following
the Executive's death.
In addition to the benefits otherwise provided above under
this subsection (a), for a period of twelve (12) months
following the Executive's death, the Executive's surviving
spouse and those persons who were the Executive's dependents
at the time of the Executive's death shall be entitled to
receive such benefits under any fringe benefit arrangement
(including, without limitation, group health and welfare
coverage) which covered the Executive at the time of his death
as though the Executive had continued to live during such
twelve (12) month period.
(b) This Agreement shall terminate in the event of the Executive's
termination of employment because of disability (as defined
below). In such event, the Executive shall be entitled to
receive:
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<PAGE> 28
(i) the amount of the Executive's Salary through the date of
his termination of employment;
(ii) the amount determined under Section 3(c) hereof for the
Company's fiscal year in which the Executive's
termination of employment occurs, equitably prorated to
reflect the fact that the Executive performed services
for only a part of such fiscal year; and
(iii) his Salary for a period of twelve (12) months following
his termination of employment.
For purposes of this Agreement, "disability" shall mean any
physical or mental impairment or disability which prevents the
Executive from performing his duties under this Agreement for
a period of at least one hundred twenty (120) days and which
is expected to be of permanent duration. A determination of
whether the Executive is disabled shall be made by two
licensed physicians, one appointed by the Board of Directors
and one appointed by the Executive. In the event the two
physicians are unable to agree with respect to whether the
Executive is disabled, the determination of whether the
Executive is disabled shall be made by a third duly licensed
physician chosen by the two physicians previously appointed.
(c) This Agreement shall terminate thirty (30) days following the
date the Executive receives notice from the Company that it
desires to terminate this Agreement. In the event that this
Agreement is terminated pursuant to the preceding sentence and
without cause (as defined in subsection(f) below), the
Executive shall be entitled to receive;
(i) the amount of his Salary through the date this Agreement
was scheduled to terminate under Section 2 hereof,
reduced by any salary or bonus he receives during such
period with respect to performing any of the acts
described in the second sentence of Section 6(a) hereof;
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<PAGE> 29
(ii) the amount determined under Section 3(c) hereof for the
Company's fiscal year in which this Agreement terminates
equitably prorated to reflect the fact that the
Executive performed services for only a part of such
fiscal year; and
(iii) to the extent not provided by a successor employer, all
fringe benefits provided under Section 3(d) of this
Agreement for a period of twelve (12) months following
the date this Agreement terminates.
In the event this Agreement is terminated pursuant to the
first sentence of this subsection (c) because the Company
discharges the Executive for cause (as defined in subsection
(f) below), the Executive shall be entitled to receive only
his Salary through the date of his termination of employment.
(d) In the event of the termination of this Agreement because of
the Executive's voluntary termination of employment for some
reason other than death or disability, the Executive shall be
entitled to receive only his Salary through the date of his
termination of employment.
(e) If during the term of this Agreement, without the Executive's
consent, either
(i) the Executive's duties with the Company are materially
reduced; or
(ii) his Salary payable under Section 3(b) hereof is reduced;
or
(iii) the benefit programs set forth in Section 3 above in
which the Executive participates are materially modified
in a manner detrimental to the Executive;
then the Executive's employment with the Company shall be
deemed to have been terminated pursuant to Section 4(c) hereof
without cause.
(f) "Cause" as used in this Agreement shall mean that either
(i) the Executive materially failed for some reason other
than illness, injury, or disability to perform his
obligations hereunder provided that
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<PAGE> 30
the Executive shall have first received written notice
from the Company stating with specificity the nature of
such failure and the Executive shall not have corrected
the failure cited in such notice within thirty (30) days
after his receipt thereof; or
(ii) the Executive has: (a) committed either any felony
involving moral turpitude or any crime in the conduct of
his official duties which is materially adverse to the
welfare of the Company; or (b) committed any material
act of fraud against the Company, its parent or
affiliates, or materially misused his position for his
personal gain or that of any third party; or (c) taken
any action (other than an error in judgment made in the
ordinary course of his duties) materially adverse to the
welfare of the Company including, but not limited to,
any material breach of the covenants and conditions
contained in Sections 5 and 6 hereof.
(g) In the event that following the termination of this Agreement
the Executive is entitled to receive any payments pursuant to
this Agreement and the Executive dies, any such payments shall
be made to the beneficiary designated by the Executive on a
form prescribed by the Company (see Exhibit E attached
hereto). The Executive shall be free to amend, alter or change
such form, provided, however, that any such amendment,
alteration or change shall be made by filing a new form with
the Secretary of the Company. In the event the Executive fails
to designate a beneficiary, following the death of the
Executive all payments of the amounts specified by this
Agreement which would have been paid to the Executive's
designated beneficiary pursuant to this Agreement shall
instead be paid to the Executive's spouse, if she survives the
Executive, or, if she does not survive the Executive, to the
Executive's estate.
5. Confidentiality and Disclosure of Information.
(a) The Executive, during his tenure as an officer and employee of
the Company, has had and will have access to, and has gained
and will gain
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<PAGE> 31
knowledge with respect to the Company's trade secrets, as they
may exist from time to time, and confidential information
concerning its financial statements, operations, sales and
marketing activities and procedures, bidding techniques,
design and construction techniques, customer lists, list of
owners of parking facilities, and credit and financial data
concerning such persons (in the aggregate referred to
hereinafter as "Secret and Confidential Information"). The
Executive acknowledges that the Secret and Confidential
Information constitutes a valuable, special and unique asset
of the Company as to which the Company has the right to retain
and hereby does retain all of its proprietary interests.
However, access to and knowledge of the Secret and
Confidential Information is essential to the performance of
the Executive's duties hereunder. In recognition of this fact,
the Executive agrees that he will not, during or after his
employment with the Company, disclose any of the Secret and
Confidential Information to any person, firm, corporation,
association or other entity for any reason or purpose
whatsoever (except as necessary in the performance of his
duties hereunder) or make use of any of the Secret and
Confidential Information for his own purposes or those of
another but only if with respect to any such disclosure or use
there is a reasonable possibility that such disclosure or use
could have a materially adverse effect upon the Company. The
provisions contained in this subsection(a) shall also apply to
information obtained by the Executive, in the course of his
employment by the Company, with respect to the Company's
subsidiary and affiliated companies.
(a) The Executive shall promptly disclose, grant and assign to the
Company for its sole use and benefit any and all inventions,
improvements, technical information and suggestions relating
to the Business of the Company (in the aggregate referred to
as the "Creations") which the Executive has or may conceive,
develop or acquire during his employment (whether or not
during the usual working hours) together with all patent
applications,
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<PAGE> 32
letters patent, copyrights and reissues thereof that may, at
any time be granted for or upon any of the Creations. At all
times during and after his employment, the Executive shall
promptly executive any and all documents requested to vest
title to any and all of the Creations in the Company and to
enable it to obtain and maintain the entire right and title
thereto throughout the world and render to the Company, at its
expense, any and all assistance required to protect its legal
rights thereto.
6. Restrictive Covenant.
The Executive recognizes that, in entering into this Agreement, the
Company is relying on his extensive experience, knowledge, ability and contacts
in the Business of the Company. For this reason, subject to the next sentence,
the Executive covenants and agrees that during the period of his employment by
the Company and, if this Agreement terminates pursuant to either Section 4(b),
of 4(c) with cause, or 4(d) hereof, for a period of one (1) year immediately
following the termination of this Agreement, he shall not have any direct or
indirect ownership or other financial interest in and will not, directly or
indirectly, engage in, or in any manner become interested in (as principal,
agent, consultant, advisor, officer, director, employee or otherwise), any
business which competes with the Business of the Company in the geographic
market in which the Company is then operating nor will he solicit business
directly or indirectly on behalf of such competing business. The preceding
sentence shall not apply to any transaction or arrangement involving the
Executive to which the Company consents in writing. Nothing herein shall
preclude the Executive from being a member of or serving as an officer or
director of any trade association or from owning, of record or beneficially, in
the aggregate up to five percent (5%) of any issue of securities of a publicly
traded company.
7. Remedies.
It is recognized by the Executive that a special and confidential
relationship exists between the Company and the Executive because of his
knowledge, expertise and judgment, and the dependence of the Company on his
knowledge, expertise and judgment. The Executive agrees that the remedy at law
for any breach or threatened breach of the covenants set forth in Sections 5 and
6 will be inadequate and that any breach or attempted breach would cause such
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<PAGE> 33
immediate and permanent damage as would be irreparable and the exact amount of
which would be impossible to ascertain. The Executive further agrees that in the
event of any such breach or threatened breach by the Executive, in addition to
any and all other legal and equitable remedies available, the Company may have
any of such actions enjoined by any court authorized by law to take such action.
8. Binding Effect; Non-Assignability.
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the Company. The performance of the Executive
hereunder is personal and nonassignable.
9. Invalidity.
(c) The territorial, time and other limitations contained in
Sections 5 and 6 are reasonable and properly required for the
adequate protection of the Business of the Company, and in the
event that any one or more of such territorial, time or other
limitation is found to be unreasonable or otherwise invalid in
any jurisdiction, in whole or in part, the parties acknowledge
and agree that such limitation shall remain valid in all other
jurisdictions.
(d) If any provision, term, clause or part thereof in this
Agreement is invalid, it shall not affect the remainder of
said provision, term or clause of this Agreement, but said
remainder shall be binding and effective against both parties
hereto.
10. Arbitration.
Any disputes between the parties with respect to the meaning or
interpretation of this Agreement or the amounts of any payments hereunder which
cannot be settled amicably by the parties hereto shall be settled by arbitration
in Cleveland, Ohio, in accordance with the rules of arbitration of the American
Arbitration Association.
11. Miscellaneous.
(e) This Agreement embodies the entire agreement between the
parties hereto concerning the subject matter hereof. This
Agreement may not be changed
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<PAGE> 34
except by a writing signed by the party against whom
enforcement thereof is sought.
(f) This Agreement has been executed in the State of Ohio and
shall be governed and interpreted in accordance with the laws
of the State of Ohio.
(g) All notices given hereunder shall be mailed postage paid to
the address of the receiving party as first indicated above or
to such other place as such party may from time to time
designate by written notice hereafter.
(h) The use of the feminine, masculine or neuter pronoun herein
shall not be restrictive as to gender and shall be interpreted
in all cases as the context may require. The use of the
singular or plural herein shall not be restrictive as to
number and shall be interpreted in all cases as the context
may require.
(i) The section headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
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<PAGE> 35
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound, have executed this Agreement this 14th day of April, 1989.
APCOA, INC.
(the "Company")
ATTEST:
/s/ By: /s/
- -------------------------------- ------------------------------------
Chairman
WITNESS:
/s/ /s/
- -------------------------------- ----------------------------------------
G. Walter Stuelpe, Jr.
(the "Executive")
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<PAGE> 36
EXHIBIT A
EXECUTIVE'S BASE SALARY
<TABLE>
<CAPTION>
Period Annual Salary
- ---------------------------------------- -------------
<S> <C>
April 14, 1989, through April 13, 1990 $225,000
April 14, 1990, through April 13, 1991 235,000
April 14, 1991, through April 13, 1992 250,000
April 14, 1992, through April 13, 1993 265,000
April 14, 1993, through April 13, 1994 280,000
</TABLE>
<PAGE> 37
EXHIBIT B
The Executive's bonus for any fiscal year of the Company (commencing
with calendar year 1989) shall be the sum of the amounts determined under I, II
and III below.
I. An amount for any fiscal year of the Company determined as follows:
(1) Begin with "Earnings Before Income Taxes" as shown on the
Consolidated Statement of Earnings in the Company's certified
financial statements.
(2) Add to (1) above the following:
(a) all depreciation and amortization charges shown on the
Consolidated Statement of Changes in Financial Position in the
Company's certified financial statements; and
(b) all interest expense shown on the Consolidated Statement of
Earnings in the Company's certified financial statements; and
(c) any amount of short-term incentive compensation accrued and
deducted in determining Earnings Before Income Taxes in (1)
above; and
(d) any intercompany charges accrued and deducted in determining
from Earnings Before Income Taxes in (1) above.
(3) Twenty percent (20%) of the aggregate of the "Purchase of Property,
Property Rights and Equipment" amounts shown on the Consolidated
Statement of Changes in Financial Position in the Company's
certified financial statement for the current year and each of the
previous four years shall be subtracted from the amount determined
under (2) above.
(4) The "Floor Amount" for the year as set forth on the attached
Schedule of Floor Amounts shall be subtracted from the amount
determined under (3) above.
(5) The amount determined under (4) above shall be multiplied by 6%.
II. An additional amount based on the Executive's achievement of specific
management goals set by the Board of Directors, which amount shall not
exceed 13-1/3% of the amount determined under I above.
III. An additional amount determined in the discretion of the Board of
Directors, which amount shall not exceed 20% of the amount determined
under I above.
<PAGE> 38
Schedule of Floor Amounts
<TABLE>
<CAPTION>
Floor Amount
Year (in thousands)
---- --------------
<S> <C>
1989 $3,776
1990 4,834
1991 5,669
1992 6,198
1993 6,975
1994 7,885
</TABLE>
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<PAGE> 39
EXHIBIT C
G.W. STUELPE
BENEFITS AND PERQUISITES
I. HEALTH INSURANCE - Provident Plan II - Family
A. Comprehensive Medical
Covers medical expenses for treatment or diagnosis, subject to
Customary and Reasonable schedule, Second Surgical Opinions and
Pre-Admission Certification programs. There is an annual deductible
of $100 per individual, $200 per family, before co-insurance is paid
at 80/20%. An annual out-of-pocket maximum of $500 per individual,
$1,000 per family, is then applied, after which 100% insurance is
payable for the remainder of the calendar year.
B. Dental
1. Provides up to $1,000 per individual per calendar year for
dental services. Benefits are subject to $50 per individual
annual deductible, then become payable as follows:
a. 100% for preventive;
b. 80% for restorative;
c. 50% for complex.
2. Dependent orthodontic services are also paid at a 50% rate to
a separate $1,000 lifetime maximum per dependent.
C. Vision
1. A schedule of benefits for vision is provided once per year as
follows:
a. Vision Exam -- $30.00
b. Lenses______ -- $20.00 to $30.00 each
c. Frames______ -- $40.00
D. Executive Medical Reimbursement
The executive level of Plan II provides for 100% payment of all
medical, dental and vision expenses submitted. This includes payment
of deductibles, co-insurance balances and expenses above and beyond
the base plan limits described in A, B and C above.
<PAGE> 40
* APCOA'S EXPENSE IS $285/MO...$3,420/YR.
II. LIFE INSURANCE - North American Life
A. This plan provides Term Life and Accidental Death and Dismemberment
coverages of $225,000 for the executive.
* APCOA'S EXPENSE IS $74.93/MO...$899.16/YR.
III. LONG-TERM DISABILITY - North American Life
A. This program provides monthly benefit payments of up to 66-2/3% (or
70% all sources) of base monthly income after 90 days of disability
due to illness or injury.
1. The executive's current benefit would be $5,000 per month, the
maximum benefit allowable.
* APCOA'S EXPENSE IS $42/MO...$504/YR.
IV. BUSINESS TRAVEL ACCIDENT. - Insurance Company of North America
A. This plan provides accidental death dismemberment coverage while the
executive travels on APCOA business.
* The expense of this plan is not calculated individually. It is part
of a total annual premium paid for all employees covered.
V. 24-HOUR PERSONAL ACCIDENT - Insurance Company of North America
A. This program provides around-the-clock accidental death and
dismemberment coverage for the executive and his eligible family
dependents as follows:
1. $250,000 -- W. Stuelpe (100%)
2. $100,000 -- Mrs. Stuelpe (40%)
3. $ 12,500 -- Each Dependent Child (5%)
B. If the executive becomes eligible for benefits paid under Business
Travel Accident portion of policy, benefits are not payable under
the Personal Accident Policy.
* APCOA'S EXPENSE IS $18.75/MO...$225/YR.
VI. 401(K) SAVINGS & RETIREMENT PLAN
A. Under this program the executive is contributing 6% of earnings on a
pre-tax basis. His maximum contribution per year is $7,627 for 1989
- this amount will be adjusted in future years for changes in the
cost of living.
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<PAGE> 41
B. APCOA is contributing $.25 for every dollar contributed by the
executive. Maximum APCOA contributions for 1989 is $1,907.
* APCOA'S EXPENSE IS (MAX)...25% of the Executive's contributions.
VII. DEFERRED COMP./EXECUTIVE RETIREMENT
A. This program provides $200,000 Life Insurance.
B. At retirement, this program will provide a benefit of $2,936.50 per
month for 240 months.
C. The current cash value of this policy is $5,676.
* APCOA'S EXPENSE IS...$2,500/YR.
VIII. LEASED CAR
A. 1988 Buick Park Avenue, currently valued at $16,578 (as of
11/30/88). (Replacement is due in July, 1991.)
B. Due to the personal nature of this benefit, the cost of the
automobile insurance coverage required by the Executive cannot be
ascertained. C. All maintenance and gas expenses for the leased car
are reimbursed to the Executive.
* APCOA'S LEASE EXPENSE IS $543.42/MO...$6,521.04/YR.
IX. COUNTRY CLUB MEMBERSHIP
A. Mr. Stuelpe is a member of Mayfield Country Club. APCOA shall
reimburse the monthly membership fees and capital charges, totaling
$272.20 per month and $3,266.40 per year. Business-related
entertainment charges incurred by the Executive in using Mayfield
Country Club are also reimbursed by APCOA.
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<PAGE> 42
X. DOWNTOWN CLUB MEMBERSHIP
The Executive is a member of The Union Club in downtown Cleveland. APCOA
shall reimburse the Executive for his club dues (currently $390 per
quarter, $1,560 per year). Business-related entertainment expenses
incurred by the Executive in using The Union Club shall be reimbursed by
APCOA.
-4-
<PAGE> 1
Exhibit 10.8
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is executed as of the 1st day of July, 1995 by and
between APCOA, INC., a Delaware corporation with offices at 25550 Chagrin
Boulevard, Beachwood, Ohio 44122 (the "Company"), and JAMES V. LaROCCO (the
"Executive").
W I T N E S S E T H:
WHEREAS, the Company is engaged in the business of operating and
managing open air parking lots and indoor garages and ramps for the purpose of
parking motor vehicles on a leasehold, license, concession or management fee
basis through the United States under agreement with municipalities, owners of
properties, and/or otherwise (the "Business of the Company"); and
WHEREAS, the Executive has been employed by the Company in a
management capacity for several years and during the course of his employment,
the Executive has become an experienced and valuable employee and is
knowledgeable with respect to the Business of the Company, its trade secrets,
customers, market areas, sources of supply and manner of doing business; and
WHEREAS, the Company desires to continue to employ the Executive and
the Executive desires to continue to work for the Company upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises hereto and the
agreements and covenants hereinafter contained, the parties hereto, intending to
be legally bound, mutually agree as follows:
<PAGE> 2
1. Employment and Duties.
The Company hereby employs the Executive to serve as Executive Vice
President and Chief Operating Officer of the Company (or under such title as the
Chief Executive Officer may hereafter assign to him). The Executive hereby
accepts employment upon the terms and conditions hereinafter set forth. The
Executive shall be responsible for operations of the Company as set forth and
prescribed by Company operating procedure and policy, corporate standards, and
contractual guidelines. He shall report to the President and Chief Executive
Officer and perform such duties as may be reasonably assigned to him by such
officer. The Executive agrees to comply in all material respects with the
Standards of Conduct set forth in Exhibit A hereof ("Standards of Conduct"). The
Executive shall devote his entire time, attention and energies to the Business
of the Company, and shall not, during the term of this Agreement, engage in any
other business activities that will interfere with the Executive's employment
pursuant to this Agreement.
2. Term.
(a) The term of this Agreement shall be for a period three (3) years
commencing on July 1, 1995 and ending on June 30, 1998.
(b) If this Agreement has not been terminated as set forth below in
Section 4 prior to June 30, 1998, and neither party hereto has given
written notice to the other party by April 30, 1998 of its desire to have
this Agreement terminate at the end of its original term (June 30, 1998),
this Agreement shall continue in full force and effect for an additional
one-year period following the end of its original term on June 30, 1998,
and the
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same procedure shall apply mutatis mutandis to any extended term of this
Agreement with respect to periods ending on June 30 in any year after
1998.
3. Compensation and Other Benefits.
For the services to be rendered by him pursuant to this Agreement,
the Company agrees to provide the Executive, so long as he shall be employed by
the Company, the following compensation and benefits:
(a) Salary at the rate of not less than $165,000.00 per annum ("Base
Salary"), payable not less often than monthly in equal installments at the
end of each month. The Base Salary figure shall be reviewed annually and
may be increased at the sole discretion of the Chief Executive Officer.
Any such increase in the Base Salary shall be deemed for all purposes
hereunder to be an amendment to this Agreement and this Agreement as so
amended shall remain in effect until otherwise terminated as provided
herein.
(b) Such bonuses as the Executive may have earned under the
Executive Bonus Plan set forth in Exhibit B hereof.
(c) Group health and welfare coverages, often fringe benefits such
as are enjoyed by senior executives of the Company generally, and such
other emoluments and fringe benefits as shall be determined by the Company
from time to time.
(d) Four (4) weeks of vacation annually during which time the
Executive's compensation will be paid in full and all other benefits under
this Agreement shall continue to be provided to him.
(e) The Company will furnish the Executive with an automobile, will
provide appropriate insurance coverage for such automobile, and will
reimburse the Executive for
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all gasoline and maintenance costs relating to such automobile. Any such
reimbursement shall be conditioned upon the Executive presenting to the
Company, in accordance with applicable Company policies and procedures, an
itemized account concerning his use of the automobile and distinguishing
between use in connection with the Business of the Company and otherwise.
(f) The Company will reimburse the Executive for reasonable business
expenses incurred by the Executive relating to the conduct of the Business
of the Company. Any such expense reimbursement shall be conditioned upon
the Executive presenting to the Company, in accordance with applicable
Company policies and procedures, an itemized account of such expenses with
supporting documents. Reimbursable expenses shall include reasonable and
necessary expenses for entertainment, travel, meals and hotel
accommodations.
(g) The Executive shall be provided with directors and officers
liability insurance coverage to the same extent as the other Directors
and/or senior officers of the Company, and shall be indemnified by the
Company to the full extent permitted by law against liability claims
arising out of his activities as an employee of the Company or a member of
the Board.
(h) The Company will provide a Supplemental Pension Plan as
described in Exhibit C.
4. Termination of Agreement.
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(a) This Agreement shall terminate upon the death of the Executive.
Upon the Executive's death, a beneficiary (the "Beneficiary") designated
by the Executive as prescribed in Section 12 shall be entitled to receive:
(i) the amount of the Executive's Base Salary through the date
of his death;
(ii) any accrued but unpaid amount under Section 3(b) and the
amount determined under Section 3(b) hereof for the Company's fiscal
year in which the Executive's death occurs as though the Executive
had survived and continued to work for the Company pursuant to this
Agreement through the end of such fiscal year, payable at the time
prescribed in Exhibit B; and
(iii) an aggregate amount equal to the sum of (A) the annual
Base Salary at the time of the Executive's death, and (B) $9,600.00
(which represents the estimated annual value of the Executive's
right to use of an automobile provided by the Company and related
benefits described in Section 3(e) hereof), payable in twelve (12)
equal monthly installments commencing on the first day of the month
next following the Executive's death.
In addition, for a period of twelve (12) months following the Executive's
death, (a) the Company shall continue to provide the benefits under
Section 3(c) to such persons who would have been entitled to such benefits
had the Executive survived and continued to be employed by the Company
hereunder for such twelve (12) month period.
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(b) This Agreement shall terminate in the event of the Executive's
termination of employment because of disability (as defined below). In
such event, the Executive shall be entitled to receive:
(i) the amount of the Executive's Base Salary through the date
of his termination of employment;
(ii) any accrued but unpaid amount under Section 3(b) and the
amount determined under Section 3(b) hereof for the Company's fiscal
year in which the Executive's disability occurs as though the
Executive has continued to work for the Company pursuant to this
Agreement through the end of such fiscal year, payable at the time
prescribed in Exhibit B; and
(iii) an aggregate amount equal to the sum of (A) the annual
Base Salary at the time of the Executive's disability and (B)
$9,600.00 (which represents the estimated annual value of the
Executive's right to use of an automobile provided by the Company
and related benefits described in Section 3(e) hereof), payable in
twelve (12) equal monthly installments commencing on the first day
of the month next following the Executive's termination of
employment; provided, however, that such payments shall be reduced
by any amounts payable to the Executive under any disability benefit
program (whether or not insured) maintained by the Company.
In addition, for a period of twelve (12) months following the Executive's
termination of employment because of disability, the Company shall
continue to provide the benefits under Section 3(c) to such persons
(including the Executive) who would have been
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entitled to such benefits had the Executive continued to be employed by
the Company for such twelve (12) month period.
For purposes of this Agreement, "disability" shall mean any physical
or mental impairment or disability which prevents the Executive from performing
his duties under this Agreement for a period of at least one hundred twenty
(120) days and which is expected to be of permanent duration. A determination of
whether the Executive is disabled shall be made by two licensed physicians, one
appointed by the Board of Directors and one appointed by the Executive. In the
event the two physicians are unable to agree with respect to whether the
Executive is disabled, the determination of whether the Executive is disabled
shall be made by a third duly licensed physician chosen by the two physicians
previously appointed.
(c) This Agreement shall terminate sixty (60) days following the
date the Executive receives notice from the Company that it desires to
terminate this Agreement. In the event that this Agreement is terminated
pursuant to the preceding sentence and without Cause (as defined in
subsection (e) below), the Executive shall be entitled to receive:
(i) an aggregate amount equal to the greater of either (A) the
Annual Base Salary at the time this Agreement terminates or (B) the
aggregate amount payable to the Executive under the Company's
Severance Benefit Policy, payable in twelve (12) equal monthly
installments commencing on the first day of the month coinciding
with or next following the date this Agreement terminates;
(ii) any accrued but unpaid amount under Section 3(b) payable
at the time prescribed in Exhibit B;
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(iii) not later than the 15th day of the fourth month
following the close of the Company's fiscal year in which this
Agreement terminates, an amount equal to the amount determined under
Section 3(b) hereof for the Company's fiscal year in which this
Agreement terminates (the "Termination Bonus"), determined as though
the Executive continued to be employed by the Company through the
end of such fiscal year, multiplied by a fraction, the numerator of
which equals the number of days remaining in such fiscal year
following the date this Agreement terminates plus 365, and the
denominator of which equals 365;
(iv) in the event this Agreement was scheduled to terminate
under Section 2 hereof after the first anniversary of the date this
Agreement terminates under this Section 4(c), then during the period
commencing on the first anniversary of the date this Agreement
terminates under this Section 4(c) and ending on the last day of the
month in which occurs the date this Agreement was scheduled to
terminate under Section 2 hereof, the Executive shall be entitled to
receive each month, commencing with the month which coincides with
or next follows the first anniversary of the date this Agreement
terminates, an amount equal to the sum of (a) one-twelfth (1/12) of
his annual Base Salary plus (b) one-twelfth (1/12) of the
Termination Bonus, reduced by any salary or bonus he receives in any
such month with respect to performing any of the acts described in
the second sentence of Section 6(a) hereof;
(v) for a period of twelve months following the Executive's
termination of employment, the Company shall continue to provide the
benefits
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under Sections 3(c) and 3(e) to such persons (including the
Executive) who would have been entitled to such benefits had the
Executive continued to be employed by the Company for such
twelve-month period but only to the extent provided by a successor
employer; provided, however, that any accounting the Executive is
required to provide to the Company under Section 3(e) need not
distinguish between the use of the automobile in connection with the
Business of the Company and other use.
In the event this Agreement is terminated pursuant to the first
sentence of this subsection (c) because the Company discharges the Executive for
Cause (as defined in subsection (e) below), the Executive shall be entitled to
receive only his Base Salary through the date of his termination of employment
and the Company will have no further obligation to Executive under this
Agreement or otherwise.
(d) In the event of the termination of this Agreement because of the
Executive's voluntary termination of employment for some reason other than
death or disability, the Executive shall be entitled to receive only his
Base Salary through the date of his termination of employment and the
Company will have no further obligations to Executive under this Agreement
or otherwise.
(e) "Cause" as used in this Agreement shall mean that either:
(i) in the judgment of the Board of Directors of the Company,
ascertained by a majority vote, the Executive has materially failed
for some reason other than illness, injury, or disability to perform
his obligations hereunder; or
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(ii) the Executive has: (a) committed either any felony
involving moral turpitude or any crime in the conduct of his
official duties which is materially adverse to the welfare of the
Company; or (b) committed any material act of fraud against the
Company, its parent or affiliates, or materially misused his
position for his personal gain or that of any third party; or (c)
taken any action (other than an error judgment made in the ordinary
course of his duties) materially adverse to the welfare of the
Company, including, but not limited to, any violation of the
Standards of Conduct attached hereto or any breach of the covenants
and conditions contained in Sections 5 and 6 hereof.
5. Confidentiality and Disclosure of Information.
(a) The Executive, during his tenure as an officer and employee of
the Company, has had and will have access to, and has gained and will gain
knowledge with respect to the Company's trade secrets, private and secret
processes, as they may exist from time to time, and confidential
information concerning its financial statements and operations conducted
by the Company, its sales and marketing activities and procedures, its
bidding techniques, its design and construction techniques, its customer
list of owners of parking facilities or credit and financial data
concerning such customers or potential customers (in the aggregate
referred to hereinafter as "Secret and Confidential Information"). The
Executive acknowledges that such information constitutes a valuable,
special and unique asset of the Company as to which the Company has the
right to retain and hereby does retain all of its proprietary interests.
However, access to and knowledge of such Secret and Confidential
Information is essential to the performance of the Executive's services
for the Company. In recognition of this fact, the Executive agrees
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that he will not, during or after his employment with the Company,
disclose any of such Secret and Confidential Information to any person,
firm, corporation, association or other entity for any reason or purposes
whatsoever or make use of any such Secret and Confidential Information for
his own purposes or those of another. The provisions contained in this
subsection (a) shall also apply to information obtained by the Executive
in the course of his employment by the Company with respect to the
Company's subsidiary and affiliated companies.
(b) The Executive shall promptly disclose, grant and assign to the
Company for its sole use and benefit any and all inventions, improvements,
technical information and suggestions relating to the Business of the
Company (in the aggregate referred to as the "Creations") which the
Executive has or may conceive, develop or acquire during his employment
(whether or not during the usual working hours) together with all patent
applications, letters patent, copyrights and reissues thereof that may, at
any time, be granted for or upon any of the Creations. At all times during
and after his employment, the Executive shall promptly execute any and all
documents requested to vest title to any and all of the Creations in the
Company and to enable it to obtain and maintain the entire right and title
thereto throughout the world and render to the Company, at its expenses,
any and all assistance required to protect its legal rights thereto.
6. Restrictive Covenant.
(a) The Executive recognizes that the Company is relying on its
extensive experience, knowledge, ability and contacts in the Business of
the Company in entering into this Agreement. For this reason, the
Executive covenants and agrees that during the
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period of his employment by the Company and, if his Agreement terminates
pursuant to either Section 4(b), or 4(c) with Cause, or 4(d) hereof, for a
period of one year immediately following the termination of this Agreement
he shall not have any direct or indirect ownership or other financial
interest in, or in any manner become interested in (as principal, agent,
consultant, advisor, officer, director, employee or otherwise), any
business which competes with the Business of the Company in the geographic
market in which the Company is then operating, or solicit business
directly or indirectly on behalf of such competing business. Nothing
herein shall preclude the Executive from being a member of or servicing as
an officer or director of any trade association or from owning, of record
or beneficially, in the aggregate up to five percent (5%) of any issue of
securities of a publicly traded company.
(b) Notwithstanding anything to the contrary set forth in Section
13(b) hereof, any dispute between the parties with respect to the
interpretation or enforceability of Section 6(a) hereof (Restrictive
Covenant) as it applies to a termination for Cause under Section 4(c)
hereof or any dispute with respect to any amount payable under Section
4(c)(iv) hereof which cannot be settled amicably by the parties hereto
shall be settled by final and binding arbitration in Cleveland, Ohio in
accordance with the rules of arbitration of the American Arbitration
Association.
7. Remedies.
It is recognized by the Executive that a special and confidential
relationship exists between the Company and the Executive because of his
knowledge, expertise and judgment and the dependency of the Company on his
knowledge, expertise and judgment. The Executive
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agrees that the remedy at law for any breach or unthreatened breach of the
covenants set forth in Sections 5 and 6 will be inadequate and that any breach
or attempted breach would cause such immediate and permanent damage as would be
irreparable and the exact amount of which would be impossible to ascertain. The
Executive further agrees that in the event of any such breach or threatened
breach by the Executive, in addition to any and all other legal and equitable
remedies available, the Company may have any such actions enjoined by any court
authorized by law to take such action.
8. Physical Examination.
The Executive shall undergo an annual physical examination. The cost
of such physical examination shall be borne by the Company. A written report of
the results of such physical shall be submitted to the Chief Executive Officer
of the Company.
9. Assignment.
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the Company. The performance of the Executive
hereunder is personal and nonassignable.
10. Invalidity.
(a) The territorial, time and other limitations contained in
Sections 5 and 6 are reasonable and properly required for the adequate
protection of the Business of the Company, and in the event that anyone or
more of such territorial, time or other limitation is found to be
unreasonable or otherwise invalid in any jurisdiction, in whole or in
part, the parties acknowledge agree that such limitation shall remain and
be valid in all other jurisdictions.
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(b) If any provision, term, clause or part thereof in this Agreement
is valid, it shall not affect the remainder of said provision, term or
clause of this Agreement, but said remainder shall be binding and
effective against both parties hereto.
11. Representations and Warranties of the Parties.
(a) The Company represents and warrants to the Executive that (i)
the Company is a corporation duly organized and validly existing and in
good standing under the laws of the State of Delaware; and (ii) the
Company has the power and authority to enter into and carry out this
Agreement, and there exists no contractual or other restriction upon its
so doing.
(b) The Executive represents and warrants to the Company that there
exists no contractual or other restriction upon his entering into and
carrying out this Agreement.
12. Post-Mortem Payments; Designation of Beneficiary.
In the event that, following the termination of the Executive's
employment with the Company, the Executive is entitled to receive any payments
pursuant to this Agreement and the Executive dies, such payments shall be made
to the Executive's beneficiary designated hereunder. At any time after the
execution of this Agreement, the Executive may prepare, execute, and file with
the Secretary of the Company a copy of the Designation of Beneficiary form
attached to this Agreement as Exhibit D. The Executive shall thereafter be free
to amend, alter or change such form; provided, however, that any such amendment,
alteration or change shall be made by filing a new Designation of Beneficiary
form with the Secretary of the Company. In the event the Executive fails to
designate a beneficiary, following the death of the Executive all payments of
the amounts specified by this Agreement which would have been paid
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to the Executive's designated beneficiary pursuant to this Agreement shall
instead be paid to the Executive's spouse, if any, if she survives the Executive
or, if there is no spouse or she does not survive the Executive, to the
Executive's estate.
13. Miscellaneous.
(a) This Agreement, including its attachments, contains the entire
agreement between the parties and incorporates and supersedes any and all
prior discussions or agreements the parties may have had with respect to
the terms of the Executive's employment with the Company. This Agreement
may be not be changed orally, but only by a writing signed by each of the
parties. The terms or covenants of this Agreement may be waived only by a
written instrument specifically referring to this Agreement and executed
by the party waiving compliance. The failure of a party at any time, or
from time to time, to require performance of any of the other party's
obligations under this Agreement shall in no manner affect the waiving
party's right to enforce any provisions of this Agreement at a subsequent
time, and the waiver by any party of any right arising out of any breach
by the other party shall not be construed as a waiver of any right arising
out of any subsequent breach.
(b) This Agreement has been executed in the State of Ohio and shall
be governed and interpreted in accordance with the laws of the State of
Ohio without regard to conflict of law provisions. Except as set forth in
Section 6(b) hereof, any disputes between the parties which cannot be
settled amicably shall be subject to the jurisdiction of the courts of
Ohio.
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(c) Any notices required under this Agreement shall be in writing
and effective when received by the other party. Notices to the Executive
shall be addressed to him at his then current mailing address on file at
the Company. Notices to the Company shall be addressed to the Secretary of
the Company at the Company's headquarters.
(d) The use of the feminine, masculine or neuter pronoun herein
shall not be restrictive as to gender and shall be interpreted in all
cases as the context may require. The use of the singular or plural herein
shall not be restrictive as to number and shall be interpreted in all
cases as the context may require.
(e) The Company may withhold from any amounts payable to the
Executive, the Executive's beneficiary designated hereunder, or any other
person, all amounts necessary to satisfy the requirements of any state or
federal statute including, without limitation, the requirements of the
United States Internal Revenue Code.
IN WITNESS WHEREOF, the parties hereto, tending to be legally bound,
have executed this Agreement this 19th day of October, 1995.
ATTEST: APCOA, INC.
(The "Company")
/s/ BY: /s/ G.W. Stuelpe
- -------------------------------- ------------------------------------
G.W. STUELPE,
President and
Chief Executive Officer
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WITNESS:
/s/ BY: /s/ James V. LaRocco
- -------------------------------- ------------------------------------
JAMES V. LaROCCO
(the "Executive")
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EXHIBIT A
GUIDELINES
1. Standards of Conduct and Business Ethics. The Board of Directors of
Apcoa, Inc., a Delaware corporation (the "Company"), has adopted a corporate
policy for itself and all other corporations, entities, or persons that,
directly or indirectly, through one or more intermediaries, control, are
controlled by, or are under common control with the Company ("Affiliates")
regarding Standards of Conduct and Business Ethics, in order to provide
directors, officers and employees of the Company or its Affiliates with
guidelines to assist them in fulfilling their responsibilities to the public,
the stockholders and the Company.
This policy is equally applicable to all of the foreign operations
of the Company or its Affiliates except where modified by specific foreign laws
and regulations.
As no policy statement can cover the total range of daily
activities, it is recognized that questions of compliance will arise. Such
questions should be directed through normal communications procedures to the
Company's General Counsel at Company Headquarters.
Your attention is also specifically directed to the fact that
disregard of sections of this policy could result in your dismissal as an
employee as well as the imposition of civil and criminal penalties against the
Company or its Affiliates and you personally.
All personnel are requested to read this policy and conform to the
principles stated therein.
2. Policy. It is the policy of the Company that the directors, officers
and employees of the Company or its Affiliates shall conduct their activities so
as to avoid loss or embarrassment to the Company or its Affiliates. Either by
implication or in reality, the objective
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exercise of sound ethical business judgment should not be in any manner limited
by any relationship, any activity or any practice. The Company recognizes and
respects the individual's right to engage in outside activities. However, the
Company reserves the right to determine when these activities create a conflict
of interest. All conduct of the individual must conform to the best interests of
the Company and its Affiliates.
3. Reciprocity. Because of the nature and variety of the business engaged
in by the Company and its Affiliates, certain legal problems could arise with
respect to purchases made by the Company or its Affiliates if such purchases are
conditioned upon suppliers' purchasing products and/or services sold by the
Company or its Affiliates. Conversely, similar legal problems could arise if
customers were to condition their purchases from the Company or its Affiliates
upon a reciprocal purchase of products or services from them. This practice,
commonly referred to as "reciprocity," is prohibited by various federal and
state laws.
It is the policy of the Company that the Company and its Affiliates
comply with all applicable federal, state and local laws. The guidelines set
forth below have been designed to ensure full compliance with such laws. These
guidelines apply to all personnel having purchase or sales responsibilities. The
executives of the Company and its Affiliates should disseminate these guidelines
to appropriate employees and agents and require adherence thereto.
4. Purchase/Sales Guidelines. The following guidelines with respect to
purchases and sales made by the Company or its Affiliates apply to all employees
and agents of the Company or its Affiliates:
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(a) No employee or agent of the Company or its Affiliates having
purchasing responsibilities or duties shall purchase any products or
services from, or enter into or adhere to any contract, agreement or the
condition or understanding that purchases made by him on behalf of the
Company or its Affiliates will be based or conditioned upon any sales to
such supplier by the Company or its Affiliates.
(b) No employee or agent of the Company or its Affiliates having
sales responsibilities or duties shall on behalf of the Company or its
Affiliates sell products or services to, or enter into or adhere to any
contract, agreement or understanding with any actual or potential customer
on the condition or understanding that any purchase by the Company or its
Affiliates from such customer will be based or conditioned upon any sales
of the Company or its Affiliates to such customer.
(c) No employee or agent of the Company or its Affiliates shall
issue to personnel with primary purchasing responsibility any lists,
notices, or other data identifying customers and their purchases from the
Company or its Affiliates or specifying or recommending that purchases be
made by the Company or its Affiliates from any of such customers.
(d) No employee or agent of the Company or its Affiliates shall
issue to personnel with primary sales responsibilities any lists, notices
or other data pertaining to purchases made by the Company or its
Affiliates from particular suppliers.
(e) No employee or agent of the Company or its Affiliates shall
prepare or maintain statistical computations which compare purchases from
suppliers who supply products or services to the Company or its
Affiliates.
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(f) No employee or agent of the Company or its Affiliates shall:
(i) Communicate to any actual or potential seller or supplier
of the Company or its Affiliates that preference will be given to
the purchase of such seller's products or services based upon sales
by the Company or its Affiliates to such supplier.
(ii) Compare or exchange statistical data with any such seller
or supplier to facilitate any relationship of mutual purchases and
sales between such seller or supplier and the Company or its
Affiliates.
(iii) Communicate to any such seller or supplier the fact that
the Company or its Affiliates have made any purchases from such
seller or supplier for the purpose of inducing a purchase by such
seller or supplier.
(iv) Direct or recommend that the Company or its Affiliates
purchase products or services from any seller or supplier for the
purpose of reciprocating purchases made by, or promoting sales to,
such seller or supplier.
(v) Agree with any seller or supplier that such seller or
supplier will purchase products or services from the Company or its
Affiliates in order to reciprocate purchases made by the Company or
its Affiliates from such supplier.
5. Standards of Business Ethics. To determine if a specific interest
creates a conflict with the interests of the Company or its Affiliates, or if a
specific interest creates a conflict with interests of the Company or its
Affiliates, or if a specific practice violates an ethical standard is more
difficult without judging the immediate circumstances involved. Moral and legal
standards are relative measurements of proper behavior. Therefore, the Company
can only set forth
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specific examples that may limit an individual's ability ethically and/or
legally to perform his or her duties for the Company or its Affiliates. Such
examples include:
(a) Having any position or interest in any other business enterprise
operated for a profit which would or could reasonably be supposed to
conflict with the proper performance of the employee's duties or
responsibilities, or which might tend to restrict the employee's
independence of judgment with respect to a transaction between the Company
or its Affiliates and such other business enterprise.
(b) Seeking to, accepting, offering or providing either directly or
indirectly from or to any individual, partnership, association,
corporation or other business entity or representative thereof, doing or
seeking to do business with the Company or its Affiliates the following:
loans (except with bank or other financial institutions), services,
payments, vacation or pleasure trips, or any gifts to more than nominal
value, or gifts of money in any amount.
(c) Benefiting personally from any purchase of any goods or services
of any nature by the Company or its Affiliates, or deriving personal gain
from actions taken or associations made in any capacity as an employee of
the Company or its Affiliates.
(d) Directly or indirectly acquiring as an investment, any stock of
any corporation engaged in the concession business or any business in
competition or doing business with the Company or its Affiliates, with the
exception of nominal stock-holdings in publicly held corporations.
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(e) Disclosing to a third party any information or data regarding
the financial status, decisions or plans of the Company or its Affiliates
which might be prejudicial to the interests of the Company or its
Affiliates, without first obtaining proper authorization.
(f) Misusing one's position with the Company or its Affiliates or
knowledge of the affairs of the Company or its Affiliates for personal
gain or benefit.
(g) Acquiring securities or other property (such as real estate)
which the Company or its Affiliates have a present or potential interest
in acquiring.
(h) Carrying on of the business of the Company or its Affiliates
with a firm in which the employee or near relative of the employee has an
appreciable ownership interest, without disclosing the relationship and
obtaining Company approval.
(i) Engaging in practices or procedures which violate any laws,
rules or regulations applying to the conduct of the business of the
Company or its Affiliates or licenses held by the Company or its
Affiliates, including violation of any antitrust laws.
(j) Contributing funds or property of the Company or its Affiliates
for political contribution purposes, in violation of local, state or
federal laws.
(k) Using or permitting others to use the services of the employees
of the Company or its Affiliates or materials or equipment of the Company
or its Affiliates for personal use or gain.
(l) Condoning or failing to report to appropriate Company authority
the activities of any other officer or employee of the Company or its
Affiliates which violate the principles set forth in this policy
statement.
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(m) Any other and all business practices which are construed or
accepted by the general business community as unethical or in violation of
law.
6. Obligations of Directors, Officers and Employees. Employment by or
association with the Company or its Affiliates carries with it the
responsibility to be constantly aware of the importance of ethical conduct. The
individual must disqualify himself from taking part, or exerting influence, in
any transaction in which his own interests may conflict with the best interests
of the Company or its Affiliates.
Interests which might otherwise be questionable may be entirely
proper if accompanied by a full advance disclosure which affords an opportunity
for prior approval or disapproval. The obligation to make such disclosure rests
upon the individual. All disclosures should be directed through normal
communication procedures to the Company's General Counsel at Company
Headquarters.
Upon disclosure, the Company recognizes that there may be many
borderline situations, and it does not intend to be unreasonable in considering
these cases, giving recognition to the attendant circumstances.
Should disclosure by an individual indicate the possibility of a
conflict of interest, the individual will be given a reasonable time to remedy
the situation.
From time to time questions may arise with respect to this Company
policy for which it is appropriate to consult with legal counsel. It is the
responsibility of each officer and employee to recognize these situations and
seek legal advice. Such advice may be obtained by contacting the Company's
General Counsel at Company Headquarters. It is never a mistake to consult with
counsel when in doubt with respect to the legality of a proposed course of
action.
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<PAGE> 25
7. Compliance with Antitrust Laws. It is the policy of the Company to
comply with all applicable federal and state antitrust laws, including trade
regulation laws, and it is expected that all of the officers and employees of
the Company or its Affiliates will likewise comply. The failure to comply with
applicable antitrust laws may subject the Company or its Affiliates and/or the
individuals involved to criminal and civil penalties, including substantial
fines and imprisonment, treble damage liability, injunctions or other court
orders adversely affecting the operation of the business of the Company or its
Affiliates, and the high cost of defending an antitrust case.
The Company's General Counsel at Company Headquarters coordinates
the handling of the legal affairs of the Company or its Affiliates. His staff is
always available for consultation with respect to compliance with the antitrust
laws. In addition, special legal counsel will be furnished, if required. No
officer or employee of the Company or its Affiliates is authorized to take any
action which the Company's General Counsel has previously advised would
constitute a violation of the antitrust laws.
To the extent it is legally able to do so, the Company shall be
prepared to accept and/or defend any individual who has acted in good faith upon
the advice of the Company's General Counsel, but who nevertheless has become
involved in antitrust proceedings in the course of his employment by the Company
or its Affiliates. Any individual who has violated the antitrust laws or is
convicted of so doing shall be subject to appropriate disciplinary action,
including dismissal, if such individual acted without seeking the advice of the
Company's General Counsel or acted contrary to his advice.
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<PAGE> 26
(a) Rules to Follow. Many of the questions arising under the
antitrust laws must be resolved in the context of a particular fact
situation. However, there are a number of clearly established rules of
conduct which must be observed by all officers and employees of the
Company or its Affiliates in all circumstances in order to assure that the
Company or its Affiliates and the individuals involved are in full
compliance with the antitrust laws.
Set out below are a number of these rules and several other
guidelines with respect to the application of the antitrust laws to the
activities of the Company or its Affiliates:
(i) No officer or employee of the Company or its Affiliates
shall enter into, or attempt to enter into, any understanding,
agreement, plan or arrangement, whether formal or informal, written
or oral, express or implied, with any competitor in regard to
prices, discounts, terms or conditions of or refusing to deal with
any actual or potential customers or suppliers of the Company or its
Affiliates.
(ii) No officer or employee of the Company or its Affiliates
shall give to or accept from a competitor, in written or oral form,
or discuss with a competitor, any information concerning prices,
terms or conditions of sale, or other competitive information except
where: (a) the information or discussion is relevant and necessary
to a bona fide existing or prospective customer or supplier
relationship between the Company or its Affiliates and such
competitor or supplier, or (b) the Company's General Counsel advised
in writing that such
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<PAGE> 27
conduct or discussions would be proper because there would be no
reasonable basis for asserting a violation of the antitrust laws.
8. Implementation Procedure. It is difficult to define all situations and
circumstances with precision in a policy. If there are nay questions at any time
on present or future interpretations of this policy or the propriety of any
conduct, employees of the Company or its Affiliates are requested to consult
with the Company's General Counsel at Company Headquarters to make sure of the
propriety of the action contemplated.
In matters of antitrust and other specialized areas, the Company
retains outside counsel who can be consulted as the need arises. The services of
outside counsel may be obtained by making your request to the Company's General
Counsel at Company Headquarters.
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<PAGE> 28
EXHIBIT B
EXECUTIVE BONUS PLAN
JAMES V. LaROCCO
No later than April 15 following the end of each calendar year
during the term of this Executive Employment Agreement, the Executive shall be
entitled to receive a bonus of up to 40% of the Base Salary paid to the
Executive during such calendar year. Eligibility for bonus shall be based solely
on the following criteria and up to the following percentages of Base Salary for
each such criterion:
<TABLE>
<CAPTION>
<C> <S>
20% - Achievement of the Company's annual Financial Plan.
This portion of the bonus shall be prorated based upon
the percentage of achievement of the annual Financial
Plan in the event the annual Financial Plan is not
achieved in full.
10% - Achievement of specific management goal set by the
President of the Company at the beginning of such year.
10% - At the sole discretion of the President of the Company.
----
40% Maximum Bonus
</TABLE>
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<PAGE> 29
EXHIBIT C
SUPPLEMENTAL PENSION PLAN
IN CONSIDERATION of the mutual promises contained herein, it is
agreed by the Executive and the Company as follows:
1. The Executive may retire from active employment at any time after
he reaches ages 65.
2. Upon retirement, the Company shall provide the Executive with a
retirement benefit of 240 equal consecutive monthly payments of $4,166.67. The
first monthly payment shall be made on the first day of the month coinciding
with or next following the date of the Executive's retirement.
3. In the event the Executive dies after commencement of payments
under paragraph 2 hereof, but before he received the number of monthly
installments set forth therein, the Company shall pay the remainder of said
monthly installments to the executive's designated beneficiary hereunder. For
purposes of this provision, the executive's designated beneficiary hereunder is
Cindi LaRocco. Executive shall have the right to change such beneficiary at
anytime hereafter, either prior to or after retirement, by notifying the Company
in writing of such change.
4. If the executive shall die prior to age 65 while in the active
employment of the Company, the Company shall pay the Executive's designated
beneficiary an aggregate of $491,000 in 60 equal monthly installments of
$8,183.33. The first installment shall be paid on the first day of the month
following the month in which the Executive dies.
5. This Plan is part of a certain Executive Employment Agreement
(the "Employment Agreement") dated July 1, 1995. Nothing herein shall prevent
the Company from
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<PAGE> 30
terminating the Employment for "cause" in accordance with the terms thereof, and
in which event this Plan shall be terminated and void in all respects and
neither party shall have any further responsibility for satisfying any
obligations that may have otherwise arisen hereunder. However, should the
Executive's employment terminate prior to retirement for any reason, other than
for "cause," resignation, disability or death, the Insurance Policy shall be
transferred by the Company to the Executive within thirty days after such
termination, and the full value of the Insurance Policy and its full cash
surrender value shall become the sole property of the Executive to do with as he
sees fit.
In the event of the Executive's resignation which is not associated
with termination for "cause" or for disability, the Company shall cancel the
Insurance Policy and provide the Executive with the cash surrender value
according to the following schedule:
<TABLE>
<CAPTION>
<S> <C>
After five (5) full years' service = 25%
After ten (10) full years' service = 50%
After fifteen (15) full years' service = 75%
After twenty (20) full years' service = 100%
</TABLE>
In the event of permanent disability the Company will continue to
pay the premiums on the full value of the Insurance Policy for twelve months
following the Executives' termination because of such disability in accordance
with Section 4(b) of the Employment Agreement and after twelve months to
transfer the full value of the Insurance Policy to the Executive within thirty
days. The full value of the Insurance Policy and its full cash current value
shall become the sole property of the Executive to do with as he sees fit, and
the Company shall have no further responsibility to fulfill any terms of the
Plan or to continue to pay premiums on the Insurance Policy after the transfer
of the Insurance Policy has been completed.
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<PAGE> 31
6. For so long as Executive is receiving payments hereunder,
Executive agrees that Sections 5, 6 and 7 of the Employment Agreement shall
remain in full force and effect.
7. Nothing in this Plan shall prevent Executive from receiving, in
addition to any amounts he may be entitled to under the Plan, any amounts which
may be distributable to him at any time under any pension plan, profit sharing
or other incentive compensation or similar plan of the Company now if effect or
which may hereafter be adopted.
8. This Plan shall be binding upon the Executive, his heirs,
executors, administrators and assigns, and on the Company, its successors and
assigns. The rights of Executive hereunder shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge.
9. This Plan may be altered, changed, amended or terminated only by
writing signed by the party to be bound thereby.
10. This document has been executed in the State of Ohio and shall
be interpreted in accordance with the laws of that State without regard to
conflict of law provisions.
11. This document contains the entire agreement between the parties
with respect to the subject matter hereof, supersedes any and all prior
discussions or agreements the parties may have had with respect thereto
(including any prior Supplemental Pension Plan).
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<PAGE> 32
EXHIBIT D TO EXECUTIVE EMPLOYMENT AGREEMENT
DESIGNATION OF BENEFICIARY
Effective July 1, 1995, I, the undersigned, entered into an
Executive Employment Agreement with APCOA, INC. Pursuant to the terms of said
Agreement, I have the right to designate a beneficiary to receive, in the event
of my death, certain payments pursuant to said Agreement. I, therefore, exercise
this right and designate Cindi LaRocco to receive any such payments if (s)he
survives me, but if Cindi LaRocco does not survive me, I designate Estate. Any
and all previous designations of beneficiary made by me are hereby revoked, and
I hereby reserve the right to revoke this designation of beneficiary.
/s/ James V. LaRocco
------------------------------------
JAMES V. LaROCCO
Date: 10/19/95
--------
Receipt of this Designation of Beneficiary form is acknowledged by
the undersigned Secretary of APCOA, INC.
APCOA, INC.
By: /s/ James C. Burdett
--------------------------------
Assistant Secretary
Date: 10/19/95
--------
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<PAGE> 1
Exhibit 10.9
MANAGEMENT EMPLOYMENT AGREEMENT
AGREEMENT dated as of April 1, 1996 by and between APCOA, Inc., a
Delaware Company with offices at 800 Superior Avenue, Cleveland, Ohio 44122
("Company"), and Trevor R. Van Horn ("Employee").
WHEREAS, the Company is engaged in the business of operating and
managing open air parking lots and indoor garages and ramps for the purpose of
parking motor vehicles on a leasehold, license, concession or management fee
basis throughout the United States under agreement with municipalities, owners
of properties, and/or otherwise (the "Business of the Company").
WHEREAS, Employee is being offered employment by the Company in a
management capacity. During the course of his employment, the Employee will
become knowledgeable with respect to the Business of the Company, its trade
secrets, customers, market areas, sources of supply, and its manner of doing
business.
WHEREAS, the Company desires to employ Employee and Employee desires
to work for the Company upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises hereto and the
agreements and covenants hereinafter contained, the parties hereto, intending to
be legally bound, mutually agree as follows:
1. EMPLOYMENT AND DUTIES
The Company hereby employs Employee to serve as Corporate Vice
President, Airport Properties (or under such title as the Company may hereafter
assign to him). The Employee hereby accepts employment upon the terms and
conditions hereinafter set forth. He shall report to the President and Chief
Executive Officer or any other officer of the Company assigned to him by such
officer. The Employee will have responsibility for the Airport Properties Group.
The Employee shall devote his entire time, attention and energies to
the Business of the Company, and shall not, during the term of this Agreement,
engage in any other business activities that will interfere with the Employee's
employment pursuant to this Agreement. The Employee agrees to comply in all
material respects with the "Standards of Conduct" as set forth in Exhibit A.
2. TERM
(a) The term of this Agreement shall be for a period of two years
(and thereafter until terminated by either party in the manner set forth in
Section 2(b) below) commencing as of the date set forth above, (unless Employee
dies, or becomes incapacitated and unable to perform the duties set forth in
Section 1 hereof and it is determined by the Company in its sole discretion that
termination is necessary for the good of the Company) or the Employee is
terminated for
<PAGE> 2
cause pursuant to Section 7 hereof. In the event of death, incapacity or
termination pursuant to Section 7 hereof, all rights of the Employee to receive
compensation and benefits (except to the extent then accrued or vested) shall
end as of the date of such event.
(b) Unless terminated (for any reason described above) this
Agreement shall remain in effect for so long as Employee is an employee of the
Company. After the initial two (2) year period, either party shall have the
right to terminate this Agreement by giving the other party thirty (30) days
prior written notice of intent to do so. Notwithstanding any such termination,
Sections 5 and 6 of this Agreement shall remain in full force and effect.
3. COMPENSATION
For the services to be rendered by him pursuant to this Agreement,
the Company agrees to pay to Employee, so long as he shall be employed
hereunder, the following compensation:
(a) Salary at the rate of not less than $135,000 per year, Base
Salary ("Salary"), payable in 26 equal installments. The salary shall be
reviewed at least annually and any adjustments shall be at the sole discretion
of the President and Chief Executive Officer.
(b) Company agrees to pay the Employee a bonus as set forth and
outlined in Exhibit B hereto attached.
(c) Benefits as outlined in Exhibit C attached.
(d) Company automobile as well as reimbursement for gasoline and
maintenance. Insurance for that automobile will be provided by the Company.
(e) Employee is eligible for three (3) week vacation in 1996 and
four (4) weeks vacation beginning January 1, 1997.
4. AUTHORIZED EXPENSES
The Company will reimburse the Employee for reasonable business
expenses on the presentation by the Employee, from time to time, of an itemized
account of such expenses with documentary supporting materials. Such expenses
shall include reasonable and necessary expenses for entertainment, travel,
meals, and hotel accommodations.
5. CONFIDENTIALITY AND DISCLOSURE OF INFORMATION
The Employee, during his tenure as an employee of the Company, will
have access to, and will gain knowledge with respect to the Company's trade
secrets, private and confidential information concerning its financial
statements and operations conducted by the Company, its sales and marketing
activities and procedures, its bidding techniques, its design and construction
techniques, its customer list of owners of parking facilities or credit and
financial data concerning such customers or potential customers (in the
aggregate hereinafter as "Secret and Confidential Information"). The Employee
acknowledges that such information constitute a
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<PAGE> 3
valuable, special and unique asset of the Company as to which the Company has
the right to retain and hereby does retain all of its proprietary interests.
However, access to and knowledge of such Secret and Confidential Information are
essential to the performance of the Employee's services for the Company. In
recognition of this fact, the Employee agrees that he will not, during or after
his employment with the Company, disclose any of such Secret and Confidential
Information to any person, firm, corporation, association of other entity for
any reason or purpose whatsoever, except as necessary in the performance of his
duties as an Employee of the Company or make use of any such Secret and
Confidential Information for his own purposes or those of another.
6. RESTRICTIVE COVENANT
(a) The Employee recognizes that the Company is relying on his
extensive experience, knowledge, ability and contacts in the Business engaged in
by the Company in entering into this Agreement. For this reason, Employee
covenants and agrees that during the period of his employment by the Company,
and for a period of one year immediately following such employment, (except in
the event the Company elects to terminate this Agreement or any extension
thereof pursuant to the Section 2(b) in which case Section 6(b) shall be in
effect) he shall not have any direct or indirect ownership or other financial
interest in and will not directly or indirectly engage in, or in any manner
become interested in (as principal, agent, consultant, advisor, officer,
director, employee or otherwise) any business which competes with the Business
of the Company in the geographic territory in which the Employee is then
operating nor will he solicit business directly or indirectly on behalf of such
competing business.
In addition, as part of the consideration required of him under this
Agreement, Employee shall not, while in the employment of the Company, and for a
period of two (2) years thereafter either:
(1) hire or otherwise induce any employee or employees of the
Company or any of its subsidiaries, to leave or terminate such employment, or
(2) employ, assist in employing or otherwise associate in business
with any such employee of the Company or any of its subsidiaries.
Further, as part of the consideration required of him under this
Agreement, Employee agrees that he will not at any time, either during his
employment with the Company or after cessation thereof divulge to any person,
firm or company any information received by him during the course of his
employment relating to or affecting the business of the Company, including, but
not specifically limited to, information relating to any contracts, statistics,
methods, costs or revenues, and all of such information shall be kept
confidential and not in any way be revealed to anyone without the express
written consent of the Company.
Employee understands that the breach or the threatened breach of any
of the covenants contained herein to which Employee has agreed will result in
irreparable injury to the Company and agrees that the Company may, in addition
to its remedies at law in any such event, seek and obtain a court injunction
restraining the breach of said covenants or any of them.
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<PAGE> 4
(b) In the event that the Company elects to terminate this
Agreement, or any extension thereof under Section 2(b) hereof, the Company shall
have the right to require Employee to abide by the covenant described herein for
a period of up to one year immediately following such termination date.
In such event, Employee covenants and agrees that for the
non-competitive period described above, he shall not have any direct or indirect
ownership or other financial interest in and will not directly or indirectly
engage in, or in any manner become interested in (as principal, agent,
consultant, advisor, officer, director, employee or otherwise) any business
which competes with the Business of the Company in the geographic territory in
which the Employee is then operating nor will he solicit business, directly or
indirectly on behalf of such competing business.
7. TERMINATION
The Company shall have the right to terminate this Agreement for
cause immediately and without any further liability to employee if, in the
judgment of the Executive Vice President and Chief Operating Officer:
(a) Employee has failed or materially neglected to perform his
obligations hereunder; or
(b) Employee has: (i) committed any crime involving moral turpitude
or any crime in the conduct of his official duties; (ii) committed any material
act of fraud against the Company, its parent or affiliates, or materially
misused his position for his personal gain or that of any third party; or (iii)
committed any act materially adverse to the welfare of the Company.
In the event this Agreement is terminated, pursuant to this Section,
Sections 5 and 6 shall remain in full force and effect. However, the one year
term period described in Section 5(a) shall commence as of the date of
termination.
8. INVALIDITY
The territorial, time and other limitations contained in Sections 5
and 6 are reasonable and properly required for the adequate protection of the
Business and affairs of the Company, and in the event that any one or more of
such territorial, time or other limitation is found to be unreasonable by a
court of competent jurisdiction, the Company agrees to submit to the reduction
of the said territorial, time or other limitation under such sections is found
to be unreasonable or otherwise invalid in any jurisdiction, in whole or in
part, the parties acknowledge and agree that such limitation shall remain and be
valid in all other jurisdictions.
If provision, term, clause or part thereof of this Agreement is
invalid, it shall not affect the remainder of said provision, term or clause of
this Agreement, but said remainder shall be binding and effective against both
parties hereto.
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<PAGE> 5
9. MISCELLANEOUS
This Agreement embodies the whole agreement between the parties
hereto concerning the subject matter hereof. This Agreement may not be changed
except by a writing signed by the party against whom enforcement thereof is
sought.
This Agreement has been executed in the State of Ohio and shall be
governed and interpreted in accordance with the laws of the State of Ohio.
All notices given hereunder shall be mailed postage paid to the
address of the receiving party as first indicated above or to such other place
as such party may from time to time designate by written notice hereafter.
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound, have executed this Agreement this 1 day of April, 1996.
ATTEST: APCOA, Inc.
- ------------------------ By: /s/ Michael J. Machi
-------------------------------
Michael J. Machi
Senior Vice President
Administration
WITNESS:
- ------------------------ By: /s/ Trevor R. Van Horn
-------------------------------
Trevor R. Van Horn
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<PAGE> 6
EXHIBIT A
GUIDELINES
STANDARDS OF CONDUCT
1. Standards of Conduct and Business Ethics. The Board of Directors
of APCOA, Inc. has adopted a Corporate policy for itself and its subsidiary and
affiliated companies regarding Standards of Conduct and Business Ethics, in
order to provide Directors, Officers and employees with a guide of conduct in
fulfilling their responsibilities to the public, and the corporation.
As no policy statement can cover the total range of daily
activities, it is recognized that questions of compliance will arise. Such
questions should be directed through normal communications procedures to the
General Counsel at Corporate Headquarters.
Your attention is also specifically called to the fact that
disregard of sections of this policy could result in your dismissal as an
employee as well as the imposition of civil and criminal penalties against the
Company and you personally.
All personnel are requested to read this policy and conform to the
principles stated herein.
2. Policy. It is the policy of the Company that its directors,
officers and employees shall regulate their activities so as to avoid loss or
embarrassment to the Company. Either by implication or in reality, the objective
exercise of sound ethical business judgment should not be in any manner limited
by any relationship, any activity or any practice.
The Company recognizes and respects the individual's right to engage
in outside activities. However, the Company reserves the right to determine when
these activities create a conflict of interest. All conduct of the individual
must conform to the best interests of the Company
3. Reciprocity. Because of the nature and variety of the business
engaged in by companies directly or indirectly controlled by APCOA, Inc.,
certain legal problems could arise with respect to purchases made by APCOA, Inc.
if such purchases are conditioned upon our suppliers' purchasing products and/or
services sold by APCOA, Inc. Conversely, similar legal problems could arise if
our customers were to condition our sales to them upon purchase of products or
services from them. This practice, commonly referred to as "reciprocity," is
prohibited by various federal and state laws.
It is the policy of APCOA, Inc. that APCOA, Inc. comply with all
applicable federal, state and local laws. The Guidelines set forth below have
been designated to ensure full compliance with such laws. These Guidelines apply
to all personnel having purchase or sales responsibilities. The Executives of
APCOA, Inc. should disseminate these Guidelines to appropriate employees and
agents and require adherence thereto.
-1-
<PAGE> 7
4. Purchase/Sales Guidelines. The following guidelines with respect
to purchases and sales made by companies owned or controlled directly or
indirectly by APCOA, Inc. apply to all employees and agents of such companies.
(a) No employee or agent of APCOA, Inc. having purchasing
responsibilities or duties shall purchase any products or
services from, or enter into or adhere to any contract,
agreement or the condition or understanding that purchases
made by him will be based or conditioned upon any sales to
such supplier by APCOA, Inc.
(b) No employee or agent of APCOA, Inc. having sales
responsibilities or duties shall sell products or services to,
or enter into or adhere to any contract agreement or
understanding that any purchase by APCOA, Inc. from such
customer will be based or conditioned upon any sales of APCOA,
Inc. to such customer.
(c) No employee or agent of APCOA, Inc. shall issue to personnel
with primary purchasing responsibility any lists, notices, or
other data identifying customers and their purchases made by
APCOA, Inc. from any of such customers.
(d) No employee or agent of APCOA, Inc. shall issue to personnel
with primary sales responsibilities any lists, notices or
other data pertaining to purchases made by APCOA, Inc. from
particular suppliers.
(e) No employee or agent of APCOA, Inc. shall prepare or maintain
statistical compilations which compare purchases from
suppliers who supply products or services to APCOA, Inc. to
such suppliers.
(f) No employee or agent of APCOA, Inc. shall:
1. Communicate to any actual or potential seller or
supplier of APCOA, Inc. that preference will be given to
the purchase of such seller's products or services based
upon sales by APCOA, Inc. to such supplier.
2. Compare or exchange statistical data with any such
seller or supplier to facilitate any relationship of
mutual purchases and sales between such seller or
supplier and APCOA, Inc.
3. Communicate to any such seller or supplier the fact that
APCOA, Inc. has made any purchases from such seller or
supplier for the purpose of inducing a purchase by such
seller or supplier.
4. Direct or recommend that APCOA, Inc. purchase products
or services from any seller or supplier for the purpose
of reciprocating purchases made by, or promoting sales
to, such seller or supplier.
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<PAGE> 8
5. Agree with any seller or supplier that such seller or
supplier will purchase products or services from APCOA,
Inc. in order to reciprocate purchases made by APCOA,
Inc. from such supplier.
5. Standards of Business Ethics. To determine if a specific interest
creates a conflict with Company interests or if a specific practice violates an
ethical standard is most difficult without judging the immediate relative
circumstances involved. Moral and legal standards are relative measurements or
proper behavior. Therefore, the Company can only set forth specific examples
that may limit an individual's ability ethically and/or legally to perform his
or her duties for the Company. Such examples include:
(a) Having any position or interest in any other business
enterprise operated for a profit which would or could
reasonably be supposed to conflict with the proper performance
of the employee's duties or responsibilities, or which might
tend to restrict the employee's independence of judgment with
respect to a transaction between the Company and such other
business enterprise.
(b) Seeking to, accepting, offering or providing either directly
from or to any individual, partnership, association,
corporation or other business entity or representative
thereof, doing or seeking to do business with the Company, or
any of its affiliates the following: loans (except with banks
or other financial institutions), services, payments, vacation
or pleasures trips, or any gifts to more than nominal value,
or gifts of money in any amount.
(c) Benefiting personally from any purchase of any goods or
services of any mature by the Company or its affiliates, or
deriving personal gain from actions taken or associations made
in any capacity as an employee of the Company.
(d) Directly or indirectly acquiring as an investment, any stock
of any company engaged in the parking business or any business
in competition or doing business with APCOA, Inc. and its
affiliates which might be prejudicial to the interest of the
Company, without first obtaining proper authorization.
(e) Revealing to a third party, any information or data regarding
the financial status, decisions or plans of the Company or any
of its affiliates which might be prejudicial to the interest
of the Company, without first obtaining proper authorization.
(f) Misusing one's position with the Company or knowledge of
Company affairs for outside gains.
(g) Acquiring securities or other property (such as real estate)
which the Company itself has a present or potential interest
in acquiring.
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<PAGE> 9
(h) Carrying on of Company business with a firm in which the
employee or near relative of the employee has an appreciable
ownership or interest, without divulging the relationship and
obtaining Company approval.
(i) Engaging in practices or procedures which violate any laws,
rules or regulations applying to the conduct of the Company's
businesses and licenses held by the Company, including
violation of any antitrust laws.
(j) Contributing corporate funds or property for political
contribution purposes, in violation of local, state or federal
laws.
(k) Using or permitting others to use the services of Company
materials or equipment for personal use or gain.
(l) Condoning or failing to report to appropriate Company
authority the activities of any other officer or employee of
the Company which violate the principles set forth in this
policy statement.
(m) Any other and all business practices which are construed or
accepted by the general business community as unethical or in
violation of law.
6. Obligation of Directors, Officers and Employees. Employment by,
or association with the Company carries with it the responsibility to be
constantly aware of the importance of ethical conduct. The individual must
disqualify himself from taking part, or exerting influence in any transaction in
which his own interest may conflict with the best interest of the Company.
Interests who might otherwise be questionable may be entirely proper
if accompanied by a full advance disclosure which affords an opportunity for
prior approval or disapproval. The obligation to make such disclosure rests upon
the individual. All disclosures should be directed through normal communication
procedures to the General Counsel at Corporate Headquarters.
Upon disclosure, the Company recognizes that there may be many
borderline situations and it does not intend to be unreasonable in considering
these cases giving recognition to the attendant circumstances.
Should disclosure by an individual indicate the possibility of a
conflict of interest, the individual will be given a reasonable time to remedy
the situation.
From time to time questions may arise with respect to this Company
policy for which it is appropriate to consult with legal counsel. It is the
responsibility of each officer and employee to recognize these situations and
seek legal advice. Such advice may be obtained by contacting the General Counsel
at Corporate Headquarters. It is never a mistake to consult with counsel when in
doubt with respect to the legality of a proposed course of action.
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<PAGE> 10
7. Compliance with Antitrust Laws. It is the policy of the Company
to comply with all applicable federal and state antitrust laws, including trade
regulation laws, and it is expected that all of the Company's officers and
employees will likewise comply. The failure to comply with applicable antitrust
laws may subject the Company and/or the individuals involved to criminal and
civil penalties, including substantial fines and imprisonment, travel damage
liability, injunctions or other court orders adversely affecting the operation
of the Company's business, and the high cost of defending an antitrust case.
The General Counsel at Corporate Headquarters coordinates the
handling of the Company's legal affairs. His staff is always available for
consultation with respect to compliance with the antitrust laws. In addition,
special legal counsel will be furnished, if required. No officer or employee is
authorized to take any action which the General Counsel has advised would
constitute a violation of the antitrust laws.
To the extent it is legally able to do so, the Company shall be
prepared to assist and/or defend any individual who has acted good faith upon
the advice of the General Counsel, but who nevertheless has become involved in
antitrust proceedings in the course of his employment. Any individual who has
violated the antitrust laws or is convicted of so doing shall be subject to
appropriate disciplinary action, including dismissal, if such individual acted
without seeking the advice of the General Counsel or acted contrary to his
advice.
a. Rules to Follow. Many of the questions arising under the
antitrust laws must be resolved in the context of a particular
fact situation. However, there are a number of clearly
established rules of conduct which must be observed by all
officers and employees in all circumstances, in order to
assure that the Company and the individuals involved are in
full compliance with the antitrust laws.
Set out below are a number of these rules and several other
guidelines with respect to the application of the antitrust
laws to the activities of the Company:
1. No officer or employee shall enter into, or attempt to
enter into, an understanding, agreement, plan or
arrangement, whether formal or informal, written or
oral, express or implied, with any competitor in regard
to prices, discounts, terms or conditions of or refusing
to deal with any actual or potential customers or
suppliers.
2. No officer or employee shall give to or accept from a
competitor, in written or oral form, or discuss with a
competitor, any information concerning prices, terms or
conditions of sale, or other competitor information
except where: (a) the information or discussion is
relevant and necessary to a bona fide existing or
prospective customer supplier relationship between the
Company and such competitor, or (b) the General Counsel
advised in writ-
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<PAGE> 11
ing that the conduct or discussions would be proper
because there would be no reasonable basis for inferring
a violation of the antitrust laws.
8. Implementation Procedures. It is difficult to define all
situations and circumstances with precision in a policy. If there are any
questions at any time on present or future interpretations of this policy or the
propriety of any conduct, employees are requested to consult with the General
Counsel at Corporate headquarters to make sure of the propriety of the action
contemplated.
In matters of antitrust and other specialized areas, the Company
retains outside counsel, who can be consulted as the need arises. The services
of outside counsel may be obtained by making your request to the General Counsel
at Corporate Headquarters.
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<PAGE> 12
EXHIBIT B
EXECUTIVE BONUS PLAN
Trevor R. Van Horn
No later than April 15, following the end of each calendar year during the term
of this Executive Employment Agreement, the Executive shall be entitled to
receive a bonus.
1. In 1996 the bonus will be a pro-rata share of up to 30% of the base
salary paid to the Executive during the calendar year.
2. In 1997 the bonus will be up to 35% of the base salary paid to the
Executive during such the calendar year.
Eligibility for bonus shall be based solely on the following
criteria and up to the following percentages of Base Salary of each
such criterion:
<TABLE>
<CAPTION>
1996 1997
- ---- ----
<C> <C> <S>
15% 20% - Achievement of Airport Properties annual Financial Plan. This
portion of the bonus shall be based upon the percentage of
achievement of the annual Airport Properties Financial Plan in
the event the annual Financial Plan is not achieved in full.
5% 5% - Achievement of specific management goal set by the President
of the Company at the beginning of such year.
10% 10% - At the sole discretion of the President of the Company.
- ------------
30% 35% - Maximum Bonus
</TABLE>
<PAGE> 13
EXHIBIT C
BENEFIT PACKAGE
The following company paid benefits will begin the first day of the month
following 90 days of employment:
1. Life Insurance: Life Insurance and matching Accidental Death and
Dismemberment coverage in the amount of 1x annual salary rounded up to the next
highest thousandth.
2. Long Term Disability: Long Term Disability coverage trough UNUM Life
Insurance Company which provides 66% of pre-disability monthly income up to a
benefit of $5,000 per month.
3. 24-Hour Personal Accident: Additional Accidental Death and Dismemberment
coverage in the amount of $180,000 for employee and family, if applicable.
4. Health Insurance: Medical coverage through Aetna Health Plans for employee
and family, if applicable, included in Executive Medical Reimbursement Program.
5. Immediately eligible to participate in the 401(K) wraparound plan for Senior
Executives.
6. After one year of service, at the next January or July Open Enrollment,
enrollment into the 401 (K) Savings Plan will be available.
This Plan allows for the contributions, to be made, via payroll deduction, up to
15% of salary (pre-tax), of which the first 6% will be matched $.35 per $1.00 by
APCOA. These monies are invested among five different funds at Society Bank.
<PAGE> 1
Exhibit 10.10
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is executed as of the 11th day of December, 1995 by and
between APCOA, INC., a Delaware corporation, with offices at 25550 Chagrin
Boulevard, Beachwood, Ohio 44122 (the "Company") and HERBERT W. ANDERSON (the
"Executive").
W I T N E S S E T H:
WHEREAS, the Company is engaged in the business of operating and managing
open air parking lots and indoor garages and ramps for the purpose of parking
motor vehicles on a leasehold, license, concession or management fee basis
through the United States under agreement with municipalities, owners of
properties and/or otherwise (the "Business of the Company"); and
WHEREAS, the Executive has been employed by the Company in a management
capacity for several years and during the course of his employment, the
Executive has become an experienced and valuable employee and is knowledgeable
with respect to the Business of the Company, its trade secrets, customers,
market areas, sources of supply and manner of doing business; and
WHEREAS, the Company desires to continue to employ the Executive and the
Executive desires to continue to work for the Company upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises hereto and the agreements
and covenants hereinafter contained, the parties hereto, intending to be legally
bound, mutually agree as follows:
1. Employment and Duties.
The Company hereby employs the Executive to serve as Corporate Vice
President Urban Properties (or under such title as the Chief Executive Officer
may hereafter assign to him).
<PAGE> 2
The Executive hereby accepts employment upon the terms and conditions
hereinafter set forth. The Executive shall be responsible for the Urban
Properties Division of the Company. He shall report to the President and Chief
Executive Officer and perform such duties as may be reasonably assigned to him
by such officer. The Executive agrees to comply in all material respects with
the Standards of Conduct set forth in Exhibit A hereof ("Standards of Conduct").
The Executive shall devote his entire time, attention and energies to the
Business of the Company, and shall not, during the term of this Agreement,
engage in any other business activities that will interfere with the Executive's
employment pursuant to this Agreement.
2. Term.
(a) The term of this Agreement shall be for a period commencing on
December 11, 1995 and ending on June 30, 1998.
(b) If this Agreement has not been terminated as set forth below in
Section 4 prior to June 30, 1998, and neither party hereto has given
written notice to the other party by April 30, 1998 of its desire to have
this Agreement terminate at the end of its original term (June 30, 1998),
this Agreement shall continue in full force and effect for an additional
one-year period following the end of its original term on June 30, 1998,
and the same procedure shall apply mutatis mutandis to any extended term
of this Agreement with respect to periods ending on June 30 in any year
after 1998.
3. Compensation and Other Benefits.
For the services to be rendered by him pursuant to this Agreement,
the Company agrees to provide the Executive, so long as he shall be employed by
the Company, the following compensation and benefits:
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<PAGE> 3
(a) Salary ("Base Salary") at the rate of not less than $112,500.00
per annum through June 30, 1996 and $125,000.00 per annum thereafter,
payable not less often than monthly in equal installments at the end of
each month. The Base Salary figure shall be reviewed annually and may be
increased at the sole discretion of the Chief Executive Officer. Any such
increase in the Base Salary shall be deemed for all purposes hereunder to
be an amendment to this Agreement, and this Agreement as so amended shall
remain in effect until otherwise terminated as provided herein.
(b) Such bonuses as the Executive may have earned under the
Executive Bonus Plan set forth in Exhibit 3 hereof.
(c) Group health and welfare coverages, other fringe benefits such
as are enjoyed by senior executives of the Company generally, and such
other emoluments and fringe benefits as shall be determined by the Company
from time to time.
(d) Four (4) weeks of vacation annually during which time the
Executive's compensation will be paid in full and all other benefits under
this Agreement shall continue to be provided to him.
(e) The Company will furnish the Executive with an automobile, will
provide appropriate insurance coverage for such automobile, and will
reimburse the Executive for all gasoline and maintenance costs relating to
such automobile. Any such reimbursement shall be conditioned upon the
Executive presenting to the Company, in accordance with applicable Company
policies and procedures, an itemized account concerning his use of the
automobile and distinguishing between use in connection with the Business
of the Company and otherwise.
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<PAGE> 4
(f) The Company will reimburse the Executive for reasonable business
expenses incurred by the Executive relating to the conduct of the Business
of the Company. Any such expense reimbursement shall be conditioned upon
the Executive presenting to the Company, in accordance with the applicable
Company policies and procedures, an itemized account of such expenses with
supporting documents. Reimbursable expenses shall include reasonable and
necessary expenses for entertainment, travel, meals and hotel
accommodations.
(g) The Executive shall be provided with directors and officers
liability insurance coverage to the same extent as the other Directors
and/or senior officers of the Company, and shall be indemnified by the
Company to the full extent permitted by law against liability claims
arising out of his activities as an employee of the Company or a member of
the Board.
(h) The Company will provide a Supplemental Pension Plan as
described in Exhibit C.
4. Termination of Agreement.
(a) This Agreement shall terminate upon the death of the Executive.
Upon the Executive's death, a beneficiary (the "Beneficiary") designated
by the Executive as prescribed in Section 12 shall be entitled to receive:
(i) the amount of the Executive's Base Salary through the date
of his death;
(ii) any accrued but unpaid amount under Section 3(b) and the
amount determined under Section 3(b) hereof for the Company's fiscal
year in which the Executive's death occurs as though the Executive
had survived and continued to
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<PAGE> 5
work for the Company pursuant to this Agreement through the end of
such fiscal year, payable at the time prescribed in Exhibit B; and
(iii) an aggregate amount equal to the sum of (A) the annual
Base Salary at the time of the Executive's death and (B) $9,600.00
(which represents the estimated annual value of the Executive's
right to use of an automobile provided by the Company and related
benefits described in Section 3(e) hereof), payable in twelve (12)
equal monthly installments commencing on the first day of the month
next following the Executive's death.
In addition, for a period of twelve (12) months following the Executive's
death, (a) the Company shall continue to provide the benefits under
Section 3(c) to such persons who would have been entitled to such benefits
had the Executive survived and continued to be employed by the Company
hereunder for such twelve (12) month period.
(b) This Agreement shall terminate in the event of the Executive's
termination of employment because of disability (as defined below). In
such event, the Executive shall be entitled to receive:
(i) the amount of the Executive's Base Salary through the date
of his termination of employment;
(ii) any accrued but unpaid amount under Section 3(b) and the
amount determined under Section 3(b) hereof for the Company's fiscal
year in which the Executive's disability occurs as though the
Executive had continued to work for the Company pursuant to this
Agreement through the end of such fiscal year, payable at the time
prescribed in Exhibit B; and
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<PAGE> 6
(iii) an aggregate amount equal to the sum of (A) the annual
Base Salary at the time of the Executive's disability and (B)
$9,600.00 (which represents the estimated annual value of the
Executive's right to use of an automobile provided by the Company
and related benefits described in Section 3(e) hereof), payable in
twelve (12) equal monthly installments commencing on the first day
of the month next following the Executive's termination of
employment; provided, however, that such payments shall be reduced
by any amounts payable to the Executive under any disability benefit
program (whether or not insured) maintained by the Company.
In addition, for a period of twelve (12) months following the Executive's
termination of employment because of disability, the Company shall
continue to provide the benefits under Section 3(c) to such persons
(including the Executive) who would have been entitled to such benefits
had the Executive continued to be employed by the Company for such twelve
(12) month period.
For purposes of this Agreement, "disability" shall mean any physical or
mental impairment or disability which prevents the Executive from performing his
duties under this Agreement for a period of at least one hundred twenty (120)
days and which is expected to be of permanent duration. A determination of
whether the Executive is disabled shall be made by two licensed physicians, one
appointed by the Board of Directors and one appointed by the Executive. In the
event the two physicians are unable to agree with respect to whether the
Executive is disabled, the determination of whether the Executive is disabled
shall be made by a third duly licensed physician chosen by the two physicians
previously appointed.
(c) This Agreement shall terminate sixty (60) days following the
date the Executive receives notice from the Company that it desires to
terminate this Agreement.
-6-
<PAGE> 7
In the event that this Agreement is terminated pursuant to the preceding
sentence and without Cause (as defined in subsection (e) below), the
Executive shall be entitled to receive:
(i) an aggregate amount equal to the greater of either (A) the
Annual Base Salary at the time this Agreement terminates or (B) the
aggregate amount payable to the Executive under the Company's
Severance Benefit Policy, payable in twelve (12) equal monthly
installments commencing on the first day of the month coinciding
with or next following the date this Agreement terminates;
(ii) any accrued but unpaid amount under Section 3(b) payable
at the time prescribed in Exhibit B;
(iii) not later than the 15th day of the fourth month
following the close of the Company's fiscal year in which this
Agreement terminates, an amount equal to the amount determined under
Section 3(b) hereof for the Company's fiscal year in which this
Agreement terminates (the "Termination Bonus"), determined as though
the Executive continued to be employed by the Company through the
end of such fiscal year, multiplied by a fraction, the numerator of
which equals the number of days remaining in such fiscal year
following the date this Agreement terminates plus 365, and the
denominator of which equals 365;
(iv) in the event this Agreement was scheduled to terminate
under Section 2 hereof after the first anniversary of the date this
Agreement terminates under this Section 4(c), then during the period
commencing on the first anniversary of the date this Agreement
terminates under this Section 4(c) and ending on the last day of the
month in which occurs the date this Agreement was scheduled to
terminate under
-7-
<PAGE> 8
Section 2 hereof, the Executive shall be entitled to receive each
month, commencing with the month which coincides with or next
follows the first anniversary of the date this Agreement terminates,
an amount equal to the sum of (a) one-twelfth (1/12) of his annual
Base Salary plus (b) one-twelfth (1/12) of the Termination Bonus,
reduced by any salary or bonus he receives in any such month with
respect to performing any of the acts described in the second
sentence of Section 6(a) hereof;
(v) for a period of twelve months following the Executive's
termination of employment, the Company shall continue to provide the
benefits under Sections 3(c) and 3(e) to such persons (including the
Executive) who would have been entitled to such benefits had the
Executive continued to be employed by the Company for such
twelve-month period but only to the extent not provided by a
successor employer; provided, however, that any accounting the
Executive is required to provide to the Company under Section 3(e)
need not distinguish between the use of the automobile in connection
with the Business of the Company and other use.
In the event this Agreement is terminated pursuant to the first sentence
of this subsection (c) because the Company discharges the Executive for Cause
(as defined in subsection (e) below), the Executive shall be entitled to receive
only his Base Salary through the date of his termination of employment and the
Company will have no further obligation to Executive under this Agreement or
otherwise.
(d) In the event of the termination of this Agreement because of the
Executive's voluntary termination of employment for some reason other than
death or disability, the
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<PAGE> 9
Executive shall be entitled to receive only his Base Salary through the
date of his termination of employment and the Company will have no further
obligations to the Executive under this Agreement or otherwise.
(e) "Cause" as used in this Agreement shall mean that either:
(i) in the judgment of the Board of Directors of the Company,
ascertained by majority vote, the Executive has materially failed
for some reason other than illness, injury, or disability to perform
his obligations hereunder; or
(ii) the Executive has: (a) committed either any felony
involving moral turpitude or any crime in the conduct of his
official duties which is materially adverse to the welfare of the
Company; or (b) committed any material act of fraud against the
Company, its parent or affiliates, or materially misused his
position for his personal gain or that of any third party; or (c)
taken any action (other than an error in judgment made in the
ordinary course of his duties) materially adverse to the welfare of
the Company, including, but not limited to, any violation of the
Standards of Conduct attached hereto or any breach of the covenants
and conditions contained in Sections 5 and 6 hereof.
5. Confidentiality and Disclosure of Information.
(a) The Executive, during his tenure as an officer and employee of
the Company, has had and will have access to, and has gained and will gain
knowledge with respect to the Company's trade secrets, private and secret
processes, as they may exist from time to time, and confidential
information concerning its financial statements and operations conducted
by the Company, its sales and marketing activities and procedures, its
bidding techniques, its design and construction techniques, its customer
list of owners of parking
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<PAGE> 10
facilities or credit and financial data concerning such customers or
potential customers (in the aggregate referred to hereinafter as "Secret
and Confidential Information"). The Executive acknowledges that such
information constitutes a valuable, special and unique asset of the
Company as to which the Company has the right to retain and hereby does
retain all of its proprietary interests. However, access to and knowledge
of such Secret and Confidential Information is essential to the
performance of the Executive's services for the Company. In recognition of
this fact, the Executive agrees that he will not, during or after his
employment with the Company, disclose any of such Secret and Confidential
Information to any person, firm, corporation, association or other entity
for any reason or purposes whatsoever or make use of any such Secret and
Confidential Information for his own purposes or those of another. The
provisions contained in this subsection (a) shall also apply to
information obtained by the Executive in the course of his employment by
the Company with respect to the Company's subsidiary and affiliated
companies.
(b) The Executive shall promptly disclose, grant and assign to the
Company for its sole use and benefit any and all inventions, improvements,
technical information and suggestions relating to the Business of the
Company (in the aggregate referred to as the "Creations") which the
Executive has or may conceive, develop or acquire during his employment
(whether or not during the usual working hours) together with all patent
applications, letters patent, copyrights and reissues thereof that may, at
any time, be granted for or upon any of the Creations. At all times during
and after his employment, the Executive shall promptly execute any and all
documents requested to vest title to any and all of the Creations in the
Company and to enable it to obtain and maintain the entire
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<PAGE> 11
right and title thereto throughout the world and render to the Company, at
its expenses, any and all assistance required to protect it legal rights
thereto.
6. Restrictive Covenant.
(a) The Executive recognizes that the Company is relying on its
extensive experience, knowledge, ability and contacts in the Business of
the Company in entering into this Agreement. For this reason, the
Executive covenants and agrees that during the period of his employment by
the Company and, if his agreement terminates pursuant to either Section
4(b) or 4(c) with Cause, or 4(d) hereof, for a period of one year
immediately following the termination of this Agreement he shall not have
any direct or indirect ownership or other financial interest in, or in any
manner become interested in (as principal, agent, consultant, advisor,
officer, director, employee or otherwise), any business which competes
with the Business of the Company in the geographic market in which the
Company is then operating, or solicit business directly or indirectly on
behalf of such competing business. Nothing herein shall preclude the
Executive from being a member of or serving as an officer or director of
any trade association or from owning, of record or beneficially, in the
aggregate up to five percent (5%) of any issue of securities of a publicly
traded company.
(b) Notwithstanding anything to the contrary set forth in Section
13(b) hereof, any dispute between the parties with respect to the
interpretation or enforceability of Section 6(a) hereof (Restrictive
Covenant) as it applies to a termination for Cause under Section 4(c)
hereof or any dispute with respect to any amount payable under Section
4(c)(iv) hereof which cannot be settled amicably by the parties hereto
shall be settled by
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<PAGE> 12
final and binding arbitration in Cleveland, Ohio in accordance with the
rules of arbitration of the American Arbitration Association.
7. Remedies.
It is recognized by the Executive that a special and confidential
relationship exists between the Company and the Executive because of his
knowledge, expertise and judgment and the dependency of the Company on his
knowledge, expertise and judgment. The Executive agrees that the remedy at law
for any breach or unthreatened breach of the covenants set forth in Sections 5
and 6 will be inadequate and that any breach or attempted breach would cause
such immediate and permanent damage as would be irreparable and the exact amount
of which would be impossible to ascertain. The Executive further agrees that in
the event of any such breach or threatened breach by the Executive, in addition
to any and all other legal and equitable remedies available, the Company may
have any of such actions enjoined by any court authorized by law to take such
action.
8. Physical Examination.
The Executive shall undergo an annual physical examination. The cost
of such physical examination shall be borne by the Company. A written report of
the results of such physical shall be submitted to the Chief Executive Officer
of the Company.
9. Assignment.
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the Company. The performance of the Executive
hereunder is personal and nonassignable.
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<PAGE> 13
10. Invalidity.
(a) The territorial, time and other limitations contained in
Sections 5 and 6 are reasonable and properly required for the adequate
protection of the Business of the Company, and in the event that any one
or more of such territorial, time or other limitation is found to be
unreasonable or otherwise invalid in any jurisdiction, in whole or in
part, the parties acknowledge and agree that such limitation shall remain
and be valid in all other jurisdictions.
(b) If any provision, term, clause or part thereof in this Agreement
is invalid, it shall not affect the remainder of said provision, term or
clause of this Agreement, but said remainder shall be binding and
effective against both parties hereto.
11. Representations and Warranties of the Parties.
(a) The Company represents and warrants to the Executive that (i)
the Company is a corporation duly organized and validly existing and in
good standing under the laws of the State of Delaware; and (ii) the
Company has the power and authority to enter into and carry out this
Agreement, and there exists no contractual or other restriction upon its
so doing.
(b) The Executive represents and warrants to the Company that there
exists no contractual or other restriction upon his entering into and
carrying out this Agreement.
12. Post-Mortem Payments; Designation of Beneficiary.
In the event that, following the termination of the Executive's
employment with the Company, the Executive is entitled to receive any payments
pursuant to this Agreement and the Executive dies, such payments shall be made
to the Executive's beneficiary designated hereunder. At any time after the
execution of this Agreement, the Executive may prepare,
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<PAGE> 14
execute, and file with the Secretary of the Company a copy of the Designation of
Beneficiary form attached to this Agreement as Exhibit D. The Executive shall
thereafter be free to amend, alter or change such form; provided, however, that
any such amendment, alteration or change shall be made by filing a new
Designation or Beneficiary form with the Secretary of the Company. In the event
the Executive fails to designate a beneficiary, following the death of the
Executive all payments of the amounts specified by this Agreement which would
have been paid to the Executive's designated beneficiary pursuant to this
Agreement shall instead by paid to the Executive's spouse, if any, if she
survives the Executive or, if there is no spouse or she does not survive the
Executive, to the Executive's estate.
13. Miscellaneous.
(a) This Agreement, including its attachments, contains the entire
agreement between the parties and incorporates and supersedes any and all
prior discussions or agreements the parties may have had with respect to
the terms of the Executive's employment with the Company. This Agreement
may not be changed orally, but only by a writing signed by each of the
parties. The terms or covenants of this Agreement may be waived only by a
written instrument specifically referring to this Agreement and executed
by the party at any time, or from time to time, to require performance of
any of the other party's obligations under this Agreement shall in no
manner affect the waiving party's right to enforce any provisions of this
Agreement at a subsequent time, and the waiver by any party of any right
arising out of any breach by the other party shall not be construed as a
waiver of any right arising out of any subsequent breach.
(b) This Agreement has been executed in the State of Ohio and shall
be governed and interpreted in accordance with the laws of the State of
Ohio without regard to conflict
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<PAGE> 15
of law provisions. Except as set forth in Section 6(b) hereof, any
disputes between parties which cannot be settled amicably shall be subject
to the jurisdiction of the courts of Ohio.
(c) Any notices required under this Agreement shall be in writing
and effective when received by the other party. Notices to the Executive
shall be addressed to him at his then current mailing address on file at
the Company. Notices to the Company shall be addressed to the Secretary of
the Company at the Company's headquarters.
(d) The use of the feminine, masculine or neuter pronoun herein
shall not be restrictive as to gender and shall be interpreted in all
cases as the context may require. The use of the singular or plural herein
shall not be restrictive as to number and shall be interpreted in all
cases as the context may require.
(e) The Company may withhold from any amounts payable to the
Executive, the Executive's beneficiary designated hereunder, or any other
person, all amounts necessary to satisfy the requirements of any state or
federal statute including, without limitation, the requirements of the
United States Internal Revenue Code.
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<PAGE> 16
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound, have executed this Agreement this 21 day of June, 1996.
ATTEST: APCOA, INC.
(the "Company")
/s/ BY: /s/ Michael J. Machi
- --------------------------------- ------------------------------
MICHAEL J. MACHI
Senior Vice President
Administration
WITNESS:
/s/ /s/ Herbert W. Anderson
- --------------------------------- ---------------------------------
HERBERT W. ANDERSON
(the "Executive")
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<PAGE> 17
EXHIBIT A
GUIDELINES
1. Standards of Conduct and Business Ethics. The Board of Directors of
Apcoa, Inc., a Delaware corporation (the "Company"), has adopted a corporate
policy for itself and all other corporations, entities, or persons that,
directly or indirectly, through one or more intermediaries, control, are
controlled by, or are under common control with the Company ("Affiliates")
regarding Standards of Conduct and Business Ethics, in order to provide
directors, officers and employees of the Company or its Affiliates with
guidelines to assist them in fulfilling their responsibilities to the public,
the stockholders and the Company.
This policy is equally applicable to all of the foreign operations of the
Company or its Affiliates except where modified by specific foreign laws and
regulations.
As no policy statement can cover the total range of daily activities, it
is recognized that questions of compliance will arise. Such questions should be
directed through normal communications procedures to the Company's General
Counsel at Company Headquarters.
Your attention is also specifically directed to the fact that disregard of
sections of this policy could result in your dismissal as an employee as well as
the imposition of civil and criminal penalties against the Company or its
Affiliates and you personally.
All personnel are requested to read this policy and conform to the
principles stated therein.
2. Policy. It is the policy of the Company that the directors, officers
and employees of the Company or its Affiliates shall conduct their activities so
as to avoid loss or embarrassment to the Company or its Affiliates. Either by
implication or in reality, the objective exercise of
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<PAGE> 18
sound ethical business judgment should not be in any manner limited by any
relationship, any activity or any practice.
The Company recognizes and respects the individual's right to engage in
outside activities. However, the Company reserves the right to determine when
these activities create a conflict of interest. All conduct of the individual
must conform to the best interests of the Company and its Affiliates.
3. Reciprocity. Because of the nature and variety of the business engaged
in by the Company and its Affiliates, certain legal problems could arise with
respect to purchases made by the Company or its Affiliates if such purchases are
conditioned upon suppliers' purchasing products and/or services sold by the
Company or its Affiliates. Conversely, similar legal problems could arise if
customers were to condition their purchases from the Company or its Affiliates
upon a reciprocal purchase of products or services from them. This practice,
commonly referred to as "reciprocity," is prohibited by various federal and
state laws.
It is the policy of the Company that the Company and its Affiliates comply
with all applicable federal, state and local laws. The guidelines set forth
below have been designed to ensure full compliance with such laws. These
guidelines apply to all personnel having purchase or sales responsibilities. The
executives of the Company and its Affiliates should disseminate these guidelines
to appropriate employees and agents and require adherence thereto.
4. Purchase/Sales Guidelines. The following guidelines with respect to
purchases and sales made by the Company or its Affiliates apply to all employees
and agents of the Company or its Affiliates:
(a) No employee or agent of the Company or its Affiliates having
purchasing responsibilities or duties shall purchase any products or
services from, or enter into or
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<PAGE> 19
adhere to any contract, agreement or the condition or understating that
purchases made by him on behalf of the Company or its Affiliates will be
based or conditioned upon any sales to such supplier by the Company or its
Affiliates.
(b) No employee or agent of the Company or its Affiliates having
sales responsibilities or duties shall on behalf of the Company or its
Affiliates sell products or services to, or enter into or adhere to any
contract, agreement or understanding with any actual or potential customer
on the condition or understanding that any purchase by the Company or its
Affiliates from such customer will be based or conditioned upon any sales
of the Company or its Affiliates to such customer.
(c) No employee or agent of the Company or its Affiliates shall
issue to personnel with primary purchasing responsibility any lists,
notices, or other data identifying customers and their purchases from the
Company or its Affiliates or specifying or recommending that purchases by
made by the Company or its Affiliates from any of such customers.
(d) No employee or agent of the Company or its Affiliates shall
issue to personnel with primary sales responsibilities any lists, notices
or other data pertaining to purchases made by the Company or its
Affiliates from particular suppliers.
(e) No employee or agent of the Company or its Affiliates shall
prepare or maintain statistical computations which compare purchases from
suppliers who supply products or services to the Company or its
Affiliates.
(f) No employee or agent of the Company or its Affiliates shall:
(i) Communicate to any actual or potential seller or supplier
of the Company or its Affiliates that preference will be given to
the purchase of such
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<PAGE> 20
seller's products or services based upon sales by the Company or its
Affiliates to such supplier.
(ii) Compare or exchange statistical data with any such seller
or supplier to facilitate any relationship of mutual purchases and
sales between such seller or supplier and the Company or its
Affiliates.
(iii) Communicate to any such seller or supplier the fact that
the Company or its Affiliates have made any purchases from such
seller or supplier for the purpose of inducing a purchase by such
seller or supplier.
(iv) Direct or recommend that the Company or its Affiliates
purchase products or services from any seller or supplier for the
purpose of reciprocating purchases made by, or promoting sales to,
such seller or supplier.
(v) Agree with any seller or supplier that such seller or
supplier will purchase products or services from the Company or its
Affiliates in order to reciprocate purchases made by the Company or
its Affiliates from such supplier.
5. Standards of Business Ethics. To determine if a specific interest
creates a conflict with the interests of the Company or its Affiliates, or if a
specific interest creates a conflict with interests of the Company or its
Affiliates, or if a specific practice violates an ethical standard is more
difficult without judging the immediate circumstances involved. Moral and legal
standards are relative measurements of proper behavior. Therefore, the Company
can only set forth specific examples that may limit an individual's ability
ethically and/or legally to perform his or her duties for the Company or its
Affiliates. Such examples include:
(a) Having any position or interest in any other business enterprise
operated for a profit which would or could reasonably be supposed to
conflict with the proper
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<PAGE> 21
performance of the employee's duties or responsibilities, or which might
tend to restrict the employee's independence of judgment with respect to a
transaction between the Company or its Affiliates and such other business
enterprise.
(b) Seeking to, accepting, offering or providing either directly or
indirectly from or to any individual, partnership, association,
corporation or other business entity or representative thereof, doing or
seeking to do business with the Company or its Affiliates the following:
loans (except with banks or other financial institutions), services,
payments, vacation or pleasure trips, or any gifts to more than nominal
value, or gifts of money in any amount.
(c) Benefiting personally from any purchase of any goods or services
of any nature by the Company or its Affiliates, or deriving personal gain
from actions taken or associations made in any capacity as an employee of
the Company or its Affiliates.
(d) Directly or indirectly acquiring as an investment, any stock of
any corporation engaged in the concession business or any business in
competition or doing business with the Company or its Affiliates, with the
exception of nominal stock-holdings in publicly held corporations.
(e) Disclosing to a third party any information or data regarding
the financial status, decisions or plans of the Company or its Affiliates
which might be prejudicial to the interests of the Company or its
Affiliates, without first obtaining proper authorization.
(f) Misusing one's position with the Company or its Affiliates or
knowledge of the affairs of the Company or its Affiliates for personal
gain or benefit.
(g) Acquiring securities or other property (such as real estate)
which the Company or its Affiliates have a present or potential interest
in acquiring.
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<PAGE> 22
(h) Carrying on of the business of the Company or its Affiliates
with a firm in which the employee or near relative of the employee has an
appreciable ownership interest, without disclosing the relationship and
obtaining Company approval.
(i) Engaging in practices or procedures which violate any laws,
rules or regulations applying to the conduct of the business of the
Company or its Affiliates or licenses held by the Company or its
Affiliates, including violation of any antitrust laws.
(j) Contributing funds or property of the Company or its Affiliates
for political contribution purposes, in violation of local, state or
federal laws.
(k) Using or permitting others to use the services of the employees
of the Company or its Affiliates or materials or equipment of the Company
or its Affiliates for personal use or gain.
(l) Condoning or failing to report to appropriate Company authority
the activities of any other officer or employee of the Company or its
Affiliates which violate the principles set forth in this policy
statement.
(m) Any other and all business practices which are construed or
accepted by the general business community as unethical or in violation of
law.
6. Obligations of Directors, Officers and Employees. Employment by or
association with the Company or its Affiliates carries with it the
responsibility to be constantly aware of the importance of ethical conduct. The
individual must disqualify himself from taking part, or exerting influence, in
any transaction in which his own interests may conflict with the best interests
of the Company or its Affiliates.
Interests which might otherwise be questionable may be entirely proper if
accompanied by a full advance disclosure which affords an opportunity for prior
approval or disapproval. The
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<PAGE> 23
obligation to make such disclosure rests upon the individual. All disclosures
should be directed through normal communication procedures to the Company's
General Counsel at Company Headquarters.
Upon disclosure, the Company recognizes that there may be many borderline
situations, and it does not intend to be unreasonable in considering these
cases, giving recognition to the attendant circumstances.
Should disclosure by an individual indicate the possibility of a conflict
of interest, the individual will be given a reasonable time to remedy the
situation.
From time to time questions may arise with respect to this Company policy
for which it is appropriate to consult with legal counsel. It is the
responsibility of each officer and employee to recognize these situations and
seek legal advice. Such advice may be obtained by contacting the Company's
General Counsel at Company Headquarters. It is never a mistake to consult with
counsel when in doubt with respect to the legality of a proposed course of
action.
7. Compliance with Antitrust Laws. It is the policy of the Company to
comply with all applicable federal and state antitrust laws, including trade
regulation laws, and it is expected that all of the officers and employees of
the Company or its Affiliates will likewise comply. The failure to comply with
applicable antitrust laws may subject the Company or its Affiliates and/or the
individuals involved to criminal and civil penalties, including substantial
fines and imprisonment, treble damage liability, injunctions of other court
orders adversely affecting the operation of the business of the Company or its
Affiliates, and the high cost of defending an antitrust case.
The Company's General Counsel at Company Headquarters coordinates the
handling of the legal affairs of the Company or its Affiliates. His staff is
always available for consultation
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<PAGE> 24
with respect to compliance with the antitrust laws. In addition, special legal
counsel will be furnished, if required. No officer or employee of the Company or
its Affiliates is authorized to take any action which the Company's General
Counsel has previously advised would constitute a violation of the antitrust
laws.
To the extent it is legally able to do so, the Company shall be prepared
to accept and/or defend any individual who has acted in good faith upon the
advice of the Company's General Counsel, but who nevertheless has become
involved in antitrust proceedings in the course of his employment by the Company
or its Affiliates. Any individual who has violated the antitrust laws or is
convicted of so doing shall be subject to appropriate disciplinary action,
including dismissal, if such individual acted without seeking the advice of the
Company's General Counsel or acted contrary to his advice.
(a) Rules to Follow. Many of the questions arising under the
antitrust laws must be resolved in the context of a particular fact
situation. However, there are a number of clearly established rules of
conduct which must be observed by all officers and employees of the
Company or its Affiliates in all circumstances in order to assure that the
Company or its Affiliates and the individuals involved are in full
compliance with the antitrust laws.
Set out below are a number of these rules and several other guidelines
with respect to the application of the antitrust laws to the activities of the
Company or its Affiliates:
(i) No officer or employee of the Company or its Affiliates
shall enter into, or attempt to enter into, any understanding,
agreement, plan or arrangement, whether formal or informal, written
or oral, express or implied, with any competitor
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<PAGE> 25
in regard to prices, discounts, terms or conditions of or refusing
to deal with any actual or potential customers or suppliers of the
Company or its Affiliates.
(ii) No officer or employee of the Company or its Affiliates
shall give to or accept from a competitor, in written or oral form,
or discuss with a competitor, any information concerning prices,
terms or conditions of sale, or other competitive information except
where: (a) the information or discussion is relevant and necessary
to a bona fide existing or prospective customer or supplier
relationship between the Company or its Affiliates and such
competitor or supplier, or (b) the Company's General Counsel advised
in writing that such conduct or discussions would be proper because
there would be no reasonable basis for asserting a violation of the
antitrust laws.
8. Implementation Procedure. It is difficult to define all situations and
circumstances with precision in a policy. If there are any questions at any time
on present or future interpretations of this policy or the propriety of any
conduct, employees of the Company or its Affiliates are requested to consult
with the Company's General Counsel at Company Headquarters to make sure of the
propriety of the action contemplated.
In matters of antitrust and other specialized areas, the Company retains
outside counsel who can be consulted as the need arises. The services of outside
counsel may be obtained by making your request to the Company's General Counsel
at Company Headquarters.
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<PAGE> 26
EXHIBIT B
EXECUTIVE BONUS PLAN
HERBERT W. ANDERSON
No later than April 15 following the end of each calendar year commencing with
1996 during the term of this Executive Employment Agreement, the Executive shall
be entitled to receive a bonus of up to 40% of the Base Salary paid to the
Executive during such calendar year. Eligibility for bonus shall be based solely
on the following criteria and up to the following percentages of Base Salary for
each such criterion:
20%- Achievement of the Company's annual Financial Plan. This portion of the
bonus shall be prorated based upon the percentage of achievement of the
annual Financial Plan in the event the annual Financial Plan is not
achieved in full.
10%- Achievement of specific management goal set by the President of the
company at the beginning of such year.
10%- At the sole discretion of the President of the Company.
- ----
40% Maximum Bonus
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<PAGE> 27
EXHIBIT C
SUPPLEMENTAL PENSION PLAN
IN CONSIDERATION of the mutual promises contained herein, it is
agreed by the Executive and the Company as follows:
1. The Executive may retire from active employment at any time after
he reaches age 65.
2. Upon retirement, the Company shall provide the Executive with a
retirement benefit of 240 equal consecutive monthly payments of $4,166.67. The
first monthly payment shall be made on the first day of the month coinciding
with or next following the date of the Executive's retirement.
3. In the event the Executive dies after commencement of payments
under paragraph 2 hereof, but before he received the number of monthly
installments set forth therein, the Company shall pay the remainder of said
monthly installments to the executive's designated beneficiary hereunder. For
purposes of this provision, the executive's designated beneficiary hereunder is
Jane Anderson. Executive shall have the right to change such beneficiary at any
time hereafter, either prior to or after retirement, by notifying the Company in
writing of such change.
4. If the executive shall die prior to age 65 while in the active
employment of the Company, the Company shall pay the Executive's designated
beneficiary an aggregate of $368,210 in 60 equal monthly installments of
$6,136.83. The first installment shall be paid on the first day of the month
following the month in which the Executive dies.
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<PAGE> 28
5. This Plan is part of a certain Executive Employment Agreement
(the "Employment Agreement") dated December 11, 1995. Nothing herein shall
prevent the Company from terminating the Employment for "cause" in accordance
with the terms thereof, and in which event this Plan shall be terminated and
void in all respects and neither party shall have any further responsibility for
satisfying any obligations that may have otherwise arisen hereunder. However,
should the Executive's employment terminate prior to retirement for any reason,
other than for "cause," resignation, disability or death, the Insurance Policy
shall be transferred by the Company to the Executive within thirty days after
such termination, and the full value of the Insurance Policy and its full cash
surrender value shall become the sole property of the Executive to do with as he
sees fit.
In the event of the Executive's resignation which is not associated with
termination for "cause" or for disability, the Company shall cancel the
Insurance Policy and provide the Executive with the cash surrender value
according to the following schedule:
After five (5) full years' service = 25%
After ten (10) full years' service = 50%
After fifteen (15) full years' service = 75%
After twenty (20) full years' service = 100%
In the event of permanent disability the Company will continue to pay the
premiums on the full value of the Insurance Policy for twelve months following
the Executives' termination because of such disability in accordance with
Section 4(b) of the Employment Agreement and after twelve months to transfer the
full value of the Insurance Policy to the Executive within thirty days. The full
value of the Insurance Policy and its full cash current value shall become the
sole property of the Executive to do with as he sees fit, and the Company
2
<PAGE> 29
shall have no further responsibility to fulfill any terms of the Plan or to
continue to pay premiums on the Insurance Policy after the transfer of the
Insurance Policy has been completed.
6. For so long as Executive is receiving payments hereunder,
Executive agrees that Sections 5, 6 and 7 of the Employment Agreement shall
remain in full force and effect.
7. Nothing in this Plan shall prevent Executive from receiving, in
addition to any amounts he may be entitled to under the Plan, any amounts which
may be distributable to him at any time under any pension plan, profit sharing
or other incentive compensation or similar plan of the Company now in effect or
which may hereafter be adopted.
8. This Plan shall be binding upon the Executive, his heirs,
executors, administrators and assigns, and on the Company, its successors and
assigns. The rights of Executive hereunder shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge.
9. This Plan may be altered, changed, amended or terminated only by
writing signed by the party to be bound thereby.
10. This document has been executed in the State of Ohio and shall
be interpreted in accordance with the laws of that State without regard to
conflict of law provisions.
11. This document contains the entire agreement between the parties
with respect to the subject matter hereof, supersedes any all prior discussions
or agreements the parties may have had with respect thereto (including any prior
Supplemental Pension Plan).
3
<PAGE> 30
EXHIBIT D TO EXECUTIVE EMPLOYMENT AGREEMENT
DESIGNATION OF BENEFICIARY
Effective December 11, 1995, I, the undersigned, entered into an Executive
Employment Agreement with APCOA, INC. Pursuant to the terms of said Agreement, I
have the right to designate a beneficiary to receive, in the event of my death,
certain payments pursuant to said Agreement. I, therefore, exercise this right
and designate my wife, JANE ANDERSON, to receive any such payments if she
survives me, but if she does not survive me, I designate my estate. Any and all
previous designations of beneficiary made by me are hereby revoked, and I hereby
reserve the right to revoke this designation of beneficiary.
/s/ Herbert W. Anderson
--------------------------------
HERBERT W. ANDERSON
Date: 21 June 96
---------------------
------------------------------------
Receipt of this Designation of Beneficiary form is acknowledged by the
undersigned Secretary of APCOA, INC.
APCOA, INC.
By: /s/
-----------------------------
Secretary
Date: 21 June 96
----------------------
<PAGE> 1
Exhibit 10.11
EMPLOYMENT AGREEMENT
AGREEMENT by and between APCOA, Inc., a Delaware corporation (the
"Company"), and Michael Celebrezze (the "Executive"), dated as of the 30th day
of March, 1998.
WHEREAS, pursuant to that certain Combination Agreement (the "Transaction
Agreement") dated as of January 15, 1998, by and among Myron C. Warshauer,
Stanley Warshauer, Steven A. Warshauer, Dosher Partners, L.P., SP Parking
Associates and the Company, the operations of the Company and Standard Parking,
L.P. will be combined (the "Transaction"); and
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its shareholders
to ensure that the Company will continue to receive the benefit of the
Executive's services after the Transaction, on the terms and conditions set
forth below in this Agreement, and the Executive desires to serve the Company in
accordance with such terms and conditions;
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment Period. The Company shall employ the Executive, and the
Executive shall serve the Company, on the terms and conditions set forth in this
Agreement, for the period beginning on the closing date of the Transaction (the
"Effective Date") and ending on the third anniversary thereof (the "Employment
Period"), provided, however, that commencing on the third anniversary of the
Effective Date and thereafter on each annual anniversary of such date (each
annual anniversary thereof shall hereinafter be referred to as the "Renewal
Date"), unless previously terminated, the Employment Period shall be
automatically extended so as to terminate two years from the Renewal Date,
unless 180 days prior to the Renewal Date the Company or the
<PAGE> 2
Executive shall terminate this Agreement by giving notice to the other party
that the Employment Period shall not be so extended (a "Notice of Nonrenewal").
2. Position and Duties. During the Employment Period, the Executive shall
serve as Senior Vice President/Chief Financial Officer of the Company, with the
duties, authority and responsibilities as are commensurate with such position
and as are customarily associated with such position. Executive shall report
directly to the Chief Executive Officer or the President of the Company. During
the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive shall devote full attention and
time during normal business hours to the business and affairs of the Company
and, to the extent necessary to discharge the responsibilities assigned to the
Executive under this Agreement, use the Executive's reasonable best efforts to
carry out such responsibilities faithfully and efficiently. The Executive shall
not, during the term of this Agreement, engage in any other business activities
that will interfere with the Executive's employment pursuant to this Agreement.
During the Employment Period, the Executive's services shall be performed
primarily in Chicago, Illinois.
3. Compensation. (a) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary of $180,000 (the "Annual Base
Salary"), payable in accordance with the Company's normal payroll practices for
executives as in effect from time to time. Such Annual Base Salary shall be
subject to review annually in accordance with the Company's review policies and
practices for executives as in effect at the time of any such review.
(b) Bonus. For each calendar year ending during the Employment
Period, the Executive shall be eligible to receive an annual bonus (the "Annual
Bonus"), based upon the
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<PAGE> 3
terms and conditions of an annual bonus program to be established by the
Company. Any such annual bonus program shall provide that the Executive's target
bonus ("Target Annual Bonus") will be at least 35% of the Annual Base Salary,
with the actual amount of the Annual Bonus determined in accordance with the
terms of the annual bonus program. Notwithstanding the foregoing sentence, for
the 1998 calendar year, the Executive's Annual Bonus shall not be less than 35%
of the Annual Base Salary.
(c) Phantom Equity and Stock Plans. During the 1998 calendar year,
the Company shall adopt an equity incentive plan or program (the "Equity Plan")
in which certain of the Company's key executives will be eligible to
participate. During the Employment Period, the Executive shall be entitled to
participate in the Equity Plan from and after the effective date thereof, in
accordance with the terms and conditions of such plan. Benefits available to
Executive under the terms of such Equity Plan shall be no less than the benefits
available to peer executives. Furthermore, Executive shall participate in any
stock awards or stock options ("stock plan") to the same extent and on the same
terms as are available to peer executives. For purposes of this Agreement, the
term "peer executives" shall refer to executive vice presidents of Company,
which term shall not include executive vice presidents of any subsidiary
companies or affiliates.
(d) Housing Differential Loan. Following the Effective Date and
contingent upon the Executive's execution of a promissory note (substantially in
the form attached hereto as Exhibit A), the Executive shall to receive a
$250,000 loan from the Company with a term of three years (the "Loan"), which
shall bear interest at the Applicable Federal Rate compounded annually. The
principal shall be disbursed to Executive upon his submission of a written
purchase offer for a residence in the vicinity of Chicago, Illinois. The
principal amount of the
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<PAGE> 4
Loan and the interest thereon shall be payable in cash on an annual basis in
three equal installments, on each of the first, second and third anniversaries
of the Effective Date (each such anniversary referred to herein as an "Annual
Payment Date"); provided, however, that if the Executive remains in the
continual employment of the Company as of each Annual Payment Date, one-third of
the principal balance of the initial Loan and the accrued interest thereon (as
of such Annual Payment Date) shall be forgiven by the Company, and such forgiven
amount shall be treated as additional compensation to the Executive in the year
of such forgiveness. Prior to the end of any calendar year in which the Company
forgives a portion of the Loan, the Company shall make the Executive whole for
the federal, state and local income tax consequences of such forgiveness.
In the event the Executive's employment hereunder is terminated for
"Cause" or the Executive terminates his employment without Good Reason, as
defined below, the Executive shall be obligated to repay the remaining principal
balance of the Loan and any accrued and unpaid interest thereon in accordance
with the original terms of the Loan; provided, however, that if the Date of
Termination does not coincide with an Annual Payment Date, the repayment of the
principal balance of the Loan and the accrued interest thereon for the year of
termination shall be pro-rated in respect of the portion of such short year that
commences on the date of the Date of Termination and ends on the next following
Annual Payment Date, and the portion of the pro-rated principal balance of the
Loan and the interest thereon with respect to the period commencing on the
Annual Payment Date prior to the Date of Termination and ending on the Date of
Termination shall be forgiven, and the Company shall, prior to the end of the
calendar year in which the Date of Termination occurs, make the Executive whole
for any income tax consequences to the Executive with respect to such forgiven
amount. In the even that
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<PAGE> 5
Executive's employment hereunder is terminated for any other reason by the
Company without Cause, including a termination on account of death or
Disability, or in the event Executive terminates his employment with Good
Reason, as defined below, the remaining principal balance and any accrued and
unpaid interest shall be forgiven, and prior to the end of the calendar year in
which such forgiveness occurs, the Company shall make the Executive whole for
any tax consequences to the Executive with respect to such forgiven amount.
(e) Other Benefits. In addition to the foregoing, during the
Employment Period: (i) the Executive shall be entitled to participate in
savings, retirement, and fringe benefit plans, practices, policies and programs
of the Company as in effect from time to time, on the same terms and conditions
as those applicable to peer executives; (ii) the Executive shall be entitled to
four weeks of annual vacation, to be taken in accordance with the Company's
vacation policy as in effect from time to time; (iii) the Executive shall be
entitled to participate in an automobile program in accordance with the terms
and conditions of the Company's automobile program as may be in effect from time
to time; and (iv) the Executive and the Executive's family shall be eligible for
participation in, and shall receive all benefits under medical, disability and
other welfare benefit plans, practices, policies and programs provided by the
Company, as in effect from time to time, on the same terms and conditions as
those applicable to peer executives, provided that Executive's benefits under
this Agreement shall be substantially similar to the benefits available to him
and his family under the Executive Employment Agreement, dated April 1, 1995, as
thereafter modified, or, if such benefits are not provided, the Company shall
Executive a monetary benefit sufficient to allow Executive to acquire personally
replacement coverage for himself or for his family, as applicable.
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<PAGE> 6
4. Termination of Employment. (a) Death or Disability. In the event of the
Executive's death during the Employment Period, the Executive's employment with
the Company shall terminate automatically. The Company, in its discretion, shall
have the right to terminate the Executive's employment because of the
Executive's Disability during the Employment Period. For purposes of this
Agreement, "Disability" shall mean the absence of the Executive from the
Executive's duties with the Company on a full-time basis for 180 consecutive
business days, or for periods aggregating 180 business days in any period of
twelve months, as a result of incapacity due to mental or physical illness or
injury which is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to the Executive or the Executive's
legal representative. A termination of the Executive's employment by the Company
for Disability shall be communicated to the Executive by written notice, and
shall be effective on the 30th day after receipt of such notice by the Executive
(the "Disability Effective Date"), unless the Executive returns to full-time
performance of the Executive's duties before the Disability Effective Date.
(b) By the Company. In addition to termination for Disability, the
Company may terminate the Executive's employment during the Employment Period
for Cause or with Cause. "Cause" means:
(i) the continued and willful or deliberate failure of the
Executive substantially to perform the Executive's
duties under this Agreement (other than as a result of
physical or mental illness or injury), or
(ii) illegal conduct or gross misconduct by the Executive, in
either case that is willful and results in material
damage to the business or reputation of the Company or
its affiliated companies, or
(iii) the breach of a fiduciary duty owed to the Company or
its affiliated companies, that is willful and results in
material damage
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<PAGE> 7
to the business or reputation of the Company, including,
without limitation, a failure to comply with Section 6
hereof.
Upon the occurrence of events constituting Cause as defined in this paragraph
(b), the Company shall give the Executive advance notice of any such termination
for Cause and shall provide the Executive with a reasonable opportunity to cure.
Such termination shall be effective only upon a vote of the Board of Directors
following a hearing before the Board on the issue of Cause of which Executive is
given reasonable notice.
(c) Voluntarily by the Executive. The Executive may terminate his
employment by giving written notice thereof to the Company.
(d) Date of Termination. The "Date of Termination" means the date of
the Executive's death, the Disability Effective Date, the date on which the
termination of the Executive's employment by the Company, for Cause as set forth
in notice from the Company is effective, the date that notice of termination is
provided to Executive from Company of a termination of Executive's employment by
the Company other than for Cause or Disability, or the date on which the
Executive gives the Company notice of a termination of employment, as the case
may be.
5. Obligations of the Company Upon Termination. (a) By the Company Other
Than for Cause or Disability. If, during the Employment Period, the Company
terminates the Executive's employment, other than for Cause or Disability, the
Company shall, for the duration of the Employment Period as in effect
immediately before the Date of Termination (as such Employment Period is
extended at the next Renewal Date if the Date of Termination occurs during the
180 days preceding a Renewal Date and no Notice of Nonrenewal has been given),
continue to pay the Executive the Annual Base Salary and the Annual Bonus
through the end of
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<PAGE> 8
such Employment Period, as and when such amounts would be paid in accordance
with Sections 3(a) and (b) above; provided, these payments shall not be subject
to offset by any other employer-provided compensation, and that the amount of
any Annual Bonus(es) so paid shall equal the Target Annual Bonus. The Company
shall also continue to provide for the same period welfare benefits to the
Executive and the Executive's family, at least as favorable as those that would
have been provided to them under clause (e)(iv) of Section 3 of this Agreement
if the Executive's employment had continued until the end of the Employment
Period, provided, that during any period when the Executive is eligible to
receive such benefits under another employer-provided plan, the benefits
provided by the Company under this Section 5(a) may be made secondary to those
provided under such other plan.
(b) Death. If the Executive's employment is terminated by reason of
the Executive's death during the Employment Period, the Company shall make,
within 30 days after the Date of Termination, a lump-sum cash payment to the
Executive's estate equal to the sum of (i) the Executive's Annual Base Salary
through the end of the calendar month in which death occurs, (ii) any earned and
unpaid Annual Bonus for any calendar year ended prior to the Date of Termination
and a pro-rated Target Bonus for services to the Date of Termination, (iii) any
accrued but unpaid vacation pay and (iv) any other vested benefits to which the
Executive is entitled, in each case to the extent not yet paid.
(c) Disability. In the event the Executive's employment is
terminated by reason of the Executive's Disability during the Employment Period
in accordance with Section 4(a) hereof, the Company shall pay to the Executive
or the Executive's legal representative, as applicable, (i) the Executive's
Annual Base Salary for the duration of the Employment Period in effect
immediately before the Date of Termination (as such Employment Period is
extended at
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<PAGE> 9
the next renewal Date if the Date of Termination occurs during the 180 days
preceding a Renewal Date and no Notice of Nonrenewal has been given), provided
that any such payments made to the Executive shall be reduced by the sum of the
amounts, if any, payable to the Executive under any disability benefit plans of
the Company or under the Social Security disability insurance program, (ii) any
earned and unpaid Annual Bonus for any calendar year ended prior to the Date of
Termination and a pro-rated Target Bonus for services to the Date of
Termination, and (iii) any other vested benefits to which the Executive is
entitled, in each case to the extent not yet paid.
(d) Cause; Voluntary Termination and Termination with Good Reason.
If the Executive's employment is terminated by the Company for Cause or the
Executive voluntarily terminates his employment during the Employment Period,
the Company shall pay the Executive (i) the Annual Base Salary through the Date
of Termination (ii) a pro-rated bonus through the Date of Termination, and (iii)
any other vested benefits to which the Executive is entitled, in each case to
the extent not yet paid, and the Company shall have no further obligations to
the Executive under this Agreement. If the Executive terminates his employment
during the Employment Period with Good Reason, the Company shall pay Executive
the amounts and benefits described in Section 5(a) above in connection with a
termination by Company for reason other than Cause or Disability; provided that
the Annual Base Salary, Target Bonus, and benefit continuation period in the
event of a termination by Executive for Good Reason shall be two years from the
date of such termination; and provided that the Annual Base Salary amount for
purposes of such payments shall be the amount of the Annual Base Salary in
effect immediately before the occurrence of Good Reason for Termination. For
purposes of this Agreement, "Good Reason" for the Executive to terminate his
employment shall exist following:
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<PAGE> 10
(i) a reduction in Executive's Annual Base Salary;
(ii) any change that results in Executive no longer reporting
to the CEO or President of the Company, a reduction in
his duties and responsibilities, or title, or other
diminishment of Executive's status within the Company;
(iii) any change in Executive's duties and responsibilities
that requires him to relocate his residence outside of
the Chicago, Illinois vicinity;
(iv) A Change of Control of the Company as that term is
defined in the March 25, 1998 Offering Memorandum for
APCOA, Inc. Senior Subordinated Notes.
6. Confidential Information; Noncompetition. (a) The Executive shall hold
in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or any of
its affiliated companies and their respective businesses that the Executive
obtains or obtained during the Executive's employment by the Company or any of
its affiliated companies and their respective businesses and that is not public
knowledge (other than as a result of the Executive's violation of this paragraph
(a) of Section 6) ("Confidential Information"). The Executive shall not
communicate, divulge or disseminate Confidential Information at any time during
or after the Executive's employment with the Company, except with the prior
written consent of the Company or as otherwise required by law or legal process.
As used in this Agreement, the term "affiliated companies" shall include any
company controlled by, controlling or under common control with the Company.
(b) During the Noncompetition Period (as defined below), the
Executive shall not, without the prior written consent of the Chief Executive
Officer of the Company, engage in or become associated with a Competitive
Activity. For purposes of this paragraph (b) of Section 6, the following terms
shall have the following meanings: (i) the "Noncompetition Period"
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<PAGE> 11
means the period during which the Executive is employed by the Company and the
one-year period following the termination of the Executive's employment by the
Company for any reason; (ii) a "Competitive Activity" means any business or
other endeavor that engages in the operation and management of open air parking
lots and indoor garages and ramps for the purpose of parking motor vehicles on a
leasehold, license, concession or management fee basis in any county of any
state in the United States in which the Company or any of its affiliated
companies is then conducting, or is in the process of developing prospects to
conduct, business; (iii) the Executive shall be considered to have become
"associated with a Competitive Activity" if he becomes directly or indirectly
involved as an owner, employee, officer, director, independent contractor,
agent, partner, advisor, or in any other capacity calling for the rendition of
the Executive's personal services, with any individual, partnership, corporation
or other organization that is engaged in a Competitive Activity. Notwithstanding
the foregoing, the Executive may make and retain investments during the
Noncompetition Period in not more than five percent of the equity of any entity
engaged in a Competitive Activity, if such equity is listed on a national
securities exchange or regularly traded in an over-the-counter market.
(c) In the event of a breach or threatened breach of this Section 6,
the Executive agrees that the Company shall be entitled to injunctive relief in
a court of appropriate jurisdiction to remedy any such breach or threatened
breach, and the Executive acknowledges that damages would be inadequate and
insufficient.
(d) Any termination of the Executive's employment or of this
Agreement shall have no effect on the continuing operation of this Section 6.
7. Successors. (a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will
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<PAGE> 12
or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean both
the Company as defined above and any such successor that assumes and agrees to
perform this Agreement, by operation of law or otherwise.
8. Miscellaneous. (a) This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified except by a written agreement executed by the parties
hereto or their respective successors and legal representatives.
(b) All notices and other communications under this Agreement shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
Michael J. Celebrezze
7960 Jill Drive
Sagamore Hills, Ohio 44067
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<PAGE> 13
If to the Company:
APCOA, Inc.
1000 McDonald Investment Center
800 Superior Avenue, E.
Cleveland, Ohio 44114
Attention: G. Walter Stuelpe, Jr.
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 8. Notices and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.
(d) Notwithstanding any other provision of this Agreement, the
Company may withhold from amounts payable under this Agreement all federal,
state, local and foreign taxes that are required to be withheld by applicable
laws or regulations.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement.
(f) The Executive and the Company acknowledge that this Agreement
supersedes any other agreement, whether written or oral, between them concerning
the subject matter hereof.
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<PAGE> 14
(g) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.
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<PAGE> 15
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization of its Board of Directors, the Company
has caused this Agreement to be executed in its name on its behalf, all as of
the day and year first above written.
/s/ Michael Celebrezze
------------------------------------
Michael Celebrezze
APCOA, INC.
/s/ G. Walter Stuelpe, Jr.
------------------------------------
By: G. Walter Stuelpe, Jr.
Title: President
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<PAGE> 16
EXHIBIT C
SUPPLEMENTAL PENSION PLAN
IN CONSIDERATION of the mutual promises contained herein, it is
agreed by the Executive and the Company as follows:
1. The Executive may retire from active employment at any time after
he reaches age 65.
2. Upon retirement, the Company shall provide the Executive with a
retirement benefit of 240 equal consecutive monthly payments of $4,166.67. The
first monthly payment shall be made on the first day of the month coinciding
with or next following the date of the Executive's retirement.
3. In the event the Executive dies after commencement of payments
under paragraph 2 hereof, but before he received the number of monthly
installments set forth therein, the Company shall pay the remainder of said
monthly installments to the Executive's designated beneficiary hereunder. For
purposes of this provision, the Executive's designated beneficiary hereunder is
______________. Executive shall have the right to change such beneficiary at
anytime hereafter, either prior to or after retirement, by notifying the Company
in writing of such change.
4. If the Executive shall die prior to age 65 while in the active,
employment of the Company, the Company shall pay- the Executive's designated
beneficiary an aggregate of Five Hundred Twenty-Five Thousand Dollars
($525,00.O0) in sixty (60) equal monthly installments of Eight Thousand Seven
Hundred Fifty Dollars ($8,750.00). The first installment shall be paid on the
first day of the month following the month in which the Executive dies.
<PAGE> 17
5. This Plan is part of a certain Executive Employment Agreement
(the "Employment Agreement") effective as of April 1, 1995. Nothing herein shall
prevent the Company from terminating the Employment Agreement for "cause," or
the Executive from resigning in accordance with the terms thereof, and in either
event this Plan shall be terminated and void in all respects and neither party
shall have any further responsibility for satisfying any obligations that may
have otherwise arisen hereunder. However, should the Executive's employment
terminate prior to retirement for any reason, other than for "cause,"
resignation, disability or death, any policy of insurance on the Executive's
life owned by the Company (the "Insurance Policy") shall be transferred by the
Company to the Executive within thirty (30) days after such termination, and the
Insurance Policy and its full cash surrender value shall become the sole
property of the Executive to do with as he sees fit.
In the event of permanent disability the Company will continue to
pay the premiums on the full value of the Insurance Policy for twelve (12)
months following the Executives' termination because of such disability in
accordance with paragraph 4(b) (iii) of the Employment Agreement, and after
twelve (12) months transfer the full value of the Insurance Policy to the
Executive within thirty (30) days. The Insurance Policy and its full cash
surrender value shall become the sole property of the Executive to do with as he
sees fit, and the Company shall have no further responsibility to fulfill any
terms of the Plan or to continue to pay premiums on the Insurance Policy after
the transfer of the Insurance Policy has been completed.
6. For so long as Executive is receiving payments hereunder,
Executive agrees that Sections 5, 6 and 7 of the Employment Agreement shall
remain in full force and effect.
7. Nothing in this Plan shall prevent Executive from receiving, in
addition to any amounts he may be entitled to under the Plan, any amounts which
may be distributable to
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<PAGE> 18
him at any time under any pension plan, profit sharing or other incentive
compensation or similar plan of the Company now in effect or which may hereafter
be adopted.
8. This Plan shall be binding upon the Executive, his heirs,
executors, administrators and assigns, and on the Company, its successors and
assigns. The rights of Executive hereunder shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge.
9. This Plan may be altered, changed, amended or terminated only by
a writing signed by the party to be bound thereby.
10. This document has been executed in the State of Ohio and shall
be interpreted in accordance with the laws of that State without regard to
conflict of law provisions.
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<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have caused this Plan to be
executed this 5th day of June ,1995.
Attest: APCOA, Inc.
(the "Company")
/s/ By: /s/
- -------------------------------- --------------------------------
/s/ Michael J. Celebrezze
--------------------------------
Michael J. Celebrezze
(the "Executive")
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<PAGE> 20
Michael J. Celebrezze
7960 Jill Drive
Sagamore Hills, Ohio 44067
April 6, 1998
Mr. G. Walter Stuelpe, Jr., President
APCOA, Inc.
McDonald Investment Center
800 Superior Avenue, E.
Cleveland, Ohio 44114-2601
Dear Walter:
At your suggestion, I am writing to document our understanding about the
term of my employment, and to the extent necessary, to amend the Employment
Agreement dated March 30, 1998. Also at your suggestion, I am attaching the
Illustration of our agreement regarding payments at termination. It is my
understanding, based on our discussions, specifically our discussion on February
12, 1998, that I will be given the opportunity to maintain my position with the
Company for at least five years following the relocation to Chicago. The
Employment Agreement addresses what compensation will be paid to me if I leave
employment for "Good Reason" at any time, but the Agreement does not fully
address what compensation should be paid to me if my employment is terminated
for reasons other than Cause , or if my contract is allowed to expire, before
the agreed five-year period.
To address these contingencies more adequately, we have agreed that if my
employment is terminated by the Company any time before the third anniversary of
the Employment Agreement for any reason, other than a termination for Cause , or
if the Company gives notice of its intention not to renew the Employment
Agreement for an additional two-year term beginning on the third anniversary of
the Employment Agreement, I will be paid my Annual Base Salary and the Target
Bonus for the remaining balance of the initial three-year term, if any, and for
an additional two years. These payments would not be subject to offset for any
compensation I may receive from another employer. In addition, my welfare and
employee benefits will continue for the same period (secondary to other
employer-provided benefits, if applicable) or their monetary equivalent will be
paid. I understand that this does not guarantee me work for a full five years,
but it does provide an economic equivalent if I am not retained for that period.
Absent this letter agreement, I am not assured of the benefit of a
five-year term, so I appreciate the opportunity to set forth our agreement in
this letter. If this letter is consistent with your understanding, please sign
the letter in your capacity as President of the Company and return a copy to me.
Thank you.
Very truly yours,
/s/Michael J. Celebrezze
Michael J. Celebrezze
Agreed: APOCA, Inc.
/s/ G. Walter Stuelpe, Jr.
- -----------------------------------
G. Walter Stuelpe, Jr., President
<PAGE> 1
Exhibit 10.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of March 26, 1998,
is by and between Standard Parking, L.P., a Delaware limited partnership (the
"Company"), and Michael K. Wolf (the "Executive").
WHEREAS, prior to the date hereof, the Executive has been employed by the
Company and the Company desires to have Executive continue in its employ; and
WHEREAS, pursuant to that certain Combination Agreement, dated as of
January 15, 1998, between, among others, APCOA, Inc., a Delaware corporation
("APCOA"), the Company and the equity holders of the Company, all of the equity
interests of the Company are being sold to APCOA; and
WHEREAS, the Company understands that APCOA intends to continue in the
business of operating private and public parking facilities for itself, its
affiliates (including the Company and its affiliates) and others, and as a
consultant and/or manager for parking facilities operated by others throughout
the United States (APCOA, its subsidiaries and affiliates (including the Company
and its subsidiaries and affiliates), and any other APCOA-controlled businesses
engaged in parking garage management (in each case including their predecessors
or successors) are referred to hereinafter as the "Parking Companies"); and
WHEREAS, the general partner of the Company has determined that it is in
the best interest of the Company to continue to employ the Executive as an
Executive Vice President and General Counsel, and the Executive desires to
continue to serve the Company in that capacity; and
<PAGE> 2
WHEREAS, the Company desires to continue to employ the Executive and the
Executive desires to continue to work for the Company on the terms and
conditions set forth herein.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment Period. The Company shall employ the Executive, and the
Executive shall serve the Company, on the terms and conditions set forth in this
Agreement, for the period beginning March 26, 1998 (the "Effective Date") and
ending on the third anniversary hereof (the "Employment Period"), provided,
however, that commencing on the date two years after the Effective Date and on
each annual anniversary of such date (each annual anniversary thereof shall
hereinafter be referred to as the "Renewal Date"), unless previously terminated,
the Employment Period shall be automatically extended so as to terminate two
years from the Renewal Date, so that there is always between one and two years
remaining in the Employment Period, unless 90 days prior to the Renewal Date the
Company or the Executive shall terminate this Agreement by giving notice to the
other party that the Employment Period shall not be so extended (a "Notice of
Nonrenewal"). Notwithstanding any such termination, Section 6 of this Agreement
shall remain in full force and effect.
2. Position and Duties. During the Employment Period, the Executive shall
serve as an Executive Vice President and General Counsel, with the duties and
responsibilities currently associated with such position. During the Employment
Period, and excluding any periods of vacation and sick leave to which the
Executive is entitled, the Executive shall devote full attention and time during
normal business hours to the business and affairs of the Company and, to the
extent necessary to discharge the responsibilities assigned to the Executive
under this Agreement, use the Executive's reasonable best efforts to carry out
such responsibilities faithfully
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<PAGE> 3
and efficiently. The Executive shall not, during the term of this Agreement,
engage in any other business activities that will interfere with the Executive's
employment pursuant to this Agreement. During the Employment Period, the
Executive's services shall be performed primarily in Chicago, Illinois.
3. Compensation. (a) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary") of no less
than $376,400, payable in accordance with the normal payroll practices for
executives of the Company as in effect from time to time (but no less frequently
than monthly). Such Annual Base Salary shall be subject to review annually in
accordance with the review policies and practices for executives of the Company
as in effect at the time of any such review.
(b) Bonus. For each calendar year ending during the Employment Period, the
Executive shall be eligible to receive an annual bonus (the "Annual Bonus"),
based upon the terms and conditions of an annual bonus program to be established
by the Company. Any such annual bonus program shall provide that the Executive's
target bonus ("Target Annual Bonus") will be a percentage of the Annual Base
Salary mutually agreed upon by the Company and Executive.
(c) Equity Plan. In the event the Company adopts an equity incentive plan
or program (the "Equity Plan") for its key executives, the Executive shall be
entitled to participate in the Equity Plan from and after the effective date
thereof in accordance with the terms and conditions of such plan.
(d) Other Benefits. In addition to the foregoing, during the Employment
Period: (i) the Executive shall be entitled to participate in savings,
retirement, and fringe benefit plans,
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<PAGE> 4
practices, policies and programs of the Company as in effect from time to time,
on the same terms and conditions as those applicable to peer executives; (ii)
the Executive shall be entitled to four weeks of annual vacation, to be taken in
accordance with the vacation policy as in effect from time to time; and (iii)
the Executive and/or the Executive's family, as the case may be, shall be
eligible for participation in, and shall receive all benefits under medical,
dental, disability and other welfare benefit plans, practices, policies and
programs provided by the Company, as in effect from time to time, on the same
terms and conditions as those applicable to peer executives.
(e) Executive shall be reimbursed by the Company for business expenses
incurred on behalf of the Parking Companies in accordance with the policies and
practices of the Company as in effect from time to time.
4. Termination of Employment. (a) Death or Disability. In the event of the
Executive's death during the Employment Period, the Executive's employment with
the Company shall terminate automatically. The Company, in its discretion, shall
have the right to terminate the Executive's employment because of the
Executive's Disability during the Employment Period. "Disability" means that (i)
the Executive has been unable, for a period of 180 consecutive days, or for
periods aggregating 180 business days in any period of twelve months, to perform
the Executive's duties under this Agreement, as a result of physical or mental
illness or injury, and (ii) a physician selected by the Company or its insurers
has determined that the Executive's incapacity is total and permanent. A
termination of the Executive's employment by the Company for Disability shall be
communicated to the Executive by written notice, and shall be effective on the
30th day after receipt of such notice by the Executive (the "Disability
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<PAGE> 5
Effective Date") unless the Executive returns to full-time performance of the
Executive's duties before the Disability Effective Date.
(b) By the Company. In addition to termination for Disability, the Company
may terminate the Executive's employment during the Employment Period for Cause
or without Cause. "Cause" means:
(i) the continued and willful or deliberate failure of the Executive
substantially to perform the Executive's duties, or to comply with the
Executive's obligations, under this Agreement (other than as a result of
physical or mental illness or injury), or
(ii) illegal conduct or gross misconduct by the Executive, in either
case that is willful and results in material damage to the business or
reputation of the Company.
Upon the occurrence of events constituting Cause as defined in subsection (i) of
this paragraph (b), the Company shall give the Executive advance notice of any
such termination for Cause and shall provide the Executive with a reasonable
opportunity to cure.
(c) Voluntarily by the Executive. The Executive may terminate his
employment by giving written notice thereof to the Company.
(d) Date of Termination. The "Date of Termination" means the date of the
Executive's death, the Disability Effective Date, the date on which the
termination of the Executive's employment by the Company for Cause as set forth
in notice from the Company is effective, or the date on which the Executive
gives the Company notice of a termination of employment, as the case may be.
After the Executive's termination occurs for any reason, in addition to any
other obligations hereunder, the Company shall pay the Executive:
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<PAGE> 6
(i) the Executive's Annual Base Salary for the period ending with
the Date of Termination;
(ii) payment for unused vacation days accrued for the year in which
the Executive's termination occurs, as determined in accordance with the
Company policy as in effect from time to time; and
(iii) any other payments or benefits to be provided to the Executive
by the Company pursuant to any employee benefit plans or arrangements
adopted by the Company, to the extent such amounts are due from the
Company. Except as may otherwise be expressly provided to the contrary in
this Agreement, nothing in this Agreement shall be construed as requiring
Executive to be treated as employed by the Company for purposes of any
employee benefit plan following the Date of Termination.
5. Additional Obligations of the Company upon Termination. (a) By the
Company Other Than for Cause, Death or Disability: If, during the Employment
Period, the Company terminates the Executive's employment, other than for Cause,
death or Disability, but excluding any termination of employment at the end of
the Employment Period (whether or not as a result of a Notice of Nonrenewal by
the Company), the Company shall, for the remainder of the Employment Period as
in effect immediately before the Date of Termination, continue to pay the
Executive the Annual Base Salary and Annual Bonus(es) through the end of the
then-current Employment Period, as and when such amounts would be paid in
accordance with Sections 3(a) and (b) above; provided, that the amount of each
of the Annual Bonus(es) so paid shall equal the Target Annual Bonus. The Company
shall also continue to provide for the same period welfare benefits to the
Executive and/or the Executive's family, at least as favorable as those that
would
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<PAGE> 7
have been provided to them under clause (d)(iv) of Section 3 of this Agreement
if the Executive's employment had continued until the end of the Employment
Period; provided, that during any period when the Executive is eligible to
receive such benefits under another employer-provided plan, the benefits
provided by the Company under this Section 5(a) may be made secondary to those
provided under such other plan. The payments provided pursuant to this Section
5(a) are intended as liquidated damages for a termination of the Executive's
employment by the Company other than for Cause or Disability and shall be the
sole and exclusive remedy therefor.
(b) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, the Company shall make, within
30 days after the Date of Termination, a lump-sum cash payment to the
Executive's estate equal to the sum of (i) the Executive's Annual Base Salary
through the end of the calendar month in which death occurs, (ii) any earned and
unpaid Annual Bonus for any calendar year ended prior to the Date of
Termination, (iii) any accrued but unpaid vacation pay and (iv) any other vested
benefits to which the Executive is entitled, in each case to the extent not yet
paid.
(c) Disability. In the event the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period in accordance
with Section 4(a) hereof, the Company shall pay to the Executive or the
Executive's legal representative, as applicable, (i) the Executive's Annual Base
Salary for the duration of the Employment Period in effect on the Date of
Termination, provided that any such payments made to the Executive shall be
reduced by the sum of the amounts, if any, payable to the Executive under any
disability benefit plans of the Company or under the Social Security disability
insurance program, (ii) any earned and unpaid
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<PAGE> 8
Annual Bonus for any calendar year ended prior to the Date of Termination and
(iii) any other vested benefits to which the Executive is entitled, in each case
to the extent not yet paid.
(d) Cause: Voluntary Termination. If the Executive's employment is
terminated by the Company for Cause or the Executive voluntarily terminates his
employment during the Employment Period, the Company shall pay the Executive
only those amounts specified in Section 5(d), in each case to the extent not yet
paid, and the Company shall have no further obligations under this Agreement.
(e) Termination After a Change in Control. (i) If Executive is terminated
by the Company during the three-year period following a Change in Control (as
defined in Section 5(f) below) for any reason other than Cause, then Executive
shall be entitled to the following:
(A) During the longer of (i) the 18-month period following his
termination and (ii) the remainder of the Employment Period in effect at
the date of termination, and except to the extent prohibited under the
terms of any applicable insurance policy, he shall continue to be covered
under the Company's welfare benefit plans to the same extent and on the
same terms as those benefits are provided to the Company's active
employees.
(B) He shall receive from the Company an amount (the "Severance
Pay") equal to the greater of (i) one and one-half times the sum of (x)
the Executive's current Annual Base Salary plus (y) the amount of any
bonus paid to Executive in the preceding twelve months and (ii) the Annual
Base Salary and Annual Bonuses through the end of the then current
Employment Period (provided, that the amount of each of the Annual Bonuses
so paid shall equal the Target Annual Bonus). The Severance Pay amount
shall be paid (a) if clause (i) in the previous sentence applies, over the
18-month period
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<PAGE> 9
commencing on the date Executive's employment terminates, in equal monthly
or more frequent installments in accordance with the Company's payroll
schedule or (b) if clause (ii) in the previous sentence applies, as and
when such amounts would be paid in accordance with Sections 3(a) and (b)
above.
The Company's obligation to provide welfare benefit coverage and make severance
payments under this Section 5(e) shall cease with respect to periods after the
earlier to occur of the date of Executive's death, or the date, if any, of the
breach by Executive of the provisions of Section 6.
(ii) If Executive terminates his employment hereunder voluntarily
following a Change in Control, then Executive shall not be entitled to Severance
Pay; provided, however, that if Executive terminates his employment for Good
Reason (as defined below) during the three-year period following a Change in
Control, such termination shall not be considered a voluntary termination by
Executive and Executive shall be treated as if he had been terminated by the
Company pursuant to paragraph (i) of this Section 5(e) above. "Good Reason"
means, in the event of or following a Change in Control:
(A) without the express written consent of the Executive, (1) the
assignment to the Executive of duties inconsistent in any substantial
respect with the Executive's position, authority or responsibilities as
held, exercised and assigned during the ninety (90) day period immediately
preceding the Change in Control, or (2) any other substantial adverse
change in such position (including titles, authority or responsibilities)
or significant reduction in salary, unless in either case the change is
warranted by an objective evaluation of Executive's performance or is
related to a bona fide company restructuring;
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<PAGE> 10
(B) any failure by the Company to comply with any of the provisions
of this Agreement, other than an insubstantial and inadvertent failure
remedied by the Company promptly after receipt of notice thereof given by
the Executive; or
(C) the Company requires or otherwise takes such action as would
reasonably require the Executive's relocation.
(f) For purposes of this Agreement, the term "Change in Control" shall
mean the first to occur of the date Myron C. Warshauer either (i) no longer
serves as Chief Executive Officer of the Company or (ii) no longer retains, for
whatever reason, primary responsibility for the daily management of the Company
and the ability to implement his management decisions with respect to the
Company.
(g) In the event that it shall be necessary for Executive to engage in
litigation in connection with the enforcement of his rights under paragraphs (i)
and (ii) of Section 5(e), he shall be entitled to recover from the Company the
reasonable attorney's fees and other costs incurred in such legal action, in
addition to any other relief to which he may be entitled; provided, however,
that Executive ultimately prevails in such litigation.
6. Protection of the Company Assets (Confidentiality, Non-Competition and
Other Matters). (a) Executive recognizes and acknowledges that the acquisition
and operation of, and the providing of consulting services for, parking
facilities is a unique enterprise and that there are relatively few firms
engaged in these businesses in the primary areas in which the Parking Companies
operate. Executive further recognizes and acknowledges that as a result of his
employment with the Parking Companies, Executive has had and will continue to
have access to confidential information and trade secrets of the Parking
Companies that constitute proprietary
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<PAGE> 11
information that the Parking Companies are entitled to protect, which
information constitutes special and unique assets of the Parking Companies,
including, but not limited to, (i) information relating to the Parking
Companies' manner and methods of doing business, including, but not limited to,
strategies for negotiating leases and management agreements; (ii) the identity
of the Parking Companies' clients, customers, lessors and locations, and the
identity of any individuals or entities having an equity or other economic
interest in any of the Parking Companies to the extent such identity has not
otherwise been voluntarily disclosed by any of the Parking Companies; (iii) the
specific confidential terms of management agreements, leases or other business
agreements, including, but not limited to, the duration of, and the fees, rent
or other payments due thereunder; (iv) the identities of beneficiaries under
land trusts; (v) the business, developments, activities or systems of the
Parking Companies, including, but not limited to, any marketing or customer
service oriented programs in the development stages or not otherwise known to
the general public; (vi) information concerning the business affairs of any
individual or firm doing business with the Parking Companies; (vii) financial
data and the operating expense structure pertaining to any parking facility
owned, operated, leased or managed by the Parking Companies or for which the
Parking Companies have or are providing consulting services; and (viii) other
confidential information and trade secrets relating to the operation of the
Company's business (the matters described in this sentence hereafter referred to
as the "Trade Secrets").
(b) Confidentiality. With respect to Trade Secrets, and except as may be
required by the lawful order of a court of competent jurisdiction, the Executive
agrees that he shall:
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<PAGE> 12
(i) hold all Trade Secrets in strict confidence and not publish or
otherwise disclose any portion thereof to any person whatsoever except
with the prior written consent of the Parking Companies;
(ii) use all reasonable precautions to assure that the Trade Secrets
are properly protected and kept from unauthorized persons;
(iii) make no use of any Trade Secrets except as is required in the
performance of his duties for the Parking Companies; and
(iv) upon termination of his employment with the Parking Companies,
whether voluntary or involuntary and regardless of the reason or cause, or
upon the request of the Parking Companies, promptly return to the Parking
Companies any and all documents, and other things relating to the Trade
Secrets, all of which are and shall remain the sole property of the
Parking Companies. The term "documents" as used in the preceding sentence
shall mean all forms of written or recorded information and shall include,
but not be limited to, all accounts, budgets, compilations, computer
records (including, but not limited to, computer, programs, software,
disks, diskettes or any other electronic or magnetic storage media),
contracts, correspondence, data, diagrams, drawings, financial statements,
memoranda, microfilm or microfiche, notes, notebooks, marketing or other
plans, printed materials, records and reports, as well as any and all
copies, reproductions or summaries thereof.
Notwithstanding the above, nothing contained herein shall restrict Executive
from using, at any time after his termination of employment with the Company,
information which is in the public domain or knowledge acquired during the
course of his employment with the Company which is
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<PAGE> 13
generally known to persons of his experience in other companies in the same
industry
(c) Assignment of Intellectual Property Rights. The Executive agrees to
assign to the Company any and all intellectual property rights including
patents, trademarks, copyright and business plans or systems developed, authored
or conceived by the Executive while so employed and relating to the business of
the Parking Companies, and the Executive agrees to cooperate with the Company's
attorneys to perfect ownership rights thereof in the Company or any one or more
of the Parking Companies. This agreement does not apply to an invention for
which no equipment, supplies, facility or trade secret information of the
Parking Companies was used and which was developed entirely on the Executive's
own time, unless (i) the invention relates either to the business of the Parking
Companies or to actual or demonstrably anticipated research or development of
the Parking Companies, or (ii) the invention results from any work performed by
the Executive for the Parking Companies.
(d) Covenants Not to Compete. The Executive agrees that while he is
employed by the Company and for a period of two (2) years after the date on
which such employment terminates (or eighteen (18) months after the date such
employment terminates if such termination follows a Change in Control), the
Executive shall not, directly or indirectly:
(i) have an ownership interest in (other than ownership of 5% or
less of the outstanding stock of any entity listed on the New York or
American Stock Exchange or included in the National Association of
Securities Dealers Automated Quotation System) any corporation, firm,
joint venture, partnership, proprietorship, or other entity or association
which manages, owns or operates a parking facility that is competitive
with the business of the Parking Companies in any of the metropolitan
areas in which, as of
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the time Executive's employment terminates, the Parking Companies own,
manage and/or operate one or more parking facilities (hereinafter the
"Metropolitan Areas");
(ii) become employed by, work for, consult with, or assist any
person, corporation, firm, joint venture, partnership, proprietorship, or
any other entity or association that is engaged in a business which is
competitive with the business of the Parking Companies in the Chicago
metropolitan area or in any of the other Metropolitan Areas in which the
Executive has been responsible for performing supervisory or other
services on behalf of any of the Parking Companies within the three (3)
years immediately preceding the termination of his employment;
(iii) contact or solicit business from any client or customer of the
Parking Companies or from any person who is responsible for referring or
who regularly refers business to the Parking Companies; or
(iv) take any action to recruit or to assist in the recruiting or
solicitation for employment of any officer, employee or representative of
the Parking Companies.
It is not the intention of the Parking Companies to interfere with the
employment opportunities of former employees except in those situations,
described above, in which such employment would conflict with the legitimate
interests of the Parking Companies. If the Executive, after the termination of
his employment hereunder, has any question regarding the applicability of the
above provisions to a potential employment opportunity, the Executive
acknowledges that it is his responsibility to contact the Company so that the
Company may inform the Executive of its position with respect to such
opportunity.
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<PAGE> 15
(e) Remedies. The Executive acknowledges that the Parking Companies would
be irreparably injured by a violation of the covenants of this Section 6 and
agrees that the Company, or any one or more of the Parking Companies, in
addition to any other remedies available to it or them for such breach or
threatened breach, shall be entitled to a preliminary injunction, temporary
restraining order, or other equivalent relief, restraining the Executive from
any actual or threatened breach of any of the provisions of this Section 6. If a
bond is required to be posted in order for the Company or any one or more of the
Parking Companies to secure an injunction or other equitable remedy, the parties
agree that said bond need not exceed a nominal sum. This Section shall be
applicable regardless of the reason for the Executive's termination of
employment, and independent of any alleged action or alleged breach of any
provision hereby by the Company. If at any time any of the provisions of this
Section 6 shall be determined to be invalid or unenforceable by reason of being
vague or unreasonable as to duration, area, scope of activity or otherwise, then
this Section 6 shall be considered divisible (with the other provisions to
remain in full force and effect) and the invalid or unenforceable provisions
shall become and be deemed to be immediately amended to include only such time,
area, scope of activity and other restrictions, as shall be determined to be
reasonable and enforceable by the court or other body having jurisdiction over
the matter, and the Executive expressly agrees that this Agreement, as so
amended, shall be valid and binding as though any invalid or unenforceable
provision had not been included herein.
7. Successors. (a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will
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<PAGE> 16
or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive's legal representatives.
This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would have been required to perform it if no such succession had taken
place. As used in this Agreement, "Company" shall mean both the Company as
defined above and any such successor that assumes and agrees to perform this
Agreement, by operation of law or otherwise.
8. Miscellaneous. (a) This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Illinois without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified except by a written agreement executed by the parties
hereto or their respective successors and legal representatives.
(b) All notices and other communications under this Agreement shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
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If to the Executive:
Michael K. Wolf
800 Bluff Street
Glencoe, Illinois 60022
If to the Company:
Standard Parking, L.P.
200 East Randolph Street
Suite 4800
Chicago, Illinois 60601
Attention: Chief Executive Officer
with a copy to:
Holberg Industries, Inc.
545 Steamboat Road
Greenwich, Connecticut 06830
Attention: Chief Financial Officer
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 8. Notices and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.
(d) Notwithstanding any other provision of this Agreement, the Company may
withhold from amounts payable under this Agreement all federal, state, local and
foreign taxes that are required to be withheld by applicable laws or
regulations.
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<PAGE> 18
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement.
(f) The Executive and the Company acknowledge that this Agreement
supersedes any other agreement, whether written or oral, between them concerning
the subject matter hereof, including, but not limited to, any written or oral
employment agreement between the Company and the Executive.
(g) This Agreement may be executed in several counterparts, each of which
shall be deemed an original, and said counterparts shall constitute but one and
the same instrument.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization of its general partner, the Company has
caused this Agreement to be executed in its name on its behalf, all as of the
day and year first above written.
/s/ Michael K. Wolf
-----------------------------
MICHAEL K. WOLF
STANDARD PARKING, L.P.
By: Standard Parking Corporation
Its: General Partner
By: /s/ Myron C. Warshauer
-----------------------------
Its: President
-----------------------------
<PAGE> 1
Exhibit 10.13
FIRST AMENDMENT TO
DEFERRED COMPENSATION AGREEMENT
This First Amendment to Deferred Compensation Agreement is made as
of the 23rd day of March, 1998 by and between STANDARD PARKING, L.P., a Delaware
limited partnership (the "Company") and MICHAEL K. WOLF (the "Employee").
RECITALS
A. The Company and Employee have previously entered into a certain
Deferred Compensation Agreement dated as of April 15, 1996 ("DCA") to provide
certain additional compensation to the Employee if the Employee continues his
employment with the Company until his retirement or earlier death.
B. Control of the Company will change by reason of the consummation
(the "Closing") of the transaction contemplated by that certain Combination
Agreement dated as of January 15, 1998 by and between APCOA, Inc., a Delaware
corporation ("APCOA"), on the one hand, and Myron C. Warshauer, Stanley
Warshauer, Steven A. Warshauer, Dosher Partners, L.P., SP Associates and SP
Parking Associates, on the other hand.
C. The parties desire to amend certain provisions of the DCA as
hereinafter set forth.
NOW, THEREFORE, in consideration of the recitals, the mutual
promises and undertakings hereinafter set forth, the sum of Ten Dollars in hand
paid, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. The following is hereby substituted in lieu of the definition of
"Change in Control" contained in paragraph 1(e) of the DCA:
(e) "Change in Control" shall mean the first to occur of (i) the
date on which Warshauer ceases to be the Chief Executive
Officer of the Company and of APCOA, Inc., a Delaware
corporation ("APCOA"), or (ii) the date on which Warshauer no
longer retains, for whatever reason, primary responsibility
for the daily management of, and the ability to implement his
management decisions with respect to, the Company and APCOA."
2. Except to the extent expressly modified above, the DCA is hereby
ratified and confirmed in all respects.
<PAGE> 2
IN WITNESS WHEREOF, the parties have executed this First Amendment
as of the day and year first above written.
STANDARD PARKING, L.P., a Delaware
limited partnership
By: Standard Parking Corporation
By: /s/ Myron C. Warshauer /s/ Michael K. Wolf
-------------------------------- ------------------------------------
President Michael K. Wolf
<PAGE> 3
DEFERRED COMPENSATION AGREEMENT
This Agreement is made and entered into as of April 15, 1996 by and
between Standard Parking L.P., a Delaware limited partnership (the "Company"),
and Michael K. Wolf (the "Employee").
RECITALS
A. The Company regards the Employee as important to the long-term
growth and profitability of the Company and has determined that it would be to
the advantage and interest of the Company to provide certain additional
compensation to the Employee if the Employee continues his employment with the
Company until his retirement or earlier death.
B. The Employee wishes to be assured that he or his family will be
entitled to a certain amount of additional compensation for some definite period
of time from and after his retirement from active service with the Company,
whether by reason of his death or otherwise.
C. The parties hereto wish to provide the terms and conditions upon
which the Company shall pay such additional compensation to the Employee or his
family after his retirement or death.
CLAUSES
Now, therefore, in consideration of the premises and of the mutual
promises contained herein, the parties hereto agree as follows:
<PAGE> 4
1. Definitions.
(a) "Actuarial Assumptions" means the mortality assumptions
reflected in the UP 84 Mortality Table and a discount rate of
six percent (6%) per annum.
(b) "Annual Retirement Benefit" means an amount equal to $150,000
per annum which, subject to the conditions set forth herein,
is to be paid by the Company to the Employee during the period
described in Section 2 hereof.
(c) "Beneficiary" means the person or persons last designated by
the Employee as the intended beneficiary or beneficiaries of
his Death Benefit, all such designations to be made in writing
on forms approved by or acceptable to the Company. In the
absence of any valid written designation by the Employee, the
Beneficiary shall be the Employee's spouse, if his spouse
survives him and was living in the same residence with the
Employee immediately before his death, or otherwise shall be
the Employee's estate.
(d) "Cause" means (i) the Employee knowingly and willfully engages
in or manifests his intent to engage in conduct which is
demonstrably and materially injurious to the Company or its
affiliates, monetarily or otherwise; or (ii) the Employee
engages in egregious misconduct involving serious moral
turpitude to the extent that, in the reasonable
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<PAGE> 5
judgment of the Company, the Employee's credibility and
reputation no longer conform to the standard of the Company's
executives.
(e) "Change in Control" means the occurrence of any one of the
following: (i) the Corporation fails to control the day-to-day
operations of the Company, whether the loss of control is due
to its removal or resignation as general partner, the
admission of one or more other general partners having equal
or greater voting rights respecting the Company's operations,
or otherwise; provided, however, that the foregoing shall not
constitute a Change in Control if Warshauer, directly or
indirectly through one or more Controlled Entities, possesses
more than 50% of the voting rights in the Company or its
general partners; (ii) Warshauer (or members of his family or
trusts created for any of their benefit) owns less than a
majority of the Corporation's voting stock; provided, however,
that the foregoing shall not constitute a Change in Control if
Warshauer, directly or indirectly through one or more
Controlled Entities, possesses more than 50% of the voting
rights in the Company or its general partners; or (iii)
Warshauer ceases for any reason (including, without
limitation, by reason of his death, disability, resignation or
retirement) to serve as the Corporation's president or chief
executive officer or as the general partner, manager,
president or chief executive officer of the Company or of any
entity that serves as the Company's general partner.
(f) "Code" means the Internal Revenue Code of 1986, as amended.
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<PAGE> 6
(g) "Commencement Date" means the first day of the third month
following the Retirement Date.
(h) "Computation Date" means the September 1 nearest to the date
of the Employee's death.
(i) "Controlled Entity" means any corporation, partnership,
limited liability company, trust or other entity that
Warshauer, members of his family or trusts for the benefit of
Warshauer or members of his family controls by virtue of
possessing more than 50% of the voting power of the stock,
general partnership interests, membership interests or other
ownership interests in the entity or by virtue of serving as a
trustee having more than 50% of the voting rights of all
trustees of the trust.
(j) "Corporation" means Standard Parking Corporation, the general
partner of the Company.
(k) "Death Benefit" means the amount set forth on the attached
Exhibit B opposite the calendar year during which the
Employee's death occurs, reduced by the date of death value of
all Retirement Benefits (or Third Party Benefits following a
Qualifying Termination of Employment) previously paid to the
Employee, if any, using an assumed interest rate of 6% per
annum from the date of each such payment, and, following a
Qualifying Termination of Employment, further reduced by the
amount of any Third Party Death Benefit.
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(l) "Disabled" or "Disability" means that the Employee is not able
to perform substantially all of the duties of his regular
occupation with the Company, except that after the first full
twenty-four (24) months of such disability, it means that the
Employee is not able to perform substantially all of the
duties of his occupation with the Company or any other
occupation for which he is or becomes fitted by education,
training or experience. The determination of whether the
Employee is Disabled shall be made by the Company and shall be
final and binding upon the Employee.
(m) "ERISA" means the Employee Income and Security Act of 1974, as
amended.
(n) "Qualifying Disability Period" means the time during which the
Employee is Disabled, but only if the Employee's Disability
first occurs while the Employee is in the employ of the
Company on a full time basis.
(o) "Qualifying Termination of Employment" means (i) the Company's
termination of the Employee's employment without Cause; or
(ii) the termination of the Employee's employment by the
Company or by the Employee for any reason, but only after a
Change in Control.
(p) "Retirement Benefits" means the aggregate of all of the Annual
Retirement Benefit payments due to the Employee for the period
described in Section 2 hereof.
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<PAGE> 8
(q) "Retirement Date" means the date on which the Employee attains
age sixty-five (65).
(r) "Substantial Compensation" means the sum of $300,000 (as
adjusted below) or more per year received by the Employee in
the form of wages, salary, cash bonus, fees for services
rendered, commissions, expense allowances under a
nonaccountable plan, self-employment income, cash
distributions from an S corporation that employs the Employee
or cash distributions from a partnership other than the
Company or a limited liability company that employs the
Employee or for which the Employee performs personal services
on a regular basis, or any other distributions relating to the
performance of personal services by the Employee, made by any
entity other than the Company which employs the Employee or
for or in connection with which the Employee performs personal
services on a regular basis. The $300,000 figure set forth
above shall be adjusted each year to reflect the increase from
May 1990 to the date of computation in the Consumer Price
Index, Chicago, Illinois, Urban Wage Earners, prepared by the
Bureau of Labor Statistics of the U.S. Department of Labor.
(s) "Third Party Benefit" means any benefit payable to the
Employee, by a person, firm or entity other than the Company
or its affiliates, pursuant to any employee pension plan
within the meaning of Section 3(2) of ERISA, deferred
compensation arrangement, golden parachute payments, plan
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<PAGE> 9
described in Section 403(a), 403(b) or 408(k) of the Code,
excess benefit plan, supplemental retirement plan or any other
type of retirement or employment termination benefit plan,
regardless of whether or not the Employee actually receives
such benefit and disregarding any forfeiture of such benefit
by reason of the termination of the employment of or the
relationship with the Employee and any discretionary
termination of such benefit by the obligor or sponsor of the
benefit. If any such benefit terminates by reason of
forfeiture, discretionary termination by the obligor or
sponsor of the benefit or for any other reason and the
Employee becomes entitled to receive a similar benefit from
the same or a different obligor or sponsor, then such similar
benefit shall constitute a Third Party Benefit only to the
extent that it exceeds the terminated benefit.
(t) "Third Party Annual Retirement Benefit" means the annual
payment which will amortize the accrued value, as of the
Employee's Retirement Date, of all Third Party Benefits over a
period of 15 years with interest at 6% per annum. For the
purposes hereof, such accrued value of a Third Party Benefit
shall be determined in accordance with the following: (i) in
the case of a Third Party Benefit under a defined benefit
plan, the present value of the Employee's accrued benefit
under the plan at his Retirement Date (the "PVAB") which shall
be determined in accordance with the actuarial assumptions
stated in such plan (or, if none are stated in the plan, in
accordance with the Actuarial Assumptions); (ii) in the case
of a Third
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<PAGE> 10
Party Benefit under a defined contribution plan or under a
plan described in Section 408(k) of the Code, the Employee's
account balance ("Account Balance") in the plan at his
Retirement Date (excluding any portion thereof attributable to
his own contributions and any earnings thereon); (iii) in the
case of a Third Party Benefit under a plan described in
Section 403(a) or 403(b) of the Code, the present value as of
the Retirement Date of the annuity payments payable to the
Employee under the plan if he retired on the Retirement Date
(the "Annuity Value"), determined in accordance with the
actuarial assumptions stated in the plan (or, if none are
stated in the plan, in accordance with the Actuarial
Assumptions); and (iv) in the case of a Third Party Benefit
under an excess benefit plan (as defined in Section 3(36) of
ERISA) or a supplemental executive retirement plan the
benefits of which are calculated by reference to the amount of
benefits available under a defined benefit plan or a defined
contribution plan, the present value as of the Retirement Date
of the amounts payable to the Employee under the plan if he
retired on the Retirement Date (the "Excess Value"),
determined in accordance with the actuarial assumptions stated
in the plan (or, if none are stated in the plan, in accordance
with the Actuarial Assumptions).
(u) "Third Party Death Benefit" means any death benefit payable to
the Employee's Beneficiary, following and by reason of the
death of the Employee, by a person, firm or entity other than
the Company or its
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<PAGE> 11
affiliates or pursuant to any life insurance policy on the
Employee's life to the extent such death benefit is
attributable to premiums paid by such person, firm or entity,
regardless of whether or not the Employee's Beneficiary
actually receives such death benefit and disregarding any
forfeitures of such death benefit by reason of termination of
the employment of or the relationship with the Employee and
any discretionary termination of such Benefit by the obligor
or sponsor of the death benefit. If any such death benefit
terminates by reason of forfeiture, discretionary termination
by the obligor or sponsor of the death benefit or for any
other reason, and the Employee's Beneficiary becomes entitled
to receive a similar death benefit from the same or different
obligor or sponsor, then such similar death benefit shall
constitute a Third Party Death Benefit only to the extent that
it exceeds the terminated death benefit.
(v) "Warshauer" means Myron C. Warshauer.
2. Retirement Benefits.
(a) Except as otherwise provided herein, the Company agrees to pay
to the Employee, as additional compensation, an Annual Retirement Benefit on the
Commencement Date and on each anniversary of the Commencement Date until the
first to occur of (i) fifteen (15) such annual payments having been made or (ii)
the Employee's death. Notwithstanding the foregoing, the Employee will not be
entitled to any Retirement Benefits unless the Employee remains in the employ of
the Company on a full-time basis without any break or interruption in
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<PAGE> 12
service (disregarding for this purpose a termination of employment that
constitutes a Qualifying Termination of Employment or a break or interruption in
service during a Qualifying Disability Period) from the date hereof to the
Retirement Date.
(b) Notwithstanding anything to the contrary set forth in Section
2(a), the Company's obligation to pay Retirement Benefits shall continue after a
Qualifying Termination of Employment, but thereafter shall be terminated or
reduced as hereinafter set forth. If, in any calendar year after a Qualifying
Termination of Employment, the Employee receives Substantial Compensation, then
the Employee shall not be entitled to any Retirement Benefits provided under
this Agreement and all of the Company's obligations hereunder shall immediately
lapse and terminate. If, at any time after a Qualifying Termination of
Employment, the Employee receives or becomes contractually entitled to receive
any Third Party Benefits, then the Annual Retirement Benefit shall be reduced
dollar for dollar by the amount of any Third Party Annual Retirement Benefits
that the Employee is entitled to receive in any year that an Annual Retirement
Benefit is payable hereunder.
3. Death Benefit.
(a) Except as otherwise provided herein, upon the death of the
Employee either prior to or after the Retirement Date but prior to payment to
him of all of the Retirement Benefits to which he is or may become entitled
under Section 2, the Company agrees to pay to the Employee's Beneficiary, as
additional compensation to the Employee, an amount equal to the Death Benefit.
Notwithstanding the foregoing, the Death Benefit will be payable if and only if
the Employee has been in the employ of the Company on a full-time basis without
any break or interruption in service (disregarding for this purpose a
termination of employment that
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<PAGE> 13
constitutes a Qualifying Termination of Employment or a break or interruption in
service during a Qualifying Disability Period) from the date hereof to the
earlier of (a) his Retirement Date or (b) the date of his death. The Death
Benefit will be paid to the Beneficiary no later than ninety (90) days after the
death of the Employee. No Death Benefit will be payable if the Employee has
received payment of all of the Retirement Benefits to which the Employee is
entitled under Section 2.
(b) Notwithstanding anything to the contrary set forth in Section
3(a), the Company's obligation to pay the Death Benefit shall continue after a
Qualifying Termination of Employment, but thereafter shall be terminated or
reduced as hereinafter set forth. If, in any calendar year after a Qualifying
Termination of Employment, the Employee receives Substantial Compensation, then
the Employee shall not be entitled to the Death Benefit provided under this
Agreement and all of the Company's obligations hereunder shall immediately lapse
and terminate. If, at any time after a Qualifying Termination of Employment, the
Employee's estate receives or becomes contractually obligated to receive any
Third Party Death Benefits, then the Death Benefit shall be reduced dollar for
dollar by the amount of any Third Party Death Benefits that the Employee's
estate is entitled to receive.
4. Termination of Employment. Except as otherwise set forth in this
Agreement, the Company's obligations under Section 2 and Section 3 are
conditioned upon the continuous employment of Employee by the Company (or by one
of its partners or affiliates) until the earlier of his death or his Retirement
Date. If the Employee's employment is terminated prior to the Retirement Date
for any reason whatsoever, except as a result of the Employee's Disability, and
the termination does not constitute a Qualifying Termination of Employment,
-11-
<PAGE> 14
then the Employee shall not be entitled to any Retirement Benefits or the Death
Benefit provided under this Agreement and all of the Company's obligations
hereunder shall immediately lapse and terminate. If the Employee's termination
of employment constitutes a Qualifying Termination of Employment, the Employee
shall be entitled to the Retirement Benefits and/or the Death Benefit on the
terms and subject to the conditions set forth herein. If the Employee's
employment is terminated on account of his Disability, the Employee shall be
entitled to the Retirement Benefits and/or the Death Benefit on the terms and
subject to the conditions set forth herein, but only if his Disability continues
until the earlier of (a) his Retirement Date, (b) his death or (c) the date on
which he is re-employed by the Company in substantially the same capacity and
performing substantially all of the duties of his employment as at the time the
Disability began.
5. Verification of Compensation. If a Qualifying Termination of
Employment occurs, the Employee or his estate shall, no less often than annually
and within one hundred twenty (120) days following the end of each applicable
calendar year, provide information to the Company sufficient to verify (a)
whether the Employee has received Substantial Compensation during the preceding
calendar year and (b) the amount of any Third Party Benefits or Third Party
Death Benefits that the Employee or his estate received during the preceding
calendar year or that the Employee or his estate is entitled to receive in the
future. Without limiting the generality of the foregoing, the Employee shall
provide the following items to the Company:
(i) annual federal income tax returns for the preceding calendar
year or any fiscal year ending in the preceding calendar year,
including all Forms
-12-
<PAGE> 15
W-2 and all Forms K-1 (or its equivalent) showing the profits,
losses and cash distributions from every partnership, S
corporation and limited liability company in which the
Employee owns an interest; and
(ii) copies of any plan or agreement providing for the payment to
the Employee of any Third Party Benefits or Third Party Death
Benefits, including but not limited to all contracts,
agreements, deferred compensation plans, pension or profit
sharing plans and summary plan descriptions, life insurance
policies and other documents that may provide for the payment,
or the terms upon which payment will or may be made, of Third
Party Death Benefits or Third Party Death Benefits.
If the Employee fails or refuses to provide the foregoing
information to the Company after a Qualifying Termination of Employment and the
Employee fails to cure such default within fifteen (15) days following notice of
such default having been given to the Employee, then the Employee shall not be
entitled to any Retirement Benefits or Death Benefit for which provision is made
in this Agreement and all of the Company's obligations hereunder shall
immediately lapse and terminate. In the event that notice of such default has
been given to the Employee with respect to three (3) or more calendar years,
then no notice of any such default thereafter shall be required to be given to
the Employee and any such default as of thereafter shall be deemed to terminate
the Employee's entitlement to any such Retirement Benefits or Death Benefit
without notice or any cure period.
6. Designation of Beneficiary. The Employee may designate a
Beneficiary of his Death Benefit by completing, signing and delivering to the
Company a Designation of
-13-
<PAGE> 16
Beneficiary form in form and substance as set forth in Exhibit A attached
hereto. The Employee may change his Beneficiary at any time by completing,
signing and delivering to the Company a new Designation of Beneficiary form.
7. Tax Withholding. The Company shall report the full amount of the
Retirement Benefits as compensation to the Employee in the year in which such
amounts are paid or as the Company may otherwise determine is required by law.
Such amounts will be reflected on the Form W-2 issued to the Employee and will
be subject to withholding for federal, state and local income and employment
taxes as determined by the Company.
8. Assignment. Neither the Employee nor his Beneficiary shall have
any power or right to transfer, assign, anticipate, pledge, hypothecate or
otherwise encumber any part or all of the amounts payable under this Agreement,
nor shall such amounts be subject to attachment, garnishment, levy, execution or
other legal or equitable process by any creditor of the Employee or his
Beneficiary, and no such benefit shall be transferable by operation of law in
the event of bankruptcy, insolvency or death of the Employee or any Beneficiary.
Any such attempted assignment, transfer or encumbrance shall be null and void
and shall terminate the Company's obligations under this Agreement and the
Company shall thereupon have no further liability to the Employee or his
Beneficiary.
9. Unfunded Arrangement. It is the intention of the parties that
this Agreement shall constitute an unfunded and unsecured arrangement maintained
for the purpose of providing deferred compensation for a select member of the
Company's management and/or a highly compensated employee for purposes of Title
I of ERISA and for federal income tax purposes. Any and all reserves,
investments, insurance policies or other assets that may be set
-14-
<PAGE> 17
aside or purchased by the Company to fund its obligations hereunder shall belong
solely to the Company and neither the Employee nor his Beneficiary shall have
any rights, claims or interest therein. The Company's obligations hereunder
shall be payable solely from the assets of the Company. Nothing contained in
this Agreement, and no action taken pursuant to its provisions, shall (a)
require the Company to set aside any reserves or other assets to fund its
obligations hereunder or (b) create, or be construed to create, a trust of any
kind. There is no guaranty that the Company's assets will be sufficient to pay
the benefits contained herein. The Employee agrees that no general or limited
partner, employee or agent of the Company (and no officer, director, employee,
agent or shareholder of the Company's general partner) shall be liable for any
obligation of the Company or any loss or claim incurred by the Employee in
connection with this Agreement. The Employee hereby releases the Company's
general partner or general partners, whether now serving or that may hereafter
become admitted as a general partner, from any and all liability to pay the
Company's obligations under this Agreement or to contribute or advance funds to
the Company to enable it to satisfy such liability.
10. Subject to Claims of Creditors. Payments to be made to the
Employee or his Beneficiary shall be made from assets which, for all purposes,
shall continue to be a part of the general assets of the Company, and no person
shall have, by virtue of the provisions of this Agreement, any interest in,
preferred claim on or beneficial interest in any of the Company's assets. The
rights of the Employee and his Beneficiary to receive payments from the Company
under the provisions hereof shall be a mere unsecured contractual right and
shall be no greater than the right of any unsecured general creditor of the
Company.
-15-
<PAGE> 18
11. No Prior Rights. This Agreement is not a contract of employment
and neither this Agreement nor any action taken hereunder shall be construed as
giving the Employee any right to be retained in the employ of the Company or any
of its partners or affiliates nor limit the right of the Company to discharge
the Employee. This Agreement provides solely for additional compensation for the
Employee's services, payable after the termination of his employment with the
Company and is not intended to be an employment contract.
12. Integration. This Agreement sets forth the entire agreement
between the parties with respect to the matters described herein and all prior
discussions and negotiations between them with respect to this subject matter
are hereby merged into this Agreement. This Agreement supersedes any and all
previous agreements between the parties or between the Employee and the general
partner of the Company, written or oral, relating to the subject matter hereof.
13. Amendments. This Agreement may not be amended, altered or
modified, except by a written instrument signed by the parties hereto, or their
respective successors or assigns, and may not be otherwise terminated except as
provided herein.
14. Successors. This Agreement shall be binding upon and inure to
the benefit of the Company, its successors and assigns, and the Employee and his
successors, assigns, heirs, executors, administrators and beneficiaries.
15. Notices. Any notice, consent or demand required or permitted to
be given under the provisions of this Agreement shall be in writing, and shall
be signed by the party giving or making the same. If such notice, consent or
demand is mailed to a party hereto, it shall be sent by United States certified
mail, return receipt requested, postage prepaid, addressed to the
-16-
<PAGE> 19
Company at its principal office or to the Employee at his last known residence
address as shown on the records of the Company. The date of receipt shall be
deemed the date of notice, consent or demand.
16. Attorney's Fees. If any action at law or in equity, or any
arbitration proceeding, is brought to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorney's fees,
costs and necessary disbursements in addition to any other relief to which he
may be entitled.
17. Illinois Law. This Agreement, and the rights of the parties
hereunder, shall be governed by and construed in accordance with the laws of the
State of Illinois. Both parties hereby consent to the exclusive jurisdiction of
any state or federal court located within Cook County, Illinois, which is the
location of the Company's principal office, and agree that any litigation or
other proceeding instituted hereunder shall be brought in such county and state.
The parties waive any objection they may have based on improper venue or forum
non conveniens to the conduct of any proceeding instituted in Cook County,
Illinois.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first written above.
-17-
<PAGE> 20
Company:
STANDARD PARKING L.P.,
a Delaware limited partnership
By: Standard Parking Corporation,
its general partner
By:
/s/
---------------------------------
Name: Myron C. Warshauer
Title: President
Employee:
/s/
---------------------------------------
Name: Michael K. Wolf
-18-
<PAGE> 21
EXHIBIT A
DESIGNATION OF BENEFICIARY
TO: General Partner
Standard Parking L.P.
In accordance with the provisions of the Deferred Compensation Agreement dated
as of , 1996 (the "Agreement"), I hereby designate, subject to the conditions
stated below, the following as my beneficiary(ies) hereby revoking all prior
designations, if any, made by me:
Primary Beneficiary(ies)
1.
-------------------------------------------------------------------------
Name and address
---------------------------- -------------------------------------
Relationship Soc. Sec. No.
2.
-------------------------------------------------------------------------
Name and address
---------------------------- -------------------------------------
Relationship Soc. Sec. No.
Secondary Beneficiary(ies) in the event no beneficiary designated above survives
me:
1.
-------------------------------------------------------------------------
Name and address
---------------------------- -------------------------------------
Relationship Soc. Sec. No.
2.
-------------------------------------------------------------------------
Name and address
---------------------------- -------------------------------------
Relationship Soc. Sec. No.
Conditions: These designations shall be effective with respect to my entire
interest, if any, under the Agreement, payable to me following my death.
-19-
<PAGE> 22
Unless otherwise provided on the face of this designation, any payment to be
made pursuant to this designation: (a) shall be paid in equal shares to such of
the primary beneficiaries who survive me, or (b) if no primary beneficiaries
shall survive me, such payment shall be made in equal shares to such of the
secondary beneficiaries who survive me. Any beneficiary who fails to survive me
by at least 10 days shall be deemed to have predeceased me.
I reserve the right to change my beneficiary(ies) by filing another designation.
This designation is subject to the terms of the Agreement.
-------------------------------------------
Name of Employee (Please print)
-------------------------------------------
Signature of Employee
-------------------------------------------
Date
Received on the ______________
day of ____________________,
19______
By:
-----------------------------
-20-
<PAGE> 23
EXHIBIT B
SCHEDULE OF DEATH BENEFITS
<TABLE>
<CAPTION>
Amount of
Year of Death Death Benefit
- ------------- -------------
<C> <C>
1996-1998 725,000
1999-2001 775,000
2002-2004 850,000
2005-2007 950,000
2008-2010 1,150,000
2011-2013 1,275,000
2014 or after 1,400,000*
</TABLE>
*To be reduced as set forth in Section 1(k) of Agreement
-21-
<PAGE> 1
Exhibit 10.14
APCOA, INC.
RETIREMENT PLAN FOR KEY EXECUTIVE OFFICERS
Effective Date: April 14, 1989
<PAGE> 2
TABLE OF CONTENTS
ARTICLE NO.
-----------
PURPOSE I
DEFINITIONS II
ADMINISTRATION III
ELIGIBILITY IV
MONTHLY ACCRUED BENEFITS V
ELIGIBILITY FOR RETIREMENT BENEFITS VI
FORMS OF RETIREMENT BENEFITS VII
AMOUNT OF RETIREMENT BENEFITS VIII
DEATH BENEFITS IX
AMENDMENT AND TERMINATION X
MISCELLANEOUS XI
<PAGE> 3
ARTICLE I
PURPOSE
1.1 The Apcoa, Inc. Retirement Plan For Key Executive Officers is adopted as of
April 14, 1989, to provide retirement income and other related benefits to
certain executive officers of Apcoa, Inc. (the "Company").
1-1
<PAGE> 4
ARTICLE II
DEFINITIONS
Unless the context otherwise indicates, the following terms shall
have the meanings set forth below whenever used in this Plan:
2.1 The words "Actual Equivalent" shall mean the benefit having the same value
as the benefit which the actuarial equivalent replaces. Except as otherwise
provided in this Plan, the actuarial equivalents shall be determined under
(a) mortality rates based upon the 1951 Group Annuity Table
projected with Scale C to 1975 for Participants, and upon the
1951 Group Annuity Table projected with Scale C to 1975 set
back five years for spouses; and
(b) an interest rate of 7% provided, however, that in computing
the lump sum actuarial equivalent of a Participant's Monthly
Accrued Benefit for purposes of Section 7.4 hereof, the
interest rate used shall not be less than the rate used by the
Pension Benefit Guaranty Corporation to value immediate
annuities for plans terminating as of the proposed Benefit
Commencement Date.
2.2 The word "Affiliate" shall mean any other corporation which is,
within the meaning of 26 U.S.C. ss. 1563(a), a member of a controlled group of
corporations which includes the Company provided that, in making such
determination, "50 percent" shall be substituted for "80 percent" wherever "80
percent" appears in 26 U.S.C. ss. 1563(a).
2.3 The word "Age" shall mean a person's actual attained age.
2.4 The words "Average Monthly Compensation" shall mean the total of
a Participant's Compensation determined for the five (5) consecutive Plan Years
(or the number of Plan Years during which the Participant received compensation,
if that number is less
2-1
<PAGE> 5
than five (5)) which ended prior to the earlier of his Termination of Employment
or his Normal Retirement Date, during which said total was highest, divided by a
number equal to the number of months the Participant was employed by the Company
during such consecutive Plan Years.
2.5 The word "Beneficiary" shall mean any person who receives or is
designated to receive payment of any benefit under the terms of the Plan on the
death of a Participant.
2.6 The words "Benefit Commencement Date" shall mean the date upon
which the retirement benefits of a Participant shall commence under the terms of
the Plan.
2.7 The word "Board" shall mean the Company's duly elected Board of
Directors as constituted at any time.
2.8 The word "Company" shall mean Apcoa, Inc., a Delaware
corporation, or any corporation which assumes the obligations of Apcoa, Inc.
under the Plan.
2.9 The word "Compensation" shall mean the total remuneration paid
by the Company to a Participant for services rendered to the Company including
salaries, commissions, overtime and bonuses, whether discretionary or not, and
amounts received by the Participant from the Short-Term Incentive Compensation
Pool, but shall not include any extra benefits such as payment by the Company of
hospitalization, group insurance, expense reimbursement, or other special
benefits or any amounts realized upon exercise or cancellation of any Stock
Options or any other compensation income resulting from a grant of, or
transaction in, stock of the Company or its Affiliates or the making of an
election under Sec-
2-2
<PAGE> 6
tion 83(b) of the Internal Revenue Code of 1986, as amended, with respect to
stock of the Company or its Affiliates. A Participant's Compensation for any
Plan Year shall consist of the compensation actually paid to the Participant
during the Plan Year.
2.10 The words "Continuous Employment" shall mean any period
(including periods prior to April 14, 1989, the effective date of the Plan)
during which a Participant is an employee of the Company and/or any Affiliate
and shall include any authorized leave of absence.
2.11 The word "Control" shall mean ownership of shares of a
corporation's stock which, directly or indirectly, gives the owner a greater
than fifty percent (50%) voting interest.
2.12 The word "Disability" shall mean any physical or mental
impairment or disability which prevents a Participant from performing the duties
of his occupation for a period of at least one hundred twenty (120) days and
which is expected to be of permanent duration. A determination of whether a
Participant is disabled shall be made by two licensed physicians, one appointed
by the Board and one appointed by the Participant. In the event the two
physicians are unable to agree with respect to whether the Participant is
disabled, the determination of whether the Participant is disabled shall be made
by a third duly licensed physician chosen by the two physicians previously
appointed. Notwithstanding the preceding provisions of this Section 2.12, a
determination with respect to a Participant's Disability under any employment
agreement between the Participant and the Company shall be dispositive with
respect to determining his Disability for purposes of the Plan.
2-3
<PAGE> 7
2.13 The words "Monthly Accrued Benefit" shall mean an amount
determined with respect to a Participant in accordance with the provisions of
Article V hereof.
2.14 The words "Normal Retirement Date" shall mean for each
Participant the first day of the month coinciding with or next following the day
he attains Age sixty-five (65).
2.15 The word "Participant" shall mean any individual designated by
the Board to participate in the Plan pursuant to Article IV of the Plan.
2.16 The word "Plan" shall mean this instrument as originally
executed and as it may be later amended.
2.17 The words "Plan Year" shall mean the calendar year.
2.18 The words "Termination of Employment" shall mean the severance
of a Participant's employment relationship with the Company and all Affiliates.
2-4
<PAGE> 8
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 The Board shall administer and interpret the Plan. All decisions of the
Board shall be final, conclusive and binding upon all affected persons, and any
person participating in the Plan thereby agrees to accept as final, conclusive
and binding the decisions of the Board. No member of the Board shall be liable
for any action or determination made with respect to the Plan and the Company
and/or any Affiliate shall indemnify the members of the Board, individually and
collectively, against any and all losses, costs of expenses which may be
incurred by them, individually or collectively, in connection with their
administering the Plan.
3.2 The Board may by appropriate resolution delegate to one of its
members or a committee the authority to exercise any of its powers in
administering and interpreting the Plan.
3-1
<PAGE> 9
ARTICLE IV
ELIGIBILITY
4.1 The persons eligible to participate in the Plan shall be only those persons
who are or who become key executive officers of the Company. While all such key
executive officers are eligible to be considered for participation, the Board
shall have the sole and exclusive right to determine those key executive
officers who will be selected from time to time to participate under the Plan.
The Board shall inform any key executive officer who is chosen to participate in
the Plan.
4-1
<PAGE> 10
ARTICLE V
MONTHLY ACCRUED BENEFIT
5.1 The Monthly Accrued Benefit of a Participant whose Termination of Employment
is on or after his Normal Retirement Date shall be an amount equal to fifty
percent (50%) of the Participant's Average Monthly Compensation.
5.2 The Monthly Accrued Benefit of a Participant whose Termination
of Employment is prior to his Normal Retirement Date and after he has completed
at least five (5) years of Continuous Employment shall be an amount equal to (a)
multiplied by (b) below where:
(a) equals fifty percent (50%) of his Average Monthly
Compensation; and
(b) equals a fraction, the numerator of which shall be the number
of years (to the nearest one-twelfth (1/12) year) of the
Participant's Continuous Employment at the date of his
Termination of Employment, and the denominator of which shall
be the number of years (to the nearest one-twelfth (1/12)
year) of the Participant's Continuous Employment he would have
had if he had continued to be employed by the Company until
his Normal Retirement Date.
5-1
<PAGE> 11
ARTICLE VI
ELIGIBILITY FOR RETIREMENT BENEFITS
6.1 A Participant whose Termination of Employment is for some reason other than
death and on or after his Normal Retirement Date shall be eligible to receive a
retirement benefit commencing on the first day of the month coinciding with or
next following his Termination of Employment, in such form as is provided in
Article VII hereof, and in the amount provided in Article VIII.
6.2 A Participant whose Termination of Employment is for some reason
other than death and on or after his completion of ten (10) years of Continuous
Employment and his attainment of Age fifty-five (55) but prior to his Normal
Retirement Date shall be eligible to retire and receive a retirement benefit
commencing on the first day of any month after his date of early retirement but
not later than his Normal Retirement Date, as he shall select, in such form as
is provided in Article VII hereof, and in the amount provided in Article VIII.
6.3 A Participant whose Termination of Employment is for some reason
other than death or Disability and after he has completed at least five (5)
years of Continuous Employment and before he is eligible for an early retirement
benefit shall be eligible for a vested deferred retirement benefit commencing on
his Normal Retirement Date or, if he has completed ten (10) years of Continuous
Employment, commencing on the first day of any month after his attainment of Age
fifty-five (55) but not later than his Normal Retirement Date as he shall
select. Such Participant's retirement benefit shall be paid in such form as is
provided in Article VII hereof, and in the amount provided in Article VIII.
6-1
<PAGE> 12
6.4 A Participant whose Termination of Employment is by reason of
his Disability before his Normal Retirement Date shall be eligible for a
disability retirement benefit commencing on the first day of the month
coinciding with or next following the later of his date of disability retirement
or the date the Board determines that he is Disabled, in such form as is
provided in Article VII, and in the amount provided in Article VIII.
6.5 A Participant whose Termination of Employment is for some reason
other than death or under circumstances described in Section 6.1, 6.2, 6.3 or
6.4 shall not be entitled to any retirement benefit.
6-2
<PAGE> 13
ARTICLE VII
FORMS OF RETIREMENT BENEFITS
7.1 The normal form of retirement benefits payable to a Participant who is
eligible therefor pursuant to Article V hereof shall be the Life Annuity Form
(Form 1 described in Section 7.4 hereof).
7.2 A Participant shall, prior to his Benefit Commencement Date,
submit to the Board satisfactory evidence of his Age and, if he is married,
satisfactory evidence of his marriage and the Age of his spouse.
7.3 In lieu of receiving his retirement benefits in accordance with
the normal form set forth in Section 7.1 above, a participant who is eligible to
receive retirement benefits pursuant to Article VI hereof may elect to receive
his retirement benefits on the basis of any other form of retirement benefits
described in Section 7.4 hereof. Any election of another form of retirement
benefits provided for in the Plan may be made by a Participant at any time prior
to his Benefit Commencement Date. Such election shall be on a form prescribed
for the purpose by the Board, shall be signed by the Participant, and shall name
the Beneficiary of such Participant if he shall have selected Form 3. Such
election shall be deemed to be made when it is received by the Board.
7.4 The form of retirement benefits under the Plan are as follows:
Form 1. Life Annuity Form. A Participant who receives payment of his
retirement benefits under the Life Annuity Form shall receive retirement benefit
payments during his life. No retirement benefits shall be payable after the
death of the Participant.
7-1
<PAGE> 14
Form 2. Spouse's Annuity Form. A Participant who receives payment of
his retirement benefits under the Spouse's Annuity Form shall receive reduced
retirement benefit payments during his life with the provision that after his
death 50% of his monthly retirement benefit shall continue during the life of
(and shall be paid to) the person who was his spouse on the date of his election
of a form of retirement benefits.
Form 3. Life-Ten Year Certain Form. A Participant who receives
payment of his retirement benefits under the Life-Ten Year Certain Form shall
receive reduced retirement benefit payments during his life, with the provision
that, in the event the Participant shall die before he shall have received
retirement benefit payments for a period of one hundred twenty (120) months,
after his death his monthly retirement benefit shall continue to be paid for the
remainder of said one hundred twenty (120) month period to such Beneficiary as
he shall have selected.
Form 4. Lump Sum Form. A Participant who receives payment of his
retirement benefits under the Lump Sum Form shall receive a single lump sum
payment upon the date his retirement benefits would otherwise have commenced
under the Plan.
7.5 The forms of retirement benefits described in Section 7.4 hereof
shall be subject to the following conditions:
(i) Retirement benefits shall be paid monthly on the first day of
the month unless the Participant receives his retirement
benefits under Form 4.
(ii) Retirement benefits which are payable during the life of any
person shall commence on the date specified in the Plan, if
such person is then living, and shall end with the payment
made as of the first day of the month during which such person
shall die.
7-2
<PAGE> 15
(iii) Regardless of the form of retirement benefits under which a
Participant was going to receive payment, if a Participant
shall die prior to his Benefit Commencement Date, no
retirement benefits shall be payable to the spouse or
Beneficiary of the Participant under this Article VI.
(iv) If any Participant shall die after he shall be receiving
retirement benefits pursuant to some Form other than Form 1 or
Form 4, his Beneficiary shall receive such payment or series
of payments, if any, provided for under such Form commencing
on the first day of the month next following the month during
which the participant shall have died (or as soon thereafter
as is practicable). No death benefits shall be payable on
behalf of a Participant who has received payment of his
benefits under Form 1 or Form 4.
(v) If any Participant was to have received retirement benefits
under Form 2 and his spouse shall die prior to his Benefit
Commencement Date, then the Participant shall receive his
retirement benefits under Form 1 unless, prior to his Benefit
Commencement Date, he remarries.
(vi) If any Participant shall be receiving retirement benefits
under Form 2 and his spouse shall die after his Benefit
Commencement Date, but prior to the death of the Participant,
such Participant shall continue to receive the monthly
retirement benefits payable under Form 2 and no payments of
retirement benefits shall be made after the subsequent death
of the Participant.
(vii) If a Participant shall be receiving or entitled to receive
retirement benefits under Form 3 and his Beneficiary shall
die, the Participant may designate a successor Beneficiary to
receive the benefits, if any, which may be payable after the
death of the Participant.
(viii) If any amounts shall be payable pursuant to Form 3 after the
death of both the Participant and his Beneficiary, such
payments shall be made to the executor or administrator of the
estate of the second to die of the Participant and his
Beneficiary at the time otherwise specified in this Article VI
for payment thereof.
7.6 Subject to Section 7.3 above, any Participant may at any time
prior to his Benefit Commencement Date,
(i) revoke an election previously made under Section 7.3 by notice
which complies with the procedures described in Section 7.3
duly filed with
7-3
<PAGE> 16
the Board, in which event the Participant shall be treated the
same as though his optional election had not been filed; or
(ii) change his election from one to another of the forms described
in Section 7.4 and/or change the Beneficiary previously
designated under Form 3 by notice and designation which
complies with the procedure described in Section 7.3 and is
duly filed with the Board.
7.7 Anything contained in this Article VI to the contrary
notwithstanding, if after the retirement of a Participant, the amount of
retirement benefit which would have been payable to him under the Plan is
subject to any deduction, change, offset or correction under the Plan, then the
amount payable to such Participant and/or his Beneficiary shall be adjusted to
reflect any such deduction, change, offset or correction.
7-4
<PAGE> 17
ARTICLE VIII
AMOUNT OF RETIREMENT BENEFITS
8.1 The monthly retirement benefit payable to a Participant who is eligible
therefor pursuant to Article VI hereof, whose retirement benefit commences on or
after his Normal Retirement Date, and is payable under Form 1 in accordance with
Article VII hereof shall be equal to his Monthly Accrued Benefit.
8.2 The monthly retirement benefit payable to a Participant who is
eligible therefor pursuant to Article VI hereof and whose retirement benefit is
payable under a form of retirement benefit described in Article VII other than
Form 1 shall be such amount so that his retirement benefits are the Actuarial
Equivalent of the retirement benefits which he would have received if his
retirement benefit had been payable under Form 1.
8.3 The monthly retirement benefit payable to a Participant who is
eligible therefor pursuant to Article VI hereof and whose retirement benefit
commences prior to his Normal Retirement Date shall be equal to the amount he
would have received at his Normal Retirement Date reduced by five-ninths of one
percent (5.9%) for each full month by which the commencement of payment of the
Participant's retirement benefits precedes his Normal Retirement Date.
8.4 The retirement benefit payable to a Participant who is eligible
therefor pursuant to Article VI hereof and whose retirement benefit is payable
under Form 4 described in Section 7.4 shall be an amount that is the Actuarial
Equivalent of the monthly retirement
8-1
<PAGE> 18
benefit which he would have received under Section 8.1 hereof if his retirement
benefit had commenced on his Normal Retirement Date and been payable under Form
1.
8.5 Notwithstanding any other provision of the Plan, the amount
payable to a Participant under this Plan shall be reduced by the Actuarial
Equivalent of the employer-funded benefit payable to the Participant under any
tax-qualified retirement plan maintained by the Company. For purposes of the
preceding sentence, any benefit payable to the Participant which is attributable
to the Participant's salary reduction contributions under a qualified cash or
deferred arrangement described in Internal Revenue Code Section 401(k) shall not
be considered an employer-funded benefit.
8-2
<PAGE> 19
ARTICLE IX
DEATH BENEFITS
9.1 In the event of the death of a Participant on or after his Benefit
Commencement Date, there shall be paid to his Beneficiary the death benefit, if
any, provided under the form of benefit under which such Participant was
receiving retirement benefits, as set forth in Article VII hereof.
9.2 If a Participant dies either
(a) before his Termination of Employment, and on or after his
Normal Retirement Date; or
(b) before his Termination of Employment, if he had completed at
least five (5) years of Continuous Employment; or
(c) after his Termination of Employment but prior to his Benefit
Commencement Date, if he had completed at least five (5) years
of Continuous Employment;
there shall be paid to the deceased Participant's surviving spouse an amount
equal to the Actuarial Equivalent of the amount such surviving spouse would have
been entitled to receive if the deceased Participant had commenced to receive
retirement benefits under the Plan on the date of his death under Form 2
described in Section 7.4 hereof.
9.3 Death benefits payable pursuant to Section 9.2 above shall be
paid to the surviving spouse in the form of a single lump sum payment. Payment
of death benefits under Section 9.2 above shall be made as soon as reasonably
possible after the death of the Participant.
9-1
<PAGE> 20
ARTICLE X
AMENDMENT AND TERMINATION
10.1 Subject to any contractual restrictions that may otherwise exist, the Board
may, in its discretion, amend or terminate the Plan, and the Board shall direct
that all documents necessary to put such amendment into full force and effect be
prepared and executed.
10.2 Notwithstanding any other provision of the Plan, with respect
to the amount of a Participant's Monthly Accrued Benefit as of the date of any
amendment to the Plan, the provisions of the Plan shall not be subject to
amendment.
10-1
<PAGE> 21
ARTICLE XI
MISCELLANEOUS
11.1 A Participant's claim to benefits under this Plan and the right to receive
amounts under this Plan are nontransferable as security for a loan or otherwise
by any means, either voluntarily or by operation of law.
11.2 In the event that any provision of the Plan is determined by
any judicial, quasijudicial or administrative body to be void or unenforceable
for any reason, all other provisions of the Plan shall remain in full force and
effect as if such void or unenforceable provision had never been a part of the
Plan.
11.3 The singular herein shall include the plural, or vice versa,
wherever the context so requires.
11.4 A pronoun in the masculine, feminine, or neuter gender shall be
deemed, where appropriate, to include also the masculine, feminine or neuter
gender.
11.5 If the Board shall find that any person to whom any amount is
payable under the Plan is unable to care for his affairs because of illness or
accident, or is a minor, any payment due (unless a prior claim therefor shall
have been made by a duly appointed guardian, committee or other legal
representative) may be made to such person's spouse, child, parent, or brother
or sister, or to any person deemed by the Board to have incurred expenses for
such person otherwise entitled to payment, in such manner and proportions as the
Board may determine.
11-1
<PAGE> 22
11.6 The Plan shall be construed in accordance with, and governed
by, the laws of the State of Delaware.
11.7 Any person's right to receive any amounts under this Plan shall
be an unsecured and unfunded obligation of the Company.
IN WITNESS WHEREOF, APCOA, INC., by its officer duly authorized, has
executed this instrument this __________ day of ________________, 1989,
effective for all purposes as of April 14, 1989.
APCOA, INC.
By: /s/
----------------------------------
Its: /s/
----------------------------------
11-2
<PAGE> 23
EXHIBIT E
DESIGNATION OF BENEFICIARY
On April 14, 1989, I, the undersigned, entered into an Executive
Employment Agreement with APCOA, Inc. Pursuant to the terms of said Agreement, I
have the right to designate a beneficiary to receive, in the event of my death,
certain payments pursuant to said Agreement. I, therefore, exercise this right
and designate Judith Stuelpe to receive any such payments if (s)he survives me,
but if Judith Stuelpe does not survive me, I designate Tyson and Casey Stuelpe.
Any and all previous designations of beneficiary made by me are hereby revoked
and I hereby reserve the right to revoke this designation of beneficiary.
/s/ G. Walter Stuelpe, Jr.
-----------------------------
G. Walter Stuelpe, Jr.
Dated: 4/14/89
Receipt of this Designation of Beneficiary form is acknowledged by
the undersigned Secretary of APCOA, Inc.
APOCA, INC.
By: /s/
----------------------------------
, Secretary
Dated: 4/14/89
11-3
<PAGE> 24
SUPPLEMENTAL PENSION PLAN
IN CONSIDERATION of the mutual promises contained herein, it is
agreed by the Executive and the Company as follows:
1. The Executive may retire from active employment at any time after
he reaches ages 65.
2. Upon retirement, the Company shall provide the Executive with a
retirement benefit of 240 equal consecutive monthly payments of $4,166.67. The
first monthly payment shall be made on the first day of the month coinciding
with or next following the date of the Executive's retirement.
3. In the event the Executive dies after commencement of payments
under paragraph 2 hereof, but before he received the number of monthly
installments set forth therein, the Company shall pay the remainder of said
monthly installments to the executive's designated beneficiary hereunder. For
purposes of this provision, the executive's designated beneficiary hereunder is
Judith Stuelpe. Executive shall have the right to change such beneficiary at
anytime hereafter, either prior to or after retirement, by notifying the Company
in writing of such change.
4. If the executive shall die prior to age 65 while in the active
employment of the Company, the Company shall pay the Executive's designated
beneficiary an aggregate of $482,000 in 60 equal monthly installments of
$8,033.33. The first installment shall be paid on the first day of the month
following the month in which the Executive dies.
1
<PAGE> 25
5. This Plan is part of a certain Executive Employment Agreement
(the "Employment Agreement") dated April 14, 1989. Nothing herein shall prevent
the Company from terminating the Employment for "cause" in accordance with the
terms thereof, and in which event this Plan shall be terminated and void in all
respects and neither party shall have any further responsibility for satisfying
any obligations that may have otherwise arisen hereunder. However, should the
Executive's employment terminate prior to retirement for any reason, other than
for "cause," resignation, disability or death, the Insurance Policy shall be
transferred by the Company to the Executive within thirty days after such
termination, and the full value of the Insurance Policy and its full cash
surrender value shall become the sole property of the Executive to do with as he
sees fit.
In the event of the Executive's resignation which is not associated
with termination for "cause" or for disability, the Company shall cancel the
Insurance Policy and provide the Executive with the cash surrender value
according to the following schedule:
<TABLE>
<CAPTION>
<S> <C>
After five (5) full years' service = 25%
After ten (10) full years' service = 50%
After fifteen (15) full years' service = 75%
After twenty (20) full years' service = 100%
</TABLE>
2
<PAGE> 26
In the event of permanent disability the Company will continue to
pay the premiums on the full value of the Insurance Policy for twelve months
following the Executives' termination because of such disability in accordance
with Section 4(b) of the Employment Agreement and after twelve months to
transfer the full value of the Insurance Policy to the Executive within thirty
days. The full value of the Insurance Policy and its full cash current value
shall become the sole property of the Executive to do with as he sees fit, and
the Company shall have further responsibility to fulfill any terms of the Plan
or to continue to pay premiums on the Insurance Policy after the transfer of the
Insurance Policy has been completed.
6. For so long as Executive is receiving payments hereunder,
Executive agrees that Sections 5, 6 and 7 of the Employment Agreement shall
remain in full force and effect.
7. Nothing in this Plan shall prevent Executive from receiving, in
addition to any amounts he may be entitled to under the Plan, any amounts which
may be distributable to him at any time under any pension plans, profit sharing
or other incentive compensation or similar plan of the Company now if effect or
which may hereafter be adopted.
8. This Plan shall be binding upon the Executive, his heirs,
executors, administrators and assigns, and on the Company, its successors and
assigns. The rights of Executive hereunder shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge.
3
<PAGE> 27
9. This Plan may be altered, changed, amended or terminated only by
writing signed by the party to be bound thereby.
10. This document has been executed in the State of Ohio and shall
be interpreted in accordance with the laws of that State without regard to
conflict of law provisions.
11. This document contains the entire agreement between the parties
with respect to the subject matter hereof, supersedes any all prior discussions
or agreements the parties may have had with respect thereto (including any prior
Supplemental Pension Plan).
4
<PAGE> 1
Exhibit 10.15
EXECUTION COPY
CONSULTING AGREEMENT
CONSULTING AGREEMENT by and between APCOA, Inc., a Delaware
corporation (the "Company") and Sidney Warshauer (the "Consultant"), dated as of
the 30th day of March, 1998.
WHEREAS, pursuant to that certain Combination Agreement (the
"Transaction Agreement") dated as of January 15, 1998, by and among Myron C.
Warshauer, the Consultant, Steven A. Warshauer, Dosher Partners, L.P., a
Delaware limited partnership, SP Parking Associates, an Illinois general
partnership, SP Associates, an Illinois general partnership, and APCOA, Inc., a
Delaware corporation ("APCOA"), the operations of APCOA and Standard will be
combined (the "Transaction"); and
WHEREAS, APCOA desires to ensure that the Company will continue to
receive the benefit of the Consultant's consulting services after the
Transaction, on the terms and conditions set forth below in this Agreement, and
the Consultant desires to render such services;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
1. Consulting Period. The Consultant shall make himself available to
render consulting services, on the terms and conditions set forth in this
Agreement, for the period beginning on the Closing Date (as defined in the
Transaction Agreement) and ending on the date of the Consultant's death (the
"Consulting Period"). This Agreement shall not be terminable by the Company for
any reason other than the death of the Consultant or a breach by the Consultant
of the provisions of Section 4 or Section 5 hereof.
2. Consulting Services. During the Consulting Period, the Consultant
shall render such services as may be requested from time to time by the Board
and/or the Chief Executive Officer of the Company. The Consultant's services and
the time spent rendering such services shall be consistent with the Consultant's
practices and experience during the five years preceding the Closing Date.
3. Consulting Fee; Office. In consideration of the foregoing, during
the Consulting Period, the Company shall (i) pay the Consultant a consulting fee
of $552,000 per annum, payable monthly in arrears, (ii) provide the Consultant
with the perquisites set forth in a letter dated January 15, 1998 from Myron C.
Warshauer to John V. Holten, and (iii) for so long as Myron C. Warshauer is
employed by or serving as a consultant to the Company, provide the Consultant
with an office at the same location as the principal business office occupied by
Myron C. Warshauer.
4. Confidential Information. During the Consulting Period and at all
times thereafter, the Consultant shall not disclose to anyone who is not
employed by the Company or by an affiliate or to any employee of the Company or
an affiliate who, to the knowledge of the
<PAGE> 2
Consultant, is not authorized to receive such information, any confidential
information of the Company and any confidential information relating to the
Company's former or present customers or potential customers of which the
Consultant became aware during his employment by the Company or of which he
becomes aware during the Consulting Period. The Consultant shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies and their respective businesses that the Consultant obtained during
his employment by the Company or any of its affiliated companies or that he
obtains during the Consulting Period and that is not public knowledge (other
than as a result of the Consultant's violation of this Section 4) ("Confidential
Information"). The Consultant shall not communicate, divulge or disseminate
Confidential Information at any time during or after the Consulting Period,
except with the prior written consent of the Company or as otherwise required by
law or legal process.
5. Noncompetition. During the Consulting Period, the Consultant
shall not, without the prior written consent of the Board, engage in or become
associated with a Competitive Activity. For purposes of this paragraph (b) of
Section 6: (i) a "Competitive Activity" means any business or other endeavor
that engages in construction, ownership, leasing, design and/or management of
parking lots, parking garages, or other parking facilities or consulting with
respect thereto; and (ii) the Consultant shall be considered to have become
"associated with a Competitive Activity" if he becomes directly or indirectly
involved as an owner, employee, officer, director, independent contractor,
agent, partner, advisor, or in any other capacity calling for the rendition of
the Consultant's personal services, with any individual, partnership,
corporation or other organization that is engaged in a Competitive Activity.
Notwithstanding the foregoing, the Consultant may make and retain investments
during the Consulting Period in not more than five percent of the equity of any
entity engaged in a Competitive Activity, if such equity is listed on a national
securities exchange or regularly traded in an over-the-counter market.
6. Successors. (a) This Agreement is personal to the Consultant and,
without the prior written consent of the Company, shall not be assignable by the
Consultant otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Consultant's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
7. Miscellaneous. (a) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Illinois without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified except by a written agreement executed
by the parties hereto or their respective successors and legal representatives.
(b) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
-2-
<PAGE> 3
(c) The Consultant acknowledges that his services hereunder are to
be rendered as an independent contractor, and that he is solely responsible for
the payment of all Federal, state, local and foreign taxes that are required by
applicable laws or regulations to be paid with respect to the Consulting Fee.
(d) The Consultant and the Company acknowledge that this Agreement
supersedes any other agreement between them concerning the subject matter
hereof.
-3-
<PAGE> 4
IN WITNESS WHEREOF, the Consultant has hereunto set his hand and,
pursuant to the authorization of its Board of Directors, the Company has caused
this Agreement to be executed in its name on its behalf, all as of the day and
year first above written.
/s/ Sidney Warshauer
--------------------------------------------
Sidney Warshauer
APCOA, INC.
By: /s/ Michael J. Celebrezze
----------------------------------------
Name: Michael J. Celebrezze
Title: Chief Financial Officer
-4-
<PAGE> 1
EXHIBIT 12.1
APCOA, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(AMOUNTS IN THOUSANDS, EXCEPT RATIO DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------- PRO FORMA
1993 1994 1995 1996 1997 1997
------- ------- ------- ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C>
Income (loss) before income
taxes and minority interest... $(4,037) $(2,880) $(2,273) $1,469 $2,320 $(2,326)
Fixed charges................... 2,966 3,129 4,216 4,261 4,611 24,648
------- ------- ------- ------ ------ -------
Earnings........................ $(1,071) $ 249 $ 1,943 $5,730 $6,931 $22,322
======= ======= ======= ====== ====== =======
Interest expense................ $ 2,084 $ 2,437 $ 3,101 $3,409 $3,713 $14,225
Amortization of deferred
financing costs............... 361 198 574 228 180 720
Interest portion of rent
expense....................... 521 494 541 624 718 9,703
------- ------- ------- ------ ------ -------
Fixed charges................... $ 2,966 $ 3,129 $ 4,216 $4,261 $4,611 $24,648
======= ======= ======= ====== ====== =======
Ratio of earnings to fixed
charges....................... Note 1 Note 1 Note 1 1.3x 1.5x Note 1
======= ======= ======= ====== ====== =======
</TABLE>
- ---------------
Note 1: Earnings were inadequate to cover fixed charges by $4,037, $2,880,
$2,273 and $2,326 for the years ended December 31, 1993, 1994 and 1995 and the
pro forma year ended December 31, 1997, respectively.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Experts" and
"Selected Historical Financial Data of APCOA" and to the use of our reports
dated February 3, 1998, in the Registration Statement (Form S-4) and related
Prospectus of APCOA, Inc. for the registration of $140,000,000 of 9 1/4% Senior
Subordinated Notes.
Cleveland, Ohio ERNST & YOUNG LLP
April 13, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF ALTSCHULER, MELVOIN AND GLASSER LLP, INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Experts" and
"Selected Historical Financial Data of Standard" and to the use of our reports
dated February 3, 1998, in the Registration Statement (Form S-4) and related
Prospectus of APCOA, Inc. for the registration of $140,000,000 of 9 1/4% Senior
Subordinated Notes.
ALTSCHULER, MELVOIN AND GLASSER LLP
Chicago, Illinois
April 13, 1998
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
---------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
APCOA, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 16-1171179
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
800 SUPERIOR AVENUE
CLEVELAND, OH 44114-2601
(Address of principal executive offices) (Zip Code)
9 1/4 % NEW SENIOR SUBORDINATED NOTES DUE 2008
(Title of indenture securities)
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO
WHICH IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its
parent, State Street Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN
EFFECT.
A copy of the Articles of Association of the trustee, as now in effect,
is on file with the Securities and Exchange Commission as Exhibit 1 to
Amendment No. 1 to the Statement of Eligibility and Qualification of
Trustee (Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference
thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of Massachusetts
that no certificate of authority for the trustee to commence business
was necessary or issued is on file with the Securities and Exchange
Commission as Exhibit 2 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No. 22-17940) and is
incorporated herein by reference thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE
TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE DOCUMENTS
SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and Exchange Commission as
Exhibit 3 to Amendment No. 1 to the Statement of Eligibility and Qualification
of Trustee (Form T-1) filed with the Registration Statement of Morse Shoe, Inc.
(File No. 22-17940) and is incorporated herein by reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect, is on file with
the Securities and Exchange Commission as Exhibit 4 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with the
Registration Statement of Eastern Edison Company (File No. 33-37823)
and is incorporated herein by reference thereto.
1
<PAGE> 3
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS IN
DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(B) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act is
annexed hereto as Exhibit 6 and made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED
PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING AUTHORITY.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority is annexed hereto as Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Hartford and The
State of Connecticut, on the 16RD OF APRIL 1998
STATE STREET BANK AND TRUST COMPANY
By: /s/ MICHAEL M. HOPKINS
NAME MICHAEL M. HOPKINS
TITLE VICE PRESIDENT
2
<PAGE> 4
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by APCOA, INC.
of its 9 1/4 % NEW SENIOR SUBORDINATED NOTES DUE 2008, we hereby consent that
reports of examination by Federal, State, Territorial or District authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/MICHAEL M. HOPKINS
NAME MICHAEL M. HOPKINS
TITLE VICE PRESIDENT
DATED: APRIL 16, 1998
3
<PAGE> 5
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business September 30, 1997,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act and in accordance
with a call made by the Commissioner of Banks under General Laws, Chapter 172,
Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
Cash and balances due from depository institutions:
<S> <C>
Noninterest-bearing balances and currency and coin ..................... 1,380,475
Interest-bearing balances .............................................. 8,821,855
Securities .................................................................. 10,461,989
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and its Edge subsidiary ........................ 6,085,138
Loans and lease financing receivables:
Loans and leases, net of unearned income .............. 5,597,831
Allowance for loan and lease losses ................... 79,416
Allocated transfer risk reserve ....................... 0
Loans and leases, net of unearned income and allowances ................ 5,518,415
Assets held in trading accounts ............................................. 917,895
Premises and fixed assets ................................................... 390,028
Other real estate owned ..................................................... 779
Investments in unconsolidated subsidiaries .................................. 34,278
Customers' liability to this bank on acceptances outstanding ................ 83,470
Intangible assets ........................................................... 227,659
Other assets ................................................................ 1,969,514
-----------
Total assets ................................................................ 35,891,495
===========
LIABILITIES
Deposits:
In domestic offices ................................................... 8,095,559
Noninterest-bearing ............................. 5,962,025
Interest-bearing ................................ 2,133,534
In foreign offices and Edge subsidiary ................................ 14,399,173
Noninterest-bearing ................................ 86,798
Interest-bearing ............................... 14,312,375
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge subsidiary ..................... 7,660,881
Demand notes issued to the U.S. Treasury and Trading Liabilities ............ 1,107,552
Other borrowed money ........................................................ 589,733
Subordinated notes and debentures ........................................... 0
Bank's liability on acceptances executed and outstanding .................... 85,600
Other liabilities ........................................................... 1,830,593
Total liabilities ........................................................... 33,769,091
-----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ............................... 0
Common stock ................................................................ 29,931
Surplus ..................................................................... 437,183
Undivided profits and capital reserves/Net unrealized holding gains (losses) 1,660,158
Cumulative foreign currency translation adjustments ......................... (4,868)
Total equity capital ........................................................ 2,122,404
-----------
Total liabilities and equity capital ........................................ 35,891,495
===========
</TABLE>
4
<PAGE> 6
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
5
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Financial Statements of the Company for each of the three years in
the period ended December 31, 1997 and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C> <C> <C>
<PERIOD-TYPE> YEAR YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1996 DEC-31-1997
<PERIOD-START> JAN-01-1995 JAN-01-1996 JAN-01-1997
<PERIOD-END> DEC-31-1995 DEC-31-1996 DEC-31-1997
<EXCHANGE-RATE> 1 1 1
<CASH> 0 2,532,000 3,332,000
<SECURITIES> 0 0 0
<RECEIVABLES> 0 10,556,000 14,249,000
<ALLOWANCES> 0 (315,000) (443,000)
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 0 14,116,000 18,254,000
<PP&E> 0 56,582,000 55,715,000
<DEPRECIATION> 0 (44,906,000) (43,375,000)
<TOTAL-ASSETS> 0 52,823,000 59,095,000
<CURRENT-LIABILITIES> 0 33,571,000 35,313,000
<BONDS> 0 32,129,000 34,181,000
0 7,841,000 8,728,000
0 0 0
<COMMON> 0 1,000 1,000
<OTHER-SE> 0 (23,232,000) (22,260,000)
<TOTAL-LIABILITY-AND-EQUITY> 0 52,823,000 59,095,000
<SALES> 141,540,000 135,752,000 115,676,000
<TOTAL-REVENUES> 141,540,000 135,752,000 115,676,000
<CGS> 120,215,000 113,501,000 92,818,000
<TOTAL-COSTS> 120,215,000 113,501,000 92,818,000
<OTHER-EXPENSES> 20,893,000 17,905,000 17,295,000
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 3,101,000 3,409,000 3,713,000
<INCOME-PRETAX> (2,273,000) 1,469,000 2,320,000
<INCOME-TAX> 240,000 106,000 140,000
<INCOME-CONTINUING> (3,117,000) 939,000 1,859,000
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> (3,117,000) 939,000 1,859,000
<EPS-PRIMARY> 0 0 0
<EPS-DILUTED> 0 0 0
</TABLE>
<PAGE> 1
LETTER OF TRANSMITTAL
APCOA, INC.
OFFER TO EXCHANGE
ALL OUTSTANDING
9 1/4% SENIOR SUBORDINATED NOTES DUE 2008
FOR
9 1/4% NEW SENIOR SUBORDINATED NOTES DUE 2008
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON , 1998,
UNLESS THE OFFER IS EXTENDED
STATE STREET BANK AND TRUST COMPANY
(the "Exchange Agent")
<TABLE>
<S> <C> <C>
By Mail By Facsimile Transmission: By Hand or Overnight Courier:
(registered or certified mail (617) 664-5395
recommended):
State Street Bank and
State Street Bank and Confirm by Telephone Trust Company
Trust Company or for Information Call: Corporate Trust Department
Corporate Trust Department (617) 664-5587 4th floor
P.O. Box 778 Attn: Kellie Mullen Two International Place
Boston, MA 02102-0078 Boston, MA 02110
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONES LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS
LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL
IS COMPLETED.
The undersigned hereby acknowledges receipt of the Prospectus dated
, 1998 (the "Prospectus") of APCOA, Inc. (the "Company") and this
Letter of Transmittal, which together constitute the Company's offer (the
"Exchange Offer") to exchange $1,000 principal amount of its 9 1/4% New Senior
Subordinated Notes due 2008 (the "New Notes"), which have been registered under
the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement of which the Prospectus is a part, for each $1,000
principal amount of its outstanding 9 1/4% Senior Subordinated Notes due 2008
(the "Notes"), respectively. The term "Expiration Date" shall mean 12:00
midnight, New York City time, on , 1998, unless the Company, in its
reasonable judgment, extends the Exchange Offer, in which case the term shall
mean the latest date and time to which the Exchange Offer is extended.
Capitalized terms used but not defined herein have the meaning given to them in
the Prospectus.
YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE
INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS
AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.
List on the next page the Notes to which this Letter of Transmittal
relates. If the space indicated is inadequate, the Certificate or Registration
Numbers and Principal Amounts should be listed on a separately signed schedule
affixed hereto.
<PAGE> 2
- --------------------------------------------------------------------------------
DESCRIPTION OF SENIOR SUBORDINATED NOTES TENDERED HEREBY
<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
AGGREGATE
PRINCIPAL
NAME(S) AND ADDRESS(ES) OF CERTIFICATE AMOUNT PRINCIPAL
REGISTERED OWNER(S) OR REGISTRATION REPRESENTED AMOUNT
(PLEASE FILL IN) NUMBERS* BY NOTES TENDERED**
- ---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
TOTAL
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by Book-entry Holders.
** Unless otherwise indicated, the Holder will be deemed to have tendered the
full aggregate principal amount represented by such Notes. All tenders must
be in integral multiples of $1,000.
- --------------------------------------------------------------------------------
This Letter of Transmittal is to be used (i) if certificates of Notes are
to be forwarded herewith, (ii) if delivery of Notes is to be made by book-entry
transfer to an account maintained by the Exchange Agent at The Depository Trust
Company, (the "Depository") pursuant to the procedures set forth in "The
Exchange Offer -- Procedures for Tendering Notes" in the Prospectus or (iii)
tender of the Notes is to be made according to the guaranteed delivery
procedures described in the Prospectus under the caption "The Exchange
Offer -- Guaranteed Delivery Procedures." See Instruction 2. Delivery of
documents to a book-entry transfer facility does not constitute delivery to the
Exchange Agent.
The term "Holder" with respect to the Exchange Offer means any person in
whose name Notes are registered on the books of the Company or any other person
who has obtained a properly completed bond power from the registered holder. The
undersigned has completed, executed and delivered this Letter of Transmittal to
indicate the action the undersigned desires to take with respect to the Exchange
Offer. Holders who wish to tender their Notes must complete this letter in its
entirety.
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE
TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE DEPOSITORY AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution
[ ] The Depository Trust Company
Account Number
Transaction Code Number
Holders whose Notes are not immediately available or who cannot deliver
their Notes and all other documents required hereby to the Exchange Agent on or
prior to the Expiration Date must tender their Notes according to the guaranteed
delivery procedure set forth in the Prospectus under the caption "The Exchange
Offer -- Guaranteed Delivery Procedures." See Instruction 2.
<PAGE> 3
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s)
Name of Eligible Institution that Guaranteed Delivery
If delivery by book-entry transfer:
Account Number
Transaction Code Number
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name
Address
<PAGE> 4
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the principal amount of the Notes
indicated above. Subject to, and effective upon, the acceptance for exchange of
such Notes tendered hereby, the undersigned hereby exchanges, assigns and
transfers to, or upon the order of, the Company all right, title and interest in
and to such Notes as are being tendered hereby, including all rights to accrued
and unpaid interest thereon as of the Expiration Date. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent the true and lawful
agent and attorney-in-fact of the undersigned (with full knowledge that said
Exchange Agent acts as the agent of the Company in connection with the Exchange
Offer) to cause the Notes to be assigned, transferred and exchanged. The
undersigned represents and warrants that it has full power and authority to
tender, exchange, assign and transfer the Notes and to acquire New Notes
issuable upon the exchange of such tendered Notes, and that when the same are
accepted for exchange, the Company will acquire good and unencumbered title to
the tendered Notes, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim.
The undersigned represents to the Company that (i) the New Notes acquired
pursuant to the Exchange Offer are being obtained in the ordinary course of
business of the person receiving such New Notes, whether or not such person is
the undersigned, and (ii) neither the undersigned nor any such other person has
an arrangement or understanding with any person to participate in the
distribution of such New Notes. If the undersigned or the person receiving the
New Notes covered hereby is a broker-dealer that is receiving the New Notes for
its own account in exchange for Notes that were acquired as a result of
market-making activities or other trading activities, the undersigned
acknowledges that it or such other person will deliver a prospectus in
connection with any resale of such New Notes; however, by so acknowledging and
by delivering a prospectus, the undersigned will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act. The undersigned
and any such other person acknowledge that, if they are participating in the
Exchange Offer for the purpose of distributing the New Notes, (i) they cannot
rely on the position of the staff of the Securities and Exchange Commission
enunciated in Exxon Capital Holdings Corporation (available April 13, 1989),
Morgan Stanley & Co., Inc. (available June 5, 1991) or similar no-action letters
and, in the absence of an exemption therefrom, must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
the resale transaction and (ii) failure to comply with such requirements in such
instance could result in the undersigned or any such other person incurring
liability under the Securities Act for which such persons are not indemnified by
the Company. If the undersigned or the person receiving the New Notes covered by
this letter is an affiliate (as defined under Rule 405 of the Securities Act) of
the Company, the undersigned represents to the Company that the undersigned
understands and acknowledges that such New Notes may not be offered for resale,
resold or otherwise transferred by the undersigned or such other person without
registration under the Securities Act or an exemption therefrom.
The undersigned also warrants that it will, upon request, execute and
deliver any additional documents deemed by the Exchange Agent or the Company to
be necessary or desirable to complete the exchange, assignment and transfer of
tendered Notes or transfer ownership of such Notes on the account books
maintained by a book-entry transfer facility. The undersigned further agrees
that acceptance of any tendered Notes by the Company and the issuance of New
Notes in exchange therefor shall constitute performance in full by the Company
of its obligations under the Registration Rights Agreement and that the Company
shall have no further obligations or liabilities thereunder for the registration
of the Notes or the New Notes.
The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "The Exchange Offer -- Conditions." The undersigned
recognizes that as a result of these conditions (which may be waived, in whole
or in part, by the Company), as more particularly set forth in the Prospectus,
the Company may not be required to exchange any of the Notes tendered hereby
and, in such event, the Notes not exchanged will be returned to the undersigned
at the address shown below the signature of the undersigned.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Tendered Notes may be withdrawn at any time
prior to the Expiration Date.
<PAGE> 5
Unless otherwise indicated in the box entitled "Special Registration
Instructions" or the box entitled "Special Delivery Instruction" in this Letter
of Transmittal, certificates for all New Notes delivered in exchange for
tendered Notes, and any Notes delivered herewith but not exchanged, will be
registered in the name of the undersigned and shall be delivered to the
undersigned at the address shown below the signature of the undersigned. If a
New Note is to be issued to a person other than the person(s) signing this
Letter of Transmittal, or if the New Note is to be mailed to someone other than
the person(s) signing this Letter of Transmittal or to the person(s) signing
this Letter of Transmittal at an address different than the address shown on
this Letter of Transmittal, the appropriate boxes of this Letter of Transmittal
should be completed. If Notes are surrendered by Holder(s) that have completed
either the box entitled "Special Registration Instructions" or the box entitled
"Special Delivery Instructions" in this Letter of Transmittal, signature(s) on
this Letter of Transmittal must be guaranteed by an Eligible Institution
(defined in Instruction 4).
<PAGE> 6
------------------------------------------------------------
SPECIAL REGISTRATION INSTRUCTIONS
To be completed ONLY if the New Notes are to be issued in the name of
someone other than the undersigned.
Name:
----------------------------------------------------
Address:
--------------------------------------------------
------------------------------------------------------------
Book-Entry Transfer Facility Account:
------------------------------------------------------------
Employer Identification or Social Security Number:
------------------------------------------------------------
(Please print or type)
============================================================
SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if the New Notes are to be sent to someone other
than the undersigned, or to the undersigned at an address other than that
shown under "Description of Notes Tendered Hereby."
Name:
----------------------------------------------------
Address:
--------------------------------------------------
------------------------------------------------------------
(Please print or type)
------------------------------------------------------------
REGISTERED HOLDER(S) OF NOTES SIGN HERE
(IN ADDITION, COMPLETE SUBSTITUTE FORM W-9 BELOW)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF REGISTERED HOLDER(S))
Must be signed by registered holder(s) exactly as name(s) appear(s) on the
Notes or on a security position listing as the owner of the Notes or by
person(s) authorized to become registered holder(s) by properly completed bond
powers transmitted herewith. If signature is by attorney-in-fact, trustee,
executor, administrator, guardian, officer of a corporation or other person
acting in a fiduciary capacity, please provide the following information.
(PLEASE PRINT OR TYPE).
Name and Capacity (full title):
- --------------------------------------------------------------------------------
Address (including zip code):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Area Code and Telephone Number:
- --------------------------------------------------------------------------------
Taxpayer Identification or Social Security No.:
- ---------------------------------------------------------------------
Dated:
- ---------------------------------
SIGNATURE GUARANTEE
(IF REQUIRED - SEE INSTRUCTION 4)
Authorized Signature:
----------------------------------------------------------------
(SIGNATURE OF REPRESENTATIVE OF SIGNATURE GUARANTOR)
Name and Title:
- --------------------------------------------------------------------------------
Name of Plan:
- --------------------------------------------------------------------------------
Area Code and Telephone Number:
-----------------------------------------------------
(PLEASE PRINT OR TYPE)
Dated:
- ---------------------------------
<PAGE> 7
PAYOR'S NAME: APCOA, INC.
THIS SUBSTITUTE FORM W-9 MUST BE COMPLETED AND SIGNED
Please provide your social security number or other taxpayer identification
number on the following Substitute Form W-9 and certify therein that you are
subject to backup withholding.
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE Part 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT Social security number
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW
----------------------------------
OR
----------------------------------
Employer identification number
------------------------------------------------------------------------------------------------
Part 2 -- Check the box if you are NOT subject to backup withholding under the provisions
Department of the Treasury of Section 3406(A)(1)(C) of the Internal Revenue Code because (1) you are exempt from
Internal Revenue Service backup withholding, (2) you have not been notified that you are subject to backup withholding
as a result of failure to report all interest or dividends or (3) the Internal Revenue Service
has notified you that you are no longer subject to backup withholding. [ ]
------------------------------------------------------------------------------------------------
PAYER'S REQUEST FOR TAXPAYER CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT THE Part 3 -
IDENTIFICATION NUMBER (TIN) INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.
SIGNATURE: DATE:
------------------------- -------------------- Awaiting TIN [ ]
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY CASH PAYMENTS IN EXCESS OF $10.00 MADE TO YOU.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAX IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office, or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number within 60 days, 31% of all reportable
payments made to me thereafter will be withheld, until I provide a number.
<TABLE>
<S> <C>
- -------------------------------------------------------- -----------------------------------------------------
Signature Date
</TABLE>
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND
CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES.
All physically delivered Notes or confirmation of any book-entry transfer
to the Exchange Agent's account at a book-entry transfer facility of Notes
tendered by book-entry transfer, as well as a properly completed and duly
executed copy of this Letter of Transmittal or facsimile thereof, and any other
documents required by this Letter of Transmittal, must be received by the
Exchange Agent at any of its addresses set forth herein on or prior to the
Expiration Date (as defined in the Prospectus). The method of delivery of this
Letter of Transmittal, the Notes and any other required documents is at the
election and risk of the Holder, and except as otherwise provided below, the
delivery will be deemed made only when actually received by the Exchange Agent.
If such delivery is by mail, it is suggested that registered mail with return
receipt requested, properly insured, be used.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering Holders, by execution of this Letter of Transmittal (or
facsimile thereof), shall waive any right to receive notice of the acceptance of
the Notes for exchange.
Delivery to an address other than as set forth herein, or instructions via
a facsimile number other than the ones set forth herein, will not constitute a
valid delivery.
2. GUARANTEED DELIVERY PROCEDURES.
Holders who wish to tender their Notes, but whose Notes are not immediately
available and thus cannot deliver their Notes, the Letter of Transmittal or any
other required documents to the Exchange Agent (or comply with the procedures
for book-entry transfer) prior to the Expiration Date, may effect a tender if:
(a) the tender is made through a member firm of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., a commercial bank or trust company having an office or correspondent
in the United States or an "eligible guarantor institution" within the
meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution");
(b) prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the Holder, the certificate number(s)
of such Notes and the principal amount of Notes tendered, stating that the
tender is being made thereby and guaranteeing that, within three New York
Stock Exchange trading days after the Expiration Date, the Letter of
Transmittal (or facsimile thereof), together with the Notes (or a
confirmation of book-entry transfer of such Notes into the Exchange Agent's
account at the Depository) and any other documents required by the Letter
of Transmittal, will be deposited by the Eligible Institution with the
Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as all tendered Notes in proper form for
transfer (or a confirmation of book-entry transfer of such Notes into the
Exchange Agent's account at the Depository) and all other documents
required by the Letter of Transmittal, are received by the Exchange Agent
within three New York Stock Exchange trading days after the Expiration
Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to Holders who wish to tender their Notes according to the guaranteed
delivery procedures set forth above. Any Holder who wishes to tender Notes
pursuant to the guaranteed delivery procedures described above must ensure that
the Exchange Agent receives the Notice of Guaranteed Delivery relating to such
Notes prior to the Expiration Date. Failure to complete the guaranteed delivery
procedures outlined above will not, of itself, affect the validity or effect a
revocation of any Letter of Transmittal form properly completed and executed by
a Holder who attempted to use the guaranteed delivery procedures.
3. PARTIAL TENDERS; WITHDRAWALS.
If less than the entire principal amount of Notes evidenced by a submitted
certificate is tendered, the tendering Holder should fill in the principal
amount tendered in the column entitled "Principal Amount Tendered" of the box
entitled "Description of Notes Tendered Hereby." A newly issued Note for the
principal amount of Notes submitted but not tendered will be sent to such Holder
as soon as practicable after the Expiration Date. All Notes delivered to the
Exchange Agent will be deemed to have been tendered in full unless otherwise
indicated.
<PAGE> 9
Notes tendered pursuant to the Exchange Offer may be withdrawn at any time
prior to the Expiration Date, after which tenders of Notes are irrevocable. To
be effective, a written, telegraphic or facsimile transmission notice of
withdrawal must be timely received by the Exchange Agent. Any such notice of
withdrawal must (i) specify the name of the person having deposited the Notes to
be withdrawn (the "Depositor"), (ii) identify the Notes to be withdrawn
(including the registration number(s) and principal amount of such Notes, or, in
the case of Notes transferred by book-entry transfer, the name and number of the
account at the Depository to be credited), (iii) be signed by the Holder in the
same manner as the original signature on this Letter of Transmittal (including
any required signature guarantees) or be accompanied by documents of transfer
sufficient to have the Trustee with respect to the Notes register the transfer
of such Notes into the name of the person withdrawing the tender and (iv)
specify the name in which any such notes are to be registered, if different from
that of the Depositor. All questions as to the validity, form and eligibility
(including time of receipt) of such notices will be determined by the Company,
whose determination shall be final and binding on all parties. Any Notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
Exchange Offer and no Exchange Notes will be issued with respect thereto unless
the Notes so withdrawn are validly retendered. Any Notes which have been
tendered but which are not accepted for exchange, will be returned to the Holder
thereof without cost to such Holder as soon as practicable after withdrawal,
rejection of tender or termination of Exchange Offer.
4. SIGNATURE ON THIS LETTER OF TRANSMITTAL; WRITTEN INSTRUMENTS AND
ENDORSEMENTS; GUARANTEE OF SIGNATURES.
If this Letter of Transmittal is signed by the registered Holder(s) of the
Notes tendered hereby, the signature must correspond with the name(s) as written
on the face of the certificates without alternation or enlargement or any change
whatsoever. If this Letter of Transmittal is signed by a participant in the
Depository, the signature must correspond with the name as it appears on the
security position listing as the owner of the Notes.
If any of the Notes tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If a number of Notes registered in different names are tendered, it will be
necessary to complete, sign and submit as many separate copies of this Letter of
Transmittal as there are different registrations of Notes.
Signatures on this Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution unless the Notes
tendered hereby are tendered (i) by a registered Holder who has not completed
the box entitled "Special Registration Instructions" or "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution.
If this Letter of Transmittal is signed by the registered Holder or Holders
of Notes (which term, for the purposes described herein, shall include a
participant in the Depository whose name appears on a security listing as the
owner of the Notes) listed and tendered hereby, no endorsements of the tendered
Notes or separate written instruments of transfer or exchange are required. In
any other case, the registered Holder (or acting Holder) must either properly
endorse the Notes or transmit properly completed bond powers with this Letter of
Transmittal (in either case, executed exactly as the name(s) of the registered
Holder(s) appear(s) on the Notes, and, with respect to a participant in the
Depository whose name appears on a security position listing as the owner of
Notes, exactly as the name of the participant appears on such security position
listing), with the signature on the Notes or bond power guaranteed by an
Eligible Institution (except where the Notes are tendered for the account of an
Eligible Institution).
If this Letter of Transmittal, any certificates or separate written
instruments of transfer or exchange are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons should so
indicate when signing, and, unless waived by the Company, proper evidence
satisfactory to the Company of their authority so to act must be submitted.
5. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS.
Tendering Holders should indicate, in the applicable box, the name and
address (or account at the Depository) in which the New Notes or substitute
Notes for principal amounts not tendered or not accepted for exchange are to be
issued (or deposited), if different from the names and addresses or accounts of
the person signing this Letter of Transmittal. In the case of issuance in a
different name, the employer identification number or social security number of
the person named must also be indicated and the tendering Holder should complete
the applicable box.
If no instructions are given, the New Notes (and any Notes not tendered or
not accepted) will be issued in the name of and sent to the acting Holder of the
Notes or deposited at such Holder's account at the Depository.
<PAGE> 10
6. TRANSFER TAXES.
The Company shall pay all transfer taxes, if any, applicable to the
transfer and exchange of Notes to it or its order pursuant to the Exchange
Offer. If a transfer tax is imposed for any other reason other than the transfer
and exchange of Notes to the Company or its order pursuant to the Exchange
Offer, the amount of any such transfer taxes (whether imposed on the registered
Holder or any other person) will be payable by the tendering Holder. If
satisfactory evidence of payment of such taxes or exception therefrom is not
submitted herewith, the amount of such transfer taxes will be collected from the
tendering Holder by the Exchange Agent.
Except as provided in this Instruction 6, it will not be necessary for
transfer stamps to be affixed to the Notes listed in this Letter of Transmittal.
7. WAIVER OF CONDITIONS.
The Company reserves the right, in its reasonable judgment, to waive, in
whole or in part, any of the conditions to the Exchange Offer set forth in the
Prospectus.
8. MUTILATED, LOST, STOLEN OR DESTROYED NOTES.
Any Holder whose Notes have been mutilated, lost, stolen or destroyed
should contact the Exchange Agent at the address indicated above for further
instructions.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering as well as requests for
additional copies of the Prospectus and this Letter of Transmittal, may be
directed to the Exchange Agent at the address and telephone number(s) set forth
above. In addition, all questions relating to the Exchange Offer, as well as
requests for assistance or additional copies of the Prospectus and this Letter
of Transmittal, may be directed to APCOA, Inc., 800 Superior Avenue, Cleveland,
Ohio 44114-2601, telephone (216) 522-0700; Attention: Robert N. Sacks.
10. VALIDITY AND FORM.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Notes and withdrawal of tendered Notes will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and all
Notes not properly tendered or any Notes the Company's acceptance of which
would, in the opinion of counsel for the Company, be unlawful. The Company also
reserves the right, in its reasonable judgment, to waive any defects,
irregularities or conditions of tender as to particular Notes. The Company's
interpretation of the terms and conditions of the Exchange Offer (including the
instructions in this Letter of Transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of Notes must be cured within such time as the Company shall determine. Although
the Company intends to notify Holders of defects or irregularities with respect
to tenders of Notes, neither the Company, the Exchange Agent nor any other
person shall incur any liability for failure to give such notification. Tenders
of Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any Notes received by the Exchange
Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering Holder as soon as practicable following the Expiration
Date.
<PAGE> 11
IMPORTANT TAX INFORMATION
Under federal income tax law, a Holder tendering Notes is required to
provide the Exchange Agent with such Holder's correct TIN on Substitute Form W-9
above. If such Holder is an individual, the TIN is the Holder's social security
number. The Certificate of Awaiting Taxpayer Identification Number should be
completed if the tendering Holder has not been issued a TIN and has applied for
a number or intends to apply for a number in the near future. If the Exchange
Agent is not provided with the correct TIN, the Holder may be subject to a $50
penalty imposed by the Internal Revenue Service. In addition, payments that are
made to such Holder with respect to tendered Notes may be subject to backup
withholding.
Certain Holders (including, among others, all domestic corporations and
certain foreign individuals and foreign entities) are not subject to these
backup withholding and reporting requirements. Such a Holder, who satisfies one
or more of the conditions set forth in Part 2 of the Substitute Form W-9 should
execute the certification following such Part 2. In order for a foreign Holder
to qualify as an exempt recipient, that Holder must submit to the Exchange Agent
a properly completed Internal Revenue Service Form W-9, signed under penalties
of perjury, attesting to that Holder's exempt status. Such forms can be obtained
from the Exchange Agent.
If backup withholding applies, the Exchange Agent is required to withhold
31% of any amounts otherwise payable to the Holder. Backup withholding is not an
additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a Holder with
respect to Notes tendered for exchange, the Holder is required to notify the
Exchange Agent of his or her correct TIN by completing the form herein
certifying that the TIN provided on Substitute Form W-9 is correct (or that such
Holder is awaiting a TIN) and that (i) each Holder is exempt, (ii) such Holder
has not been notified by the Internal Revenue Service that he or she is subject
to backup withholding as a result of failure to report all interest or dividends
or (iii) the Internal Revenue Service has notified such Holder that he or she is
no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
Each Holder is required to give the Exchange Agent the social security
number or employer identification number of the record Holder(s) of the Notes.
If Notes are in more than one name or are not in the name of the actual Holder,
consult the instructions on Internal Revenue Service Form W-9, which may be
obtained from the Exchange Agent, for additional guidance on which number to
report.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
If the tendering Holder has not been issued a TIN and has applied for a
number or intends to apply for a number in the near future, write "Applied For"
in the space for the TIN or Substitute Form W-9, sign and date the form and the
Certificate of Awaiting Taxpayer Identification Number and return them to the
Exchange Agent. If such certificate is completed and the Exchange Agent is not
provided with the TIN within 60 days, the Exchange Agent will withhold 31% of
all payments made thereafter until a TIN is provided to the Exchange Agent.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF (TOGETHER WITH
NOTES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS)
OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR
PRIOR TO THE EXPIRATION DATE.
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: e.g.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: e.g., 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- ------------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- ------------------------------------------------------------
<S> <C> <C>
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, any
one of the
individuals(1)
3. Husband and wife (joint account) The actual owner of
the account or, if
joint funds, either
person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the minor(1)
6. Account in the name of guardian or The ward, minor, or
committee for a designated ward, incompetent
minor, or incompetent person person(3)
7. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under State law
8. Sole proprietorship account The owner(4)
<CAPTION>
- ------------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- ------------------------------------------------------------
<S> <C> <C>
9. A valid trust, estate, or pension Legal entity (Do
trust not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club, or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State or
local government, school district,
or prison) that receives
agricultural program payments
- ------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner. You may also enter your business or "doing
business as" name. Furnish the owner's social security number or the
employer identification number of the sole proprietorship.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at an office of the Social Security
Administration or the Internal Revenue Service.
To complete Substitute Form W-9, if you do not have a taxpayer identification
number, write "Applied For" in the space for the taxpayer identification number
in Part I, sign and date the Form, and give it to the requester. Generally, you
will then have 60 days to obtain a taxpayer identification number and furnish it
to the requester. If the requester does not receive your taxpayer identification
number within 60 days, backup withholding, if applicable, will begin and will
continue until you furnish your taxpayer identification number to the requester.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under section 403(b)(7).
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government or a political subdivision, agency or instrumentality
thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the United
States or a possession of the United States.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An entity registered at all times during the tax year under the Investment
Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. NOTE: You may be
subject to backup withholding if (i) this interest is $600 or more, (ii) the
interest is paid in the course of the payer's trade or business and (iii)
you have not provided your correct taxpayer identification number to the
payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE A SUBSTITUTE FORM W-9 TO AVOID
POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER. FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividends,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. Payers must be
given the numbers whether or not recipients are required to file tax returns.
Payers must generally withhold 31% of taxable interest, dividends, and certain
other payments to a payee who does not furnish a taxpayer identification number
to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE STATEMENTS WITH RESPECT TO WITHHOLDING.--If you make
a false statement with no reasonable basis which results in no imposition of
backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--If you falsify certifications
or affirmations, you are subject to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR
TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE
Unless otherwise noted herein, all references to section numbers or to
regulations are references to the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder.
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
9 1/4% SENIOR SUBORDINATED NOTES DUE 2008
(INCLUDING THOSE IN BOOK-ENTRY FORM)
OF
APCOA, INC.
This form or one substantially equivalent hereto must be used to accept the
Exchange Offer of APCOA, Inc. (the "Company") made pursuant to the Prospectus,
dated , 1998 (the "Prospectus"), if certificates for the outstanding
9 1/4% Senior Subordinated Notes Due 2008 of the Company (the "Notes") are not
immediately available or if the procedure for book-entry transfer cannot be
completed on a timely basis or time will not permit all required documents to
reach the Exchange Agent prior to 12:00 midnight, New York time, on the
Expiration Date of the Exchange Offer. Such form may be delivered or transmitted
by telegram, telex, facsimile transmission, mail or hand delivery to State
Street Bank and Trust Company (the "Exchange Agent") as set forth below. In
addition, in order to utilize the guaranteed delivery procedure to tender Notes
pursuant to the Exchange Offer, a completed, signed and dated Letter of
Transmittal (or facsimile thereof) must also be received by the Exchange Agent
prior to 12:00 midnight, New York City time, on the Expiration Date. Capitalized
terms not defined herein are defined in the Prospectus.
STATE STREET BANK AND TRUST COMPANY, EXCHANGE AGENT
<TABLE>
<S> <C> <C>
By Mail By Facsimile Transmission: By Hand or Overnight Courier:
(registered or certified mail (617) 664-5395
recommended):
State Street Bank and
State Street Bank and Confirm by Telephone Trust Company
Trust Company or for Information Call: Corporate Trust Department
Corporate Trust Department (617) 664-5587 4th floor
P.O. Box 778 Attn: Kellie Mullen Two International Place
Boston, MA 02102-0078 Boston, MA 02110
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY.
<PAGE> 2
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Company the principal amount of Notes set forth below, pursuant to the
guaranteed delivery procedure described in "The Exchange Offer -- Guaranteed
Delivery Procedures" section of the Prospectus.
Principal Amount of Notes Tendered:*
$
-------------------------------------------------------------------------------
Certificate Nos. (if available):
- --------------------------------------------------------------------------------
Total Principal Amount Represented by Certificate(s):
$
-------------------------------------------------------------------------------
*Must be in denominations of principal amount of $1,000 and any integral
multiple thereof.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.
PLEASE SIGN HERE
<TABLE>
<S> <C>
X
- ------------------------------------------------------------ ------------------------------------
- ------------------------------------------------------------ ------------------------------------
Signature(s) of Owner(s) Date
or Authorized Signatory
</TABLE>
Area Code and Telephone Number:
-----------------------------------------------------------------------------
Must be signed by the holder(s) of Notes as their name(s) appear(s) on
certificates for Notes or on a security position listing, or by person(s)
authorized to become registered holder(s) by endorsement and documents
transmitted with this Notice of Guaranteed Delivery. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer or other
person acting in a fiduciary or representative capacity, such person must set
forth his or her full title below. If Notes will be delivered by book-entry
transfer to The Depository Trust Company, provide account number.
<TABLE>
<CAPTION>
Please print name(s) and address(es)
<S> <C>
Name(s):
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
Capacity:
------------------------------------------------------------
------------------------------------------------------------
Address(es):
------------------------------------------------------------
------------------------------------------------------------
Account Number:
------------------------------------------------------------
</TABLE>
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a financial institution (including most banks, savings and
loan associations and brokerage houses) that is a participant in the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Program or the Stock Exchanges Medallion Program, hereby guarantees
that the undersigned will deliver to the Exchange Agent the certificates
representing the Notes being tendered hereby or confirmation of book-entry
transfer of such Notes into the Exchange Agent's account at The Depository Trust
Company, in proper form for transfer, together with any other documents required
by the Letter of Transmittal within three New York Stock Exchange trading days
after the Expiration Date.
<TABLE>
<S> <C>
Name of Firm:
AUTHORIZED SIGNATURE
Address: Name:
(Please Type or Print)
Title:
Zip Code
Area Code and Date:
Telephone Number:
</TABLE>
NOTE: DO NOT SEND CERTIFICATES OF NOTES WITH THIS FORM. CERTIFICATES OF NOTES
SHOULD BE SENT ONLY WITH A COPY OF THE PREVIOUSLY EXECUTED LETTER OF
TRANSMITTAL.
