<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 9, 1998.
REGISTRATION NO. 333-50437
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
APCOA, INC.*
(TO BE RENAMED APCOA/STANDARD PARKING, 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. [ ]
------------------------
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 Corporation(2)................. Illinois 7521 36-2932936
Standard Parking Corporation IL(2).............. Illinois 7521 36-3880811
Standard Auto Park, Inc.(2)..................... Illinois 7521 36-2439841
S&S Parking, Inc.(1)............................ California 7521 95-3400582
Century Parking, Inc.(2)........................ California 7521 95-2548427
Sentry Parking Corporation(2)................... California 7521 95-2950548
</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.
EXPLANATORY NOTE
This Amendment No. 1 to the Registration Statement reflects, among other
things, (i) the change of the Company's name to APCOA/Standard Parking, Inc. and
(ii) the mergers of certain of the Company's wholly owned subsidiaries as
follows: Standard Parking, L.P., a Delaware limited partnership, Standard
Parking Corporation MW, 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 will each merge with and into Standard Parking Corporation, an Illinois
corporation and a wholly owned subsidiary of the Company. Following the merger,
the separate corporate or other existence of each such subsidiary will cease and
as such these entities will no longer be additional registrants or guarantors of
any obligations of the Company. The Company expects to complete such
transactions prior to the effectiveness of the Registration Statement.
<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 JUNE 9, 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/STANDARD PARKING, INC.
(FORMERLY KNOWN AS APCOA, INC.)
THE EXCHANGE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON , 1998, UNLESS EXTENDED
APCOA/Standard Parking, Inc., a Delaware corporation (the "Company")
formerly known as APCOA, Inc., 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 wholly owned 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 Corporation, an Illinois corporation, Standard Parking Corporation IL,
an Illinois corporation, Standard Auto Park, Inc., an Illinois corporation, S&S
Parking, Inc., a California corporation, Century Parking, Inc., a California
corporation, and Sentry Parking Corporation, a California corporation (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, as amended as of June
, 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 17, FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY HOLDERS WHO TENDER NOTES IN THE EXCHANGE OFFER OR
IN CONNECTION WITH AN INVESTMENT IN THE NEW NOTES.
------------------------
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 March 31, 1998,
on a pro forma basis, after giving effect to the Combination and the related
financings and other transactions described herein, there would have been $0.5
million of Senior Debt outstanding. Upon the closing of the Offering (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. 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 (i) a broker-dealer that acquired Notes directly from the Company or
(ii) 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 that
such holder does not intend to participate in the distribution of such New
Notes.
2
<PAGE> 5
Notwithstanding the foregoing, 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. Notwithstanding the foregoing, broker-dealers
that acquired Notes directly from the Company may not resell New Notes received
in exchange for such Notes without complying with the registration and
prospectus delivery requirements of the Securities Act.
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 Markets, 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 "Depositary"
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 Depositary 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/STANDARD PARKING, 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 106. Unless
the context indicates or otherwise requires, (i) references in this Prospectus
to "APCOA" are to APCOA/Standard Parking, 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 March 31, 1998,
the Company operated approximately 73% of its approximately 1,100 parking
facilities under
5
<PAGE> 8
management contracts and approximately 27% under leases. Renewal rates for the
Company's management contracts and leases were approximately 96% for each of the
last three years.
RECENT DEVELOPMENTS
THE COMBINATION
Pursuant to the terms of the Combination Agreement, on March 30, 1998,
APCOA acquired all of the outstanding capital stock, partnership and other
equity interests of Standard for consideration consisting of $65 million in
cash, 16% of the common stock of the Company and the assumption of certain
liabilities, subject to certain adjustments. See "The Transactions -- The
Combination."
THE FINANCING
In connection with, and concurrently with the consummation of, the
Combination, on March 30, 1998, (a) the Company consummated the Offering and
entered into the New Credit Facility and (b) AP Holdings, Inc. ("AP Holdings"),
a Delaware corporation and the parent of the Company, contributed $40.7 million
of cash to the Company (the "Preferred Stock Contribution") in exchange for
$40.7 million initial liquidation preference 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 the Company. The net proceeds from the Offering, 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. See "Use of Proceeds" and "The Transactions -- The
Financing."
OTHER ACQUISITIONS
On May 1, 1998, the Company acquired the remaining 76% interest in
Executive Parking Industries LLC, a Delaware limited liability company ("EPI")
through the acquisition of all of the outstanding capital stock of S&S Parking,
Inc., a California corporation ("S&S Parking"), the sole asset of which was such
76% interest in EPI, for $7.0 million in cash. In addition, on June 1, 1998, the
Company acquired all of the outstanding capital stock of Century Parking, Inc.,
a California corporation ("Century Parking"), and Sentry Parking Corporation, a
California corporation ("Sentry Parking"), for consideration consisting of $5.2
million in cash at closing and $1.0 million payable on the third anniversary of
the closing date. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations of APCOA -- Summary of Operating
Facilities."
6
<PAGE> 9
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 (the "Combination"). 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 six small
acquisitions (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."
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
7
<PAGE> 10
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%. The
Company's cash flow from operating activities increased from $3.2 million
to $6.0 million from 1993 to 1997. 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. After giving pro forma effect to the Transactions and the
Other Acquisitions, the Company's earnings would have been inadequate to
cover fixed charges by $2.4 million for the year ended December 31, 1997.
- 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.
- 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.
8
<PAGE> 11
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."
------------------------
The Company'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.
9
<PAGE> 12
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
10
<PAGE> 13
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-
11
<PAGE> 14
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."
12
<PAGE> 15
Note Guarantees............ The New Notes will be fully and unconditionally
guaranteed on a joint and several basis by each of
the following 12 wholly owned subsidiaries of the
Company: Tower Parking, Inc., Graelic, Inc., APCOA
Capital Corporation, A-1 Auto Park, Inc.,
Metropolitan Parking System, Inc., Events Parking
Company, Inc., Standard Parking Corporation,
Standard Parking Corporation IL, Standard Auto
Park, Inc., S&S Parking, Inc., Century Parking,
Inc. and Sentry Parking Corporation (the
"Subsidiary Guarantors"). Effective as of July 1,
1998, the Company completed a reorganization of
certain of its wholly owned subsidiaries pursuant
to which certain of such subsidiaries were merged
with and into another such subsidiary. As a result,
such subsidiaries are no longer guarantors of any
obligations of the Company. See "Description of New
Notes -- General."
The Company has 32 additional subsidiaries which
will not be guarantors of the New Notes (the
"Non-Guarantor Subsidiaries"). The aggregate pro
forma total assets, net income (loss) and total
stockholders' equity of the Non-Guarantor
Subsidiaries for the year ended December 31, 1997
were $13.3 million, ($0.2) million and $0.4
million, respectively, and for the three months
ended March 31, 1998 were $14.1 million, $0.2
million and $1.0 million, respectively. Condensed
consolidating financial information for the
Company, the Subsidiary Guarantors and the Non-
Guarantor Subsidiaries is set forth in Note M to
the Consolidated Financial Statements of APCOA,
Inc. presented herein.
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 March 31, 1998, on a pro forma basis, after
giving effect to the Combination and the related
financings and other transactions described herein,
there would have been $0.5 million of 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."
13
<PAGE> 16
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 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
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 OR IN CONNECTION WITH AN INVESTMENT IN THE
NEW NOTES, SEE "RISK FACTORS."
14
<PAGE> 17
SUMMARY HISTORICAL AND UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS)
The following table sets forth summary historical financial data of APCOA
at and for the year ended December 31, 1997 and at and for the three months
ended March 31, 1998 and summary unaudited pro forma consolidated income
statement data of the Company for the year ended December 31, 1997 and the three
months ended March 31, 1998. The historical financial data at and for the year
ended December 31, 1997, have been derived from the audited financial statements
of APCOA, and the historical financial data at and for the three months ended
March 31, 1998, have been derived from the unaudited financial statements of
APCOA. The pro forma consolidated balance sheet data at March 31, 1998 give
effect to the acquisition of EPI as if it had occurred on March 31, 1998. The
pro forma consolidated income statement data and other data for the year ended
December 31, 1997 and the three months ended March 31, 1998 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 audited financial
statements of APCOA, the unaudited 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 THREE MONTHS ENDED
DECEMBER 31, 1997 MARCH 31, 1998
---------------------- ----------------------
HISTORICAL PRO FORMA HISTORICAL PRO FORMA
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Parking services revenue........................ $115,676 $186,078 $ 28,804 $ 44,769
Cost of parking services........................ 92,818 146,165 23,576 35,571
General and administrative expenses............. 13,528 20,045 3,460 5,131
Restructuring charge............................ -- -- 14,500 14,500
Depreciation and amortization................... 3,767 7,496 1,055 1,860
-------- -------- -------- --------
Operating income (loss)......................... 5,563 12,372 (13,787) (12,293)
Interest expense, net........................... 3,243 14,735 888 3,668
Minority interest............................... 321 321 143 143
Income tax expense.............................. 140 140 30 30
-------- -------- -------- --------
Income (loss) before extraordinary item......... $ 1,859 $ (2,824) $(14,848) $(16,134)
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------------------- AT
AT DECEMBER 31, AT MARCH 31, MARCH 31,
1997 1998 1998
--------------- ------------ ---------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents........................... $ 3,322 $ 60,480 $ 54,078
Working capital (deficiency)........................ (17,059) 27,691 20,332
Total assets........................................ 59,095 213,510 215,136
Total debt.......................................... 38,283 150,123 150,221
Redeemable preferred stock.......................... 8,728 40,683 40,683
Common stock subject to put/call rights(1).......... -- 4,589 4,589
Stockholders' equity (deficit)...................... (22,259) (45,706) (45,706)
</TABLE>
15
<PAGE> 18
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, 1997 MARCH 31, 1998
---------------------- ----------------------
HISTORICAL PRO FORMA HISTORICAL PRO FORMA
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
OTHER DATA:
Gross customer collections...................... $476,183 $948,612 $128,591 $250,256
EBITDA(2)....................................... 9,330 19,868 1,768 4,067
Capital expenditures............................ 2,357 2,849 1,600 1,600
Net cash provided by (used in):
Operating activities......................... 931 N/A (5,017) N/A
Investing activities......................... (3,592) N/A (72,869) N/A
Financing activities......................... 3,451 N/A 135,044 N/A
Ratio of earnings to fixed charges(3)........ 1.5x N/A N/A N/A
</TABLE>
- ------------------------------
(1) 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 Company will not be obligated to repurchase such common stock prior to
the third anniversary of the consummation of the Combination.
(2) EBITDA represents operating income plus depreciation and amortization and
restructuring charge.
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, 1997 MARCH 31, 1998
---------------------- ----------------------
HISTORICAL PRO FORMA HISTORICAL PRO FORMA
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
EBITDA is computed as follows:
Operating income (loss).................................. $ 5,563 $ 12,372 $(13,787) $(12,293)
Depreciation and amortization............................ 3,767 7,496 1,055 1,860
Restructuring charge..................................... -- -- 14,500 14,500
-------- -------- -------- --------
EBITDA................................................... $ 9,330 $ 19,868 $ 1,768 $ 4,067
======== ======== ======== ========
</TABLE>
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, as prepared
by the Company, however, may not necessarily be comparable to similarly
titled measures prepared by other companies within the industry. The Company
understands that EBITDA is not intended to represent (a) cash flow for the
period, (b) a source of liquidity or (c) funds to be used for discretionary
purposes, 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.
(3) 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 $2.4 million. For the three months ended March 31,
1998, on a historical and pro forma basis, earnings were inadequate to cover
fixed charges by $14.7 million and $16.0 million, respectively.
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RISK FACTORS
Holders of Notes and prospective purchasers of New 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
or making an investment in the New Notes. 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 acquisition of EPI, the Company would have
had total indebtedness of $150.2 million and a stockholders' deficit of $45.7
million as of March 31, 1998, and earnings would have been inadequate to cover
fixed charges by $2.4 million for the year ended December 31, 1997 and $16.0
million for the three months ended March 31, 1998. The pro forma ratio of total
indebtedness to total capitalization would have been 1.0x as of March 31, 1998.
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) approximately
$13.0 million of the Company's annual cash flow from operations will be required
to service interest on the New Notes 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.
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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 March 31, 1998, on
a pro forma basis after giving effect to the Transactions, the Company would
have had $0.5 million of Senior Debt outstanding. 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
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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 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
The Company will have to integrate Standard's and APCOA's businesses, as
well as the Other Acquisitions. While this process has already begun and 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
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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.
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") owns 82.5% of the issued and outstanding Common Stock of AP
Holdings, which, in turn, owns 84.0% of the issued and outstanding common 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
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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 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, and by the Notes for which New Notes are exchanged was,
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 Exchange Offer, and the Transactions, the Company will be,
and was, solvent, will, and did, have sufficient capital for carrying on its
business and will be, and was, 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 (either under the New Notes or the Notes for
which New Notes are exchanged), 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, and by the Notes for
which New Notes are exchanged has been, 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, and the Subsidiary Guarantors' obligations
under the Notes was, 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 Exchange Offer, and the
Transactions, each of the Subsidiary Guarantors will be, and was, solvent, will,
and did, have sufficient capital for carrying on its business, and will be, and
was, 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(either under the
New Notes or the Notes for which New Notes are exchanged), 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.
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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 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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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 Private
Offerings, Resales and Trading through Automated Linkages ("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.
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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 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.
24
<PAGE> 27
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 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 Depositary for the purpose of facilitating the Exchange Offer,
and subject to the establishment thereof, any financial institution that is a
participant in the Depositary's system may make book-entry delivery of the Notes
by causing the Depositary to transfer such
25
<PAGE> 28
Notes into the Exchange Agent's account with respect to the Notes in accordance
with the Depositary'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 Depositary, 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 Depositary 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 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 Depositary) 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 Depositary) 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.
26
<PAGE> 29
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 Depositary 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 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").
27
<PAGE> 30
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 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 (i)
a broker-dealer that acquired Notes directly from the Company or (ii) 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
28
<PAGE> 31
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. Notwithstanding the
foregoing, 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. Notwithstanding the foregoing,
broker-dealers that acquired Notes directly from the Company may not resell New
Notes received in exchange for such Notes without complying with the
registration and prospectus delivery requirements of the Securities Act.
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, (i) broker-dealers that acquired Notes directly from
the Company or (ii) 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.
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."
29
<PAGE> 32
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."
30
<PAGE> 33
THE TRANSACTIONS
In connection with, and concurrently with the consummation of, the
Combination, on March 30, 1998, 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,
on March 30, 1998, 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
entities, collectively, "Standard") for consideration consisting of $65.0
million in cash, 5.0095230 shares or 16%, of the common stock of the Company
("Company Common Stock") outstanding as of January 15, 1998, valued at $4.6
million, and the assumption of certain liabilities. In addition, on March 30,
1998, 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 the
Company, contributed $40.7 million of cash to the Company (the "Preferred Stock
Contribution") in exchange for $40.7 million initial liquidation preference 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 the Company.
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."
31
<PAGE> 34
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."
The following table sets forth the approximate sources and uses of funds in
connection with the Transactions:
<TABLE>
<S> <C>
SOURCES OF FUNDS:
9 1/4% Senior Subordinated Notes due 2008................. $140.0
Preferred Stock Contribution.............................. 40.7
------
Total sources of funds................................. $180.7
======
USES OF FUNDS:
Cash consideration to the Standard Owners................. $ 65.0
Refinance APCOA debt...................................... 40.7
Refinance Standard debt................................... 0.3
General corporate purposes................................ 45.6
Consideration to EPI owners............................... 7.0
Redeem preferred stock.................................... 8.0
Fees and expenses......................................... 14.1
------
Total uses of funds.................................... $180.7
======
</TABLE>
32
<PAGE> 35
CAPITALIZATION
(DOLLARS IN THOUSANDS)
The following table sets forth the actual cash and cash equivalents and
capitalization of the Company as of March 31, 1998, which reflects the
Transactions, and on a pro forma basis, adjusted to reflect the acquisition of
EPI. 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 MARCH 31, 1998
---------------------
ACTUAL PRO FORMA
-------- ---------
<S> <C> <C>
Cash and cash equivalents................................... $ 60,480 $ 54,078
======== ========
Long-term debt (including current portion):
New Credit Facility(1).................................... $ 497 $ 497
9 1/4% Senior Subordinated Notes due 2008................. 140,000 140,000
Other debt................................................ 9,626 9,724
-------- --------
Total long-term debt................................... 150,123 150,221
Redeemable preferred stock.................................. 40,683 40,683
Common stock subject to put/call rights(2).................. 4,589 4,589
Stockholders' equity (deficit):
Common stock and additional paid-in capital............... 11,423 11,423
Retained earnings (deficit)............................... (57,129) (57,129)
-------- --------
Total stockholders' equity (deficit)................... (45,706) (45,706)
-------- --------
Total capitalization.............................. $149,689 $149,787
======== ========
</TABLE>
- ------------------------------
(1) $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, which occurred on March 30,
1998, subject to the achievement of certain financial ratios and compliance
with certain conditions. See "Description of Indebtedness--New Credit
Facility."
(2) 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. The Company will not be obligated to repurchase such
common stock prior to the third anniversary of the consummation of the
Combination.
33
<PAGE> 36
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, and at and for the three months ended March 31, 1997 and
1998, which have been derived from the unaudited financial statements of APCOA.
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. In the opinion of
management, the interim financial statements at and for the three months ended
March 31, 1997 and 1998 reflect all adjustments (consisting only of normal
recurring adjustments) necessary to fairly present the information presented for
such periods. The results of operations for the three months ended March 31,
1998 are not necessarily indicative of the results of operations to be expected
for the full year.
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------------------------------- -------------------
1993 1994 1995 1996 1997 1997 1998
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Parking services
revenue.............. $150,280 $148,398 $141,540 $135,752 $115,676 $ 27,019 $ 28,804
Cost of parking
services............. 132,598 129,175 120,215 113,501 92,818 22,547 23,576
General and
administrative
expenses............. 10,712 10,879 12,121 13,017 13,528 2,940 3,460
Restructuring charge.... -- -- -- -- -- -- 14,500
Depreciation and
amortization......... 8,486 8,749 8,772 4,888 3,767 1,110 1,055
-------- -------- -------- -------- -------- -------- --------
Operating income
(loss)............... (1,516) (405) 432 4,346 5,563 422 (13,787)
Interest expense, net... 2,021 2,350 2,705 2,877 3,243 767 888
Other expense........... 500 125 -- -- -- -- --
Minority interest....... 496 850 604 424 321 38 143
Income tax expense...... 126 169 240 106 140 60 30
Extraordinary loss...... -- -- -- -- -- -- 2,816
-------- -------- -------- -------- -------- -------- --------
Net income (loss)....... $ (4,659) $ (3,899) $ (3,117) $ 939 $ 1,859 $ (443) $(17,664)
======== ======== ======== ======== ======== ======== ========
OTHER DATA:
Gross customer
collections.......... $352,466 $389,556 $408,952 $430,696 $476,183 $108,474 $128,591
Capital expenditures.... 1,577 2,002 2,782 2,552 2,357 257 1,600
Net cash provided by
(used in):
Operating
activities......... 3,062 3,403 4,340 2,042 931 (4,216) (5,017)
Investing
activities......... (3,013) (4,647) (4,917) (3,349) (3,592) (658) (72,869)
Financing
activities......... (98) 1,068 1,107 1,288 3,451 6,304 135,044
Ratio of earnings to
fixed charges(1)..... N/A N/A N/A 1.3x 1.5x N/A N/A
Number of managed
locations............ 173 197 227 207 318 217 813
Number of leased
locations............ 232 223 260 243 252 240 303
Number of total
locations............ 405 420 487 450 570 457 1,116
Number of parking
spaces............... 268,000 235,000 226,000 225,000 273,000 243,000 595,000
</TABLE>
34
<PAGE> 37
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------------------------------- -------------------
1993 1994 1995 1996 1997 1997 1998
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (AT END
OF PERIOD):
Cash and cash
equivalents.......... $ 2,197 $ 2,021 $ 2,551 $ 2,532 $ 3,322 $ 3,962 $ 60,480
Working capital
(deficiency)......... (24,065) (20,795) (20,990) (19,455) (17,059) (13,626) 27,691
Total assets............ 52,788 51,544 51,605 52,823 59,095 56,101 213,510
Total debt.............. 24,829 27,700 30,461 32,795 38,283 39,099 150,123
Redeemable preferred
stock................ 6,000 6,330 7,045 7,841 8,728 7,842 40,683
Common stock subject to
put/call rights...... -- -- -- -- -- -- 4,589
Stockholders' equity
(deficit)............ (14,137) (19,542) (23,374) (23,231) (22,259) (23,490) (45,706)
</TABLE>
(1) For purposes of computing this ratio, earnings consist of income before
income taxes, minority interest and extraordinary item 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,
and the three months ended March 31, 1997 and 1998, earnings were inadequate
to cover fixed charges by $4,037, $2,880, $2,273, $345 and $14,675,
respectively.
35
<PAGE> 38
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
March 31, 1998, the Company (giving effect to the Combination and the Other
Acquisitions) operated approximately 73% of its approximately 1,100 parking
facilities under management contracts and approximately 27% 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, the Company
completed six 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 Parking Management & Development, Ltd. (November
1, 1997); (iv) Dixie Parking (January 22, 1998); (v) S&S Parking (the remaining
76% interest in EPI) (May 1, 1998); and (vi) Century Parking and
36
<PAGE> 39
Sentry Parking (June 1, 1998) (the "Other Acquisitions"). The Other
Acquisitions, excluding Century Parking and Sentry Parking, contributed 233
additional parking locations as of March 31, 1998.
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>
THREE MONTHS
FISCAL YEAR ENDED MARCH 31,
--------------------- ----------------
1995 1996 1997 1997 1998
<S> <C> <C> <C> <C> <C>
Managed facilities:
APCOA..................................... 227 207 263 217 262
Standard.................................. 233 295 344 303 364
Other Acquisitions........................ N/A N/A 187 31 187
--- --- ----- --- -----
Combined............................... 460 502 794 551 813
Leased facilities:
APCOA..................................... 260 243 227 240 224
Standard.................................. 32 32 35 30 33
Other Acquisitions........................ N/A N/A 46 22 46
--- --- ----- --- -----
Combined............................... 292 275 308 292 303
--- --- ----- --- -----
Total facilities............................ 752 777 1,102 843 1,116
=== === ===== === =====
Contract retention rate..................... 96% 96% 96% N/A N/A
</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.
In analyzing gross margins of APCOA, it should be noted that the cost of
parking services in connection with the provision of management services is
generally paid by the clients. Margins for lease arrangements 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>
THREE MONTHS
FISCAL YEAR ENDED MARCH 31,
-------------------------------- --------------------
1995 1996 1997 1997 1998
<S> <C> <C> <C> <C> <C>
Gross customer
collections............... $408,952 $430,696 $476,183 $108,474 $128,591
======== ======== ======== ======== ========
Parking services revenue:
Lease contracts........... $128,745 $120,286 $ 99,594 $ 23,371 $ 24,663
Management contracts...... 12,795 15,466 16,082 3,648 4,141
-------- -------- -------- -------- --------
141,540 135,752 115,676 27,019 28,804
Cost of parking services:
Lease contracts........... 113,337 104,718 83,327 20,158 21,315
Management contracts...... 6,878 8,783 9,491 2,389 2,261
-------- -------- -------- -------- --------
120,215 113,501 92,818 22,547 23,576
</TABLE>
37
<PAGE> 40
<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEAR ENDED MARCH 31,
-------------------------------- --------------------
1995 1996 1997 1997 1998
<S> <C> <C> <C> <C> <C>
General and administrative
expenses.................. $ 12,121 $ 13,017 $ 13,528 $ 2,940 $ 3,460
Restructuring charge........ -- -- -- -- 14,500
Depreciation and
amortization.............. 8,772 4,888 3,767 1,110 1,055
-------- -------- -------- -------- --------
Operating income (loss)..... 432 4,346 5,563 422 (13,787)
Interest expense, net....... 2,705 2,877 3,243 767 888
Minority interest........... 604 424 321 38 143
Income tax expense.......... 240 106 140 60 30
Extraordinary loss.......... -- -- -- -- 2,816
-------- -------- -------- -------- --------
Net income (loss)........... $ (3,117) $ 939 $ 1,859 $ (443) $(17,664)
======== ======== ======== ======== ========
</TABLE>
FIRST QUARTER 1998 COMPARED TO FIRST QUARTER 1997
Gross customer collections. Gross customer collections increased $20.1
million, or 18.5%, to $128.6 million in the first quarter of 1998 compared to
$108.5 in the first quarter of 1997. This increase is attributable to the net
addition of 14 management contracts plus the acquisition of 55 managed locations
and 25 leased locations during the period.
Parking services revenue -- leases. Lease revenue increased $1.3 million,
or 5.5%, to $24.7 million during the first quarter of 1998 as compared to $23.4
million in the first quarter of 1997. This increase was driven by core business
growth of $2.2 million and revenue from acquisitions of $0.4 million, offset
somewhat by the impact of the loss of a large airport lease in January 1997 that
had revenue of $1.3 million in the first quarter of 1997.
Parking services revenue -- management contracts. Management contract
revenue increased $0.5 million, or 13.5%, to $4.1 million in the first quarter
of 1998 as compared to $3.6 million in the first quarter of 1997. This increase
resulted from improvement in management fees at existing locations of $0.3
million, and the impact of management contracts added through acquisitions of
$0.2 million.
Cost of parking services -- leases. Cost of parking for leases increased
$1.1 million, or 5.7%, to $21.3 million in the first quarter of 1998 from $20.2
million in the first quarter of 1997. This increase resulted from increases in
costs at existing locations of $2.3 million and costs associated with acquired
leases of $0.3 million offset by expenses at an airport that was lost in 1997 of
$1.4 million. Gross margin for leases remained relatively flat for the first
quarter of 1998 at 13.6% of lease revenue compared to 13.7% for the first
quarter of 1997.
Cost of parking services -- management contracts. Cost of parking for
management contracts decreased by $0.1 million, or 5.4%, to $2.3 million in the
first quarter of 1998 from $2.4 million in the first quarter of 1997. This
improvement resulted from $0.2 million of cost reductions at existing accounts
offset by $0.1 million of additional costs for acquired management contracts.
Gross margin for management contracts improved to 45.4% in the first quarter of
1998 compared to 34.5% for the first quarter of 1997. This improvement resulted
from the relative mix of locations that were added compared to those already in
the contract portfolio. Management contracts added to the contract portfolio
relating to new locations do not carry any cost of parking services because all
of such costs are paid by the client while some of the older management
contracts in the contract portfolio do carry costs of parking services. The
addition of management contracts relating to new locations dilutes the impact of
the costs borne by the Company in respect of older management contracts and
thereby improves gross margin as a percent of management contract revenue.
General and administrative expenses. General and administrative costs
increased $0.6 million, or 17.7%, to $3.5 million for the first quarter of 1998
as compared to $2.9 million for the first quarter of 1997. This increase
resulted primarily from inflation and increases in field administrative costs
associated with the acquisitions made in 1997.
38
<PAGE> 41
Restructuring charge. APCOA recorded a $14.5 million restructuring charge
in the first quarter of 1998 which was based upon a thorough analysis of the
costs associated with implementing the planned consolidation of the Company's
headquarters in Chicago and the costs related to APCOA staff reductions. The
charge included $5.8 million of severance costs, $5.0 million of relocation
costs, the write-off of $2.4 million of assets that will no longer be used in
the business, and $1.3 million in other restructuring costs.
Other income and expenses. Net interest expense for the first quarter of
1998 increased $0.1 million to $0.9 million from $0.8 million in the first
quarter of 1997. During the first quarter of 1998, the Company recorded an
extraordinary loss of $2.8 million which was comprised of $2.1 million from a
prepayment penalty for early extinguishment of debt and $0.7 million from a
write-off of the unamortized balance of deferred financing costs associated with
the extinguished debt. Minority interest expense for the first quarter of 1998
totaled $0.1 million.
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). Gross margin for leases
improved to 16.3% of lease revenue in 1997 from 12.9% in 1996. This improvement
in gross margin resulted from the termination of a large airport lease with a
low gross margin.
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).
Gross margin for management contracts declined to 41.0% of management contract
revenue in 1997 from 43.2% in 1996. This decline resulted from the addition of a
location in 1997 that had a small loss in its initial contract year.
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
39
<PAGE> 42
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.
Other income and expenses. Net interest expense for 1997 increased $0.3
million, or 12.7%, to $3.2 million from $2.9 million in 1996. The increase was
due to an increased level of indebtedness resulting from the incurrence of debt
to fund working capital needs and acquisitions that occurred in 1997. Minority
interest expense for 1997 declined by $0.1 million to $0.3 million compared to
$0.4 million in 1996. Income taxes were $0.1 million in both 1997 and 1996.
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).
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). Gross margin for leases improved to 12.9% of lease revenue in 1996
from 12.0% in 1995 due to an improvement in the average profit per contract and
growth in the number of urban contracts which generally earn a higher margin
than airport leases.
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). Gross margin for management contracts declined to 43.2% of
management contract revenue in 1996 from 46.2% in 1995. This change resulted
from the addition of an airport shuttle contract under which APCOA is obligated
to pay payroll expenses out of its management fee, thereby reducing the gross
margin of the contract.
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.
Other income and expenses. Net interest expense for 1996 increased $0.2
million, or 6.4%, to $2.9 million from $2.7 million in 1995. The increase
resulted from minor fluctuations in interest rates during the period. Minority
interest expense for 1996 decreased $0.2 million to $0.4 million from $0.6
million in 1995. Income taxes declined to $0.1 million in 1996 from $0.2 million
in 1995.
40
<PAGE> 43
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.
The Company had $27.7 million of working capital at March 31, 1998 as
compared to $13.6 million of negative working capital at March 31, 1997. This
significant increase resulted primarily from an increase in the cash balance to
$60.5 million at March 31, 1998, from $4.0 million at March 31, 1997, resulting
from the retention of excess cash from a cash contribution from the parent of
the Company and the proceeds of the debt offering consummated by the Company in
March 1998, partially offset by an increase in accrued liabilities as a result
of the restructuring charge of $14.5 million recorded in March 1998 and other
purchase accounting reserves that were recorded in March 1998. The majority of
the balance in these accruals will be disbursed during the remainder of 1998.
Net cash used in operating activities totaled $5.0 million for the first
quarter of 1998 compared to $4.2 million for the first quarter of 1997. This
increase in cash used resulted from a $2.1 million prepayment penalty for early
extinguishment of debt offset by improved operating profit.
Cash used in investing activities totaled $72.9 million in the first
quarter of 1998 compared to $0.7 million in the same period in 1997. The change
was a result of the acquisition of Standard and Dixie Parking by APCOA in the
first quarter of 1998. In addition, APCOA expended $1.6 million in capital
purchases in the first quarter of 1998 compared to $0.3 million in the first
quarter of 1997. This increase related to the acquisition of a leasehold in
March 1998.
Cash from financing activities totaled $135.0 million in the first quarter
of 1998 compared to $6.3 million for the same quarter in 1997. The financing
activities in the first quarter of 1998 included $148.9 million of proceeds from
the issuance of debt, $40.7 million of proceeds from the issuance of preferred
stock, $40.7 million in debt repayments and $8.0 million for the redemption of
preferred stock. These transactions were completed in conjunction with the
combination with Standard. Cash from financing activities for the first quarter
of 1997 included primarily an increase in the working capital revolver due to
seasonal working capital swings.
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
41
<PAGE> 44
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.
APCOA had $19.5 million of negative working capital at December 31, 1996 as
compared to $21.0 million at December 31, 1995. The change resulted from a small
decline in accounts payable and accrued insurance.
Net cash provided by operating activities totaled $2.0 million for 1996
compared to $4.3 million for 1995. This reduction resulted primarily from
changes in working capital including a decrease in accounts payable of $2.9
million.
Cash used in investing activities totaled $3.3 million in 1996 compared to
$4.9 million in 1995. The reduction in spending resulted from lower capital
expenditures during 1996.
Cash provided by financing activities totaled $1.3 million in 1996 compared
to $1.1 million in 1995. During 1996, APCOA refinanced its revolver with a new
bank.
PRO FORMA LIQUIDITY AND CAPITAL RESOURCES
In connection with the Offering, the Company has $54.1 million of
additional cash on its balance sheet as of March 31, 1998. 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."
The pro forma results of operations for the first quarter of 1998, assuming
the Transactions had occurred as of January 1, 1998, include $37.9 million in
lease parking services revenues, $6.9 million in management contract revenues,
$33.0 million in cost of parking services under lease arrangements, $2.6 million
in cost of parking services under management contracts and $5.1 million in
general and administrative expenses. In addition, the pro forma statement of
operations for the first quarter of 1998 reflects a $14.5 million restructuring
charge, depreciation and amortization of $1.9 million and $3.7 million of
interest expense.
Pro forma results of operations for 1997, assuming the Transactions had
occurred as of January 1, 1997, include $159.8 million in lease parking services
revenues, $26.3 million in management contract revenues, $136.7 million in cost
of parking services under lease arrangements, $9.5 million in cost of parking
services under management contracts and $20.0 million in general and
administrative expenses. In addition, the pro forma statement of operations for
1997 reflects $7.5 million of depreciation and amortization and $15.0 million of
interest expense.
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.
The Company's primary capital requirements are for working capital, capital
expenditures and debt service. In addition, the Company will be relocating its
headquarters offices to Michigan Avenue in Chicago, Illinois in the fall of
1998. It is expected that the costs to improve the space for the new office will
approximate $3.5 million which will be capitalized as expended. 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
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<PAGE> 45
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. Effective as of June 1, 1998, the Company completed the
acquisition of Century Parking and Sentry Parking for consideration consisting
of $5.2 million in cash at closing and $1.0 million payable on the third
anniversary of the closing date. The results of operations of Century Parking
and Sentry Parking prior to acquisition were not material to the Company. The
Company is currently in negotiations with respect to several possible
acquisitions, none of which are "probable" as of the date hereof. 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.
On a pro forma basis, the Company would have had total indebtedness of
$150.2 million as of March 31, 1998. 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) approximately $13.0 million of the Company's annual cash
flow from operations will be required to service interest on the New Notes 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.
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
The Company 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.
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<PAGE> 46
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> 47
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
Interest income, net....................................... 59 56 85
-------- -------- --------
Net income................................................. $ 2,978 $ 4,570 $ 5,274
======== ======== ========
</TABLE>
Standard does not incur any net expenses in providing services for
management contracts. The facility owner pays all of the property-level
expenses. Thus, Standard is fully reimbursed for any and all costs that it
incurs in providing its management contract services. Such reimbursements
include (but are not limited to) all payroll and related expenses for all
supervisory, bookkeeping and accounting personnel performing services at the
managed locations.
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
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<PAGE> 48
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 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.
Interest income, net. Interest income, net of interest expense, was $0.1
million in fiscal 1997 and 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.
Interest income, net. Interest income, net of interest expense, was $0.1
million in fiscal 1996 and fiscal 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.
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<PAGE> 49
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.
During fiscal 1996, Standard generated cash flows from operating activities
of $5.3 million compared to $2.8 million in fiscal 1995. This increase in cash
flow from operating activities resulted primarily from an increase in net income
and net changes in the components of working capital.
Net cash used in investing activities was $0.5 million for the year ended
December 31, 1996 and $1.3 million for the year ended December 31, 1995. This
decrease in net cash used in investing activities was primarily due to the
purchase of 19 management contracts in fiscal 1995.
Net cash used by financing activities was $3.1 million for the years ended
December 31, 1996 and December 31, 1995. 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.
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<PAGE> 50
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 March 31, 1998,
the Company operated approximately 73% of its approximately 1,100 parking
facilities under management contracts and approximately 27% 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
48
<PAGE> 51
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
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<PAGE> 52
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%. The Company's cash flows from operating
activities increased from $3.2 million to $6.0 million from 1993 to 1997.
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.
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<PAGE> 53
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. 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.
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<PAGE> 54
Emergency Car Services. The Company offers complimentary services
such as battery starts, lost car assistance, tire inflation, tire change,
escort service and key retrieval.
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> 55
PARKING FACILITIES
The Company operates parking facilities in 35 states, Washington D.C. and
three 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 March
31, 1998, 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 13 13 13,392 13,392
British Columbia Vancouver 5 5 2,236 2,236
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 3 13 16 363 7,625 7,988
Connecticut Stamford and Airport 1 6 7 4,351 4,332 8,683
Delaware Wilmington 1 1 500 500
District of Columbia Washington D.C. 10 10 7,577 7,577
Florida Miami, Orlando and Airports 4 13 17 4,340 6,085 10,425
Georgia Atlanta and Airports 2 33 35 2,142 9,405 11,547
Hawaii Honolulu 53 53 21,735 21,735
Idaho Airport 1 1 376 376
Illinois Chicago and Airport 2 150 152 26,800 86,116 112,916
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 2 42 44 984 8,546 9,530
Maine Airport 2 2 1,299 1,299
Maryland Baltimore, Bethesda 19 19 4,597 4,597
Massachusetts Boston and Airports 2 97 99 645 63,362 64,007
Michigan Detroit and Airports 6 1 7 1,412 132 1,544
Minnesota Minneapolis and Airports 8 36 44 13,495 11,219 24,714
Missouri Kansas City and Airports 2 74 76 9,848 13,367 23,215
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 96 105 7,492 39,515 47,007
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 2,181 3,512
Airports
Quebec Airports 3 3 8,591 8,591
South Carolina Airport 1 1 4,987 4,987
South Dakota Airport 2 2 1,508 1,508
Tennessee Memphis and Airports 2 13 15 3,077 5,226 8,303
Texas Houston, Dallas, Fort Worth and 4 57 61 2,862 29,176 32,038
Airports
Virginia Richmond and Airport 5 36 41 3,468 8,776 12,244
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 1,016 1,116 148,094 447,148 595,242
=== ===== ===== ======= ======= =======
</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> 56
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 March 31, 1998, 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> 57
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> 58
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> 59
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 $1 billion operation in the U.S., headquartered in New York
City, from 1979 to 1983. Mr. Klintberg received his undergraduate degree from
Dartmouth College in 1972 and a degree in Business Administration and Economics
from the University of Uppsala, Sweden in 1974.
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<PAGE> 60
A. Petter Ostberg. Mr. Ostberg joined Holberg in 1994 and was appointed
Chief Financial Officer of Holberg in 1997. Mr. Ostberg is currently a Vice
President of APCOA. Prior to joining Holberg, Mr. Ostberg held various finance
positions from 1990 to 1994 with New York Cruise Lines, Inc., including Group
Vice President, Treasurer and Secretary. Prior to joining New York Cruise Lines,
Inc., Mr. Ostberg was General Manager of Planter Technology Ltd. in Mountain
View, California, and from 1985 to 1987, Mr. Ostberg was a Financial Analyst
with Prudential Securities, Inc. in New York. Mr. Ostberg received a B.A. in
International Relations and Economics from Tufts University in 1985, and an
M.B.A. from Stanford University Graduate School of Business in 1989.
EXECUTIVE COMPENSATION
The following table sets forth information for 1995, 1996 and 1997 with
regard to compensation for services rendered in all capacities (a) to APCOA by
the Chief Executive Officer and the other four most highly compensated executive
officers of APCOA and (b) to Standard by two executive officers of Standard for
each of whom disclosure would have been provided but for the fact that he was
not serving as an executive officer of APCOA at the end of the last completed
fiscal year (collectively, the "Named Executive Officers"). Except as otherwise
noted, information set forth in the table reflects compensation earned by such
individuals for services with APCOA or its respective subsidiaries.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
OTHER
ANNUAL ALL OTHER
COMPEN- COMPEN-
FISCAL SALARY BONUS SATION SATION
NAME AND PRINCIPAL POSITION YEAR ($) $ $ ($)
--------------------------- ------ ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
G. Walter Stuelpe, Jr..................... 1997 420,942(1) 183,500 -- 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) 62,390 -- 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(4)..................... 1997 140,399(1) 45,741 -- --
Corporate Vice President, 1996 98,654(1) 29,798 17,033(3) --
Airport Properties 1995 -- -- -- --
Herbert W. Anderson, Jr................... 1997 130,250(1) 45,448 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 -- 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(5)..................... 1997 98,265 -- 41,229(6) 42,102(7)
Chief Executive Officer and 1996 53,290 -- 28,795(6) 41,630(7)
President of Standard 1995 37,950 -- 18,740(6) 46,169(7)
Michael K. Wolf(5)........................ 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.
(4) As of February 26, 1998, Mr. Van Horn is no longer an employee of the
Company.
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<PAGE> 61
(5) All compensation information set forth in the table for this individual
reflects compensation earned for services with Standard or its respective
subsidiaries.
(6) The amount shown includes car allowances, club dues, health insurance
premiums and legal fees related to estate planning paid by Standard.
(7) 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 shall not 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 an
eighteen-month term, scheduled to lapse on September 30, 1999, and an annual
base salary of not less than $190,000, subject to annual review and increases at
the discretion of the Company's President, plus severance pay in the amount of
$157,872, paid on April 10, 1998, a severance bonus of $66,500 payable on
September 30, 1998, an annual bonus of $76,000 for 1998 and an annual bonus for
1999 of up to forty percent of annual base salary, as well as certain other
benefits. Mr. LaRocco shall not disclose confidential information for any reason
whatsoever.
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<PAGE> 62
During the term of the employment agreement, and for one year after its
termination if Mr. LaRocco is terminated other than without Cause (as defined in
the agreement), Mr. LaRocco shall not 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, (ii) the annual bonus for the year of termination and (iii)
certain other benefits.
Mr. Van Horn's employment agreement with the Company terminated as of
February 26, 1998. In connection with such termination, the Company provided Mr.
Van Horn with a severance package the total value of which was $218,251 and
pursuant to which 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
three-year term, scheduled to lapse on March 30, 2001, default annual renewals,
and an annual base salary of not less than $175,000, subject to annual review,
plus an annual bonus of up to forty percent of the annual base salary and a
$250,000 housing differential loan bearing interest at an annual rate of 5.39%
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. Anderson in the year of such forgiveness, for
each year Mr. Anderson remains in the continual employ of the Company (and the
Company shall make Mr. Anderson whole with respect to the tax consequences of
any such forgiveness), as well as certain other benefits.
Mr. Anderson shall not 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 one year after its
termination, Mr. Anderson shall not 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. Anderson's employment
agreement does not contain change of control provisions.
If Mr. Anderson's employment is terminated by reason of his death, the
Company is obligated to pay Mr. Anderson's estate an amount equal to the sum of
(i) Mr. Anderson'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. Anderson's employment is terminated by reason of
his Disability (as defined in the agreement), the Company is obligated to pay
Mr. Anderson or his legal representative (a) Mr. Anderson'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. Anderson's employment is terminated by the Company other than for
death, Disability or Cause (as defined in the agreement) or if Mr. Anderson
terminates his employment for Good Reason (as defined in the agreement), the
Company is required to continue (A) to pay Mr. Anderson 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. Anderson and/or his family with certain
other benefits.
If Mr. Anderson's employment is terminated by the Company for Cause, or by
Mr. Anderson without Good Reason, Mr. Anderson shall be obligated to repay the
remaining principal balance of, and any accrued
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and unpaid interest on, the housing differential loan within thirty days from
the date of such termination. If Mr. Anderson's employment is terminated by the
Company for any reason other than Cause, or by Mr. Anderson for Good Reason, 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. Anderson whole for any tax consequences of such forgiveness.
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 bearing
interest at an annual rate of 5.39% 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.
Mr. Celebrezze shall not 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 shall not 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 shall hold all confidential information in strict confidence
and not publish or otherwise disclose any portion thereof to any
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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 shall not 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.
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
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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.
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>
- ------------------------------
* The address of AP Holdings and the business address of Messrs. Stuelpe,
Celebrezze, Sacks and LaRocco is 800 Superior Avenue, Cleveland, Ohio
44114-2601.
** The address of Orkla and the business address of Mr. Holten is 545
Steamboat Road, Greenwich, Connecticut 06830.
*** The address of Delaware North is 438 Main Street, Buffalo, New York 14202.
+ The address of Dosher Partners, L.P. and the business address of Mr.
Warshauer is 200 East Randolph Drive, Suite 4800, Chicago, Illinois
60601.
++ The address of SP Associates is 900 North Michigan Avenue, Chicago,
Illinois 60611.
(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.
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(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 (the "Put/Call 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 (a
summary of which is set forth below), (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 (a summary of which is set forth below). AP
Holdings has exercised the right to repurchase the AP Holdings common stock held
by Delaware North, and is in negotiations with Delaware North with respect to
the price of such repurchase.
The AP Holdings Stockholders Agreement provides that, subject to any direct
or indirect restrictions imposed by financing agreements or arrangements entered
into by AP Holdings or the Company, upon the termination of employment of a
management investor for death, retirement, complete disability, or otherwise,
(a) such management investor, or his estate or heir (in the case of death,
retirement or complete disability), shall have the right to cause AP Holdings
to, and (b) AP Holdings shall have the right to, repurchase such management
investor's AP Holdings common stock, at a purchase price, which, under some
circumstances, is partially payable in subordinated notes, equal to, (X) in the
case of a termination of employment for death, retirement or complete disability
or by AP Holdings without Cause (as defined in the AP Holdings Stockholders
Agreement) or a voluntary termination of employment by such management investor,
the greatest of, or (Y) in the case of a termination of employment by AP
Holdings for Cause, the lowest of,
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(i) the price per share paid by such management investor for such AP Holdings
common stock, (ii) the adjusted book value per share of AP Holdings common stock
and (iii) the sum, on a per share basis, of (x) the product of the cash
contribution from operations of AP Holdings for the immediately preceding four
fiscal quarters multiplied by 6.84 minus (y) the amount of debt reflected in AP
Holdings most recent consolidated financial statements.
The Put/Call Agreement provides that AP Holdings shall have an option to
purchase, and that Delaware North shall have an option to cause AP Holdings to
purchase, the AP Holdings common stock held by Delaware North at certain times
or upon the occurrence of certain events. Upon the exercise by either Delaware
North or AP Holdings of its respective option described above, the parties
shall, pursuant to a certain procedure, select a nationally recognized
investment bank to determine the fair market value of the AP Holdings common
stock held by Delaware North, which, subject to certain adjustments shall be the
purchase price (which purchase price may at the option of AP Holdings be
partially payable in the form of a promissory note) for such common stock.
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 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.
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,
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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 receives
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 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.
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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
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. These loans and advances were interest bearing at
a variable rate that approximated the prime interest rate. The accumulated
interest was added to, or deducted from (as appropriate), the balance in the
loan or advance account on a monthly basis. In connection with the Combination,
APCOA made a $6.5 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.
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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ANY NOTES WHICH REMAIN OUTSTANDING FOLLOWING THE EXCHANGE OFFER WILL HAVE THE
SAME RIGHT, PRIVILEGES AND LIMITATIONS AS, AND WILL RANK PARI PASSU WITH, THE
NEW NOTES.
DESCRIPTION OF NEW NOTES
GENERAL
The New Notes will be issued pursuant to the indenture (the "Indenture")
among the Company, the direct or indirect domestic Restricted Subsidiaries of
the Company 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 following 12 wholly owned subsidiaries of the Company: Tower Parking, Inc.,
Graelic, Inc., APCOA Capital Corporation, A-1 Auto Park, Inc., Metropolitan
Parking System, Inc., Events Parking Company, Inc., Standard Parking
Corporation, Standard Parking Corporation IL, Standard Auto Park, Inc., S&S
Parking, Inc., Century Parking, Inc. and Sentry Parking Corporation (the
"Subsidiary Guarantors"). Effective as of July 1, 1998, the Company completed a
reorganization of certain of its wholly owned subsidiaries pursuant to which,
among other things, Standard Parking, L.P., Standard Parking Corporation MW,
Standard/Wabash Parking Corporation, Standard Parking of Canada, L.P., Standard
Parking I, L.L.C. and Standard Parking II, L.L.C. were merged with and into
Standard Parking Corporation. Following the merger, the separate corporate or
other existence of each such subsidiary ceased and as such these entities are no
longer guarantors of any obligations 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 March 31, 1998, on a pro
forma basis giving effect to the Combination, and the related financings and
other transactions described herein, there was $0.5 million of 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 Company has 32 additional subsidiaries which will not be guarantors of
the New Notes (the "Non-Guarantor Subsidiaries"). The aggregate pro forma total
assets, net income (loss) and total stockholders' equity of the Non-Guarantor
Subsidiaries for the year ended December 31, 1997 were $13.3 million, ($0.2
million) and $0.4 million, respectively, and for the three months ended March
31, 1998 were $14.1 million, $0.2 million and $1.0 million, respectively.
Condensed consolidating financial information for the Company, the Subsidiary
Guarantors and the Non-Guarantor Subsidiaries is set forth in Note M to the
Consolidated Financial Statements of APCOA, Inc. presented herein.
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
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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 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
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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 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."
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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.
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>
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 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.
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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 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
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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 (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
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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 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
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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.
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
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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, 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,
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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.
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
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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 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
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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 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
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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
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
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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.
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
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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 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
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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 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"),
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(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 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/Standard
Parking, Inc., 800 Superior Avenue, Cleveland, Ohio 44114; Attention: Robert N.
Sacks.
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 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
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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.
DEPOSITARY 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 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
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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.
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 Depositary. 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 Depositary and the
Depositary'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 certificated New Notes ("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.
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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 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 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 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
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 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
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Guarantors fail to consummate the Exchange Offer within 30 business days of the
Effectiveness Target Date with respect to the Registration Statement, or (d) the
Shelf Registration Statement or the 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 ("Liquidated
Damages"). The amount of the Liquidated Damages will 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
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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).
"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).
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"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
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.
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"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 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
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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.
"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
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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."
"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
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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.
"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
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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.
"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
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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.
"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
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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
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 the material 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 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.
105
<PAGE> 108
INDEX OF CERTAIN DEFINED TERMS
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
ADA............................... 20
Affiliate Transaction............. 81
Agent............................. 31
Alternate Base Rate............... 70
Annual Base Salary................ 62
APCOA............................. 5
AP Holdings....................... 6
Asset Sale Offer.................. 76
Auditorium........................ 68
Board............................. 62
BPLP.............................. 68
CAGR.............................. 8
Calculation Date.................. 94
Cause............................. 63
Century Parking................... 6
Certificate of Incorporation...... 20
Certificated New Notes............ 89
Change of Control Offer........... 75
Change of Control Payment......... 75
Change of Control Payment Date.... 75
Closing........................... 2
Code.............................. 101
Combination....................... 7
Combination Agreement............. 31
Commission........................ 4
Company........................... 1
Company Common Stock.............. 31
Consulting Agreement.............. 69
Consulting Period................. 69
Covenant Defeasance............... 85
Cutoff Date....................... 63
Delaware North.................... 64
Depositary........................ 3
Depositor......................... 27
Disability........................ 63
DLJ............................... 3
Dosher............................ 66
DTC............................... 3
Effectiveness Target Date......... 90
Eligible Institution.............. 25
Employment Period................. 62
EPI............................... 6
Excess Proceeds................... 76
Exchange Act...................... 4
Exchange Agent.................... 2
Exchange Offer.................... 1
</TABLE>
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
Expiration Date................... 2
Financial Institution............. 103
Financing......................... 31
First Chicago..................... 3
Global New Note Registered
Owner........................... 87
Global New Notes.................. 87
Good Reason....................... 63
Holberg........................... 20
incur............................. 78
Indenture......................... 1
Indirect Participants............. 88
Initial Purchasers................ 3
IRS............................... 30
Legal Defeasance.................. 85
Lenders........................... 18
Letter of Transmittal............. 1
Liquidated Damages................ 91
Named Executive Officers.......... 58
New Credit Facility............... 31
New Notes......................... 1
New Note Guarantees............... 1
New Regulations................... 103
Noncompetition Period............. 63
Non-Guarantor Subsidiaries........ 13
Notes............................. 1
Offering.......................... 10
Option Plan....................... 63
Orkla............................. 64
Other Acquisitions................ 7
Other Real Estate................. 63
Participants...................... 88
Participating Broker-Dealer....... 104
Payment Blockage Period........... 73
Payment Default................... 84
Payment Notice.................... 73
Permitted Debt.................... 78
Permitted Investments............. 63
PORTAL............................ 23
Preferred Stock Contribution...... 6
Property-level expenses........... 68
Put/Call Agreement................ 64
Registration Default.............. 91
Registration Rights Agreement..... 1
Registration Statement............ 4
Restricted Payments............... 77
S&S Parking....................... 6
</TABLE>
106
<PAGE> 109
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
SEC............................... 4
Securities Act.................... 1
Sentry Parking.................... 6
Severance Pay..................... 62
Shelf Registration Statement...... 14
Standard.......................... 31
Standard Owners................... 31
Standard Parties.................. 66
Standard Tremont.................. 68
Stockholders...................... 66
Stockholders Agreement............ 66
</TABLE>
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
Subsidiary Guarantors............. 1
Tax Sharing Agreement............. 67
TIN............................... 103
Transactions...................... 31
Transfer Restricted Securities.... 90
Tremont Facility.................. 68
Trustee........................... 1
Trust Indenture Act............... 71
U.S. Alien Holder................. 101
U.S. Holder....................... 101
Warshauer Employment Agreement.... 62
</TABLE>
107
<PAGE> 110
APCOA/STANDARD PARKING, 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 March
31, 1998.................................................. P-3
Notes to Unaudited Pro Forma Consolidated Balance Sheet as
of March 31, 1998......................................... P-4
Unaudited Pro Forma Consolidated Statement of Operations for
the Year Ended December 31, 1997 and the Three Months
Ended March 31, 1998...................................... P-5
Notes to Unaudited Pro Forma Consolidated Statement of
Operations for the Year Ended December 31, 1997 and the
Three Months Ended March 31, 1998......................... P-7
</TABLE>
P-1
<PAGE> 111
APCOA/STANDARD PARKING, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Consolidated Balance Sheet as of March
31, 1998 and Unaudited Pro Forma Consolidated Statements of Operations for the
year ended December 31, 1997 and the three months ended March 31, 1998 are based
on the historical consolidated financial statements of APCOA. The Unaudited Pro
Forma Consolidated Balance Sheet is adjusted to give effect to the acquisition
of EPI as if this event had occurred on March 31, 1998. The Unaudited Pro Forma
Consolidated Statements of Operations is adjusted to give effect to (1) the
acquisition of Standard, (2) the Other Acquisitions, including the 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 Statements of
Operations combine 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. Management believes that the final
allocation of the purchase price will not materially differ from the preliminary
estimated amounts. 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> 112
APCOA/STANDARD PARKING, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS
------------------ FOR EPI COMBINED
APCOA EPI ACQUISITION(1) PRO FORMA
-------- ------ --------------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash....................................................... $ 60,480 $ 598 $ (7,000) $ 54,078
Notes and accounts receivable, net......................... 19,461 434 -- 19,895
Prepaid expenses........................................... 1,595 235 -- 1,830
-------- ------ -------- --------
Total current assets................................. 81,536 1,267 (7,000) 75,803
Equipment and leasehold improvements, net................... 9,749 408 -- 10,157
Cost of parking contracts, net.............................. 12,558 -- 935 13,493
Cost in excess of net assets acquired, net.................. 95,504 -- 6,424 101,928
Intangible and other assets, net............................ 12,197 -- (414) 11,783
Advances and deposits....................................... 1,966 6 -- 1,972
-------- ------ -------- --------
$213,510 $1,681 $ (55) $215,136
======== ====== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable........................................... $ 16,578 $ 952 $ -- $ 17,530
Accrued expenses........................................... 36,184 576 -- 36,760
Current portion of long-term debt.......................... 1,083 98 -- 1,181
-------- ------ -------- --------
Total current liabilities............................ 53,845 1,626 -- 55,471
Long-term liabilities:
New credit facility........................................ 497 -- -- 497
9 1/4% Senior Subordinated Notes due 2008.................. 140,000 -- -- 140,000
Other debt................................................. 5,293 -- -- 5,293
Seller notes............................................... 3,250 -- -- 3,250
Other liabilities.......................................... 11,059 -- -- 11,059
-------- ------ -------- --------
Total long-term liabilities.......................... 160,099 -- -- 160,099
Redeemable preferred stock.................................. 40,683 -- -- 40,683
Common stock subject to put/call rights..................... 4,589 -- -- 4,589
Stockholders' equity (deficit):
Common stock............................................... 1 -- -- 1
Additional paid in capital................................. 11,422 -- -- 11,422
Retained earnings (deficit)................................ (57,129) -- -- (57,129)
Owners' equity............................................. -- 55 (55) --
-------- ------ -------- --------
Total stockholders' equity (deficit)................. (45,706) 55 (55) (45,706)
-------- ------ -------- --------
$213,510 $1,681 $ (55) $215,136
======== ====== ======== ========
</TABLE>
See accompanying notes to unaudited pro forma consolidated balance sheet.
P-3
<PAGE> 113
APCOA/STANDARD PARKING, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1998
(IN THOUSANDS)
(1) Represents the following adjustments to reflect the acquisition of EPI on
May 1, 1998 (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 of EPI................................ $ 55
Less: Current APCOA investment in EPI....................... (414)
-------
Net deficit acquired................................... (359)
Cost of parking contracts................................... 935
Cost in excess of net assets acquired....................... 6,424
-------
Cash consideration payable from excess cash................. $ 7,000
=======
</TABLE>
P-4
<PAGE> 114
APCOA/STANDARD PARKING, 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 services 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 -- 1,302(4) 7,676 (180)(8) 7,496
2,143(5)
-------- ------- ------ ------- -------- ------- --------
Total costs and
expenses......... 110,113 58,463 6,771 (1,461) 173,886 (180) 173,706
-------- ------- ------ ------- -------- ------- --------
Operating income............. 5,563 5,189 (21) 1,461 12,192 180 12,372
Other expense (income):
Interest expense........... 3,713 45 -- 7,124(6) 10,882 4,102(9) 14,984
Interest income............ (470) (130) -- 351(7) (249) -- (249)
-------- ------- ------ ------- -------- ------- --------
Income (loss) before income
taxes and minority
interest................... 2,320 5,274 (21) (6,014) 1,559 (3,922) (2,363)
Minority interest............ 321 -- -- -- 321 -- 321
Income tax expense........... 140 -- -- -- 140 -- 140
-------- ------- ------ ------- -------- ------- --------
Net income (loss)............ $ 1,859 $ 5,274 $ (21) $(6,014) $ 1,098 $(3,922) $ (2,824)
======== ======= ====== ======= ======== ======= ========
</TABLE>
See accompanying notes to unaudited pro forma consolidated statements of
operations.
P-5
<PAGE> 115
APCOA/STANDARD PARKING, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998
(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 services revenue..... $ 28,804 $14,590 $1,375 $ -- $ 44,769 $ -- $ 44,769
Cost and expenses:
Cost of parking services... 23,576 11,212 783 -- 35,571 -- 35,571
General and
administrative.......... 3,460 2,012 494 (575)(2) 5,131 -- 5,131
(260)(3)
Restructuring charge....... 14,500 -- -- -- 14,500 -- 14,500
Depreciation and
amortization............ 1,055 52 -- 290(4) 1,908 (48)(8) 1,860
511(5)
-------- ------- ------ ------- -------- ------- --------
Total costs and
expenses......... 42,591 13,276 1,277 (34) 57,110 (48) 57,062
-------- ------- ------ ------- -------- ------- --------
Operating income (loss)...... (13,787) 1,314 98 34 (12,341) 48 (12,293)
Other expense (income):
Interest expense........... 1,037 5 -- 1,687(6) 2,729 982(9) 3,711
Interest income............ (149) (7) -- 113(7) (43) -- (43)
-------- ------- ------ ------- -------- ------- --------
Income (loss) before income
taxes, minority interest
and extraordinary item..... (14,675) 1,316 98 (1,766) (15,027) (934) (15,961)
Minority interest............ 143 -- -- -- 143 -- 143
Income tax expense........... 30 -- -- -- 30 -- 30
-------- ------- ------ ------- -------- ------- --------
Income (loss) before
extraordinary item......... $(14,848) $ 1,316 $ 98 $(1,766) $(15,200) $ (934) $(16,134)
======== ======= ====== ======= ======== ======= ========
</TABLE>
See accompanying notes to unaudited pro forma consolidated statements of
operations.
P-6
<PAGE> 116
APCOA/STANDARD PARKING, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997 AND THREE MONTHS ENDED MARCH 31, 1998
(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 historical
consolidated statement of operations data for the Other Acquisitions for
the three months ended March 31, 1998 represents the results of operations
of such companies (to the extent the company was acquired in 1998) from
January 1, 1998 to the earlier of their respective dates of acquisition or
March 31, 1998. 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 (May 1,
1998). Each of the Other Acquisitions has been or will 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>
<CAPTION>
FISCAL THREE MONTHS
1997 1998
------ ------------
<S> <C> <C>
Payroll reductions for the elimination of duplicative
administrative and operations personnel............. $1,461 $365
Reduction in salaries of certain Standard executives
pursuant to post-acquisition employment
agreements.......................................... 1,139 113
Reductions in management information systems costs.... 387 97
------ ----
$2,987 $575
====== ====
</TABLE>
In addition, there are $3,289 of anticipated annual 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
statements of operations because they are not directly attributable to the
acquisition of Standard. APCOA recorded a $14,500 charge in the first
quarter of 1998 related to its planned restructuring of existing
operations. This charge is composed of $10,800 in employee severance and
relocation costs, $2,400 in writedowns of long-term assets to current fair
value, and $1,300 in other restructuring costs. See Note L to the
historical financial statements of APCOA included elsewhere herein.
(3) Represents the net reduction in costs in accordance with APCOA's business
plans to integrate the Other Acquisitions:
<TABLE>
<CAPTION>
FISCAL THREE MONTHS
1997 1998
------ ------------
<S> <C> <C>
Payroll reductions for the elimination of duplicative
administrative and operations personnel:
EPI............................................ $ 331 $ 83
Other.......................................... 428 12
Reduction in salaries of certain EPI executives
pursuant to post-acquisition employment
agreements.......................................... 577 144
Reduction in management fees paid to third parties
which will be eliminated upon acquisition........... 583 21
------ ----
$1,919 $260
====== ====
</TABLE>
(4) Represents the incremental depreciation and amortization due to the
application of purchase accounting. Equipment and leasehold improvements
and cost of parking contracts are being amortized over 3 to 7 years. The
cost of parking contracts are being amortized over their contract term.
Depreciation and
P-7
<PAGE> 117
APCOA/STANDARD PARKING, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS--(CONTINUED)
amortization has been increased to reflect each acquisition as if it had
occurred on January 1, 1997 as follows:
<TABLE>
<CAPTION>
FISCAL THREE MONTHS
1997 1998
------ ------------
<S> <C> <C>
Amortization of cost of parking contracts acquired
from Standard....................................... $1,014 $254
Amortization of cost of parking contracts acquired
from the Other Acquisitions......................... 347 51
Net reduction in depreciation of property and
equipment acquired from Standard.................... (59) (15)
------ ----
$1,302 $290
====== ====
</TABLE>
(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>
<CAPTION>
FISCAL THREE MONTHS
1997 1998
------ ------------
<S> <C> <C>
Amortization of excess cost over fair value of net
assets acquired
for Standard.......................................... $1,854 $464
Amortization of excess cost over fair value of net
assets acquired for the Other Acquisitions............ 289 47
------ ----
$2,143 $511
====== ====
</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 EPI acquisition was 9 1/4%, the actual rate of the
Senior Subordinated Notes, the proceeds from which were partially used to
finance such acquisitions. The interest expense is as follows:
<TABLE>
<CAPTION>
INCREMENTAL INTEREST EXPENSE
-------------------------------
PRINCIPAL FISCAL THREE MONTHS
AMOUNT RATE 1997 1998
--------- ----------- ----------- ----------------
<S> <C> <C> <C> <C>
Standard................. $65,000 9 1/4% $6,013 $1,503
EPI...................... 7,000 9 1/4% 648 162
Seller notes for Dixie
acquisition............ 3,250 8 1/4% 268 22
Other borrowings (pro-
rated)................. 3,128 8.0% - 9.0% 195 --
------ ------
$7,124 $1,687
====== ======
</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.
P-8
<PAGE> 118
APCOA/STANDARD PARKING, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS--(CONTINUED)
(9) Represents the change in interest expense related to the Offering:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT FISCAL THREE MONTHS
OF DEBT 1997 1998
--------- ----------- ------------
<S> <C> <C> <C>
Recording of pro forma interest expense:
9 1/4% Senior Subordinated Notes due 2008........ $140,000 $12,950 $3,238
Nonrecourse third party debt at 11.0% to 15.0%... 5,523 660 150
Seller notes for Dixie acquisition at 8.25%...... 3,250 268 67
Letters of credit................................ 4,905 123 31
Capital leases................................... 168 29
Other debt....................................... 56 6
------- ------
Cash interest expense............................ 14,225 3,521
Amortization of deferred financing costs......... 759 190
------- ------
Total interest expense................... 14,984 3,711
Less: Combined pro forma interest expense.......... 10,882 2,729
------- ------
Pro forma interest adjustment after the Offering... $ 4,102 $ 982
======= ======
</TABLE>
P-9
<PAGE> 119
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, and as of March 31, 1998 (unaudited)................ F-3
Consolidated Statements of Operations for each of the three
years in the period ended December 31, 1997, and for the
three months ended March 31, 1997 and 1998 (unaudited).... F-4
Consolidated Statements of Stockholders' Equity (Deficit)
for each of the three years in the period ended December
31, 1997, and for the three months ended March 31, 1998
(unaudited)............................................... F-5
Consolidated Statements of Cash Flows for each of the three
years in the period ended December 31, 1997, and for the
three months ended March 31, 1997 and 1998 (unaudited).... F-6
Notes to Consolidated Financial Statements.................. F-7
STANDARD PARKING
Report of Altschuler, Melvoin and Glasser LLP, Independent
Auditors.................................................. F-18
Balance Sheets as of December 31, 1996 and 1997............. F-19
Statements of Income for each of the three years in the
period ended December 31, 1997............................ F-20
Statements of Changes in Equity for each of the three years
in the period ended December 31, 1997..................... F-21
Statements of Cash Flows for each of the three years in the
period ended December 31, 1997............................ F-22
Notes to Financial Statements............................... F-23
</TABLE>
F-1
<PAGE> 120
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> 121
APCOA, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31
------------------ MARCH 31,
1996 1997 1998
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash...................................................... $ 2,532 $ 3,322 $ 60,480
Notes and accounts receivable, less allowances of $315 in
1996 and $443 in 1997.................................. 10,241 13,806 19,461
Prepaid expenses and supplies............................. 1,343 1,126 1,595
------- ------- ---------
Total current assets........................................ 14,116 18,254 81,536
Leaseholds and equipment:
Equipment................................................. 9,296 10,024 10,153
Leasehold improvements.................................... 15,804 13,981 14,214
Leaseholds................................................ 31,446 31,293 38,543
Construction in progress.................................. 36 417 2,611
------- ------- ---------
56,582 55,715 65,521
Less accumulated depreciation and amortization............ 44,906 43,375 43,214
------- ------- ---------
11,676 12,340 22,307
Other assets:
Advances and deposits..................................... 1,011 1,509 1,966
Cost in excess of net assets acquired, less accumulated
amortization of $2,979 and $3,412 in 1996 and 1997,
respectively........................................... 17,118 18,457 95,504
Intangible and other assets, less accumulated amortization
of $3,081 and $3,433 in 1996 and 1997, respectively.... 3,381 4,013 12,197
Due from affiliate........................................ 5,521 4,522 --
------- ------- ---------
27,031 28,501 109,667
------- ------- ---------
Total assets...................................... $52,823 $59,095 $ 213,510
======= ======= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable.......................................... $15,742 $16,401 $ 16,578
Accrued rent.............................................. 6,023 5,649 5,578
Compensation and payroll withholdings..................... 2,057 1,924 2,275
Property, payroll and other taxes......................... 3,004 3,111 3,454
Accrued insurance and expenses............................ 6,079 4,126 8,377
Accrued restructuring costs............................... -- -- 16,500
Current portion of long-term borrowings................... 666 4,102 1,083
------- ------- ---------
Total current liabilities................................... 33,571 35,313 53,845
Long-term borrowings, excluding current portion:
Obligation under credit agreements........................ 25,261 27,729 140,497
Other..................................................... 6,868 6,452 8,543
------- ------- ---------
32,129 34,181 149,040
Other long-term liabilities................................. 2,513 3,132 11,059
Redeemable preferred stock.................................. 7,841 8,728 40,683
Common stock subject to put/call rights..................... -- -- 4,589
Stockholders' equity (deficit):
Common stock, par value $1.00 per share, 1,000 shares
authorized; 26.3 shares issued and outstanding......... 1 1 1
Additional paid-in capital................................ 17,205 17,205 11,422
Accumulated deficit....................................... (40,437) (39,465) (57,129)
------- ------- ---------
Total stockholders' equity (deficit)........................ (23,231) (22,259) (45,706)
------- ------- ---------
Total liabilities and stockholders' equity
(deficit)....................................... $52,823 $59,095 $ 213,510
======= ======= =========
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE> 122
APCOA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31 ENDED MARCH 31
-------------------------------- -------------------
1995 1996 1997 1997 1998
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Parking services revenue:
Lease contracts.................... $128,745 $120,286 $ 99,594 $23,371 $ 24,663
Management contracts............... 12,795 15,466 16,082 3,648 4,141
-------- -------- -------- ------- --------
141,540 135,752 115,676 27,019 28,804
Costs and expenses:
Cost of parking services:
Lease contracts................. 113,337 104,718 83,327 20,158 21,315
Management contracts............ 6,878 8,783 9,491 2,389 2,261
-------- -------- -------- ------- --------
120,215 113,501 92,818 22,547 23,576
General and administrative......... 12,121 13,017 13,528 2,940 3,460
Restructuring charge............... -- -- -- -- 14,500
Depreciation and amortization...... 8,772 4,888 3,767 1,110 1,055
-------- -------- -------- ------- --------
Total costs and expenses............. 141,108 131,406 110,113 26,597 42,591
-------- -------- -------- ------- --------
Operating income (loss).............. 432 4,346 5,563 422 (13,787)
Other expenses (income):
Interest expense................... 3,101 3,409 3,713 869 1,037
Interest income.................... (396) (532) (470) (102) (149)
-------- -------- -------- ------- --------
2,705 2,877 3,243 767 888
-------- -------- -------- ------- --------
Income (loss) before minority
interest, income taxes and
extraordinary item................. (2,273) 1,469 2,320 (345) (14,675)
Minority interest.................... 604 424 321 38 143
Income tax expense................... 240 106 140 60 30
-------- -------- -------- ------- --------
Income (loss) before extraordinary
item............................... (3,117) 939 1,859 (443) (14,848)
Extraordinary loss................... -- -- -- -- 2,816
-------- -------- -------- ------- --------
Net income (loss).................... $ (3,117) $ 939 $ 1,859 $ (443) $(17,664)
======== ======== ======== ======= ========
</TABLE>
See Notes to Consolidated Financial Statements.
F-4
<PAGE> 123
APCOA, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(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)
Net loss (unaudited).................... (17,664) (17,664)
Non-cash distribution to affiliate
(unaudited)........................... (6,511) (6,511)
Contribution to capital (unaudited)..... 728 728
----- -- ------- -------- --------
Balance (deficit) at March 31, 1998
(unaudited)........................... 26.3 $1 $11,422 $(57,129) $(45,706)
===== == ======= ======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
F-5
<PAGE> 124
APCOA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31 ENDED MARCH 31,
------------------------------ -------------------
1995 1996 1997 1997 1998
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss)...................... $(3,117) $ 939 $ 1,859 $ (443) (17,664)
Adjustment to reconcile net income
(loss) to net cash provided by (used
in) operations:
Depreciation and amortization........ 8,772 4,888 3,767 1,110 1,055
Restructuring charge................. 14,500
Changes in operating assets and
liabilities:
(Increase) decrease in notes and
accounts receivable............. (686) 1,041 (3,495) (1,120) (2,968)
(Increase) decrease in prepaid
assets.......................... (2) 163 273 (88) (319)
(Increase) decrease in other
assets.......................... (452) (1,071) 216 95 (1,321)
Increase (decrease) in accounts
payable......................... 2,067 (845) 294 (3,661) 176
Increase (decrease) in accrued
liabilities..................... (1,340) (1,209) (2,982) 960 3,413
(Increase) decrease in due from
affiliate....................... (902) (1,864) 999 (1,069) (1,889)
------- -------- ------- ------- --------
Net cash provided by (used in)
operating activities................. 4,340 2,042 931 (4,216) (5,017)
INVESTING ACTIVITIES
Purchase of leaseholds and equipment... (2,782) (2,552) (2,357) (257) (1,600)
Purchase of leaseholds and equipment by
joint ventures....................... (1,930) (1,181) (480) (24)
Increase in other assets............... (100) (906) (270) (491)
Businesses acquired, net of cash, and
including direct acquisition costs... (227) 151 (131) (70,754)
Proceeds from disposition of leaseholds
and equipment........................ 122 384
------- -------- ------- ------- --------
Net cash used in investing
activities........................... (4,917) (3,349) (3,592) (658) (72,869)
FINANCING ACTIVITIES
Proceeds from refinancing.............. 11,217
Payments due to refinancing............ (11,071)
Proceeds from long-term borrowings..... 1,027 4,269 6,508 148,949
Payments on long-term borrowings....... (1,183) (412) (829) (85) (40,584)
Proceeds from joint venture
borrowings........................... 2,430 2,665 400
Payments on joint venture borrowing.... (140) (1,414) (389) (119) (105)
Payments of debt issuance costs........ (724) (5,899)
Proceeds from issuance of preferred
stock................................ 40,683
Redemption of redeemable preferred
stock................................ (8,000)
------- -------- ------- ------- --------
Net cash provided by financing
activities........................... 1,107 1,288 3,451 6,304 135,044
------- -------- ------- ------- --------
Increase (decrease) in cash............ 530 (19) 790 1,430 57,158
Cash at beginning of period............ 2,021 2,551 2,532 2,532 3,322
------- -------- ------- ------- --------
CASH AT END OF PERIOD.................. $ 2,551 $ 2,532 $ 3,322 $ 3,962 $ 60,480
======= ======== ======= ======= ========
</TABLE>
See Notes to Consolidated Financial Statements.
F-6
<PAGE> 125
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
parking contracts in the ordinary course of business.
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.
LEASEHOLDS AND EQUIPMENT--Leaseholds, equipment and leasehold improvements
are stated at cost. Leaseholds (cost of parking contracts) 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 leaseholds of
$184, $481 and $478 in 1995, 1996 and 1997, respectively.
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
F-7
<PAGE> 126
APCOA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
at December 31, 1996 and 1997, respectively, are amortized over the terms of the
credit agreements using the straight-line method.
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. Effective
January 1, 1998, the Company adopted Statement No. 130, Reporting Comprehensive
Income, which establishes the standards for reporting and displaying
comprehensive earnings and its components as part of a full set of financial
statements. Since this statement applies only to the presentation of
comprehensive income, it did not have any impact on the Company's results of
operations, financial position or cash flows. In addition, the Company does not
have any elements of comprehensive income.
INTERIM FINANCIAL DATA--The unaudited consolidated balance sheet as of
March 31, 1998, and the related consolidated statements of operations and cash
flows for the three months ended March 31, 1997 and 1998 and the consolidated
statement of stockholders' equity (deficit) for the three months ended March 31,
1998, have been prepared in accordance with generally accepted accounting
principles for interim financial information and with Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and notes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting only of adjustments of
a normal and recurring nature) considered necessary for a fair presentation of
the financial position and results of operations have been included. Operating
results for the three months ended March 31, 1998 are not necessarily indicative
of the results that might be expected for the year ending December 31, 1998.
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
F-8
<PAGE> 127
APCOA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
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.
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 and 1997.
A reconciliation of the Company's reported income tax expense to the amount
computed by multiplying income (loss) before minority interest and income taxes
by the effective federal income tax rate is as follows:
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Statutory amount (benefit)............. $(773) $ 499 $ 789
Benefit from carryforward of net
operating losses..................... -- (499) (789)
Reduction in benefit due to inability
to carryback operating losses........ 773 -- --
State and local income taxes........... 240 106 140
----- ----- -----
Income tax expense..................... $ 240 $ 106 $ 140
===== ===== =====
</TABLE>
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
F-9
<PAGE> 128
APCOA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
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 offers deferred compensation arrangements for certain key
executives and sponsors an employees' savings and retirement plan in which
certain employees are eligible to participate. Subject to their continued
employment by the Company, employees offered deferred compensation arrangements
will receive a defined monthly benefit upon attaining age 65. At December 31,
1996 and 1997, the Company has accrued $1,668 and $1,733, respectively,
representing the present value of the future benefit payments. 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.
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>
F-10
<PAGE> 129
APCOA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
Rent expense, including percentage rents, was $97,343, $90,419 and $69,113
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 -- Holberg Industries, Inc. (Holberg), was
issued 60 shares of preferred stock in 1994 for $6,000. Holberg 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 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 Holberg 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 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.
F-11
<PAGE> 130
APCOA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
NOTE K. SUBSEQUENT ACQUISITIONS AND FINANCINGS (UNAUDITED)
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, 16% of the common stock of the Company
outstanding as of January 15, 1998 and the assumption of certain liabilities. In
addition, on March 30, 1998, the Company paid to the Standard owners $2.8
million, generally representing Standard's earnings through the date of the
acquisition and Standard's cash on hand at such time. Financing of the
acquisition included a contribution from AP Holdings, Inc., and other
transactions as described below.
The acquisition has been accounted for under the purchase method;
accordingly, its results are included in the consolidated financial statements
of the Company from the date of acquisition. Following is the preliminary
purchase price allocation (the final purchase price allocation will be based on
a final determination of the fair value of assets acquired and liabilities
assumed). Management believes that the final allocation of the purchase price
will not materially differ from the preliminary estimated amounts.
<TABLE>
<S> <C>
Cash consideration.......................................... $65,000
5.0095230 shares of common stock issued, at calculated
put/call value............................................ 4,589
Closing distribution to the Standard owners................. 2,822
Direct acquisition costs.................................... 5,219
-------
Total purchase price........................................ $77,630
=======
Cash........................................................ $ 1,711
Notes and accounts receivable............................... 2,687
Prepaid expenses............................................ 150
Property and equipment...................................... 1,118
Cost of parking contracts................................... 6,853
Cost in excess of net assets acquired....................... 74,162
Other assets................................................ 991
Accounts payable and accrued expenses....................... (1,872)
Restructuring reserves...................................... (2,000)
Long-term severance liabilities............................. (5,000)
Other liabilities........................................... (1,170)
-------
$77,630
=======
</TABLE>
The put/call value is based primarily upon a multiple of EBITDA of the
Company. For financial reporting purposes the Company believes that the put/call
value is the best measure of fair value of the common stock issued in connection
with the acquisition because such value was negotiated at arms' length and there
is no active market for the Company's common stock. Direct acquisition costs
incurred in connection with the acquisition include investment banking fees of
$3,289 and legal and other professional fees of $1,930.
The restructuring reserves represent the estimated costs to integrate
existing information and operating systems of Standard in connection with the
Company's business plans.
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
F-12
<PAGE> 131
APCOA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
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.
In connection with the early extinguishment of debt in March 1998, the
Company recorded an extraordinary loss of $2,816. The extraordinary loss
represents the unamortized balance of debt issuance costs related to the
Company's previous credit agreement of $727 and a prepayment penalty of $2,089
related to the Company's previous credit agreement.
The following unaudited pro forma results of operations for the year ended
December 31, 1997 and the three months ended March 31, 1998 assume the
acquisition of Standard and related transactions occurred at the beginning of
each period presented:
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
1997 1998
------------ ---------------
<S> <C> <C>
Net sales................................................ $186,078 $ 44,769
Loss before extraordinary item........................... (2,824) (16,134)
</TABLE>
This pro forma information does not purport to be indicative of the results
that actually would have been obtained if the combined operations had been
conducted during the periods presented and is not intended to be a projection of
future results.
On May 1, 1998, the Company acquired the remaining 76% interest in
Executive Parking Industries LLC (EPI), through the acquisition of all of the
outstanding capital stock of S&S Parking, Inc., the sole asset of which was such
76% interest in EPI, for $7.0 million in cash. In addition, on June 1, 1998, the
Company acquired all of the outstanding capital stock of Century Parking, Inc.,
and Sentry Parking Corporation, for $5.2 million in cash at closing and $1.0
million payable on the third anniversary of the closing date. These acquisitions
will be accounted for under the purchase method. The operating results of the
businesses are not material to the consolidated results of the Company.
NOTE L. RESTRUCTURING CHARGE
Included in the "restructuring charge" in the accompanying consolidated
statements of operations for the three months ended March 31, 1998 are the
following:
<TABLE>
<S> <C>
Employee severance costs.................................... $ 5,800
Employee relocation costs................................... 5,000
Impairment of assets that will no longer be used............ 2,400
Other restructuring costs................................... 1,300
-------
$14,500
=======
</TABLE>
During the first quarter of 1998, management performed a thorough analysis
of the costs associated with implementing the business plan of consolidating the
Company's headquarters in Chicago and costs related to Company staff reductions.
During the first quarter of 1998, all affected employees were notified of the
Company's plans. It is expected that substantially all actions related to the
restructuring will be completed during 1998.
F-13
<PAGE> 132
APCOA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
NOTE M. SUBSIDIARY GUARANTORS
All of the Company's direct or indirect wholly owned domestic subsidiaries,
including Standard, other than inactive subsidiaries, fully, unconditionally,
jointly and severally guarantee the Senior Subordinated Notes discussed in Note
K. 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 non-guarantor subsidiaries include
joint ventures, wholly owned subsidiaries of the Company organized under the
laws of foreign jurisdictions and inactive subsidiaries, all of which are
included in the consolidated financial statements. 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
Equity in earnings of subsidiaries.......... 1,240 -- -- (1,240) --
Net income (loss)........................... (3,117) 216 1,024 (1,240) (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 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
Leaseholds and equipment, net............... 5,925 146 5,605 -- 11,676
Cost in excess of net assets acquired,
net....................................... 16,479 639 -- -- 17,118
Investment in subsidiaries.................. 3,357 -- -- (3,357) --
Total assets................................ 44,186 977 11,017 (3,357) 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)........ (19,053) 600 (1,421) (3,357) (23,231)
Total liabilities and stockholders'
equity.................................... 44,186 977 11,017 (3,357) 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
Equity in earnings of subsidiaries.......... 663 -- -- (663) --
Net income (loss)........................... 939 216 447 (663) 939
Statement of Cash Flows Data:
Net cash provided by (used in) operating
activities................................ 2,012 286 (256) -- 2,042
Investing activities:
Purchase of leaseholds and equipment...... (2,481) (71) (1,181) -- (3,733)
</TABLE>
F-14
<PAGE> 133
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>
Other..................................... $ 384 $ -- $ -- $ -- $ 384
-------- -------- ------- -------- --------
Net cash used in investing activities....... (2,097) (71) (1,181) -- (3,349)
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............... 10,587 326 2,893 -- 13,806
Current assets.............................. 12,801 1,292 4,161 -- 18,254
Leaseholds and equipment, net............... 6,246 227 5,867 -- 12,340
Cost in excess of net assets acquired,
net....................................... 16,190 1,432 835 -- 18,457
Investment in subsidiaries.................. 3,652 -- -- (3,652) --
Total assets................................ 46,000 3,477 13,270 (3,652) 59,095
Accounts payable............................ 13,574 1,756 1,071 -- 16,401
Current liabilities......................... 26,593 2,178 6,542 -- 35,313
Long-term borrowings, excluding current
portion................................... 28,747 -- 5,434 -- 34,181
Redeemable preferred stock.................. 8,728 -- -- -- 8,728
Total stockholders' equity (deficit)........ (20,229) 1,219 403 (3,652) (22,259)
Total liabilities and stockholders'
equity.................................... 46,000 3,477 13,270 (3,652) 59,095
Income Statement Data:
Parking revenue............................. 78,051 3,439 34,186 -- 115,676
Gross profit................................ 18,400 940 3,518 -- 22,858
Depreciation and amortization............... 2,836 65 866 -- 3,767
Operating income............................ 4,451 419 693 -- 5,563
Interest expense (income), net.............. 2,654 -- 589 -- 3,243
Equity in earnings of subsidiaries.......... 202 -- -- (202) --
Net income (loss)........................... 1,859 419 (217) (202) 1,859
Statement of Cash Flows Data:
Net cash provided by (used in) operating
activities................................ (173) 704 400 -- 931
Investing activities:
Purchase of leaseholds and equipment...... (2,357) -- (480) -- (2,837)
Other..................................... (1,467) 81 631 -- (755)
-------- -------- ------- -------- --------
Net cash provided by (used in) investing
activities................................ (3,824) 81 151 -- (3,592)
Financing activities:
Proceeds from long-term borrowings........ 4,269 -- 400 -- 4,669
Payments on long-term borrowings.......... (685) -- (533) -- (1,218)
-------- -------- ------- -------- --------
Net cash provided by (used in) financing
activities................................ 3,584 -- (133) -- 3,451
THREE MONTHS ENDED MARCH 31, 1997
Income Statement Data:
Parking revenue............................. 17,437 524 9,058 -- 27,019
Gross profit................................ 3,600 27 845 -- 4,472
Depreciation and amortization............... 928 12 170 -- 1,110
Operating income (loss)..................... 260 (85) 247 -- 422
Interest expense (income), net.............. 612 -- 155 -- 767
Equity in earnings of subsidiaries.......... (31) -- -- 31 --
Net income (loss)........................... (443) (85) 54 31 (443)
Statement of Cash Flows Data:
Net cash provided by (used in) operating
activities................................ (4,686) 125 345 -- (4,216)
</TABLE>
F-15
<PAGE> 134
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>
Investing activities:
Purchase of leaseholds and equipment...... $ (213) $ (44) $ -- $ -- $ (257)
Other..................................... (243) (158) -- -- (401)
-------- -------- ------- -------- --------
Net cash provided by (used in) investing
activities................................ (456) (202) -- -- (658)
Financing activities:
Proceeds from long-term borrowings........ 6,508 -- -- -- 6,508
Payments on long-term borrowings.......... (85) -- (119) -- (204)
-------- -------- ------- -------- --------
Net cash provided by (used in) financing
activities................................ 6,423 -- (119) -- 6,304
THREE MONTHS ENDED MARCH 31, 1998
Balance Sheet Data:
Cash and cash equivalents................... 56,537 2,961 982 -- 60,480
Notes and accounts receivable............... 10,929 4,458 4,074 -- 19,461
Current assets.............................. 68,698 7,535 5,303 -- 81,536
Leaseholds and equipment, net............... 8,551 8,203 5,553 -- 22,307
Cost in excess of net assets acquired,
net....................................... 19,470 75,204 830 -- 95,504
Investment in subsidiaries.................. 90,472 -- -- (90,472) --
Total assets................................ 196,981 92,925 14,076 (90,472) 213,510
Accounts payable............................ 13,955 1,483 1,140 -- 16,578
Current liabilities......................... 43,786 3,957 6,102 -- 53,845
Long-term borrowings, excluding current
portion................................... 142,615 321 6,104 -- 149,040
Redeemable preferred stock.................. 40,683 -- -- -- 40,683
Common stock subject to put/call rights..... 4,589 -- -- -- 4,589
Total stockholders' equity (deficit)........ (43,939) 87,727 978 (90,472) (45,706)
Total liabilities and stockholders'
equity.................................... 196,981 92,925 14,076 (90,472) 213,510
Income Statement Data:
Parking revenue............................. 17,847 1,054 9,903 -- 28,804
Gross profit................................ 3,673 331 1,224 -- 5,228
Restructuring charge........................ 14,500 -- -- -- 14,500
Depreciation and amortization............... 766 28 261 -- 1,055
Operating income (loss)..................... (14,466) 194 485 -- (13,787)
Interest expense (income), net.............. 732 -- 156 -- 888
Equity in earnings of subsidiaries.......... 383 -- -- (383) --
Net income (loss)........................... (17,664) 194 189 (383) (17,664)
Statement of Cash Flows Data:
Net cash provided by (used in) operating
activities................................ (5,311) 231 63 -- (5,017)
Investing activities:
Purchase of leaseholds and equipment...... (1,600) -- (24) -- (1,624)
Businesses acquired....................... (72,465) 1,711 -- -- (70,754)
Other..................................... (491) -- -- -- (491)
-------- -------- ------- -------- --------
Net cash provided by (used in) investing
activities................................ (74,556) 1,711 (24) -- (72,869)
Financing activities:
Proceeds from long-term borrowings........ 148,949 -- -- -- 148,949
Payments on long-term borrowings.......... (40,584) -- (105) -- (40,689)
Payments of debt issuance costs........... (5,899) -- -- -- (5,899)
Proceeds from issuance of preferred
stock................................... 40,683 -- -- -- 40,683
Redemption of redeemable preferred
stock................................... (8,000) -- -- -- (8,000)
-------- -------- ------- -------- --------
Net cash provided by (used in) financing
activities................................ 135,149 -- (105) -- 135,044
</TABLE>
F-16
<PAGE> 135
APCOA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
The following pro forma income statement data reflects the Combination with
Standard and the Other Acquisitions as if they had occurred as of the beginning
of the periods presented. The pro forma balance sheet data as of March 31, 1998
reflects the acquisition of EPI as if it had occurred on that date.
<TABLE>
<CAPTION>
APCOA, GUARANTOR NON-GUARANTOR
INC. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL
------ ------------ ------------- ------------ -----
<S> <C> <C> <C> <C> <C>
1997 (PRO FORMA)
Income Statement Data:
Parking revenue............................. 78,051 73,841 34,186 -- 186,078
Gross profit................................ 18,400 17,995 3,518 -- 39,913
Depreciation and amortization............... 2,656 3,974 866 -- 7,496
Operating income............................ $ 4,631 $ 7,048 $ 693 $ -- $ 12,372
Interest expense (income), net.............. 14,245 (130) 620 -- 14,735
Equity in earnings of subsidiaries.......... 6,930 -- -- (6,930) --
Net income (loss)........................... (2,824) 7,178 (248) (6,930) (2,824)
THREE MONTHS ENDED MARCH 31, 1998 (PRO FORMA)
Balance Sheet Data:
Cash and cash equivalents................... 49,537 3,559 982 -- 54,078
Notes and accounts receivable............... 10,929 4,892 4,074 -- 19,895
Current assets.............................. 61,698 8,802 5,303 -- 75,803
Leaseholds and equipment, net............... 8,551 9,546 5,553 -- 23,650
Cost in excess of net assets acquired,
net....................................... 19,470 81,628 830 -- 101,928
Investment in subsidiaries.................. 97,886 -- -- (97,886) --
Total assets................................ 196,981 101,965 14,076 (97,886) 215,136
Accounts payable............................ 13,955 2,435 1,140 -- 17,530
Current liabilities......................... 43,786 5,583 6,102 -- 55,471
Long-term borrowings, excluding current
portion................................... 142,615 321 6,104 -- 149,040
Redeemable preferred stock.................. 40,683 -- -- -- 40,683
Common stock subject to put/call rights..... 4,589 -- -- -- 4,589
Total stockholders' equity (deficit)........ (43,939) 95,141 978 (97,886) (45,706)
Total liabilities and stockholders'
equity.................................... 196,981 101,965 14,076 (97,886) 215,136
Income Statement Data:
Parking revenue............................. 17,847 17,019 9,903 -- 44,769
Gross profit................................ 3,673 4,301 1,224 -- 9,198
Restructuring charge........................ 14,500 -- -- -- 14,500
Depreciation and amortization............... 737 862 261 -- 1,860
Operating income (loss)..................... (14,404) 1,626 485 -- (12,293)
Interest expense (income), net.............. 3,519 (7) 156 -- 3,668
Equity in earnings of subsidiaries.......... 1,822 -- -- (1,822) --
Income (loss) before extraordinary item..... (16,134) 1,633 189 (1,822) (16,134)
</TABLE>
F-17
<PAGE> 136
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-18
<PAGE> 137
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-19
<PAGE> 138
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 -- leased facilities............. 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
======= ======= =======
Pro Forma Data (unaudited):
Income before provision for income taxes (from above)..... $ 2,978 $ 4,570 $ 5,274
Income tax provision...................................... 1,191 1,828 2,110
------- ------- -------
Net income................................................ $ 1,787 $ 2,742 $ 3,164
======= ======= =======
</TABLE>
The accompanying notes are an integral part of this statement.
F-20
<PAGE> 139
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-21
<PAGE> 140
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-22
<PAGE> 141
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-23
<PAGE> 142
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-24
<PAGE> 143
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-25
<PAGE> 144
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-26
<PAGE> 145
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-27
<PAGE> 146
STANDARD PARKING
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Unaudited Pro Forma Net Income. The unaudited pro forma net income
represents the results of operations adjusted to reflect a provision for income
tax on historical income as if Standard Parking were a C corporation. The
difference between the pro forma income tax rates utilized and federal statutory
rate of 34% relates primarily to state income taxes (approximately 6%, net of
federal tax benefit).
F-28
<PAGE> 147
=========================================================
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............................. 17
The Exchange Offer....................... 23
Certain Federal Income Tax Consequences
of the Exchange Offer.................. 30
The Transactions......................... 31
Use of Proceeds.......................... 32
Capitalization........................... 33
Selected Historical Financial Data of
APCOA.................................. 34
Management's Discussion and Analysis of
Financial Condition and Results of
Operations of APCOA.................... 36
Selected Historical Financial Data of
Standard............................... 44
Management's Discussion and Analysis of
Financial Condition and Results of
Operations of Standard................. 45
Business................................. 48
Management............................... 56
Security Ownership of Certain Beneficial
Holders and Management................. 64
Certain Relationships and Related Party
Transactions........................... 66
Description of Indebtedness.............. 70
Description of New Notes................. 71
Description of Certain Federal Income Tax
Consequences........................... 101
Plan of Distribution..................... 104
Legal Matters............................ 105
Experts.................................. 105
Index of Certain Defined Terms........... 106
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> 148
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 Amended and Restated 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> 149
<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 Articles of Incorporation of Standard Parking Corporation.*
3.16 Amended and Restated By-laws of Standard Parking Corporation.*
3.17 Articles of Incorporation of Standard Parking Corporation IL.*
3.18 By-laws of Standard Parking Corporation IL.*
3.19 Articles of Incorporation of Standard Auto Park, Inc.*
3.20 Amended and Restated By-laws of Standard Auto Park, Inc.*
3.21 Articles of Incorporation of S&S Parking, Inc. ***
3.22 By-laws of S&S Parking, Inc.***
3.23 Articles of Incorporation of Century Parking, Inc.***
3.24 By-laws of Century Parking, Inc.***
3.25 Restated Articles of Incorporation of Sentry Parking Corporation***
3.26 By-laws of Sentry Parking Corporation***
4.1 Indenture, dated as of March 30, 1998, amended as of , 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 Executive Transition Employment Agreement between the Company and James V. LaRocco, Jr.***
10.9 Severance 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> 150
<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>
- ---------------
* Previously filed.
** To be filed by amendment.
*** Filed herewith.
(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.
II-3
<PAGE> 151
(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.
(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> 152
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 June 9, 1998.
APCOA, INC.
By **
------------------------------------
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 June 9, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
** Chief Executive Officer and Director
- ----------------------------------------------------- (Principal Executive Officer)
Myron C. Warshauer
* President and Director
- -----------------------------------------------------
G. Walter Stuelpe, Jr.
* Chief Financial Officer and Executive Vice
- ----------------------------------------------------- President (Principal Financial and Accounting
Michael J. Celebrezze Officer)
* Chairman and Director
- -----------------------------------------------------
John V. Holten
* Vice President and Director
- -----------------------------------------------------
Gunnar E. Klintberg
** Director
- -----------------------------------------------------
Patrick J. Meara
*By: /s/ ROBERT N. SACKS
------------------------------------------------
Robert N. Sacks
Attorney-in-Fact
**By: /s/ MICHAEL K. WOLF
-----------------------------------------------
Michael K. Wolf
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 153
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 June 9, 1998.
TOWER PARKING, INC.
By *
------------------------------------
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 June 9, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
* President and Director
- ----------------------------------------------------- (Principal Executive Officer)
G. Walter Stuelpe, Jr.
* Vice President and Treasurer
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
* Director
- -----------------------------------------------------
John V. Holten
* Director
- -----------------------------------------------------
Gunnar E. Klintberg
*By: /s/ ROBERT N. SACKS
------------------------------------------------
Robert N. Sacks
Attorney-in-Fact
</TABLE>
II-6
<PAGE> 154
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 June 9, 1998.
APCOA CAPITAL CORPORATION
By *
------------------------------------
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 June 9, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
* President and Director (Principal Executive
- ----------------------------------------------------- Officer)
G. Walter Stuelpe, Jr.
* Vice President and Treasurer (Principal
- ----------------------------------------------------- Financial and Accounting Officer)
Michael J. Celebrezze
* Director
- -----------------------------------------------------
John V. Holten
* Director
- -----------------------------------------------------
Gunnar E. Klintberg
*By: /s/ ROBERT N. SACKS
------------------------------------------------
Robert N. Sacks
Attorney-in-Fact
</TABLE>
II-7
<PAGE> 155
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 June 9, 1998.
GRAELIC, INC.
By *
------------------------------------
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 persons in the
capacities indicated and on June 9, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
* President
- ----------------------------------------------------- (Principal Executive Officer)
James V. LaRocco, Jr.
* Vice President and Director
- -----------------------------------------------------
G. Walter Stuelpe, Jr.
* Vice President, Treasurer and Director
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
/s/ ROBERT N. SACKS Secretary and Director
- -----------------------------------------------------
Robert N. Sacks
*By: /s/ ROBERT N. SACKS
------------------------------------------------
Robert N. Sacks
Attorney-in-Fact
</TABLE>
II-8
<PAGE> 156
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 June 9, 1998.
A-I AUTO PARK, INC.
By *
------------------------------------
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 June 9, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
* President and Director
- ----------------------------------------------------- (Principal Executive Officer)
G. Walter Stuelpe, Jr.
* Vice President, Treasurer and Director
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
/s/ ROBERT N. SACKS Secretary and Director
- -----------------------------------------------------
Robert N. Sacks
*By:
/s/ ROBERT N. SACKS
------------------------------------------------
Robert N. Sacks
Attorney-in-Fact
</TABLE>
II-9
<PAGE> 157
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 June 9, 1998.
EVENTS PARKING COMPANY, INC.
By *
------------------------------------------
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 June 9, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
* President
- ----------------------------------------------------- (Principal Executive Officer)
Edward P. Settino, Jr.
* Vice President and Director
- -----------------------------------------------------
G. Walter Stuelpe, Jr.
* Treasurer and Director
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
/s/ ROBERT N. SACKS Director
- -----------------------------------------------------
Robert N. Sacks
*By:
/s/ ROBERT N. SACKS
------------------------------------------------
Robert N. Sacks
Attorney-in-Fact
</TABLE>
II-10
<PAGE> 158
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 June 9, 1998.
METROPOLITAN PARKING SYSTEM, INC.
By *
------------------------------------------
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 June 9, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
* President
- ----------------------------------------------------- (Principal Executive Officer)
Edward P. Settino, Jr.
* Vice President and Director
- -----------------------------------------------------
G. Walter Stuelpe, Jr.
* Treasurer and Director
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
/s/ ROBERT N. SACKS Director
- -----------------------------------------------------
Robert N. Sacks
*By:
/s/ ROBERT N. SACKS
------------------------------------------------
Robert N. Sacks
Attorney-in-Fact
</TABLE>
II-11
<PAGE> 159
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 June 9, 1998.
STANDARD PARKING CORPORATION
By *
------------------------------------
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 June 9, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
* President and Director
- ----------------------------------------------------- (Principal Executive Officer)
Myron C. Warshauer
** Assistant Treasurer
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
*By: /s/ MICHAEL K. WOLF
------------------------------------------------
Michael K. Wolf
Attorney-in-Fact
**By: /s/ ROBERT N. SACKS
-----------------------------------------------
Robert N. Sacks
Attorney-in-Fact
</TABLE>
II-12
<PAGE> 160
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 June 9, 1998.
STANDARD PARKING CORPORATION IL
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 June 9, 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> 161
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 June 9, 1998.
STANDARD AUTO PARK, INC.
By *
----------------------------------------
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 June 9, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
* President and Director
- ----------------------------------------------------- (Principal Executive Officer)
Myron C. Warshauer
** Assistant Treasurer
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
*By: /s/ MICHAEL K. WOLF
- -----------------------------------------------------
Michael K. Wolf
Attorney-in-Fact
**By: /s/ ROBERT N. SACKS
-----------------------------------------------
Robert N. Sacks
Attorney-in-Fact
</TABLE>
II-14
<PAGE> 162
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 June 9, 1998.
S&S PARKING, 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 June 9, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ MYRON C. WARSHAUER Chief Executive Officer and Director
- ----------------------------------------------------- (Principal Executive Officer)
Myron C. Warshauer
/s/ MICHAEL J. CELEBREZZE Vice President and Treasurer
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
</TABLE>
II-15
<PAGE> 163
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 June 9, 1998.
CENTURY PARKING, 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 June 9, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ MYRON C. WARSHAUER Chief Executive Officer and Director
- ----------------------------------------------------- (Principal Executive Officer)
Myron C. Warshauer
/s/ MICHAEL J. CELEBREZZE Vice President and Treasurer
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
</TABLE>
II-16
<PAGE> 164
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 June 9, 1998.
SENTRY PARKING CORPORATION
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 June 9, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ MYRON C. WARSHAUER Chief Executive Officer and Director
- ----------------------------------------------------- (Principal Executive Officer)
Myron C. Warshauer
/s/ MICHAEL J. CELEBREZZE Vice President and Treasurer
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Michael J. Celebrezze
</TABLE>
II-17
<PAGE> 165
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-18
<PAGE> 166
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-19
<PAGE> 167
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 Amended and Restated 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 Articles of Incorporation of Standard Parking Corporation.*
3.16 Amended and Restated By-laws of Standard Parking
Corporation.*
3.17 Articles of Incorporation of Standard Parking Corporation
IL.*
3.18 By-laws of Standard Parking Corporation IL.*
3.19 Articles of Incorporation of Standard Auto Park, Inc.*
3.20 Amended and Restated By-laws of Standard Auto Park, Inc.*
3.21 Articles of Incorporation of S&S Parking, Inc. ***
3.22 By-laws of S&S Parking, Inc.***
3.23 Articles of Incorporation of Century Parking, Inc.***
3.24 By-laws of Century Parking, Inc.***
3.25 Restated Articles of Incorporation of Sentry Parking
Corporation***
3.26 By-laws of Sentry Parking Corporation***
4.1 Indenture, dated as of March 30, 1998, amended as of
, 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.***
</TABLE>
<PAGE> 168
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
<C> <S> <C>
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 Executive Transition Employment Agreement between the
Company and James V. LaRocco, Jr.***
10.9 Severance 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>
- ---------------
* Previously filed.
** To be filed by amendment.
*** Filed herewith.
<PAGE> 1
Exhibit 3.21
A485831
================================================================================
STATE OF CALIFORNIA
[GRAPHIC OMITTED]
[SEAL OMITTED]
SECRETARY OF STATE
I, BILL JONES, Secretary of State of the State of California, hereby
certify:
That the annexed transcript has been compared with the corporate record on
file in this office, of which it purports to be a copy, and that same is full,
true and correct.
IN WITNESS WHEREOF, I execute
this certificate and affix the Great
Seal of the State of California this
JAN 07 1997
------------------------------------
THE GREAT SEAL OF THE STATE OF
EUREKA
CALIFORNIA
/s/ Bill Jones
Secretary of State
SEC/STATE FORM CE-107 (REV.11/96) BG 34095
================================================================================
<PAGE> 2
A485831
ENDORSED
FILED
In the office of the Secretary of State
of the State of California
DEC 30 1996
/s/ Bill Jones
BILL JONES, Secretary of State
CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
EXECUTIVE PARKING INC.
The undersigned certify that:
1. They are the President and the Chief Financial Officer, respectively, of
Executive Parking Inc., a California corporation (Corporation Number 912380).
2. Article One of the Articles of Incorporation of this corporation is
amended to read as follows:
"The name of this corporation is S & S Parking, Inc."
4. The foregoing amendment of Articles of Incorporation has been duly
approved by the Board of Directors.
5. The foregoing amendment of Articles of Incorporation has been duly
approved by the required vote of shareholders in accordance with Section 902 of
the Corporations Code. The total number of outstanding shares of the corporation
is 1,000. The number of shares voting in favor of the amendment equaled or
exceeded the vote required. The percentage vote required was more than 50%.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
Date: December 26, 1996
/s/ Ed Simmons
--------------------------------------
Edward Simmons, President
/s/ Dale Stark
--------------------------------------
Dale Stark, Chief Financial Officer
2723.00020
12/15/96/CLH:CLH/66989.1 CERT OF AMENDMENT 66989
<PAGE> 3
SEC/STATE FORM Cl-4 (REV. 1-77) RECEIPT
DUP (1) OSP
Issuing Certificate of Reservation
For Corporate Name ______ $4.00
Special Handling:
L.A. CONSTRUCTION AND SERVICES, INC.
1100 Glendon Avenue Suite 1651
Los Angeles, CA 90024
Attn: ED Simmons
No. 286458
================================================================================
State of California
[GRAPHIC OMITTED]
Office of the No. 286458
Secretary of State
I, MARCH FONG EU, Secretary of State of the State of California, do hereby
certify that the name:
EXECUTIVE PARKING, INC.
is not one which is likely to mislead the public and is not the same as, and
does not resemble, so closely as to tend to deceive the name of a corporation
formed under the laws of this State, or the name of a corporation not
incorporated under the laws of this State which is authorized to transact
intrastate business in this State, or a name which is under reservation, as
provided in Section 201 of the Corporations Code of this State, and that this
name is hereby reserved for a period of sixty days commencing on the date hereof
for the use of the applicant for this certificate.
Issued August 18, 1983 be
THE GREAT SEAL OF THE STATE OF
EUREKA
CALIFORNIA
/s/ March Fong Eu
Secretary of State
================================================================================
<PAGE> 4
================================================================================
[GRAPHIC OMITTED] State
of
California
OFFICE OF THE SECRETARY OF STATE
I, MARCH FONG EU, Secretary of State of the State of California, hereby
certify:
That the annexed transcript has been compared with the record on file in
this office, of which it purports to be a copy, and that same is full, true and
correct.
IN WITNESS WHEREOF, I execute
this certificate and affix the Great
Seal of the State of California this
OCT 20 1983
------------------------------------
THE GREAT SEAL OF THE STATE OF
EUREKA
CALIFORNIA
/s/ March Fong Eu
Secretary of State
================================================================================
<PAGE> 5
ENDORSED
FILED
In the office of the Secretary of State
of the State of California
OCT 14 1983
MARCH FONG EU, Secretary of State
By JAMES E. HARRIS
Deputy
[LOGO] EXECUTIVE PARKING SERVICE
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
EDWARD E. SIMMONS AND DALE G. STARK certify that:
1. They are the president and secretary, respectively, of L.A. CONSTRUCTION &
SERVICES, Incorporated, a California Corporation.
2. Article One (1) of the atticles of incorporation of this corporation is
amended to read as follows: The name of the corporation is Executive Parking
Inc.
3. The foregoing amendment of articles of incorporation has been duly approved
by the board of directors.
4. The foregoing amendment of articles of incorporation has been duly approved
by the required vote of shareholders in accordance with Section 902 of the
Corporation Code. The total number of outstanding shares of the corporation is
1000. The total number of shares voting in favor of the amendment equaled or
exceeded the vote required. The percentage vote required was more than 50%.
/s/ Edward E. Simmons
--------------------------------------
EDWARD E. SIMMONS, President
/s/ Dale G. Stark
--------------------------------------
DALE G. STARK, Secretary
The undersigned declare under penalty of perjury that the matters set forth in
the foregoing certificate are true of their own knowledge:
Executed at Los Angeles on 9/8/83.
/s/ Edward E. Simmons
--------------------------------------
EDWARD E. SIMMONS
/s/ Dale G. Stark
--------------------------------------
DALE G. STARK
========1100 Glendon Ave., Suite 1515, Westwood, CA 90024 (213) 208-1172========
<PAGE> 6
912380
ENDORSED
FILED
In the office of the Secretary of State
of the State of California
MAR 5 1979
MARCH-FONG EU, Secretary of State
By BILL HOLDEN
Deputy
ARTICLES OF INCORPORATION
OF
L.A. CONSTRUCTION & SERVICES, INCORPORATED
ONE: The name of this Corporation is L.A. CONSTRUCTION & SERVICES,
INCORPORATED.
TWO: The purpose of this corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.
THREE: The name and address in this state of the corporation's initial
agent for service of process is EDWARD E. SIMMONS, 4322 Morro Drive, Woodland
Hills, CA.
FOUR: The total number of shares with the corporation is authorized to
issue is One Thousand Shares (1000).
FIVE: This corporation is a close corporation. The issued shares of this
corporation of all classes shall be held of record by not more than ten (10)
persons.
Dated: February __ , 1979
/s/ DALE GLENN STARK
----------------------------------
DALE GLENN STARK - Incorporator
/s/ EDWARD EARL SIMMONS
----------------------------------
EDWARD EARL SIMMONS - Incorporator
-1-
<PAGE> 7
We declare that we are the persons who executed the above Articles of
Incorporation, and such instrument is our act and deed.
/s/ DALE GLENN STARK
----------------------------------
DALE GLENN STARK
/s/ EDWARD EARL SIMMONS
----------------------------------
EDWARD EARL SIMMONS
-2-
<PAGE> 1
Exhibit 3.22
BY-LAWS OF
ARTICLE I
PLACE OF BUSINESS
The principal office for the transaction of the business of the corporation
shall be located at such place or places within the County of Los Angeles, State
of California, as the Board of Directors shall from time to time determine.
ARTICLE II
DIRECTORS - MANAGEMENT
Section 1. POWERS. Subject to the limitation of the Articles of Incorporation,
of the By-Laws and of the Laws of the State of California as to actions to be
authorized or approved by the shareholders, all corporate powers shall be
exercised by or under authority of, and the business and affairs of this
corporation shall be controlled by, a Board of Directors.
a. Exception for Close Corporation.
Notwithstanding the provisions of Section 1, in the event that this
corporation shall elect to become a close corporation, its Shareholders may
enter into a Shareholders' Agreement. Said agreement may provide for the
exercise of corporate powers and the management of the business and affairs of
this corporation by the Shareholders, provided however such agreement shall, to
the extent and so long as the discretion or the powers of the Board in its
management of corporate affairs is controlled by such agreement, impose upon
each Shareholder who is a party thereof, liability for managerial acts performed
or omitted by such person pursuant thereto otherwise imposed upon Directors.
Section 2. NUMBER OF DIRECTORS AND QUALIFICATIONS. The authorized number of
directors of the corporation shall be two until changed by amendment to the
Articles of Incorporation or by an amendment to this Section 2, Article I of
these By-Laws, adopted by the vote or written assent of the shareholders
entitled to exercise the majority of the voting power of the corporation.
Section 3. ELECTION AND TENURE OF OFFICE. The directors shall be elected by
ballot at the annual meeting of the shareholders, to serve for one year and
until their successors are elected and have qualified. Their term of office
shall begin immediately after election.
Section 4. VACANCIES. Vacancies in the Board of Directors may be filled by a
majority of the remaining directors, though less than a quorum, or by a sole
remaining director, and, each director so elected shall hold office until his
successor is elected at an annual meeting of shareholders or at a special
meeting called for that purpose.
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The Shareholders may at any time elect a director to fill any vacancy not
filled by the directors, and may elect the additional directors at the meeting
at which an amendment of the By-Laws is voted authorizing an increase in the
number of directors.
A vacancy or vacancies shall be deemed to exist in case of the death,
resignation or removal of any director, of if the shareholders shall increase
the authorized number of directors but shall fail at the meeting at which such
increase is authorized, or at an adjournment thereof, to elect the additional
director so provided for, or in case the shareholders fail at any time to elect
the full number of authorized directors.
If the Board of Directors accepts the resignation of a Director tendered
to take effect at a future time, The Board, or the shareholders, shall have
power to elect a successor to take office when the resignation shall become
effective.
No reduction of the number of directors shall have the effect of removing
any director prior to the expiration of his term or office.
The entire Board of Directors or any individual director may be removed
from office as provided in the Corporations Code. In such case, the remaining
Board members may elect a successor Director to fill such vacancy for the
remaining unexpired term of the Director so removed.
Section 5. NOTICE, PLACE AND MANNER OF MEETINGS. Meetings of the Board of
Directors may be called by the Chairman of the Board, or the President, or any
Vice President, or the Secretary, or any two (2) Directors and shall be held at
the principal executive office of the corporation in the State of California,
unless some other place is designated in the notice of the meeting. Members of
the Board may participate in a meeting through use of a conference telephone or
similar communications equipment so long as all members participating in such a
meeting can hear one another. Accurate minutes of any meeting of the Board or
any committee thereof, shall be maintained as required by the Corporations Code
by the Secretary or other Officer designated for that purpose.
Section 6. ORGANIZATION MEETINGS. The organization meetings of the Board of
Directors shall be held immediately following the adjournment of the annual
meetings of the Shareholders.
SECTION 7. OTHER REGULAR MEETINGS. Regular meetings of the Board of Directors
shall be held at the corporate offices, or such other place as may be designated
by the Board of Directors, on the 15th day of each month at 9:00 AM. If said day
shall fall upon a holiday, such meeting shall be held on the next succeeding
business day thereafter. No notice need be given at such regular meetings.
Section 9. SPECIAL MEETINGS - NOTICES - WAIVERS. Special meetings of the Board
may be called at any time by the President or, if he is absent or unable or
refuses to act, by any Vice President or the Secretary or by any two Directors,
or by one Director if only one is provided.
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<PAGE> 3
At least forty-eight (48) hours notice of the time and place of special
meetings shall be delivered personally to the Directors or personally
communicated to them by a corporate Officer by telephone or telegraph. If the
notice is sent to a Director by letter, it shall be addressed to him at his
address as it is shown upon the records of the corporation, (or if it is not so
shown on such records or is not readily ascertainable at the place in which the
meetings of the Directors are regularly held). In case such notice is mailed, it
shall be deposited in the United States mail, postage prepaid, in the place in
which the principal executive office of the corporation is located at least four
(4) days prior to the time of the holding of the meeting. Such mailing,
telegraphing, telephoning or delivery as above provided shall be due, legal and
personal notice to such Director.
When all of the Directors are present at any Directors' meeting, however
called or noticed, and either (i) sign a written consent thereto on the records
of such meeting, or, (ii) if a majority of the Directors are present and if
those not present sign a waiver of notice of such meeting or a consent to
holding the meeting or an approval of the minutes thereof, whether prior to or
after the holding of such meeting, which said waiver, consent or approval shall
be filed with the Secretary of the corporation or (iii) if a Director attends a
meeting without notice but without protesting, prior thereto or at its
commencement, the lack of notice to him, then the transactions thereof are as
valid as if had at a meeting regularly called and noticed.
Section 10. SOLE DIRECTOR PROVIDED BY ARTICLES OF INCORPORATION. In the event
only one Director is required by the By-Laws or Articles of Incorporation, then
any reference herein to notices, waivers, consents, meetings or other actions by
a majority or quorum of the Directors shall be deemed to refer to such notice,
waiver, etc., by such sole Director, who shall have all the rights and duties
and shall be entitled to exercise all of the powers and shall assume all the
responsibilities otherwise herein described as given to a Board of Directors.
Section 11. DIRECTORS ACTING BY UNANIMOUS WRITTEN CONSENT. Any action required
or permitted to be taken by the Board of Directors may be taken without a
meeting and with the same force and effect as if taken by a unanimous vote of
Directors, if authorized by a writing signed individually or collectively by all
members of the Board. Such consent shall be filed with the regular minutes of
the Board.
Section 12. A majority of the number of Directors as fixed by the Articles of
Incorporation or By-Laws shall be necessary to constitute a quorum for the
transaction of business, and the action of a majority of the Directors present
at any meeting at which there is a quorum, when duly assembled, is valid as a
corporate act; provided that a minority of the Directors, in the absence of a
quorum, may adjourn from time to time, but may not transact any business. A
meeting at which a quorum is initially present may continue to transact
business, notwithstanding the withdrawal of Directors, if any action taken is
approved by a majority of the required quorum for such meeting.
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<PAGE> 4
Section 13. NOTICE OF ADJOURNMENT. Notice of the time and place of holding an
adjourned meeting need not be given to absent Directors if the time and place be
fixed at the meeting adjourned and held within twenty-four (24) hours, but if
adjourned more than twenty-four (24) hours, notice shall be given to all
Directors not present at the time of the adjournment.
Section 14. COMPENSATION OF DIRECTORS. Directors, as such, shall not receive any
stated salary for their services, but by resolution of the Board a fixed sum and
expense of attendance, if any, may be allowed for attendance at each regular and
special meeting of the Board; provided that nothing herein contained shall be
construed to preclude any Director from serving the company in any other
capacity and receiving compensation therefor.
Section 15. COMMITTEES. Committees of the Board may be appointed by resolution
passed by a majority of the whole Board. Committees shall be composed of two or
more members of the Board, and shall have such powers of the Board as may be
expressly delegated to it by resolution of the Board of Directors, except those
powers expressly made non-delegable by the Corporations Code.
Section 16. ADVISORY DIRECTORS. The Board of Directors from time to time may
elect one or more persons to be Advisory Directors who shall not by such
appointment be members of the Board of Directors Advisory Directors shall be
available from time to time to perform special assignments specified by the
President, to attend meetings of the Board of Directors upon invitation and to
furnish consultation to the Board. The period during which the title shall be
held may be prescribed by the Board of Directors. If no period is prescribed,
the title shall be held at the pleasure of the Board.
Section 17. RESIGNATIONS. Any Director may resign effective upon giving written
notice to the Chairman of the Board, the President, the Secretary or the Board
of Directors of the corporation, unless the notice specifies a later time for
the effectiveness of such resignation. If the resignation is effective at a
future time, a successor may be elected to take office when the resignation
becomes effective.
ARTICLE III
OFFICERS
Section 1. OFFICERS. The officers of the corporation shall be a Chairman of the
Board or a President or both, a Secretary and a Chief Financial Officer. The
corporation may also have, at the discretion of the Board of Directors, one or
more Vice Presidents, one or more Assistant Secretaries and such other officers
as may be appointed in accordance with the provisions of Section 3 of this
Article. One person may hold two or more offices.
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<PAGE> 5
Section 2. ELECTION. The Officers of the corporation, except such Officers as
may be appointed in accordance with the provisions of Section 3 or Section 5 of
this Article shall be chosen annually by the Board of Directors, and each shall
hold his office until he shall resign or shall be removed or otherwise
disqualified to serve, or his successor shall be elected and qualified.
Section 3. SUBORDINATE OFFICERS, ETC. The Board of Directors may appoint such
other Officers as the business of the corporation may require, each of whom
shall hold office for such period, have such authority and perform such duties
as are provided in the By-Laws or as the Board of Directors may from time to
time determine.
Section 4. REMOVAL AND RESIGNATION. Any Officer may be removed, either with or
without cause, by a majority of the Directors at the time in office, at any
regular or special meeting of the Board, or, except in case of an Officer chosen
by the Board of Directors, by any Officer upon whom such power of removal may be
conferred by the Board of Directors.
Any Officer may resign at any time by giving written notice to the Board
of Directors, or to the President, or to the Secretary of the corporation. Any
such resignation shall take effect at the date of the receipt of such notice or
at any later time specified therein; and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it effective.
Section 5. VACANCIES. A vacancy in any office because of death, resignation,
removal, disqualification or any other cause shall be filled in the manner
prescribed in the By-Laws for regular appointments to such office.
Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if there shall be
such an Officer, shall, if present, preside at all meetings of the Board of
Directors, and exercise and perform such other powers and duties as may be from
time to time assigned to him by the Board of Directors or prescribed by the
By-Laws.
Section 7. PRESIDENT. Subject to such supervisory powers, if any, as may be
given by the Board of Directors to the Chairman of the Board, if there be such
an Officer, the President shall be the Chief Executive Officer of the
corporation and shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and Officers of the
corporation. He shall preside at all meetings of the Shareholders and in the
absence of the Chairman of the Board, or if there be none, at all meetings of
the Board of Directors. He shall be ex officio a member of all the standing
committees, including the Executive Committee, if any, and shall have the
general powers and duties of management usually vested in the office of
President of a corporation, and shall have such other powers and duties as may
be prescribed by the Board of Directors or the By-Laws.
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<PAGE> 6
Section 8. VICE PRESIDENT. In the absence or disability of the President, the
Vice Presidents, in order of their rank as fixed by the Board of Directors, or
if not ranked, the Vice President designated by the Board of Directors, shall
perform all 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. The Vice
Presidents shall have such other powers and perform such other duties as from
time to time may be prescribed for them respectively by the Board of Directors
or the By-Laws.
Section 9. SECRETARY. The Secretary shall keep, or cause to be kept, a book of
minutes at the principal office or such other place as the Board of Directors
may order, of all meetings of Directors and Shareholders, with the time and
place of holding, whether regular or special, and if special, how authorized,
the notice thereof given, the names of those present at Directors' meetings, the
number of shares present or represented at Shareholders' meetings and the
proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal office or
at the office of the corporation's transfer agent, a share register, or
duplicate share register, showing the names of the Shareholders and their
addresses; the number and classes of shares held by each; the number and date
of certificates issued for the same; and the number and date of cancellation of
every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all the meetings
of the Shareholders and of the Board of Directors required by the By-Laws or by
law to be given, and he shall keep the seal of the corporation in safe custody,
and shall have such other powers and perform such other duties as may be
prescribed by the Board of Directors or by the By-Laws.
Section 10. CHIEF FINANCIAL OFFICER. This Officer shall keep and maintain, or
cause to be kept and maintained in accordance with generally accepted accounting
principles, adequate and correct accounts of the properties and business
transactions of the corporation, including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital, earnings (or surplus) and
shares. The books of account shall at all reasonable times be open to inspection
by any Director.
This Officer shall deposit all moneys and other valuables in the name and
to the credit of the corporation with such depositaries as may be designated by
the Board of Directors. He shall disburse the funds of the corporation at may be
ordered by the Board of Directors, shall render to the President and Directors,
whenever they request it, an account of all of his transactions and of the
financial condition of the corporation, and shall have such other powers and
perform such other duties as may be prescribed by the Board of Directors of the
By-Laws.
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ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. PLACE OF MEETINGS. Meetings of the Shareholders shall be held at the
principal executive office of the corporation, in the State of California,
unless some other appropriate and convenient location be designated for that
purpose from time to time by the Board of Directors.
Section 2. ANNUAL MEETINGS. The annual meetings of the Shareholders shall be
held, each year, as follows: on the 1st day of April of each year commencing
1979. If this day shall be a legal holiday, then the meeting shall be held on
the next succeeding business day, at the same hour. At the annual meeting, the
Shareholders shall elect a Board of Directors, consider reports of the affairs
of the corporation and transact such other business as may be properly brought
before the meeting.
Section 3. SPECIAL MEETINGS. Special meetings of the Shareholders may be called
at any time by the Board of Directors, the Chairman of the Board, the President,
a Vice President, the Secretary, or by one or more Shareholders holding not less
than one-tenth (1/10) of the voting power of the corporation, except as next
provided, notice shall be given as for the annual meeting.
Upon receipt of a written request addressed to the Chairman, President,
Vice President, or Secretary, mailed or delivered personally to such Officer by
any person (other than the Board) entitled to call, a special meeting of
Shareholders, such Officer shall cause notice to be given to the Shareholders
entitled to vote, that a meeting will be held at a time requested by the person
or persons calling the meeting, not less than twenty-five nor more than sixty
days after the receipt of such request. If such notice is not given within
twenty days after receipt of such request, the persons calling the meeting may
give notice thereof in the manner provided by these By-Laws or apply to the
Superior Court as provided in the Corporations Code.
Section 4. NOTICE OF MEETINGS - REPORTS. Notice of meetings, annual or special,
shall be given in writing not less than ten nor more than sixty days before the
date of the meeting, to Shareholders entitled to vote thereat by the Secretary
or the Assistant Secretary, or if there be no such Officer, or in the case of
his neglect or refusal, by any Director or Shareholder.
Such notices or any reports shall be given personally or by mail or other
means of written communication as provided in the Corporations Code and shall be
sent to the Shareholder's address appearing on the books of the corporation, or
supplied by him to the corporation for the purpose of notice, and in the absence
thereof, as provided in the Corporations Code.
Notice of any meeting of Shareholders shall specify the place, the day and
the hour of meeting, and (1) in case of a special meeting, the general nature of
the business to be transacted and no other business may be transacted, or (2) in
the case of an annual meeting,
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ARTICLE IV
AMENDMENT TO BY-LAWS OF EXECUTIVE PARKING INC.
by Joint Action by Shareholders and Directors
by Unanimous Written Consent, dated 1/21/87.
Section 1.1. TELEPHONIC MEETINGS. Any meeting, annual or special, may be
held by conference telephone or similar communication equipment, so long as all
shareholders participating in such meeting can hear one another, and all such
shareholders shall be deemed to be present in person at such meeting.
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those matters which the Board at date of mailing, intends to present for action
by the Shareholders. At any meetings where Directors are to be elected, notice
shall include the names of the nominees, if any, intended at date of Notice to
be presented by management for election.
If a Shareholder supplies no address, notice shall be deemed to have been
given to him if mailed to the place where the principal executive office of the
company, in California, is situated, or published at least once in some
newspaper of general circulation in the County of said principal office.
Notice shall be deemed given at the time it is delivered personally or
deposited in the mail or sent by other means of written communication. The
Officer giving such notice or report shall prepare and file an affidavit or
declaration thereof.
When a meeting is adjourned for forty-five days or more, notice of the
adjourned meeting shall be given as in case of an original meeting. Save, as
aforesaid, it shall not be necessary to give any notice of adjournment or of the
business to be transacted at an adjourned meeting other than by announcement at
the meeting at which such adjournment is taken.
Section 5. VALIDATION OF SHAREHOLDERS' MEETINGS. The transactions of any meeting
of Shareholders, however called and noticed, shall be valid as though had at a
meeting duly held after regular call and notice, if a quorum be present either
in person or by proxy, and if, either before or after the meeting, each of the
Shareholders entitled to vote, not present in person or by proxy, sign a written
waiver of notice, or a consent to the holding of such meeting or an approval of
the minutes thereof. All such waivers, consents or approvals shall be filed with
the corporate records or made a part of the minutes of the meeting. Attendance
shall constitute a waiver of notice, unless objection shall be made as provided
in the Corporations Code.
Section 6. SHAREHOLDERS ACTING WITHOUT A MEETING - DIRECTORS. Any action which
may be taken at a meeting of the Shareholders, may be taken without a meeting or
notice of meeting if authorized by a writing signed by all of the Shareholders
entitled to vote at a meeting for such purpose, and filed with the Secretary of
the corporation, provided further that while ordinarily Directors can only be
elected by unanimous written consent as provided in the Corporations Code, if
the Directors fail to file a vacancy, then a Director to fill that vacancy may
be elected by the written consent of persons holding a majority of shares
entitled to vote for the election of Directors.
Section 7. OTHER ACTIONS WITHOUT A MEETING. Unless otherwise provided in the
Corporations Code or the Articles, any action which may be taken at any annual
or special meeting of Shareholders may be taken without a meeting and without
prior notice of a consent in writing, setting forth the action so taken, shall
be signed by the holders of outstanding shares having not less than the minimum
number
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ARTICLE IV
AMENDMENT TO BY-LAWS OF EXECUTIVE PARKING INC.
by Joint Action by Shareholders and Directors
by Unanimous Written Consent, dated 1/21/87.
Section 4.1.
The notice of any meeting of shareholders shall specify... (3) in the case
of both special and annual meetings, if such is to be held by telephonic
communication, the notice thereof shall so state.
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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.
Unless the consents of all Shareholders entitled to vote have been
solicited in writing,
(1) Notice of any Shareholder approval pursuant to the Corporations Code
without a meeting by less than unanimous written consent shall be given at least
10 days before the consummation of the action authorized by such approval, and
(2) Prompt notice shall be given of the taking of any other corporate
action approved by Shareholders without a meeting by less than unanimous written
consent, to each of those Shareholders entitled to vote who have not consented
in writing.
Any Shareholder giving a written consent, or the Shareholder's
proxyholders, or a transferee of the shares of a personal representative of the
Shareholder or their respective proxyholders, may revoke the consent by a
writing received by the corporation prior to the time that written consents of
the number of shares required to authorize the proposed action have been filed
with the Secretary of the corporation, but may not do so thereafter. Such
revocation is effective upon its receipt by the Secretary of the corporation.
Section 8. QUORUM. The holders of a majority of the share entitled to vote
thereat, present in person, or represented by proxy, 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 the power to adjourn the meeting from time to
time, until the requisite amount of voting shares shall be present. At such
adjourned meeting at which the requisite amount of voting shares shall be
represented, any business may be transacted which might have been transacted at
a meeting as originally notified.
If a quorum be initially present, the Shareholders may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
Shareholders to leave less then a quorum, if any action taken is approved by a
majority of the Shareholders required to initially constitute a quorum.
Section 9. VOTING RIGHTS; CUMULATIVE VOTING. Only persons in whose names shares
entitled to vote stand on the stock records of the corporation on the day of any
meeting of Shareholders, unless some other day be fixed by the Board of
Directors for the determination of Shareholders of record, and then on such
other day, shall be entitled to vote at such meeting.
Provided the candidate's name has been placed in nomination prior to the
voting and one or more Shareholder has given notice at the meeting prior to the
voting of the Shareholder's intent to cumulate the Shareholder's votes, every
Shareholder entitled to vote at any election for Directors of any corporation
for profit may cumulate his votes and give one candidate a number of votes equal
to the number of Directors to be elected multiplied by the number of votes
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ARTICLE X
INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES, AND OTHER AGENTS
The Corporation shall, to the maximum extent permitted by the California
Corporation Code indemnify each of its directors and officers against expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with any proceeding arising by reason of the fact that any such
person is or was a director or officer of the Corporation and shall advance to
such director or officer expenses incurred in defending any such proceeding to
the maximum extent permitted by law. For purposes of this Article X, a
"director" or "officer" of the Corporation includes any person who is or was a
director or officer of the Corporation, or is or was serving at the request of
the corporation as a director or officer of another Corporation, or other
enterprise, or was a director or officer of a Corporation which was a
predecessor corporation of the Corporation or of another enterprise at the
request of such predecessor corporation. The board of directors may in its
discretion provide by resolution for such indemnification of, or advance of
expenses to, other agents of the Corporation, and likewise may refuse to provide
for such indemnification or advance of expenses except to the extent such
indemnification is mandatory under the California Corporation Code.
(As added to the By-Laws of Executive Parking, Inc. by Amendment by Resolution
adopted by Unanimous Written Consent of the Shareholders and Directors dated
1/21/87.)
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to which his shares are entitled, or distribute his votes on the same principle
among as many candidates as he thinks fit.
The candidates receiving the highest number of votes up to the number of
Directors to be elected are elected.
The Board of Directors may fix a time in the future not exceeding thirty
days preceding the date of any meeting of Shareholders or the date fixed for the
payment of any dividend or distribution, or for the allotment of rights, or when
any change or conversion or exchange of shares shall go into effect, as a record
date for the determination of the Shareholders entitled to notice of and to vote
at any such meeting, or entitled to receive any such dividend or distribution,
or any allotment of rights, or to exercise the rights in respect to any such
change, conversion or exchange of shares, in such case only Shareholders of
record on the date so fixed shall be entitled to notice of and to vote at such
meeting, or to receive such dividends, distribution or allotment of rights, or
to exercise such rights, as the case may be, notwithstanding any transfer of any
share on the books of the company after any record date fixed as aforesaid. The
Board of Directors may close the books of the company against transfers of
shares during the whole or any part of such period.
Section 10. PROXIES. Every Shareholder entitled to vote, or to execute consents,
may do so, either in person or by written proxy, executed in accordance with the
provisions of the Corporations Code and filed with the Secretary of the
corporation.
Section 11. ORGANIZATION. The President, or in the absence of the President, any
Vice President, shall call the meeting of the Shareholders to order, and shall
act as chairman of the meeting. In the absence of the President and all of the
Vice Presidents, Shareholders shall appoint a chairman for such meeting. The
Secretary of the company shall act as Secretary of all meetings of the
Shareholders, but in the absence of the Secretary at any meeting of the
Shareholders, the presiding Officer may appoint any person to act as Secretary
of the meeting.
Section 12. INSPECTORS OF ELECTION. In advance of any meeting of Shareholders
the Board of Directors may, if they so elect, appoint inspectors of election to
act at such meeting or any adjournments thereof. If inspectors of election be
not so appointed, the chairman of any such meeting may, and on the request of
any Shareholder or his proxy shall, make such appointment at the meeting in
which case the number of inspectors shall be either one or three as determined
by a majority of the Shareholders represented at the meeting.
Section 13. SHAREHOLDERS' AGREEMENTS. Notwithstanding the above provisions in
the event this corporation elects to become a close corporation, an agreement
between two or more Shareholders thereof, if in writing and signed by the
parties thereof, may provide that in exercising any voting rights the shares
held by them shall be voted as provided therein or as provided by the
Corporations Code, and may otherwise modify these provisions as to Shareholders'
meetings and actions.
10
<PAGE> 14
ARTICLE VI
(As added by amendment to the By-Laws of Executive Parking, Inc.) by Resolution
adopted by Unanimous Written Consent of the Shareholders and Directors dated
1/21/87.)
Section 6. FINANCIAL STATEMENTS. A copy of any annual financial statement
and any income statement of the Corporation for each quarterly period of each
fiscal year, and any accompanying balance sheet of the Corporation as of the end
of each such period, that has been prepared by the Corporation shall be kept on
file in the principal executive office of the Corporation for twelve (12) months
and each such statement shall be exhibited at all reasonable times to any
shareholder demanding an examination of any such statement or a copy shall be
mailed to any such shareholder upon written request to the chief financial
officer therefore.
If a shareholder or shareholders holding at least five percent (5%) of the
outstanding shares of any class of shares of the Corporation make a written
request to the Corporation for an income statement of the Corporation for a
three-month, six-month or nine-month period of the current fiscal year ended
more than thirty (30) days prior to the date of the request, and a balance sheet
of the Corporation as of the end of such period, the chief financial officer
shall cause such statement to be prepared, if not already prepared, and shall
deliver personally or mail such statement or statements to the person making the
request within thirty (30) days after the receipt of such request. If the
Corporation has not sent to the shareholders its annual report for the last
fiscal year, this report shall likewise be delivered or mailed to such
shareholder or shareholders within thirty (30) days after such request.
The Corporation also shall, upon the written request of any shareholder,
mail to the shareholder a copy of the last annual, semi-annual or quarterly
income statement which it has prepared and a balance sheet as of the end of such
period.
The quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report thereon, if any, of any independent
accountant engaged by the Corporation or the certificate of an authorized
officer of the Corporation that such financial statements were prepared without
audit from the books and records of the Corporation.
10
<PAGE> 15
ARTICLE V
CERTIFICATES AND TRANSFER OF SHARES
Section 1. CERTIFICATES FOR SHARES. Certificates for shares shall be of such
form and device as the Board of Directors may designate and shall state the name
of the record holder of the shares represented thereby; its number; date of
issuance; the number of shares for which it is issued; a statement of the
rights, privileges, preferences and restrictions, if any; a statement as to the
redemption or conversion, it any; a statement of liens or restrictions upon
transfer or voting, if any; if the shares be assessable or, if assessments are
collectible by personal action, a plain statement of such facts.
Every certificate for shares must be signed by the President or a Vice
President and the Secretary or an Assistant Secretary or must be authenticated
by facsimiles of the signatures of the President and Secretary or by a facsimile
of the signature of its President and the written signature of its Secretary or
an Assistant Secretary. (Before it becomes effective every certificate for
shares authenticated by a facsimile of a signature must be countersigned by a
transfer agent or transfer clerk and must be registered by an incorporated bank
or trust company, either domestic or foreign, as registrar of transfers.
OPTIONAL)
Section 2. TRANSFER ON THE BOOKS. Upon surrender to the Secretary or transfer
agent of the corporation of a certificate for shares 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.
Section 3. LOST OR DESTROYED CERTIFICATES. Any person claiming a certificate of
stock to be lost or destroyed shall make an affidavit or affirmation of that
fact and shall if the Directors so require give the corporation a bond of
indemnity, in form and with one or more sureties satisfactory to the Board, in
at least double the value of the stock represented by said certificate,
whereupon a new certificate may be issued in the same tenor and for the same
number of shares as the one alleged to be lost or destroyed.
Section 4. TRANSFER AGENTS AND REGISTRARS. The Board of Directors may appoint
one or more transfer agents or transfer clerks, and one or more registrars,
which shall be an incorporated bank or trust company -- either domestic or
foreign, who shall be appointed at such times and places as the requirements of
the corporation may necessitate and the Board of Directors may designate.
Section 5. CLOSING STOCK TRANSFER BOOKS - RECORD DATE. In order that the
corporation may determine the Shareholders entitled to notice of any meeting or
to vote 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
other lawful action,
11
<PAGE> 16
the Board may fix, in advance, a record date, which shall not be more than sixty
nor less then ten days prior to the date of such meeting nor more than sixty
days prior to any other action.
If no record date is fixed:
The record date for determining Shareholders entitled to notice of or to
vote at a meeting of Shareholders shall be at the close of business on the
business day next preceding the day on which notice is given or, if notice is
waived, at the close of business on the business day next preceding the day on
which the meeting is held.
The record date for determining Shareholders entitled to give consent to
corporate action in writing without a meeting, when no prior action by the Board
is necessary, shall be the day on which the first written consent is given.
The record date for determining Shareholders for any other purpose shall
be it the close of business on the day on which the Board adopts the resolution
relating thereto, or the 60th day prior to the date of such other action,
whichever is later.
Section 6. LEGEND CONDITION. In the event any shares of this corporation are
issued pursuant to a permit or exemption therefrom requiring the imposition of a
legend condition the person or persons issuing or transferring said shares shall
make sure said legend appears on the certificate and on the stub relating
thereto in the stock record book and shall not be required to transfer any
shares free of such legend unless an amendment to such permit or a new permit be
first issued so authorizing such a deletion.
Section 7. CLOSE CORPORATION CERTIFICATES. All certificates representing shares
of this corporation, in the event it shall elect to become a close corporation,
shall contain the legend required by the Corporations Code.
ARTICLE VI
CORPORATE RECORDS AND REPORTS -- INSPECTION
Section 1. RECORDS. The corporation shall maintain, in accordance with generally
accepted accounting principles, adequate and correct accounts, books and records
of its business and properties. All of such books, records and, accounts shall
be kept at its principal executive office in the State of California, as fixed
by the Board of Directors from time to time.
Section 2. INSPECTION OF BOOKS AND RECORDS. All books and records provided for
in the Corporations Code shall be open to inspection of the Directors and
Shareholders from time to time and in the manner provided in said Corporations
Code.
Section 3. CERTIFICATION AND INSPECTION OF BY-LAWS. The original or a copy of
these By-Laws, as amended or otherwise altered to date, certified by the
Secretary, shall be kept at the corporation's
12
<PAGE> 17
principal executive office and shall be open to inspection by the Shareholders
of the company, at all reasonable times during office hours, as provided in the
Corporations Code.
Section 4. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for payment
of money, notes or other evidences of indebtedness, issued in the name of or
payable to the corporation, shall be signed or endorsed by such person or
persons and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
Section 5. CONTRACTS, ETC. -- HOW EXECUTED. The Board of Directors, except as in
the By-Laws otherwise provided, may authorize any officer or officers, agent or
agents, to enter into any contract or execute any instrument in the name of and
on behalf of the corporation. Such authority may be general or confined to
specific instances. Unless so authorized by the Board of Directors, no Officer,
agent or employee shall have any power or authority to bind the corporation by
any contract or agreement, or to pledge its credit, or to render it liable for
any purpose or to any amount, except as provided in the Corporations Code.
ARTICLE VII
ANNUAL REPORTS
Section 1. DUE DATE, CONTENTS. The Board of Directors shall cause an annual
report or statement to be sent to the Shareholders of this corporation not later
than 120 days after the close of the fiscal or calendar year in accordance with
the provisions of the Corporations Code. Such report shall be sent to
Shareholders at least fifteen days prior to the annual meeting of Shareholders.
Such report shall contain a balance sheet as of the end of the fiscal year, an
income statement and a statement of report thereon of independent accountant, or
if there is no such report, a certificate of the Chief Financial Officer or
President that such statements were prepared without audit from the books and
records of the corporation.
Section 2. WAIVER. The foregoing requirement of an annual report may be
waived by the Board so long as this corporation shall have less than 100
Shareholders.
ARTICLE VIII
AMENDMENTS TO BY-LAWS
Section 1. BY SHAREHOLDERS. New By-Laws may be adopted or these By-Laws may be
repealed or amended at their annual meeting, or at any other meeting of the
Shareholders called for that purpose, by a vote of Shareholders entitled to
exercise a majority of the voting power of the corporation, or by written assent
of such Shareholders.
13
<PAGE> 18
Section 2. POWER OF DIRECTORS. Subject to the right of the Shareholders to
adopt, amend or repeal By-Laws, as provided in Section 1 of this Article VII,
and the limitations of the Corporations Code, the Board of Directors may adopt,
amend or repeal any of these By-Laws other than a By-Law or amendment thereof
changing the authorized number or Directors.
Section 3. RECORD OF AMENDMENTS. Whenever an amendment or new By-Law is
adopted, it shall be copied in the book of By-Laws with the original By-Laws, in
the appropriate place. If any By-Law is repealed, the fact of repeal with the
date of the meeting at which the repeal was enacted or written assent was filed
shall be stated in said book.
ARTICLE IX
SEAL
The corporation shall adopt and use a corporate seal setting forth the name of
the corporation and showing the State and date of incorporation.
KNOW ALL MEN BY THESE PRESENTS:
That we, the undersigned, being all the directors of L.A. Construction &
Services, a corporation incorporated, organized and existing under the laws of
the State of California, do hereby certify that the foregoing By-Laws, were duly
adopted as the By-Laws of the said corporation.
IN WITNESS WHEREOF, we have hereunto subscribed our names this 21 day of
March, 1979.
/s/ Dale Stark /s/ Ed Simmons
----------------------- ------------------------
----------------------- ------------------------
14
<PAGE> 19
CERTIFICATE OF ADOPTION OF BY-LAWS
Adoption by Incorporator(s) or First Director(s).
The undersigned person(s) appointed in the Articles of Incorporation to
act as the Incorporator(s) or First Director(s) of the above named corporation
hereby adopt the same as the By-Laws of said corporation.
Executed this 21 day of March, 1979.
/s/ Dale Stark /s/ Ed Simmons
- ----------------------- ------------------------
Certificate by Secretary.
I DO HEREBY CERTIFY AS FOLLOWS:
That I am the duly elected, qualified and acting Secretary of the above
named corporation; that the foregoing By-Laws were adopted as the By-Laws of
said corporation on the date set forth above by the person(s) appointed in the
Articles of Incorporation to act as the Incorporator(s) or First Director(s) of
said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate
seal this 21 day of March, 1979.
/s/ Dale Stark
Certificate by Secretary of Adoption by Shareholders' Vote.
THIS IS TO CERTIFY:
That I am the duly elected, qualified and acting Secretary of the above
named corporation and that the above and foregoing Code of By-Laws was submitted
to the shareholders at their first meeting held on the date set forth in the
By-Laws and recorded in the minutes thereof, was ratified by the vote of
shareholders entitled to exercise the majority of the voting power of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand this _______ day of
_____________________, 19__.
15
<PAGE> 1
Exhibit 3.23
================================================================================
A402723
[GRAPHIC OMITTED] State
of
California
OFFICE OF THE SECRETARY OF STATE
CORPORATION DIVISION
I, MARCH FONG EU, Secretary of State of the State of California, hereby
certify:
That the annexed transcript has been compared with the corporate record on
file in this office, of which it purports to be a copy, and that same is full,
true and correct.
IN WITNESS WHEREOF, I execute
this certificate and affix the Great
Seal of the State of California this
MAY -6 1991
------------------------------------
THE GREAT SEAL OF THE STATE OF
EUREKA
CALIFORNIA
/s/ March Fong Eu
Secretary of State
================================================================================
<PAGE> 2
A402723
CERTIFICATE OF AMENDMENT OF ENDORSED
ARTICLES OF INCORPORATION FILED
OF In the office of the Secretary of State
CENTURY PARKING, INC. of the State of California
APR 25 1991
MARCH FONG EU, Secretary of State
The undersigned certify that:
1. They are the president and secretary, respectively, of: CENTURY PARKING,
INC.
2. The board of directors of the corporation has approved the amendment of
Article Fifth of the corporation's Articles of Incorporation to read in full as
follows:
"This corporation is authorized to issue only one class of
shares of capital stock, and the total number of shares of
capital stock which this corporation is authorized to issue
is ten thousand (10,000). On the amendment of this article
to read as hereinabove set forth, each outstanding share is
split up, divided, and converted into 100 shares."
3. The amendment was approved by the required vote of shareholders in
accordance with Section 902 of the California Corporation Code. The total number
of outstanding
<PAGE> 3
shares entitled to vote with respect to the amendment, the number of favorable
votes required, and the number of such shares voting in favor of the amendment
were as follows:
Outstanding voting shares: 90
Number of favorable votes required: 46
Shares voting in favor of amendment: 90
The number of shares voting in favor of the amendment equaled or exceeded the
vote required.
/s/ Raymond T. Liesegang
------------------------------------
RAYMOND T. LIESEGANG, President
/s/ Veldree R. Liesegang
------------------------------------
VELDREE R. LIESEGANG, Secretary
Each of the undersigned declares under penalty of perjury that the
statements contained in the foregoing certificate are true and correct of his or
her own knowledge, and that this declaration was executed as follows:
Date: April 18, 1991
Place: Los Angeles, California
/s/ Raymond T. Liesegang
------------------------------------
RAYMOND T. LIESEGANG, President
/s/ Veldree R. Liesegang
------------------------------------
VELDREE R. LIESEGANG, Secretary
-2-
<PAGE> 4
================================================================================
STATE OF CALIFORNIA
THE GREAT SEAL OF THE STATE OF
EUREKA
CALIFORNIA
DEPARTMENT OF STATE
To all whom these presents shall come, Greetings:
I, FRANK M. JORDAN, Secretary of State of the State of California, hereby
certify;
That the annexed transcript has been compared with the RECORD on file in my
office, of which it purports to be a copy, and that the same is full, true and
correct.
In testimony whereof, I, FRANK M. JORDAN, Secretary of State, have
hereunto caused the Great Seal of the State of California to be
affixed and my name subscribed, at the City of Sacramento, in the
State of California, this JUL 31 1968
THE GREAT SEAL OF THE STATE OF
EUREKA
CALIFORNIA
/s/ Frank M. Jordan
Secretary of State
By /s/ [Illegible]
------------------------
Assistant Secretary of State
================================================================================
<PAGE> 5
ARTICLES OF INCORPORATION
OF
CENTURY PARKING, INC.
* * * * *
KNOW ALL MEN BY THESE PRESENTS: That we, the undersigned, have this day
voluntarily associated ourselves together for the purpose of forming a
corporation under the laws of the State of California, AND WE HEREBY CERTIFY:
FIRST: That the name of the corporation is
CENTURY PARKING, INC.
SECOND: That the specific business in which the said corporation will
primarily engage is:
To engage in the business of owning, operating, leasing, managing, buying,
selling or otherwise dealing in lots, real estate, garages, or other facilities
used to park or store motor vehicles or other similar equipment.
The general purposes and powers of the corporation are:
To manufacture, purchase or otherwise acquire own, mortgage, pledge,
sell, assign and transfer, or otherwise dispose of, to invest, trade, deal in
and deal with, goods, wares and merchandise and real and personal property of
every
<PAGE> 6
class and description.
To acquire and pay for in cash, stock or bonds of this corporation or
otherwise, the good will, rights, assets and property and to undertaKe or assume
the whole or any part of the obligations or liabilities of any person, firm,
association or corporation.
To acquire, hold, use, sell, assign, lease, grant licenses in respect of,
mortgage or otherwise dispose of letters patent of the United States or any
foreign country, patent rights, licenses and privileges, inventions,
improvements and processes, copyrights, trade-marks and trade names, relating to
or useful in connection with any business of this corporation.
To acquire, subscribe for, hold, own, pledge and otherwise dispose of and
vote shares of stock, bonds and securities of any other corporation, domestic or
foreign.
To enter into, make and perform contracts of every kind and description
with any person, firm, association, corporation, municipality, county, state,
body politic or government or colony or dependency thereof, conducive to the
attainment of any of the objects or purposes of the corporation.
To borrow money and issue bonds, debentures, notes and evidences of
indebtedness and to secure the payment or performance of its obligations by
mortgage, deed of trust,
<PAGE> 7
pledge or otherwise.
To purchase, hold, sell and transfer the shares of its own capital stock so
far as may be permitted by the laws of the State of California.
To have one or more offices within or without the State of California, to
carry on all or any of its operations and business and, without restriction or
limit as to amount, to purchase or otherwise acquire, hold, own, mortgage, sell,
convey or otherwise dispose of real and personal property of every class and
description in any of the states, districts, territories or colonies of the
United States, and in any and all foreign countries, subject to the laws of such
state, district, territory, colony or country.
The foregoing clauses shall be construed both as objects and powers and it
is hereby expressly provided that the foregoing enumeration of specific powers
shall not be held to limit or restrict in any manner the powers of the
corporation.
In general, to carry on any other business in connection with the
foregoing, and to have and exercise all the powers conferred by the State of
California upon corporations formed under the laws of the State of California.
THIRD: That the county in which the principal office for the transaction of
the business of said corporation
<PAGE> 8
is located is Los Angeles County, State of California.
FOURTH: The number of its directors is three (3). The names and addresses
of the persons who are appointed to act as the first directors are as follows:
NAMES ADDRESSES
----- ---------
Gordon O. Larson 16661 Charmel Lane
Pacific Palisades, Calif. 9027
Ray Liesegang 5741 Corbin Avenue
Tarzana, California
Fred Riscen 8639 Columbus Avenue
Apt # 10
Sepulveda, California
The number of directors may be changed from time to time by a by-law fixing
or changing the number duly adopted by the shareholders.
FIFTH: the total number of shares which the corporation is authorized to
issue is one hundred (100) of the par value of Ten Dollars ($10.00) so that the
aggregate par value of all shares amounts to One Thousand Dollars ($1,000).
SIXTH: Subject to the right of shareholders to adopt, amend or repeal
by-laws, by-laws may be adopted, amended, or repealed by the board of directors,
except a by-law or amendment thereof changing the authorized number of
directors.
SEVENTH: This corporation reserves the right to
<PAGE> 9
to amend, alter, change or repeal any provision contained in these articles or
incorporation in the manner now or hereafter prescribed by statute, and all
rights conferred upon shareholders herein are granted subject to this
reservation.
IN WITNESS WHEREOF, we have hereunto set our hands and seals this 26th day
of July A.D. 1968.
GORDON O. LARSON (SEAL)
----------------------
Gordon O. Larson
RAY LIESEGANG (SEAL)
----------------------
Ray Liesegang
FRED RISCEN (SEAL)
----------------------
Fred Riscen
<PAGE> 10
STATE OF CALIFORNIA )
) ss:
COUNTY OF LOS ANGELES )
On this 26th day of July, 1968, before me, a notary pub1ic in and for the
county and state aforesaid, personally appeared, Gordon O. Larson, Ray Liesegang
and Fred Riscen, known to me to be the persons whose names are subscribed to and
who executed the within instrument, and acknowledged to me that they executed
the same, and that they are the directors named therein.
IN WITNESS WHEREOF, I have hereto set my hand and affixed my official seal
the day and year above written.
ALLAN STORMS
--------------------
Notary Public
My commission expires Oct. 21, 1969
<PAGE> 1
Exhibit 3.24
CERTIFICATE OF SECRETARY
The undersigned, being the duly elected Secretary of CENTURY
PARKING, INC., a California corporation, does hereby certify that the following
is a true, full and correct copy of resolutions concerning a Bylaw amendment
adopted by the shareholder and Board of Directors of said corporation on July
15, 1987, by unanimous written consent in lieu of the annual meeting, which
consent was filed with the minutes of the proceedings of the shareholder and
Board of Directors in conformity with the provisions of Sections 603(a) and
307(b) of the California Corporations Code:
Bylaw Amendment
WHEREAS, the condition of the corporation's Bylaws was brought to
the attention of the shareholder and Board of Directors and it was
deemed desirable and in the best interest of this corporation to
amend the Bylaws to change the annual meeting date from July 15 to
January 20 each year, in connection with the corporation's change in
its accounting year.
NOW, THEREFORE, BE IT RESOLVED, that the first paragraph of ARTICLE
II, SECTION 2.02, of the Bylaws of this corporation is hereby
amended, in order to change the annual meeting date, to read as
follows:
"SECTION 2.02 ANNUAL MEETINGS. The annual meetings of
shareholders shall be held on the 20th day of January at 2:00
o'clock P.M. each year; provided, however, that should said day fall
upon a legal holiday, then any such annual meeting of shareholders
shall be held at the same time and place on the next day thereafter
ensuing which is a full business day. At such meetings, Directors
shall be elected, reports of the affairs of the corporation shall be
considered, and any other business may be transacted which is within
the powers of the shareholders."
The foregoing resolutions are in conformity with the Articles of
Incorporation and Bylaws of this corporation, have never been modified or
repealed, and are now in full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
corporate seal of said corporation this 15th day of July, 1967.
/s/ Veldree Liesegang
----------------------------
VELDREE LIESEGANG,
Secretary
<PAGE> 2
CERTIFICATE OF SECRETARY
I, the undersigned, do hereby certify:
1. That I am the duly elected and acting Secretary of CENTURY
PARKING, INC., a California corporation;
2. That the foregoing Bylaws, consisting of twenty (20) pages, are a
true and correct copy of the duly adopted bylaws of said corporation duly
adopted by the Board of Directors on July 15, 1982.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed
the seal of said corporation this 15th day of July, 1982.
/s/ Veldree Liesegang
----------------------------
VELDREE LIESEGANG,
Secretary
[SEAL]
<PAGE> 3
BYLAWS FOR THE REGULATION, EXCEPT AS
OTHERWISE PROVIDED BY STATUTE OR ITS
ARTICLES OF INCORPORATION, OF
CENTURY PARKING, INC.
(A California Corporation)
ARTICLE I
OFFICES
SECTION 1.01 PRINCIPAL EXECUTIVE OFFICE. The principal executive office of
the Corporation is hereby fixed and located at: 706 South Hill Street, 8th
Floor, Los Angeles, California 90014. The Board of Directors is hereby granted
full power and authority to change said principal executive office from one
location to another. Any such change shall be noted on the Bylaws by the
Secretary, opposite this section, or this section may be amended to state the
new location. If the principal executive office is located outside California,
and the corporation has one or more business offices in California, the Board of
Directors shall fix and designate a principal business office in the State of
California.
SECTION 1.02 OTHER OFFICES. Other business offices may at any time be
established by the Board of Directors at any place or places where the
corporation is qualified to do business.
ARTICLE II
MEETINGS OF SHAREHOLDERS
SECTION 2.01 PLACE OF MEETINGS. All annual or other meetings of
shareholders shall be held at the principal executive office of the corporation,
or at any other place within or without the State of California which may be
designated either by the Board of Directors or by the written consent of all
persons entitled to vote thereat and not present at the meeting, given either
before or after the meeting and filed with the Secretary of the corporation.
SECTION 2.02 ANNUAL MEETINGS. The annual meetings of shareholders shall be
held on the 15th day of July, at 2:00 o'clock P.M.; provided, however, that
should said day fall upon a legal holiday, then any such annual meeting of
shareholders shall be held at the same time and place on the next day thereafter
ensuing which is a full business day. At such meetings, Directors shall be
elected, reports of the affairs of the corporation shall be considered, and any
other business may be transacted which is within the powers of the shareholders.
<PAGE> 4
Written notice of each annual meeting shall be given to each shareholder
entitled to vote, either personally or by mail or other means of written
communication, charges prepaid, addressed to such shareholder at his address
appearing on the books of the corporation or given by him to the corporation for
the purpose of notice. If any notice or report addressed to the shareholder at
the address of such shareholder appearing on the books of the corporation is
returned to the corporation by the United States Postal Service marked to
indicate that the United States Postal Service is unable to deliver the notice
or report to the shareholder at such address, all future notices or reports
shall be deemed to have been duly given without further mailing if the same
shall be available for the shareholder upon written demand of the shareholder at
the principal executive office of the corporation for a period of one year from
the date of the giving of the notice or report to all other shareholders. If a
shareholder gives no address, notice shall be deemed to have been given if sent
by mail or telegraphic or other means of written communication addressed to the
place where the principal executive office of the corporation is situated, or if
published at least once in some newspaper of general circulation in the county
in which said principal executive office is located.
All such notices shall be given to each shareholder entitled thereto not
lees than ten (10) days nor more than sixty (60) days before each annual
meeting. Any such notice shall be deemed to have been given at the time when
delivered personally, or deposited in the mail or sent by telegram or other
means of written communication. An affidavit of mailing of any such notice in
accordance with the foregoing provisions, executed by the Secretary, Assistant
Secretary, or any transfer agent of the corporation shall be prima facie
evidence of the giving of the notice.
Such notices shall specify
(a) the place, the date, and the hour of such meeting;
(b) those matters which the Board, at the time of the mailing of the
notice, intends to present for action by the shareholders;
(c) if Directors are to be elected, the names of nominees intended at the
time of the notice to be presented by management for election;
(d) the general nature of a proposal, if any, to take action with respect
to approval of (i) a contract or other transaction with an interested Director,
(ii) amendment of the articles of incorporation, (iii) a reorganization of the
corporation as defined in Section 181 of the California General Corporation Law,
(iv) voluntary dissolution of the corporation, or (v) a distribution in
2
<PAGE> 5
dissolution other than in accordance with the rights of outstanding preferred
shares, if any; and
(e) such other matters, if any, as may be expressly required by statute.
SECTION 2.03 SPECIAL MEETINGS. Special Meetings of the shareholders, for
the purpose of taking any action permitted by the shareholders under the
California General Corporation Law and the articles of incorporation of this
corporation, may be called at any time by the Chairman of the Board or. the
President, or by the Board of Directors, or by one or more shareholders holding
not less than ten percent (10%) of the votes at the meeting. Upon request in
writing that a special meeting of shareholders be called for any proper purpose,
directed to the Chairman of the Board, President, Vice-President or Secretary by
any person (other than the Board) entitled to call a special meeting of
shareholders, the officer forthwith shall cause notice to be given to
shareholders entitled to vote that a meeting will be held at a time requested by
the person or persons calling the meeting, not less than thirty-five (35) nor
more than sixty (60) days after receipt of the request. Except in special cases
where other express provision is made by statute, notice of such special
meetings shall be given in the same manner as for annual meetings of
shareholders. In addition to the matters required by items (a) and, if
applicable, (c) of the preceding section, notice of any special meeting shall
specify the general nature of the business to be transacted, and no other
business may be transacted at such meeting.
SECTION 2.04 QUORUM. The presence in person or by proxy of the persons
entitled to vote a majority of the voting shares at any meeting shall constitute
a quorum for the transaction of business. The shareholders present at a duly
called or held meeting at which a quorum is present may continue to do business
until adjournment, notwithstanding the withdrawal of enough shareholders to
leave less than a quorum, if any action taken (other than adjournment) is
approved by at least a majority of the shares required to constitute a quorum.
SECTION 2.05 ADJOURNED MEETING AND NOTICE THEREOF. Any shareholders'
meeting, annual or special, whether or not a quorum is present, may be adjourned
from time to time by the vote of a majority of the shares, the holders of which
are either present in person or represented by proxy thereat, but in the absence
of a quorum no other business may be transacted at such meeting, except as
provided in Section 2.04 above.
When any shareholders' meeting, either annual or special, 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
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the meeting at which the adjournment is taken, unless after the adjournment a
new record date is fixed for the adjourned meeting or unless the adjournment is
for more than forty-five (45) days from the date set for the original meeting,
in which case the Board of Directors shall set a new record date. Notice of any
such adjourned meeting shall be given to each shareholder of record entitled to
vote at the adjourned meeting in accordance with the provisions of Section 2.02
above. At any adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting.
SECTION 2.06 VOTING. Unless a record date for voting purposes be fixed as
provided in Section 5.01 of Article V of these Bylaws then, subject to the
provisions of Sections 702 through 704, inclusive, of the California General
Corporation Law (relating to voting of shares held by a fiduciary, in the name
of a corporation, or in joint ownership), only persons in whose names shares
entitled to vote stand on the stock records of the corporation at the close of
business on the business day next preceding the day on which notice of the
meeting is given or if such notice is waived, at the close of business on the
business day next preceding the day on which the meeting of shareholders is
held, shall be entitled to vote at such meeting, and such day shall be the
record date of such meeting. Such vote may be viva voce or by ballot; provided,
however, that all elections for Directors must be by ballot upon demand made by
a shareholder at any election and before the voting begins. On any matter other
than election of Directors, any shareholder may vote part of his shares in favor
of the proposal and refrain from voting the remaining shares or vote them
against the proposal, but, if the shareholder fails to specify the number of
shares which the shareholder is voting affirmatively, it will be conclusively
presumed that the shareholder's approving vote is with respect to all shares
such shareholder is entitled to vote. If a quorum is present, except with
respect to election of Directors, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on any matter shall be
the act of the shareholders, unless the vote of a greater number of voting by
classes is required by the California General Corporation Law or the articles of
incorporation. Subject to the requirements of the next sentence, every
shareholder entitled to vote at any election for Directors shall have the right
to cumulate his votes and give one candidate a number of votes equal to the
number of Directors to be elected multiplied by the number of votes to which his
shares are entitled, or to distribute his votes on the same principle among as
many candidates as he shall think fit. No shareholder shall be entitled to
cumulate votes unless the name of the candidate or candidates for whom such
votes would be cast has been placed in nomination prior to the voting, and any
shareholder has given notice at the meeting prior to the voting of such
shareholder's intention to cumulate his votes. The candidates
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receiving the highest number of votes of shares entitled to be voted for them,
up to the number of Directors to be elected, shall be elected.
SECTION 2.07 VALIDATION OF DEFECTIVELY CALLED OR NOTICED MEETINGS. The
transactions of any meeting of shareholders, either annual or special, however
called and noticed, if a quorum be present either in person or by proxy, and if,
either before or after the meeting, each of the persons entitled to vote, not
present in person or by proxy, or who though present, has, at the beginning of
the meeting, properly subjected to the transaction of any business because the
meeting was not lawfully called or convened, or to particular matters of
business legally required to be included in the notice, but not so included,
signs a written waiver of notice, or a consent to the holding of such meeting,
or an approval of the minutes thereof. All such waivers, consents or approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting. Neither the business to be transacted at nor the purpose of any regular
or special meeting of shareholders need be specified in the written waiver of
notice, consent to the holding of the meeting, or approval of the minutes
thereof, unless otherwise provided in the articles of incorporation, these
Bylaws, or by statute.
SECTION 2.08 ACTION WITHOUT MEETING. Directors may be elected without a
meeting by a consent in writing, setting forth the action so taken, signed by
all of the persons who would be entitled to vote for the election of Directors,
provided that, without notice except as hereinafter set forth, a Director may be
elected at any time to fill a vacancy not filled by the Board of Directors by
the written consent of persons holding a majority of the outstanding shares
entitled to vote for the election of Directors.
Any other action which, under any provision of the California General
Corporation Law, may be taken at a meeting of the shareholders, may be taken
without a meeting, and without notice except as hereinafter set forth, if a
consent in writing, setting forth the action so taken, is signed 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 voted. Unless the consents of
all shareholders entitled to vote have been solicited in writing,
(a) Notice of any proposed shareholder approval of, (i) a contract
or other transaction with an interested Director, (ii) indemnification of an
agent of the corporation as authorized by Section 5.08 of Article V of these
Bylaws, (iii) a reorganization of the corporation as defined in Section 181 of
the California
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General Corporation Law, or (iv) a distribution in dissolution other than in
accordance with the rights of outstanding preferred shares, if any, without a
meeting by less than unanimous written consent, shall be given at least ten (10)
days before the consummation of the action authorized by such approval; and
(b) Prompt notice shall be given of the taking of any other
corporate action approved by shareholders without a meeting by less than
unanimous written consent,
to those shareholders entitled to vote who have not consented in writing. Such
notices shall be given in the manner and shall be deemed to have been given as
provided in Section 2.02 of Article II of these Bylaws.
Unless, as provided in Section 5.01 of Article V of these Bylaws, the
Board of Directors has fixed a record date for the determination of shareholders
entitled to give such written consent, the record date for such determination
shall be the day on which the first written consent is given, when no prior
action by the Board of Directors has been taken. In all other cases in which the
Board of Directors has not fixed a record date for the determination of
shareholders entitled to give such written consent as provided in Section 5.01
of Article V of these Bylaws, the record date shall be determined as set forth
in such Section 5.01.
Any shareholder giving a written consent, or the shareholder's
proxyholders, or a transferee of the shares or a personal representative of the
shareholder or their respective proxyholders, may revoke the consent by a
writing received by the corporation prior to the time that written consents of
the number of shares required to authorize the proposed action have been filed
with the Secretary of the corporation, but may not do so thereafter. Such
revocation is effective upon its receipt by the Secretary of the corporation.
SECTION 2.09 PROXIES. Every person entitled to vote or execute consents
shall have the right to do so either in person or by one or more agents
authorized by a written proxy executed by such person or his duly authorized
agent and filed with the Secretary of the Corporation. Any proxy duly executed
is not revoked and continues in full force and effect until, (i) an instrument
revoking it or a duly executed proxy bearing a later date is filed with the
Secretary of the corporation prior to the vote pursuant thereto, (ii) the person
executing the proxy attends the meeting and votes in person, or (iii) written
notice of the death or incapacity of the maker of such proxy is received by the
corporation before the vote pursuant thereto is counted; provided that no such
proxy shall be valid after the expiration of eleven (11) months from the date of
its execution, unless the person
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executing it specifies therein the length of time for which such proxy is to
continue in force.
SECTION 2.10 INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the Board of Directors may appoint any persons other than nominees
for office as inspectors of election to act at such meeting or any adjournment
thereof. If inspectors of election be not so appointed, the Chairman of any such
meeting may, and on the request of any shareholder or his proxy shall, make such
appointment at the meeting. The number of inspectors shall be either one or
three. If appointed at a meeting on the request of one or more shareholders or
proxies, the majority of shares represented in person or by proxy shall
determine whether one or three inspectors are to be appointed. In case any
person appointed as inspector fails to appear or fails or refuses to act, the
vacancy may, and on the request of any shareholder or a shareholder's proxy
shall, be filled by appointment by the Board of Directors in advance of the
meeting, or at the meeting by the Chairman of the meeting.
The duties of such inspectors shall be as prescribed in Section 707 of the
California General Corporation Law and shall include: determining the number of
shares outstanding and the voting power of each; the shares represented at the
meeting; the existence of a quorum; the authenticity, validity and effect of
proxies; receiving votes, ballots or consents; hearing and determining all
challenges and questions in any way arising in connection with the right to
vote; counting and tabulating all votes or consents; determining when the polls
shall close; determining the result; and such acts as may be proper to conduct
the election or vote with fairness to all shareholders. In the determination of
the validity and effect of proxies the dates contained on the forms of proxy
shall presumptively determine the order of execution of the proxies, regardless
of the postmark dates on the envelopes in which they are mailed.
The inspectors of election shall perform their duties impartially, in good
faith, to the best of their ability and as expeditiously as is practical. If
there are three inspectors of election, the decision, act or certificate of a
majority is effective in all respects as the decision, act or certificate of
all. Any report or certificate made by the inspectors of election is prima facia
evidence of the facts stated therein.
ARTICLE III
DIRECTORS
SECTION 3.01 POWERS. Subject to limitations of the articles of
incorporation and of the California General Corporation Law as
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to action to be authorized or approved by the shareholders, and subject to the
duties of Directors as prescribed by these Bylaws, all corporate powers shall be
exercised by or under the authority of, and the business and affairs of the
corporation shall be controlled by, the Board of Directors. Without prejudice to
such general powers, but subject to the same limitations, it is hereby expressly
declared that the Directors shall have the following powers:
First - To select and remove all the officers, agents and employees of the
corporation, prescribe such powers and duties for them as may not be
inconsistent with law, with the articles of incorporation or these Bylaws, fix
their compensation and require from them security for faithful service.
Second - To conduct, manage and control the affairs and business of the
corporation, and to make such rules and regulations therefor not inconsistent
with law, or with the articles of incorporation or these Bylaws, as they may
deem best.
Third - To change the principal executive office and principal office for
the transaction of the business of the corporation from one location to another
as provided in Article I, Section 1.01 of these Bylaws; to fix and locate from
time to time one or more subsidiary offices of the corporation within or without
the State of California, as provided in Article I, Section 1.02 of these Bylaws;
to designate any place within or without the State of California for the holding
of any shareholders' meeting or meetings; and to adopt, make and use a corporate
seal, and to prescribe the forms of certificates of stock, and to alter the form
of such seal and of such certificates from time to time, as in their judgment
they may deem best, provided such seal and such certificates shall at all times
comply with the provisions of law.
Fourth - To authorize the issue of shares of stock of the corporation from
time to time, upon such terms as may be lawful.
Fifth - To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefor.
Sixth - By resolution adopted by a majority of the authorized number of
Directors, to designate an executive and other committees, each consisting of
two or more Directors, to serve at the pleasure of the Board, and to prescribe
the manner in which proceedings of such committee shall be conducted. Unless the
Board of Directors shall otherwise prescribe the manner of proceedings of any
such committee, meetings of such committee may be regularly
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scheduled in advance and may be called at any time by any two members thereof;
otherwise, the provisions of these Bylaws with respect to notice and conduct of
meetings of the Board shall govern. Any such committee, to the extent provided
in a resolution of the Board, shall have all of the authority of the Board,
except with respect to:
(i) the approval of any action for which the California General
Corporation Law or the articles of incorporation also require shareholder
approval;
(ii) the filling of vacancies on the Board or in any committee;
(iii) the fixing of compensation of the Directors for serving on the
Board or on any committee;
(iv) the adoption, amendment or repeal of Bylaws;
(v) the amendment or repeal of any resolution of the Board;
(vi) any distribution to the shareholders, except at a rate or in a
periodic amount or within a price range determined by the Board; and
(vii) the appointment of other committees of the Board or the
members thereof.
SECTION 3.02 NUMBER AND QUALIFICATION OF DIRECTORS. The authorized number
of directors shall be not less than three (3) nor more than five (5) until
changed by amendment of the articles of incorporation or by a Bylaw amending
this Section 3.02, duly adopted by the vote or written consent of holders of a
majority of the outstanding shares entitled to vote; provided, however, that if
the number of Directors should ever be increased to five (5) or more, an
amendment to this Section 3.02 or an amendment to the articles of incorporation,
either of which would reduce the fixed number of Directors to a number less than
five (5), cannot be adopted if the votes cast against its adoption at a meeting,
or the shares not consenting in the case of action by written consent, are equal
to more than 16-2/3% of the outstanding shares entitled to vote.
SECTION 3.03 ELECTION AND TERM OF OFFICE. The Directors shall be elected
at each annual meeting of shareholders but, if any such annual meeting is not
held or the Directors are not elected thereat, the Directors may be elected at
any special meeting of shareholders held for that purpose. All Directors shall
hold office until their respective successors are elected, subject to the
General Corporation Law and the provisions of these Bylaws with respect to
vacancies on the Board.
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SECTION 3.04 VACANCIES. A vacancy in the Board of Directors shall be
deemed to exist in case of the death, resignation or removal of any Director, if
a Director has been declared of unsound mind by order of court or convicted of a
felony, if the authorized number of Directors be increased, or if the
shareholders fail, at any annual or special meeting of shareholders at which any
Director or Directors are elected, to elect the full authorized number of
Directors to be voted for at that meeting.
Vacancies in the Board of Directors, except for a vacancy created by the
removal of a Director, may be filled by a majority of the remaining Directors,
though less than a quorum, or by a sole remaining Director, and each Director so
elected shall hold office until his successor is elected at an annual or a
special meeting of the shareholders. A vacancy in the Board of Directors created
by the removal of a Director may only be filled by the vote of a majority of the
shares entitled to vote represented at a duly held meeting at which a quorum is
present, or by the written consent of the holders of a majority of the
outstanding shares.
The shareholders may elect a Director or Directors at any time to fill any
vacancy or vacancies not filled by the remaining Directors. Any such election by
written consent shall require the consent of holders of a majority of the
outstanding shares entitled to vote.
Any Director may resign effective upon giving written notice to the
Chairman of the Board, the President, the Secretary or the Board of Directors of
the corporation, unless the notice specifies a later time for the effectiveness
of such resignation. If the Board of Directors accepts the resignation of a
Director tendered to take effect at a future time, the Board or the shareholders
shall have power to elect a successor to take office when the resignation is to
become effective.
No reduction of the authorized number of Directors shall have the effect
of removing any Director prior to the expiration of his term of office.
SECTION 3.05 PLACE OF MEETING. Regular meetings of the Board of Directors
shall be held at any place within or without the State which has been designated
from time to time by resolution of the Board or by written consent of all
members of the Board. In the absence of such designation regular meetings shall
be held at the principal executive office of the corporation. Special meetings
of the Board may be held either at a place so designated or at the principal
executive office.
SECTION 3.06 ORGANIZATION MEETING. Immediately following each annual
meeting of shareholders the Board of Directors shall
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hold a regular meeting at the place of said annual meeting or at such other
place as shall be fixed by the Board of Directors, for the purpose of
organization, election of officers, and the transaction of other business. Call
and notice of such meetings are hereby dispensed with.
SECTION 3.07 OTHER REGULAR MEETINGS. Other regular meetings of the Board
of Directors shall be held without call or notice on such dates and times as
shall be fixed by the Board of Directors from time to time.
SECTION 3.08 SPECIAL MEETINGS. Special meetings of the Board of Directors
for any purpose or purposes may be called at any time by the Chairman of the
Board, the President, any Vice-President, the Secretary or by any two (2)
Directors.
Written notice of the time and place of special meetings shall be
delivered personally to each Director or communicated to each Director by
telephone, or by telegraph or mail, charges prepaid, addressed to him at his
address as it is shown upon the records of the corporation or, if it is not so
shown on such records or is not readily ascertainable, at the place at which the
meetings of the Directors are regularly held. In case such notice is mailed, it
shall be deposited in the United States mail in the place in which the principal
executive office of the corporation is located at least four (4) days before the
time of the holding of the meeting. In case the notice is delivered personally,
or by telephone or telegram, it shall be delivered personally or by telephone or
to the telegraph company, at least forty-eight (48) hours before the time of the
holding of the meeting. Any oral notice given personally or by telephone may be
communicated either to the Director or to a person at the office or residence of
the Director whom the person giving the notice has reason to believe will
promptly communicate it to the Director. Such mailing, telegraphing or delivery,
personally or by telephone, as above provided, shall constitute due, legal and
personal notice to such Director.
Any notice shall state the date, place and hour of the meeting. However,
the notice need not specify the purpose of the meeting.
SECTION 3.09 ACTION WITHOUT MEETING. Any action by the Board of Directors
may be taken without a meeting if all members of the Board shall 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 such Directors.
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SECTION 3.10 ACTION AT A MEETING; QUORUM AND REQUIRED VOTE. Presence of a
majority of the authorized number of Directors at a meeting of the Board of
Directors constitutes a quorum for the transaction of business, except as
hereinafter provided. Members of the Board may participate in a meeting through
use of conference telephone or similar communications equipment, so long as all
members participating in such meeting can hear one another. Participation in a
meeting as permitted in the preceding sentence constitutes presence in person at
such meeting. Every act or decision done or made by a majority of the Directors
present at a meeting duly held at which a quorum is present shall be regarded as
the act of the Board of Directors, unless a greater number, or the same number
after disqualifying one or more Directors from voting, is required by law, by
the articles of incorporation or by these Bylaws. A meeting at which a quorum
is initially present may continue to transact business notwithstanding the
withdrawal of a Director, provided that any action taken is approved by at least
a majority of the required quorum for such meeting.
SECTION 3.11 VALIDATION OF DEFECTIVELY CALLED OR NOTICED MEETINGS. The
transactions of any meeting of the Board of Directors, however called and
noticed or wherever held shall be as valid as though had at a meeting duly held
after regular call and notice, if a quorum is present and if, either before or
after the meeting, each of the Directors not present or who, though present, has
prior to the meeting or at its commencement, protested the lack of proper notice
to him, signs a written waiver of notice or a consent to holding such meeting or
an approval of the minutes thereof. All such waivers, consents or approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting. The waiver of notice or consent need not specify the purpose of the
meeting.
SECTION 3.12 ADJOURNMENT. A quorum of the Directors may adjourn any
Directors' meeting to meet again at a stated day and hour; provided, however,
that in the absence of a quorum a majority of the Directors present at any
Directors' meeting, either regular or special, may adjourn from time to time
until the time fixed for the next regular meeting of the Board.
SECTION 3.13 NOTICE OF ADJOURNMENT. If the meeting is adjourned for more
than twenty-four (24) hours, notice of any adjournment to another time or place
shall be given prior to the time of the adjourned meeting to the Directors who
were not present at the time of adjournment. Otherwise notice of the time and
place of holding an adjourned meeting need not be given to absent Directors if
the time and place be fixed at the meeting adjourned.
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ARTICLE IV
OFFICERS
SECTION 4.01 OFFICERS. The officers of the corporation shall be a
President, a Secretary and a Treasurer. The corporation may also have, at the
discretion of the Board of Directors, a Chairman of the Board, one or more
Vice-Presidents, one or more Assistant Secretaries, one or more Assistant
Treasurers, and such other officers as may be appointed in accordance with the
provisions of Section 4.03 of this Article. Any two (2) or more offices may be
held by the same person.
SECTION 4.02 ELECTION. The officers of the corporation, except such
officers as may be appointed in accordance with the provisions of Section 4.03
or Section 4.05 of this Article, shall be chosen annually by the Board of
Directors, and each shall hold his office until he shall resign or shall be
removed or otherwise disqualified to serve, or his successor shall be elected
and qualified.
SECTION 4.03 SUBORDINATE OFFICERS, ETC. The Board of Directors may
appoint, and may empower the President to appoint, such other officers as the
business of the corporation may require, each of whom shall hold office for such
period, have such authority, and perform such duties as are provided in these
Bylaws or as the Board of Directors may from time to time determine.
SECTION 4.04 REMOVAL AND RESIGNATION. Any officer may be removed, either
with or without cause, by the Board of Directors at any regular or special
meeting thereof, or, except in case of an officer chosen by the Board of
Directors, by any officer upon whom such power of removal may be conferred by
the Board of Directors (subject, in each case, to the rights, if any, of an
officer under any contract of employment).
Any officer may resign at any time by giving written notice to the Board
of Directors or to the President, or to the Secretary of the corporation,
without prejudice however, to the rights, if any, of the corporation under any
contract to which such officer is a party. Any such resignation shall take
effect at the date of the receipt of such notice or at any later time specified
therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 4.05 VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular appointments to such office.
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SECTION 4.06 CHAIRMAN OF THE BOARD. The Chairman of the Board, if there
shall be such an officer, shall, if present, preside at all meetings of the
Board of Directors and exercise and perform such other powers and duties as may
be from time to time assigned to him by the Board of Directors or prescribed by
these Bylaws.
SECTION 4.07 PRESIDENT. Subject to such supervisory powers, if any, as may
be given by the Board of Directors to the Chairman of the Board, if there be
such an officer, the President shall be the Chief Executive Officer of the
corporation and shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and officers of the
corporation. He shall preside at all meetings of the shareholders and, in the
absence of the Chairman of the Board, or if there be none, at all meetings of
the Board of Directors. He shall be ex officio a member of all the standing
committees, including the executive committee, if any, and shall have the
general powers and duties of management usually vested in the office of the
President of a corporation, and shall have such powers and duties as may be
prescribed by the Board of Directors or these Bylaws.
SECTION 4.08 VICE-PRESIDENT. In the absence or disability of the
President, the Vice-Presidents in order of their rank as fixed by the Board of
Directors or, if not ranked, the Vice-President designated by the Board of
Directors, shall perform all 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. The Vice-Presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by the
Board of Directors or these Bylaws.
SECTION 4.09 SECRETARY. The Secretary shall record or cause to be
recorded, and shall keep or cause to be kept, at the principal executive office
and such other place as the Board of Directors may order, a book of minutes of
actions taken at all meetings of Directors and shareholders, with the time and
place of holding, whether regular or special, and, if special, how authorized,
the notice thereof given, the names of those present at Directors' meetings, the
number of shares present or represented at shareholders' meetings, and the
proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal executive
office or at the office of the corporation's transfer agent, a share register,
or a duplicate share register, showing the names of the shareholders and their
addresses, the number and classes of shares held by each, the number and date of
certificates issued for the same, and the number and date of cancellation of
every certificate surrendered for cancellation.
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The Secretary shall give, or cause to be given, notice of all the meetings
of the shareholders and of the Board of Directors required by these Bylaws or by
law to be given, and he shall keep the seal of the corporation in safe custody,
and shall have such other powers and perform such other duties as may be
prescribed by the Board of Directors or by these Bylaws.
SECTION 4.10 TREASURER. The Treasurer shall be the Chief Financial Officer
of the corporation and shall keep and maintain, or cause to be kept and
maintained, adequate and correct accounts of the properties and business
transactions of the corporation, including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital, surplus and shares. Any
surplus, including earned surplus, paid-in surplus and surplus arising from a
reduction of stated capital, shall be classified according to source and shown
in a separate account. The books of account shall at all reasonable times be
open to inspection by any Director.
The Treasurer shall deposit all monies and other valuables in the name and
to the credit of the corporation with 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, shall render to the President and Directors,
whenever they request it, an account of all of his transactions as Treasurer and
of the financial condition of the corporation, and shall have such other powers
and perform such other duties as may be prescribed by the Board of Directors or
these Bylaws.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 RECORD DATE. The Board of Directors may fix a time in the
future as a record date for the determination of the shareholders entitled to
notice of and to vote at any meeting of shareholders or entitled to give consent
to corporate action in writing without a meeting, to receive any report, to
receive any dividend or distribution, or any allotment of rights, or to exercise
rights in respect to any change, conversion, or exchange of shares. The record
date so fixed shall be not more than sixty (60) days nor less than ten (10) days
prior to the date of any meeting, nor more than sixty (60) days prior to any
other event for the purposes of which it is fixed. When a record date is so
fixed, only shareholders of record on that date are entitled to notice of and to
vote at any such meeting, to give consent without a meeting, to receive any
report, to receive a dividend, distribution, or allotment of rights, or to
exercise the rights, as the case may be, notwithstanding any transfer of any
shares on the books of the corporation after the record date, except as
otherwise provided in the articles of incorporation or Bylaws.
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If no record date is fixed,
(a) the record date for determining shareholders entitled to notice of or
to vote at a meeting of shareholders shall be at the close of business on the
business day next preceding the day on which notice is given or, if notice is
waived, at the close of business on the business day next preceding the day on
which the meeting is held;
(b) the record date for determining shareholders entitled to give consent
to corporate action in writing without a meeting, when no prior action by the
Board of Directors has been taken, shall be the day on which the first written
consent is given; and
(c) the record date for determining shareholders 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, or the sixtieth (60th) day prior to the
date of such other action, whichever is later.
SECTION 5.02 INSPECTION OF CORPORATE RECORDS. The accounting books and
records, the record of shareholders, and minutes of proceedings of the
shareholders and the Board and committees of the Board of this corporation and
any subsidiary of this corporation shall be open to inspection upon the written
demand on the corporation of any shareholder or holder of a voting trust
certificate at any reasonable time during usual business hours, for a purpose
reasonably related to such holder's interests as a shareholder or as the holder
of such voting trust certificate. Such inspection by a shareholder or holder of
a voting trust certificate may be made in person or by agent or attorney, and
the right of inspection includes the right to copy and make extracts.
A shareholder or shareholders holding at least five percent (5%) in the
aggregate of the outstanding voting shares of the corporation or who hold at
least one percent (1%) of such voting shares and have filed a Schedule 14B with
the United States Securities and Exchange Commission relating to the election of
Directors of the corporation shall have (in person, or by agent or attorney) the
right to inspect and copy the record of shareholders' names and addresses and
shareholdings during usual business hours upon five (5) business days' prior
written demand upon the corporation and to obtain from the transfer agent for
the corporation, upon written demand and upon the tender of its usual charges, a
list of the shareholders' names and addresses, who are entitled to vote for the
election of Directors, and their shareholdings, as of the most recent record
date for which it has been compiled or as of a date specified by the shareholder
subsequent to the date of demand. The list shall be made available on or before
the later of five (5) business days after the demand is received or the date
16
<PAGE> 19
specified therein as the date as of which the list is to be compiled.
Every Director shall have the absolute right at any reasonable time to
inspect and copy all books, records and documents of every kind and to inspect
the physical properties of the corporation and each of its subsidiary
corporations. Such inspection by a Director may be made in person or by agent or
attorney and the right of inspection includes the right to copy and make
extracts.
SECTION 5.03 CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
payment of money, notes or other evidences of indebtedness, issued in the name
of or payable to the corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, shall be determined by
resolution of the Board of Directors
SECTION 5.04 ANNUAL AND OTHER REPORTS. The annual report to shareholders
referred to in Section 1501 of the California General Corporation Law is
expressly waived, but nothing herein shall be interpreted as prohibiting the
Board from issuing annual or other periodic reports to shareholders.
SECTION 5.05 CONTRACTS, ETC., HOW EXECUTED. The Board of Directors, except
as in these Bylaws otherwise provided, may authorize any officer or officers,
agent or agents, to enter into any contract or execute any instrument in the
name of and on behalf of the corporation, and such authority may be general or
confined to specific instances; and, unless so authorized by the Board of
Directors, no officer, agent or employee shall have any power or authority to
bind the corporation by any contract or engagement or to pledge its credit or to
render it liable for any purpose or to any amount.
SECTION 5.06 CERTIFICATE FOR SHARES. Every holder of shares in the
corporation shall be entitled to have a certificate signed in the name of the
corporation by the Chairman or Vice Chairman of the Board or the President or a
Vice-President and by the Chief Financial Officer or an Assistant Treasurer or
the Secretary or any Assistant Secretary, certifying the number of shares and
the class or series of shares owned by the shareholder. Any of the signatures on
the certificate may be facsimile, provided that in such event at least one
signature, including that of either officer or the corporation's registrar or
transfer agent, if any, shall be manually signed. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the corporation
with the same effect as if such person were an officer, transfer agent or
registrar at the date of issue.
17
<PAGE> 20
Any such certificate shall also contain such legend or other statement as
may be required by Section 418 of the California General Corporation Law, the
Corporate Securities Law of 1968, the federal securities laws, or any agreement
between the corporation and the issuee of such certificate.
Certificates for shares may be issued prior to full payment under such
restrictions and for such purposes as the Board of Directors or the Bylaws may
provide; provided, however, that any such certificate so issued prior to full
payment shall state on the face thereof the amount remaining unpaid and the
terms of payment thereof.
No new certificate for shares shall be issued in lieu of an old
certificate unless the latter is surrendered and cancelled at the same time;
provided, however, that a new certificate will be issued without the surrender
and cancellation of the old certificate if (1) the old certificate is lost,
apparently destroyed or wrongfully taken; (2) the request for the issuance of
the new certificate is made within a reasonable time after the owner of the old
certificate has notice of its loss, destruction, or theft; (3) the request for
the issuance of a new certificate is made prior to the receipt of notice by the
corporation that the old certificate has been acquired by a bona fide purchaser;
(4) the owner of the old certificate files a sufficient indemnity bond with or
provides other adequate security to the corporation; and (5) the owner satisfies
any other reasonable requirements imposed by the corporation. In the event of
the issuance of a new certificate, the rights and liabilities of the
corporation, and of the holders of the old and new certificates, shall be
governed by the provisions of Sections 8104 and 8405 of the California
Commercial Code.
SECTION 5.07 REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The President
or any Vice-President and the Secretary or any Assistant Secretary of this
corporation are authorized to vote, represent and exercise on behalf of this
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of this corporation. The authority herein
granted to said officers to vote or represent on behalf of this corporation any
and all shares held by this corporation in any other corporation or corporations
may be exercised either by such officers in person or by any other person
authorized so to do by proxy or power of attorney duly executed by said
officers.
SECTION 5.08 INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER
AGENTS. The corporation shall, to the maximum extent permitted by the California
General Corporation Law, indemnify each of its agents against expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
in
18
<PAGE> 21
connection with any proceeding arising by reason of the fact any such person is
or was an agent of the corporation. For purposes of this section, an "agent" of
the corporation includes any person who is or was a Director, officer, employee,
or other agent of the corporation, or is or was serving at the request of the
corporation as a Director, officer, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust or other enterprise, or
was a Director, officer, employee, or agent of a foreign or domestic corporation
which was a predecessor corporation of the corporation or of another enterprise
at the request of such predecessor corporation; "proceeding" means any
threatened, pending or completed action or proceeding, whether civil, criminal,
administrative, or investigative; and "expenses" includes, without limitation,
attorneys' fees and any expenses of establishing a right to indemnification from
the corporation.
SECTION 5.09 INSPECTION OF BYLAWS. The corporation shall keep in its
principal executive office in California, or if its principal executive office
is not in California, then at its principal business office in California (or
otherwise provide upon written request of any shareholder) the original or a
copy of the Bylaws as amended or otherwise altered to date, certified by the
Secretary, which shall be open to inspection by the shareholders at all
reasonable times during office hours. If the principal executive office of the
corporation is outside California and the corporation has no principal business
office in California, the Secretary shall, upon the written request of any
shareholder, furnish to that shareholder a copy of the Bylaws as amended to
date.
SECTION 5.10 CONSTRUCTION AND DEFINITIONS. Unless the context otherwise
requires, the general provisions, rules of construction and definitions
contained in the California General Corporation Law shall govern the
construction of these Bylaws. Without limiting the generality of the foregoing,
the masculine gender includes the feminine and neuter, the singular number
includes the plural and the plural number includes the singular, and the term
"person" includes a corporation as well as a natural person.
ARTICLE VI
AMENDMENTS
SECTION 6.01 POWER OF SHAREHOLDERS. New Bylaws may be adopted or these
Bylaws may be amended or repealed by the affirmative vote or written consent of
holders of a majority of the outstanding shares entitled to vote; provided,
however, that if the articles of incorporation of the corporation set forth the
number of authorized directors of the corporation, the authorized number
19
<PAGE> 22
of directors may be changed only by an amendment of the articles of
incorporation.
SECTION 6.02 POWER OF DIRECTORS. Subject to the right of shareholders as
provided in Section 6.01 of this Article to adopt, amend or repeal Bylaws,
Bylaws, other than a Bylaw or amendment thereof changing the authorized number
of Directors, may be adopted, amended or repealed by the Board of Directors.
<PAGE> 23
CENTURY PARKING, INC
* * * * *
BY-LAWS
* * * * *
ARTICLE I
OFFICES
Section 1. The principal office shall be located in Los Angeles,
California.
Section 2. The corporation may also have offices at such other places both
within and without the State of California as the board of directors may from
time to time determine or the business of the corporation may require.
ARTICLE II
ANNUAL MEETINGS OF SHAREHOLDERS
Section 1. All meetings of shareholders for the election of
directors shall be held in 5471 Corbin Avenue, Tarzana, State of California, at
such place as may be fixed from time to time by the board of directors.
Section 2. Annual meetings of shareholders, com-
<PAGE> 24
mencing, with the year 1969, shall be held on the fifteenth day of July, if not
a legal holiday, and if a legal holiday, then on the next secular day following,
at 2:00 P.M., at which they shall elect by a plurality vote a board of
directors, and transact such other business as may properly be brought before
the meeting.
Section 3. Written or printed notice of the annual meeting stating
the place, day and hour of the meeting shall be given to each shareholder
entitled to vote thereat not less than ten days before the date of the meeting.
ARTICLE III
SPECIAL MEETINGS OF SHAREHOLDERS
Section 1. Special meetings of shareholders for any purpose other
than the election of directors may be held at such time and place within or
without the State of California as shall be stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
Section 2. Special meetings of the shareholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the articles of
incorporation, may be called by the president, the board of directors, or the
holders of not less than one-fifth of all the shares entitled to vote at the
meeting.
Section 3. Written or printed notice of a special meeting of
shareholders, stating the time, place and purpose
<PAGE> 25
or purposes thereof, shall be given to each shareholder entitled to vote
thereat, at least ten days before the date fixed for the meeting.
Section 4. The business transacted at any special meeting of shareholders shall
be limited to the purposes stated in the notice.
ARTICLE IV
QUORUM AND VOTING 0F STOCK
Section 1. The holders of a majority of the shares of stock issued
and outstanding and entitled to vote, represented in person or by proxy, shall
constitute a quorum at all meetings of the shareholders for the transaction of
business except as otherwise provided by statute or by the articles of
incorporation. If, however, such quorum shall not be present or represented at
any meeting of the shareholders, the shareholders present in person or
represented by proxy shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 2. If a quorum is present, the affirmative vote of a
majority of the shares of stock represented at the meeting shall be the act of
the shareholders unless the vote
<PAGE> 26
of a greater number of shares of stock is required by law or the majority of
incorporation.
Section 3. Each outstanding share of stock, having voting powers,
shall be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders. A shareholder may vote either in person or by proxy executed in
writing by the shareholder or by his duly authorized attorney-in-fact.
In all elections for directors every shareholder, entitled to vote,
shall have the right to vote, in person or by proxy, the number of shares of
stock owned by him, for as many persons as there are directors to be elected, or
to cumulate the vote of said shares, and give one candidate as many votes as the
number of directors multiplied by the number of his shares of stock shall equal,
or to distribute the votes on the same principle among as many candidates as he
may see fit.
Section 4. Any action required to be taken at a meeting of the
shareholders may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by all of the shareholders entitled
to vote with respect to the subject matter thereof.
<PAGE> 27
ARTICLE V
DIRECTORS
Section 1. The number of directors shall be not more than five nor
less than three. Directors need not be residents of the State of California nor
shareholders of the corporation. The directors, other than the first board of
directors, shall be elected at the annual meeting of the shareholders, and each
director elected shall serve until the next succeeding annual meeting and until
his successor shall have been elected and qualified. The first board of
directors shall hold office until the first annual meeting of shareholders.
Section 2. Vacancies and newly created directorships resulting from
any increase in the number of directors may be filled by a majority of the
directors then in office, though less than a quorum, and the directors so chosen
shall hold office until the next annual election and until their successors are
duly elected and shall qualify.
Section 3. The business affairs of the corporation shall be managed
by its board of directors which may exercise all such powers of the corporation
and do all such lawful acts and things as are not by statute or by the article
of incorporation or by these by-laws directed or required to be exercised or
done by the shareholders.
<PAGE> 28
Section 4. The directors may keep the books of the corporation,
except such as are required by law to be kept within the state, outside of the
State of California, at such place or places as they may from time to time
determine.
Section 5. The board of directors, by the affirmative vote of a
majority of the 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.
ARTICLE VI
MEETINGS 0F THE BOARD OF DIRECTORS
Section 1. Meetings of the board of directors, regular or special,
may be held either within or without the State of California.
Section 2. The first meeting of each newly elected board of
directors shall be held at such time and place as shall be fixed by the vote of
the shareholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meetings provided a quorum shall be present, or it may convene at such place and
time as shall be fixed by the consent in writing of all the directors.
Section 3. Regular meetings of the board of directors may be held
upon such notice, or without notice, and at
<PAGE> 29
such time and at such place as shall from time to time be determined by the
board.
Section 4. Special meetings of the board of directors may be called
by the president on 5 days' notice to each director, either personally or by
mail or by telegram; special meetings shall be called by the president or
secretary in like manner and on like notice on the written request of two
directors.
Section 5. Attendance of a director at any meeting shall constitute
a waiver of notice of such meeting, except where a director attends 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. Two thirds of the directors shall constitute a quorum for
the transaction of business unless a greater number is required by law or by the
articles of incorporation. The act of a majority of the directors present at any
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 or by the articles of
incorporation. If a quorum shall not be present at any meeting of directors, the
directors present thereat may adjourn the meeting from
<PAGE> 30
time to time, without notice other than announcement at the meeting, until a
quorum shall be present.
Section 7. Any action required or permitted to be taken at a meeting
of the directors may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by all of the directors entitled to
vote with respect to the subject matter thereof.
ARTICLE VII
EXECUTIVE COMMITTEE
Section 1. The board of directors, by resolution adopted by a
majority of the number of directors fixed by the by-laws or otherwise, may
designate two or more directors to constitute an executive committee, which
committee, to the extent provided in such resolution, shall have and exercise
all of the authority of the board of directors in the management of the
corporation, except as otherwise required by law. Vacancies in the membership of
the committee shall be filled by the board of directors at a regular or special
meeting of the board of directors. The executive committee shall keep regular
minutes of its proceedings and report the same to the board when required.
ARTICLE VIII
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
article of incorporation or of these
<PAGE> 31
by-laws, notice is required to be given to any director or shareholder, it shall
not be construed to mean personal notice, but such notice may be given in
writing, by mail, addressed to such director or shareholder, at his address as
it appears on the records of the corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Notice to directors may also be given by
telegram.
Section 2. Whenever any notice whatever is required to be given
under the provisions of the statutes or under the provisions of the articles of
incorporation or these bylaws, 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.
ARTICLE IX
OFFICERS
Section 1. The officers of the corporation shall be chosen by the
board of directors and shall be a president, a vice-president, a secretary and a
treasurer. The board of directors may also choose additional vice-presidents,
and one or more assistant secretaries and assistant treasurers.
<PAGE> 32
Any two or more offices, except those of President and Secretary, may be held by
the same person.
Section 2. The board of directors at its first meeting after each
annual meeting of shareholders shall choose a president, one or more
vice-presidents, a secretary and a treasurer, none of whom need be a member of
the board.
Section 3. The board of directors nay appoint such other officers
and agents as it shall deem necessary 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 4. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer elected or appointed by the
board of directors may be removed at any time by the affirmative vote of a
majority of the board of directors. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.
THE PRESIDENT
Section 6. The president shall be the chief executive officer of the
corporation, shall preside at all meetings or of the shareholders and the board
of directors, shall have
<PAGE> 33
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.
Section 7. He shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the board of
directors to some other officer or agent of the corporation.
THE VICE-PRESIDENTS
Section 8. The vice-president, or if there shall be more than one,
the vice-presidents in the order determined by the board of directors, shall, in
the absence or disability of the president, perform the duties and exercise the
powers of the president and shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 9. The secretary shall attend all meetings of the board of
directors and all meetings of the shareholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be
<PAGE> 34
given, notice of all meetings of the shareholders and special meetings of the
board of directors, and shall perform such other duties as may be prescribed by
the board of directors or president, under whose supervision he shall be. He
shall have custody of the corporate seal of the corporation and he, or an
assistant secretary, shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by his signature or by the
signature of such assistant secretary. The board of directors may give general
authority to any other officer to affix the seal of the corporation and to
attest the affixing by his signature.
Section 10. The assistant secretary, or if there be more than one,
the assistant secretaries in the order determined by the board of directors,
shall, in the absence or disability of the secretary, perform the duties and
exercise the powers of the secretary and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the corporate
funds and securities and 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 and to the credit of the corporation in
such depositories as may be designated by the
<PAGE> 35
board of directors.
Section 12. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
Section 13. If required by the board of directors, he shall give the
corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the board of directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
Section 14. The assistant treasurer, or, if there shall be more than
one, the assistant treasurers in the order determined by the board of directors,
shall, in the absence or disability of the treasurer, perform the duties and
exercise the powers of the treasurer and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
<PAGE> 36
ARTICLE X
CERTIFICATES FOR SHARES
Section 1. The shares of the corporation shall be represented by
certificates signed by the president or a vice-president and the secretary or an
assistant secretary of the corporation, and may be sealed with the seal of the
corporation or a facsimile thereof.
When the corporation is authorized to issue shares of more than one
class there shall be set forth upon the face or back of the certificate, or the
certificate shall have a statement that the corporation will furnish to any
shareholder upon request and without charge, a full or summary statement of the
designations, preferences, limitations, and 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 or the board of directors to
fix and determine the relative rights and preferences of subsequent series.
Section 2. The signatures of the officers of the corporation upon a
certificate may be facsimiles if the certificate is countersigned by a transfer
agent, or registered by a registrar, other than the corporation itself or an
employee of the corporation. In case any officer who has
<PAGE> 37
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate to be
issued in place of any certificate theretofore issued by the corporation alleged
to have been lost or destroyed. When authorizing such issue of a new
certificate, the board of directors, in its discretion and as a condition
precedent to the issuance thereof, may prescribe such terms and conditions as it
deems expedient, and may require such indemnities as it deems adequate, to
protect the corporation from any claim that may be made against it with respect
to any such certificate alleged to have been lost or destroyed.
TRANSFERS OF SHARES
Section 4. Upon surrender to the corporation or the transfer agent
of the corporation of a certificate representing shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, a new certificate shall be issued to the person entitled thereto, and
the old certificate cancelled and the transaction recorded upon the books of the
corporation.
<PAGE> 38
CLOSING OF TRANSFER BOOKS
Section 5. 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 the stock transfer books shall be closed for a stated
period but not to exceed, in any case, fifty 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. 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 in any case to be not
more than fifty 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. If the stock transfer books are
not closed and 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
<PAGE> 39
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, such
determination shall apply to any adjournment thereof.
REGISTERED SHAREHOLDERS
Section 6. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or 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
California.
ARTICLE XI
GENERAL PROVISIONS
DIVIDENDS
Section 1. Subject to the provisions of the articles of
incorporation relating thereto, if any, dividends may be declared by the board
of directors at any regular or special meeting, pursuant to law. Dividends may
be paid in cash, in property or in shares of the capital stock, subject to any
provisions of the articles of
<PAGE> 40
incorporation.
Section 2. 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 directors from time to time, in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
SEAL
Section 5. The corporate seal shall have inscribed thereon the name
of the corporation, the date of its incorporation and the words "Corporate Seal
California".
<PAGE> 41
ARTICLE XII
AMENDMENTS
Section 1. These by-laws may be altered, amended or repealed or new
by-laws may be adopted (a) at any regular or special meeting of shareholders at
which a quorum is present or represented, by the affirmative vote of a majority
of the stock entitled to vote, provided notice of the proposed alteration,
amendment or repeal be contained in the notice of such meeting, or (b) by the
affirmative vote of a majority of the board of directors at any regular or
special meeting of the board.
The board of directors shall not make or alter any by-law fixing
their number.
ARTICLE XIII
DIRECTORS' ANNUAL REPORT
Section 1. The directors shall cause to be sent to the shareholders
not later than one hundred twenty days after the close of the fiscal year, a
report which shall include a balance sheet as of the closing date of the last
fiscal year, and a statement of income or profit and loss, for the year ended on
that date, certified by the president, secretary, treasurer or a public
accountant. The balance sheet shall set forth the bases employed in stating the
valuation of the assets and any changes in such bases during the preceding year;
the amount of the surplus, the sources
<PAGE> 42
thereof and any changes therein during the past year; the number of shares of
each class authorized and outstanding and the number of shares, if any, carried
as treasury shares, the cost thereof and the source from which such cost was
paid; and the amounts, if any, of loans or advances to or from officers,
shareholders and employees. The statement of income or profit and loss shall
disclose the amount of income or loss, setting forth in particular the amounts
of depreciation, depletion, amortization, interest and extraordinary income or
charges, and the amount of income from subsidiary corporations, if any. In case
no adequate written or printed statement of its affairs has been given to the
shareholders for six months and shareholders holding at least ten per cent of
the number of outstanding shares make a written request to the secretary,
assistant secretary or treasurer of the corporation therefor, a statement,
including a balance sheet as of the end of the preceding calendar month and a
statement of income or profit and loss for the period from the end of the
preceding fiscal year to the end of the preceding calendar month, shall be
delivered to the person or persons making the request within thirty days
thereafter and a copy thereof shall be kept on file in the principal office of
the corporation for a period of twelve months for inspection by any shareholder
demanding an examination thereof or a copy thereof shall be mailed to such
shareholder.
<PAGE> 43
KNOW ALL MEN BY THESE PRESENTS:
That we, the undersigned, being all of the persons appointed in the Articles of
Incorporation to act as the first Board of Directors of CENTURY PARKING, INC.
hereby assent to the foregoing By-Laws, and adopt the same as the By-Laws of
said corporation.
IN WITNESS WHEREOF, we have hereunto set our hands this 1st day of August 1968.
/s/ RAY LIESEGANG )
- ------------------------------ )
RAY LIESEGANG )
)
)
/s/ GORDON O. LARSON )
- ------------------------------ ) Directors.
GORDON O. LARSON )
)
)
/s/ FRED RISCEN )
- ------------------------------ )
FRED RISCEN )
)
THIS IS TO CERTIFY:
That I am the duly elected, qualified and acting Secretary of CENTURY
PARKING, INC. and that the above and foregoing By-Laws were adopted as the
By-Laws of said corporation on the 1st day of August 1968, by the persons
appointed in the Articles of Incorporation to act as the first directors of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand this 1st day of August
1968.
/s/ GORDON O. LARSON
------------------------------
GORDON O. LARSON Secretary.
THIS IS TO CERTIFY:
That I am the duly elected, qualified and acting Secretary of CENTURY
PARKING, INC. and that the above and foregoing Code of By-Laws was submitted to
the shareholders at their first meeting held on the 1st day of August 1968, and
was ratified by the vote of shareholders entitled to exercise the majority of
the voting power of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand this 1st day of August
1968.
------------------------------
GORDON O. LARSON, Secretary.
<PAGE> 1
Exhibit 3.25
================================================================================
A477951
State of California
[GRAPHIC OMITTED]
THE GREAT SEAL OF THE STATE OF
EUREKA
CALIFORNIA
SECRETARY OF STATE
CORPORATION DIVISION
I, BILL JONES, Secretary of State of the State of California hereby
certify:
That the annexed transcript has been compared with the corporate record on
file in this office, of which it purports to be a copy, and that same is full,
true and correct.
IN WITNESS WHEREOF, I execute
this certificate and affix
the Great Seal of the State
of California this
Jun 28 1996
-----------------------------
/s/ Bill Jones
Secretary of State
THE GREAT SEAL OF THE STATE OF
EUREKA
CALIFORNIA
Sec/State Form CE-107(rev 9/95)
================================================================================
<PAGE> 2
A477951
ENDORSED
FILED
in the office of the Secretary of State
of the State of California
JUN 21 1996
/s/ Bill Jones
BILL JONES, Secretary of State
RESTATED
ARTICLES OF INCORPORATION OF
SENTRY PARKING CORPORATION
RICHARD E. WILSON, JR., and VELDREE R. LIESEGANG certify that:
1. They are the President and the Secretary, respectively, of SENTRY
PARKING CORPORATION, a California corporation.
2. The Articles of Incorporation of this corporation are amended and
restated to read as follows:
FIRST: The name of this corporation is: SENTRY PARKING CORPORATION.
SECOND: The purpose of the corporation is to engage in any lawful
act or activity for which a corporation may be organized under the General
Corporation Law of California other than the banking business, the trust
company business or the practice of a profession permitted to be
incorporated by the California Corporations Code.
THIRD: This corporation is authorized to issue only one class of
shares of stock, which shall be designated "Common shares", and the total
number of shares which the corporation is authorized to issue is One
Hundred Thousand (100,000).
FOURTH: The liability of the directors of the corporation for
monetary damages shall be eliminated to the fullest extent permissible
under California law.
FIFTH: The corporation is authorized to indemnify the directors and
officers of the corporation to the fullest extent permissible under
California law.
SIXTH: This corporation elects to be governed by all of the
provisions of the General Corporation Law of 1977 not otherwise applicable
to it under Chapter 23 thereof.
3. The foregoing amendment and restatement of Articles of
Incorporation has been duly approved by the Board of Directors.
<PAGE> 3
4. The foregoing amendment and restatement of Articles of
Incorporation has been duly approved by the required vote of shareholders in
accordance with Section 902 of the Corporations Code. The total number of
outstanding shares of the corporation is 500. The number of shares voting in
favor of the amendment equaled or exceeded the vote required. The percentage
vote required was more than 50%.
We further declare under penalty of perjury under the laws of the
State of California, that the matters set forth in this Certificate are true and
correct of our own knowledge.
DATED: March 27, 1996.
/s/ Richard E. Wilson
-----------------------
RICHARD E. WILSON, JR.,
President
/s/ Veldree R. Liesegang
------------------------
VELDREE R. LIESEGANG,
Secretary
2
<PAGE> 4
================================================================================
STATE OF CALIFORNIA
THE GREAT SEAL OF THE STATE OF
EUREKA
CALIFORNIA
OFFICE OF THE
SECRETARY OF STATE
I, MARCH FONG EU, Secretary of State of the State of California, hereby
certify:
That the annexed transcript has been compared with the RECORD on file in
this office, of which it purports to be a copy, and that same is full, true and
correct.
IN WITNESS WHEREOF, I execute this
certificate and affix the Great
Seal of the Slate of California
this
MAR 4 - 1975
-------------------------------------
/s/ March Fong Eu
Secretary of State
THE GREAT SEAL OF THE STATE OF
EUREKA
CALIFORNIA
================================================================================
<PAGE> 5
731834
ENDORSED
FILED
in the office of the Secretary of State
of the State of California
MAR 3 - 1975
MARCH FONG EU, Secretary of State
Janet E. Jauregui
Deputy
ARTICLES OF INCORPORATION
OF
SENTRY PARKING CORPORATION
FIRST: The name of this corporation shall be:
SENTRY PARKING CORPOPATION
SECOND: The purposes for which this corporation is formed are:
(a) Primarily to engage in the specific business of leasing
and operating parking facilities.
(b) To acquire, buy, sell, construct, hold, own, encumber,
improve, lease, let, hire, exchange and generally deal in real property,
personal property, goods, wares and merchandise of any and every kind, and
description, and all rights thereto and interests therein, in every manner
permitted by law.
(c) To enter into joint ventures, partnerships, trust or other
forms of business organization which such joint venture, partnership, trust or
other form of business organization is used to carry on and transact any and all
business which this corporation itself could carry on and transact; to enter
into such form of business organization as general partner, limited partner or
otherwise; to participate in any transaction in such joint venture,
<PAGE> 6
partnership, trust or other business organization by and through officers,
agents, employees, attorneys or other persons delegated by this corporation to
act for it in such business venture.
(d) To borrow money in any manner and amount authorized by
law, and to evidence such indebtedness by bonds, notes, debentures or other
appropriate instruments, and to execute mortgages, deeds of trust, security
agreements or pledges of and upon the whole or any part of the real and personal
property of this corporation for the purpose of securing the payment of such
indebtedness, to guarantee the obligations of persons, firms, and corporations
whenever expedient or convenient to promote the interests of this corporation.
(e) To engage in any business related or unrelated to those
described in clauses (a) through (d) of this Article SECOND and from time to
time authorized or approved by the Board of Directors of this corporation.
(f) To have and exercise all rights and powers from time to
time granted to a corporation by law.
The above purpose clauses shall not be limited by reference to or
inference from one another, but each such purpose clause shall be construed as a
separate statement conferring independent purposes and powers upon the
corporation.
2.
<PAGE> 7
THIRD: The county in the State of California where the principal
office for the transaction of the business of the corporation is located in the
County of Los Angeles.
FOURTH:
(a) The number of directors of the corporation is three (3).
(b) The names and addresses of the persons who are appointed
to act as first directors are:
RICHARD C. GREENBERG
515 South Flower Street, Suite 4400
Los Angeles, California 90071
JEAN SAVASKY
515 South Flower Street, Suite 4400
Los Angeles, California 90071
CAROLYN BAUGH
515 South Flower Street, Suite 4400
Los Angeles, California 90071
FIFTH: This corporation is authorized to issue only one class of
shares of stock. The total number of shares which the corporation is authorized
to issue is One Hundred Thousand (100,000) shares. The aggregate par value of
said shares is One Hundred Thousand Dollars ($100,000), and the par value of
each share is One Dollar ($1.00). No distinction shall exist between the shares
of the corporation or the holders thereof.
3.
<PAGE> 8
IN WITNESS WHEREOF, the undersigned and above named incorporators
and first directors of this corporation have executed these Articles of
Incorporation this 21st day of February, 1975.
/s/ Richard C. Greenberg
------------------------
RICHARD C. GREENBERG
/s/ Jean Savasky
------------------------
JEAN SAVASKY
/s/ Carolyn Baugh
------------------------
CAROLYN BAUGH
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On this day, the 21st day of February, 1975, before me, the
undersigned, a notary public in and for said County and State, personally
appeared RICHARD C. GREENBERG, JEAN SAVASKY and CAROLYN BAUGH known to me to be
the persons whose names are subscribed to the foregoing Articles of
Incorporation and acknowledged to me that they executed the same.
WITNESS my hand and official seal.
[NOTARIAL SEAL]
/s/ [ILLEGIBLE]
------------------------
Notary Public in and for
said County and State
<PAGE> 1
Exhibit 3.26
BY-LAWS
of
SENTRY PARKING CORPORATION
----------------------------------
a California corporation
ARTICLE I
SHAREHOLDERS' MEETING
Section 1. Place of Meetings.
All meetings of the shareholders shall be held at the office of the
corporation, in the State of California, or at some other appropriate and
convenient location as may be designated for that purpose from time to time by
the Board of Directors.
Section 2. Annual Meetings.
The annual meeting of the shareholders shall be held, each year, at
the time and on the day following:
Time of Meeting: 10:00 a.m.
Date of Meeting: March 25
If this day shall be a legal holiday, then the meeting shall be held on the next
succeeding business day, at the same hour. At the annual meeting, the
shareholders shall elect a Board of Directors, consider reports of the affairs
of the corporation and transact such other business as may properly be brought
before the meeting.
Section 3. Special Meetings.
Special meetings of the shareholders for any purpose or purposes may
be called at any time by the president, a vice president, the secretary, an
assistant secretary, or by the Board of Directors, or by one or more
shareholders holding not less than one-fifth (1/5) of the voting power of the
corporation. Upon request in writing by registered mail to the president, a vice
president, the secretary or an assistant secretary, directed to such officers at
the principal office
<PAGE> 2
of the corporation, in California, or delivered to such officer in person by any
person entitled to call a meeting of shareholders, it shall be the duty of such
officer forthwith to cause notice to be given to the shareholders entitled to
vote of a meeting to be held at such time as such officer may fix not less than
ten nor more than sixty days after the receipt of such request. If such notice
shall not be given within seven days after the date of mailing or date of
delivery of such request, the person or persons calling the meeting may fix the
time of meeting and given notice thereof in the manner provided by these
By-laws.
Section 4. Notice of Meetings.
Notices of meetings, annual or special, shall be given in writing to
shareholders entitled to vote by the secretary or the assistant secretary, or if
there be no such officer, or in the case of his neglect or refusal, by any
director or shareholder.
Such notices shall be sent to the shareholder's address appearing on
the books of the corporation, or supplied by him to the corporation for the
purpose of notice, but not less than seven days before such meeting.
Notice of any meeting of shareholders shall specify the place, the
day and the hour of meeting, and in case of special meeting, as provided by the
Corporations Code of California, the general nature of the business to be
transacted.
If a shareholder supplies no address, notice shall be deemed to have
been given to him if mailed to the place where principal office of the company,
in California, is situated, or published at least once in some newspaper of
general circulation in the County of said principal office. Such notice shall
specify the place, the day and hour of the meeting, and in the case of special
meetings, the general nature of the business to be transacted.
When a meeting is adjourned for thirty days or more, notice of the
adjourned meeting shall be given as in case of an original meeting. Save, as
aforesaid, it shall not be necessary to give any notice of the adjournment or of
the business to be transacted at an adjourned meeting other than by announcement
at the meeting at which such adjournment is taken.
<PAGE> 3
Section 5. Consent to Shareholders' Meetings.
The transactions of any meeting of shareholders, however called and
noticed, shall be valid as though had at a meeting duly held after regular call
and notice, if a quorum be present either in person or by proxy, and if, either
before or after the meeting, each of the shareholders entitled to vote, not
present in person or by proxy, sign a written waiver of notice, or a consent to
the holding of such meeting, or an approval of the minutes thereof. All such
waivers, consents or approvals shall be filed with the corporate records or made
a part of the minutes of the meeting.
Section 6. Shareholders Acting Without a Meeting.
Any action which may be taken at a meeting of the shareholders, may
be taken without a meeting if authorized by a writing signed by all of the
shareholders entitled to vote at a meeting for such purpose, and filed with the
secretary of the corporation.
Section 7. Quorum.
The holders of a majority of the shares 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 provide 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 the power to adjourn
the meeting from time to time, until the requisite amount of voting shares shall
be present. At such adjourned meeting at which the requisite amount of voting
shares shall be represented, any business may be transacted which might have
been transacted at the meeting as originally notified.
Section 8. Voting Rights; Cumulative Voting.
Only persons in whose names shares entitled to vote stand on the
stock records of the corporation on the day of any meeting of shareholders,
unless some other day be fixed by the Board of Directors for the determination
of shareholders of record, and then on such other day, shall be entitled to vote
at such meeting.
Every shareholder entitled to vote at any election for directors of
any corporation for profit may cumulate his votes and give one candidate a
number of votes equal to the number of directors to be elected multiplied by the
number of votes to which his shares are entitled, or distribute his votes on the
same principle among as many candidates as he thinks fit.
<PAGE> 4
The candidates receiving the highest number of votes up to the
number of directors to be elected are elected.
The Board of Directors may fix a time in the future not exceeding
thirty days preceding the date of any meeting of shareholders or the date fixed
for the payment of any dividend or distribution, or for the allotment of rights,
or when any change or conversion or exchange of shares shall go into effect, as
a record date for the determination of the shareholders entitled to notice of
and to vote at any such meeting, or entitled to receive any such dividend or
distribution, or any allotment of rights, or to exercise the rights in respect
to any such change, conversion or exchange of shares. In such case only
shareholders of record on the date so fixed shall be entitled to notice of and
to vote at such meeting, or to receive such dividends, distribution or allotment
of rights, or to exercise such rights, as the case may be, notwithstanding any
transfer of any share on the books of the company after any record date fixed as
foresaid. The Board of Directors may close the books of the company against
transfers of shares during the whole or any part of such period.
Section 9. Proxies.
Every shareholder entitled to vote, or to execute consents, may do
so, either in person or by written proxy, executed in accordance with the
provisions of Section 2225 of the Corporations Code of California and filed with
the secretary of the corporation.
Section 10. Organization.
The president, or in the absence of the president, any vice
president, shall call the meeting of the shareholders to order, and shall act as
chairman of the meeting. In the absence of the president and all of the vice
presidents, shareholders shall appoint a chairman for such meeting. The
secretary of the company shall act as secretary of all meetings of the
shareholders, but in the absence of the secretary at any meeting of the
shareholders, the presiding officer may appoint any person to act as secretary
of the meeting.
Section 11. Inspectors of Election.
In advance of any meeting of shareholders the Board of Directors
may, if they so elect, appoint inspectors of election to act at such meeting of
any adjournments thereof. If inspectors of elected be not so appointed, the
chairman of any meeting may, and on the
<PAGE> 5
request of any shareholder or his proxy shall, make such appointment at the
meeting. The number of inspectors shall be either one or three.
ARTICLE II
DIRECTORS; MANAGEMENT
Section 1. Powers.
Subject to the limitation of the Articles of Incorporation, of the
By-laws, and of the laws of the State of California as to action to be
authorized or approved by the shareholders, all corporate powers shall be
exercised by or under authority of, and the business and affairs of this
corporation shall be controlled by, a Board of Directors.
Section 2. Number and Qualification.
The authorized number of directors of the corporation shall be as
follows: Three (3)
This number may be changed by amendment to the Articles of
Incorporation or by an amendment to this Section 2., ARTICLE II, of these
By-laws, adopted by the vote or written assent of the shareholders entitled to
exercise majority voting power.
Section 3. Election and Tenure of Office.
The directors shall be elected by ballot at the annual meeting of
shareholders, to serve for one year or until their successors are elected and
have qualified. Their term of office shall begin immediately after election.
Section 4. Vacancies.
Vacancies in the Board of Directors may be filled by a majority of
the remaining directors, though not less than a quorum, or by a sole remaining
director, and each director so elected shall hold office until his successor is
elected at an annual meeting of shareholders or at a special meeting called for
that purpose.
The shareholders may at any time elect a director to fill any
vacancy not filled by the directors, and may elect the additional directors at
the meeting at which an amendment of the By-laws is voted authorizing an
increase in the number of directors.
<PAGE> 6
A vacancy or vacancies shall be deemed to exist in case of the
death, resignation or removal of any director, or if the shareholders shall
increase the authorized number of directors but shall fail at the meeting at
which such increase is authorized, or at an adjournment thereof, to elect the
additional director so provided for, or in case the shareholders fail at any
time to elect the full number of authorized directors.
If the Board of Directors accepts the resignation of a director
tendered to take effect at a future time, the Board, or the shareholders, shall
have power to elect a successor to take office when the resignation shall become
effective.
No reduction of the number of directors shall have the effect of
removing any director prior to the expiration of his term of office.
Section 5. Removal of Directors.
The entire Board of Directors or any individual director may be
removed from office as provided by Section 810 of the Corporations Code of the
State of California.
Section 6. Place of Meetings.
Meetings of the Board of Directors shall be held at the office of
the corporation in the State of California, as designated for that purpose, from
time to time, by resolution of the Board of Directors or written consent of all
of the members of the Board of Directors, given either before or after the
meeting and filed with the secretary of the corporation.
Section 7. Organization Meetings.
The organization meetings of the Board of Directors shall be held
immediately following the adjournment of the annual meetings of the
shareholders.
Section 8. Other Regular Meetings.
Regular meetings of the Board of Directors shall be held at the
corporate offices, or such other place as may be designated by the Board of
Directors, as follows:
Time of Regular Meeting: Directly after shareholders' meeting.
Date of Regular Meeting: March 25
If said day shall fall upon a holiday, such meeting shall be held on the next
succeeding business day thereafter. No notice need be given of such regular
meeting.
<PAGE> 7
Section 9. Special Meetings - Notices.
Special meetings of the Board of Directors for any purpose or
purposes shall be called at any time by the president or if he is absent or
unable or refuses to act, by any vice president or by any two directors.
Written notice of the time and place of special meetings shall be
delivered personally to the directors or sent to each director by letter or by
telegram, charges prepaid, addressed to him at his address as it is shown upon
the records of the corporation, or if it is not so shown on such records or is
not readily ascertainable, at the place in which the meetings of the directors
are regularly held. In case such notice is mailed or telegraphed, it shall be
deposited in the United States mail or delivered to the telegraph company in the
place in which the principal office of the corporation is located at least
forty-eight (48) hours prior to the time of holding of the meeting. In case such
notice is delivered as above provided, it shall be so delivered at least
twenty-four (24) hours prior to the time of the holding of the meeting. Such
mailing, telegraphing or delivery as above provided shall be due, legal and
personal notice to such director.
Section 10. Waiver of Notice.
When all of the directors are present at any directors' meeting,
however called or noticed, and sign a written consent thereto on the records of
such meeting, or, if a majority of the directors are present, and if those not
present sign in writing a waiver of notice of such meeting, whether prior to or
after the holding of such meeting, which said waiver shall be filed with the
secretary of the corporation, the transactions thereof are as valid as if had at
a meeting regularly called and noticed.
Section 11. Directors Acting Without a Meeting by Unanimous
Written Consent.
Any action required or permitted to be taken by the Board of
Directors may be taken without a meeting and with the same force and effect as
if taken by a unanimous vote of directors, if authorized by a writing signed by
all members of the Board. Such consent shall be filed with the regular minutes
of the Board.
Section 12. Notice of Adjournment.
Notice of the time and place of holding an adjourned meeting need
not be given to absent directors if the time and place be fixed at the meeting
adjourned.
<PAGE> 8
Section 13. Quorum.
A majority of the number of directors as fixed by the Articles of
Incorporation or By-laws shall be necessary to constitute a quorum for the
transaction of business, and the action of a majority of the directors present
at any meeting at which there is a quorum, when duly assembled, is valid as a
corporate act; provided that a minority of the directors, in the absence of a
quorum, may adjourn from time to time, but may not transact any business.
Section 14. Compensation of Directors.
Directors, as such, shall not receive any stated salary for their
services, but by resolution of the Board a fixed sum and expense of attendance,
if any, may be allowed for attendance at each regular and special meeting of the
Board; provided that nothing herein contained shall be construed to preclude any
director from serving the company in any other capacity and receiving
compensation therefor.
Section 15. Executive Committee.
An executive committee may be appointed by resolution passed by a
majority of the whole Board. The executive committee shall be composed of
members of the Board, and shall have such powers as may be expressly delegated
to it by resolution of the Board of Directors. It shall act only in the
intervals between meetings of the Board of Directors and shall be subject at all
times to the control of the Board of Directors.
ARTICLE III
OFFICERS
Section 1. Officers.
The officers of the corporation shall be a president, a vice
president, a secretary and a treasurer. The corporation may also have, at the
discretion of the Board of Directors, a chairman of the board, one or more
additional vice presidents, one or more assistant secretaries, one or more
assistant treasurers, and such other officers as may be appointed in accordance
with the provisions of Section 3 of this Article. One person may hold two or
more offices, except those of president and secretary.
<PAGE> 9
Section 2. Election.
The officers of the corporation, except such officers as may be
appointed in accordance with the provisions of Section 3 or Section 5 of this
Article shall be chosen annually by the Board of Directors, and each shall hold
his office until he shall resign or shall be removed or otherwise disqualified
to serve, or his successor shall be elected and qualified.
Section 3. Subordinate Officers, Etc.
The Board of Directors may appoint such other officers as the
business of the corporation may require, each of whom shall hold office for such
period, have such authority and perform such duties as are provided in the
By-laws or as the Board of Directors may from time to time determine.
Section 4. Removal and Resignation.
Any officer may be removed, either with or without cause, by a
majority of the directors at the time in office, at any regular or special
meeting of the Board, or, except in case of an officer chosen by the Board of
Directors, by any officer upon whom such power of removal may be conferred by
the Board of Directors.
Any officer may resign at any time by giving written notice to the
Board of Directors, or to the president, or to the secretary of the corporation.
Any such resignation shall take effect at the date of the receipt of such notice
or at any later time specified therein; and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it effective.
Section 5. Vacancies.
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
the By-laws for regular appointments to such office.
Section 6. Chairman of the Board.
The Chairman of the Board, if there shall be such an officer shall,
if present, preside at all meetings of the Board of Directors, and exercise and
perform such other powers and duties as may be from time to time assigned to him
by the Board of Directors or prescribed by the By-laws.
<PAGE> 10
Section 7. President.
Subject to such supervisory powers, if any, as may be given by the
Board of Directors to the Chairman of the Board, if there be such an officer,
the president shall be the chief executive officer of the corporation and shall,
subject to the Control of the Board of Directors, have general supervision,
direction and control of the business and officers of the corporation. He shall
preside at all meetings of the shareholders and in the absence of the Chairman
of the Board, or if there be none, at all meetings of the Board of Directors. He
shall be ex officio a member of all the standing committees, including the
executive committee, it any, and shall have the general powers and duties of
management usually vested in the office of president of a corporation, and shall
have such other powers and duties as may be prescribes by the Board of Directors
or the By-laws.
Section 8. Vice President.
In the absence or disability of the president, the vice presidents,
in order of their rank as fixed by the Board of Directors, or if not ranked, the
vice president designated by the Board of Directors, shall perform all the
duties of the president, and when acting shall have all the powers of, and be
subject to, all the restrictions upon, the president. The vice presidents shall
have such other powers and perform such other duties as from time to time may be
prescribed for them respectively by the Board of Directors or the By-laws.
Section 9. Secretary.
The secretary shall keep, or cause to be kept, a book of minutes at
the principal office or such other place as the Board of Directors may order, of
all meetings of directors and shareholders, with the time and place of holding,
whether regular or special, and if special, how authorized, the notice thereof
given, the names of those present at directors' meetings, the number of shares
present or represented at shareholders' meetings and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal
office or at the office of the corporation's transfer agent, a share register,
or duplicate share register, showing the names of the shareholders and their
addresses; the number and classes of shares held by each; the number and date of
certificates issued for the same; and the number and date of cancellation of
every certificate surrendered for cancellation.
<PAGE> 11
The secretary shall give, or cause to be given, notice of all the
meetings of the shareholders and of the Board of Directors required by the
By-laws or by law to be given, and he shall keep the seal of the corporation in
safe custody, and shall have such other powers and perform such other duties as
may be prescribed by the Board of Directors or by the By-laws.
Section 10. Treasurer.
The treasurer shall keep and maintain, or cause to be kept and
maintained, adequate and correct accounts of the properties and business
transactions of the corporation, including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital, surplus and shares. Any
surplus, including earned surplus, paid-in surplus and surplus arising from a
reduction of stated capital, shall be classified according to source and shown
in a separate account. The books of account shall at all reasonable times be
open to inspection by any director.
The treasurer shall deposit all moneys and other valuables in the
name and to the credit of the corporation with 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, shall render to the
president and directors, whenever they request it, an account of all of his
transactions as treasurer and of the financial condition of the corporation, and
shall have such other powers and perform such other duties as may be prescribed
by the Board of Directors or the By-laws.
ARTICLE IV
CORPORATE RECORDS AND REPORTS -- INSPECTION
Section 1. Records.
The corporation shall maintain adequate and correct accounts, books
and records of its business and properties. All of such books, records and
accounts shall be kept at its principal place of business in the State of
California, as fixed by the Board of Directors from time to time.
Section 2. Inspection of Books and Records.
All books and records provided for in Section 3003 of the
Corporations Code of California shall be open to inspection of the directors and
shareholders from time to time and in the manner provided in said Section 3003.
<PAGE> 12
Section 3. Certification and Inspection of By-laws.
The original or a copy of these By-laws, as amended or otherwise
altered to date, certified by the secretary, shall be open to inspection by the
shareholders of the company, as provided in Section 502 of the Corporations Code
of California.
Section 4. Checks, Drafts, Etc.
All checks, drafts or other orders for payment of money, notes or
other evidences of indebtedness, issued in the name of or payable to the
corporation, shall be signed or endorsed by such person or persons and in such
manner as shall be determined from time to time by resolution of the Board of
Directors.
Section 5. Contracts, Etc. -- How Executed.
The Board of Directors, except as in the By-laws or otherwise
provided, may authorize any officer or officers, agent or agents, to enter into
any contract or execute any instrument in the name of and on behalf of the
corporation. Such authority may be general or confined to specific instances.
Unless so authorized by the Board of Directors, no officer, agent or employee
shall have any power or authority to bind the corporation by any contract or
engagement, or to pledge its credit, or to render it liable for any purpose or
to any amount.
Section 6. Annual Report.
The Board of Directors shall cause an annual report or statement to
be sent to the shareholders of this corporation not later then 120 days after
the close of the fiscal or calendar year in accordance with the provisions of
Sections 3006 - 3010 of the Corporations Code of the State of California.
ARTICLE V
CERTIFICATES AND TRANSFER OF SHARES
Section 1. Certificate for Shares.
Certificates for shares shall be of such form and device as the
Board of Directors may designate and shall state the name of the record holder
of the shares represented thereby; its number; date of issuance; the number of
shares for which it is issued; the par value, if any, or a statement that such
shares are without par value; a statement of the rights, privileges, preferences
and restrictions, if any; a statement as to the redemption or conversion, if
any; a state-
<PAGE> 13
ment of liens or restrictions upon transfer or voting, if any; if the shares be
assessable or, if assessments are collectible by personal action, a plain
statement of such facts.
Every certificate for shares must be signed by the president or a
vice president and the secretary or an assistant secretary or must be
authenticated by facsimiles of the signatures of the president and secretary or
by a facsimile of the signature of its president and the written signature of
its secretary or an assistant secretary. Before it becomes effective every
certificate for shares authenticated by a facsimile of a signature must be
countersigned by a transfer agent or transfer clerk and must be registered by
an incorporated bank or trust company, either domestic or foreign, as registrar
of transfers.
Section 2. Transfer on the Books.
Upon surrender to the secretary or transfer agent of the
corporation of a certificate for shares 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.
Section 3. Lost or Destroyed Certificates.
Any person claiming a certificate of stock to be lost or destroyed
shall make an affidavit or affirmation of that fact and advertise the same 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 with one or more
sureties satisfactory to the Board, in at least double the value of the stock
represented by said certificate, whereupon a new certificate may be issued in
the same tenor and for the same number of shares as the one alleged to be lost
or destroyed.
Section 4. Transfer Agents and Registrars.
The Board of Directors may appoint one or more transfer agents or
transfer clerks, and one or more registrars, which shall be an incorporated bank
or trust company -- either domestic of foreign, who shall be appointed at such
times and places as the requirements of the corporation may necessitate and the
Board of Directors may designate.
Section 5. Closing Stock Transfer Books.
The Board of Directors may close the transfer books in their
discretion for a period not exceeding thirty days preceding any meeting, annual
or special, of the shareholders, or the day appointed for the payment of a
dividend.
<PAGE> 14
CERTIFICATE OF SECRETARY
I, the undersigned, do hereby certify:
1. That I am the duly elected and acting Secretary of SENTRY PARKING
CORPORATION, a California corporation;
2. That the foregoing Bylaws, consisting of twenty (20) pages, are a
true and correct copy of the duly adopted Bylaws of said corporation duly
adopted by the Board of Director on March 25, 1977.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed
the seal of said corporation this 25th day of March, 1977.
/s/ Veldree Liesegang
---------------------
VELDREE LIESEGANG,
Secretary
[SEAL]
<PAGE> 1
EXHIBIT 10.1
EXECUTION COPY
APCOA, INC.
$140,000,000
9 1/4% SENIOR SUBORDINATED NOTES DUE 2008
REGISTRATION RIGHTS AGREEMENT
DATED AS OF MARCH 30, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
FIRST CHICAGO CAPITAL MARKETS, INC.
<PAGE> 2
This Registration Rights Agreement (this "Agreement") is made and entered
into as of March 30, 1998, by and among APCOA, Inc., a Delaware corporation (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 Co., Inc., a Massachusetts corporation, Standard
Parking, L.P., a Delaware limited partnership, Standard Parking Corporation, an
Illinois corporation, Standard Parking Corporation, IL, 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 Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ") and First Chicago Capital Markets, Inc. ("First
Chicago" and, together with DLJ, the "Initial Purchasers"), who have agreed to
purchase the Company's 9 1/4% Senior Subordinated Notes due 2008 (the "Senior
Subordinated 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 the Company, the
Subsidiary Guarantors and the Initial Purchasers. In order to induce the Initial
Purchasers to purchase the Senior Subordinated Notes, the Company 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
Purchasers 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
Subordinated Notes that are acquired by a Broker-Dealer in the Exchange Offer in
exchange for Senior Subordinated Notes that such Broker-Dealer acquired for its
own account as a result of market-making activities or other trading activities
(other than Senior Subordinated Notes acquired directly from the Company or any
of its respective affiliates).
Certificated Securities: As defined in the Indenture.
<PAGE> 3
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 Subordinated Notes to be issued in the Exchange
Offer, (b) the maintenance of such Registration Statement continuously 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
the Company to the Registrar under the Indenture of New Senior Subordinated
Notes in the same aggregate principal amount as the aggregate principal amount
of Senior Subordinated 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 the Company under the Act of the
New Senior Subordinated Notes pursuant to the Exchange Offer Registration
Statement pursuant to which the Company shall offer the Holders of all
outstanding Transfer Restricted Securities the opportunity to exchange all such
outstanding Transfer Restricted Securities for New Senior Subordinated 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 Purchasers
propose to sell the Senior Subordinated 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 the Company,
the Subsidiary Guarantors 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.
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<PAGE> 4
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.
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 the Company
and the Subsidiary Guarantors relating to (a) an offering of New Senior
Subordinated 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
provisions of this Agreement and (ii) including the Prospectus included therein,
all amendments and supplements thereto (including post-effective amendments) and
all exhibits and material incorporated by reference therein.
Restricted Broker-Dealer: Any Broker-Dealer which holds
Broker-Dealer Transfer Restricted Securities.
Notes: The Senior Subordinated Notes and the New Senior Subordinated
Notes.
New Senior Subordinated Notes: The Company's 9 1/4% New Senior
Subordinated 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 Subordinated
Notes covered by a Shelf Registration Statement, in exchange for such Senior
Subordinated 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
3
<PAGE> 5
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 Registration Statement (including delivery of the 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 the Company 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), the Company and the Subsidiary Guarantors 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 Subordinated 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 the Company 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 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 Subordinated Notes to be offered
in exchange for the Senior Subordinated 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) The Company and the Subsidiary Guarantors shall use their 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. The Company and the Subsidiary
Guarantors 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. The Company and the Subsidiary
Guarantors shall use their respective
4
<PAGE> 6
best efforts to cause the Exchange Offer to be Consummated 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) The Company 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 Subordinated 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 Subordinated Notes (other than Transfer
Restricted Securities acquired directly from the Company or any affiliate of the
Company) 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 Subordinated 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.
The Company and the Subsidiary Guarantors shall use their respective
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.
The Company and the Subsidiary Guarantors 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) the Company is not required to file an
Exchange Offer Registration Statement with respect to the New Senior
Subordinated 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 the
Company within 20 Business Days following the Consummation 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 Subordinated Notes acquired by it in the
5
<PAGE> 7
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 Subordinated Notes acquired directly from the Company or one of
its respective affiliates, then the Company and the Subsidiary Guarantors shall
(x) cause to be filed on or prior to the earliest of (1) 45 days after the date
on which the Company 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 the Company 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 their respective 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 the Company becomes obligated to file such Shelf Registration Statement.
If, after the Company has filed an Exchange Offer Registration Statement which
satisfies the requirements of Section 3(a) above, the Company 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. The Company and the Subsidiary Guarantors shall use their
respective best efforts 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
the Company 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 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 the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.
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<PAGE> 8
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"), the Company 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 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 the Company and the Subsidiary
Guarantors 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.
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<PAGE> 9
6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the Exchange
Offer, the Company and the Subsidiary Guarantors shall comply with all
applicable provisions of Section 6(c) below, shall use their respective 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 the Company there is a substantial
question as to whether the Exchange Offer is permitted by applicable
federal law or Commission policy, the Company and the Subsidiary
Guarantors hereby agree to seek a no-action letter or other favorable
decision from the Commission allowing the Company and the Subsidiary
Guarantors to Consummate an Exchange Offer for such Senior Subordinated
Notes. The Company and the Subsidiary Guarantors hereby agree 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, the Company
and the Subsidiary Guarantors hereby agree, 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 the Company 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 the Company,
prior to the Consummation of the Exchange Offer, a written representation
to the Company and the Subsidiary Guarantors (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 the Company,
(B) it is not engaged 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 Subordinated Notes to be issued in the
Exchange Offer and (C) it is acquiring the New Senior Subordinated Notes
in its ordinary course of business. In addition, all such holders of
Transfer Restricted Securities shall otherwise cooperate in the Company's
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
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<PAGE> 10
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 Subordinated Notes obtained by such
Holder in exchange for Senior Subordinated Notes acquired by such Holder
directly from the Company or an affiliate thereof.
(iii) To the extent required by the Commission, prior to
effectiveness of the Exchange Offer Registration Statement, the Company
and the Subsidiary Guarantors shall provide a supplemental letter to the
Commission (A) stating that the Company and the Subsidiary Guarantors are
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 neither the Company nor any Subsidiary
Guarantor has entered into any arrangement or understanding with any
Person to distribute the New Senior Subordinated Notes to be received in
the Exchange Offer and that, to the best of the Company's and the
Subsidiary Guarantors' information and belief, each Holder participating
in the Exchange Offer is acquiring the New Senior Subordinated 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
Subordinated 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 the Company and the Subsidiary Guarantors 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
methods of distribution thereof (as indicated in the information furnished to
the Company pursuant to Section 4(b) hereof), and pursuant thereto the Company
and the Subsidiary Guarantors 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), the Company and the
Subsidiary Guarantors shall:
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(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, the Company and the Subsidiary Guarantors 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, the Company may allow the Shelf Registration Statement to
cease to be effective and usable if (x) 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 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 any
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 Prospectus 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
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<PAGE> 12
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, the Company
and the Subsidiary Guarantors shall use their respective best efforts to
obtain the withdrawal or lifting of such order at the earliest possible
time;
(iv) furnish to the Initial Purchasers, 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 amendments 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 the Company will not file any such Registration Statement or
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 the Company's and the Subsidiary
Guarantors' 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
underwriter(s), if any, reasonably may request;
(vi) make available at reasonable times at the Company's 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 the Company 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 the
Company and each of the Subsidiary Guarantors, as reasonably requested,
and cause the Company's and the Subsidiary Guarantors' officers, directors
and employees to respond to such inquiries as shall be
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<PAGE> 13
reasonably 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 the Company 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 the Company 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 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 the Company 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; the Company and the Subsidiary Guarantors
hereby consent 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, the Company may allow
the Shelf Registration Statement to cease to be effective and usable if
(x) 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 two business days after the
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<PAGE> 14
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, the Company 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 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 corporate
transaction involving the Company; and in such connection, whether or not
an underwriting agreement is entered into and whether or not the
registration is an Underwritten Registration, the Company and the
Subsidiary Guarantors 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 each of the Company and the Subsidiary Guarantors by (x)
the President or any Vice President and (y) a principal
financial or accounting officer of the Company and each of the
Subsidiary Guarantors 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 the
Company and the Subsidiary Guarantors, 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
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<PAGE> 15
(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 the Company's 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-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 the
Company and the Subsidiary Guarantors 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 the
Company and the Subsidiary Guarantors contemplated in (A)(1) above cease
to be true and correct, the Company and the Subsidiary Guarantors 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 neither the
Company nor any Subsidiary Guarantor shall 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;
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<PAGE> 16
(xii) issue, upon the request of any Holder of Senior Subordinated
Notes covered by any Shelf Registration Statement contemplated by this
Agreement, New Senior Subordinated Notes, having an aggregate principal
amount equal to the aggregate principal amount of Senior Subordinated
Notes surrendered to the Company by such Holder in exchange therefor or
being sold by such Holder; such New Senior Subordinated 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 Subordinated
Notes held by such Holder shall be surrendered to the Company 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;
(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;
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<PAGE> 17
(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 the
Company's 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 respective 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 the Company 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 the Company 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 the Company, each Holder will deliver to the Company (at the
Company's 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 the Company 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.
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<PAGE> 18
The Company 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 the Company such information
regarding such Holder and such Holder's intended method of distribution of the
applicable Transfer Restricted Securities as the Company 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 the
Company as promptly as practicable of (i) any inaccuracy or change in
information previously furnished by such Holder to the Company, 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 regarding
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 the Company 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 the Company's and the Subsidiary Guarantors'
performance of or compliance with this Agreement will be borne by the Company,
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 Purchasers 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 Subordinated Notes to be issued in the Exchange
Offer and printing of Prospectuses); (iv) all fees and disbursements of counsel
for the Company, the Subsidiary Guarantors and, in accordance with Section 7(b)
below, the Holders of Transfer Restricted Securities; (v) all messenger and
delivery services and telephone expenses of the Company and the Subsidiary
Guarantors; (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 the Company and the Subsidiary Guarantors
(including the expenses of any special audit and comfort letters required by or
incident to such performance).
(b) The Company will, in any event, bear its and the Subsidiary
Guarantors' 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
17
<PAGE> 19
and the fees and expenses of any Person, including special experts, retained by
the Company or the Subsidiary Guarantors.
(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), the Company and
the Subsidiary Guarantors will reimburse the Initial Purchasers 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.
8. INDEMNIFICATION
(a) The Company and each Subsidiary Guarantor agree, jointly and
severally, to indemnify and hold harmless 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) 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 Purchasers
furnished in writing to the Company by such Initial Purchasers; 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
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<PAGE> 20
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 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 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
19
<PAGE> 21
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
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
Purchasers exceeds the amount of any damages which the Initial
20
<PAGE> 22
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. RULE 144A
The Company and the Subsidiary Guarantors hereby agree with each
Holder, for so long as any Transfer Restricted Securities remain outstanding and
during any period in which the Company and the Subsidiary Guarantors are 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 the Company. Such investment bankers
and managers are referred to herein as the "underwriters."
12. MISCELLANEOUS
(a) Remedies. The Company and the Subsidiary Guarantors agree 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. Neither the Company nor any Subsidiary
Guarantor will, on or after the date of this Agreement, enter into any agreement
with respect to its securities
21
<PAGE> 23
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, neither the Company nor any Subsidiary Guarantor has
previously entered into any agreement granting any registration rights with
respect to 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 the Company's and the Subsidiary Guarantors'
securities under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. Neither the Company nor any
Subsidiary Guarantor will 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), the Company has obtained the written consent
of the Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company 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.
22
<PAGE> 24
(ii) if to the Company or any Subsidiary Guarantor:
APCOA, Inc.
800 Superior Avenue
Cleveland, Ohio 44114
Telecopier No.: (216) 523-8080
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
23
<PAGE> 25
YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF
NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW RULES.
(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]
24
<PAGE> 26
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
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
A-1 AUTO PARK, INC.
By: /s/ Michael J. Celebrezze
-----------------------------------------
Name: Michael J. Celebrezze
Title: Vice President, Treasurer
<PAGE> 27
METROPOLITAN PARKING SYSTEM, INC.
By: /s/ Michael J. Celebrezze
-----------------------------------------
Name: Michael J. Celebrezze
Title: Vice President, Treasurer
EVENTS PARKING COMPANY, INC.
By: /s/ Michael J. Celebrezze
-----------------------------------------
Name: Michael J. Celebrezze
Title: Vice President, Treasurer
<PAGE> 28
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
STANDARD AUTO PARK, INC.
By: /s/ Myron C. Warshauer
-----------------------------------------
Name: Myron C. Warshauer
Title: President
<PAGE> 29
STANDARD/WABASH PARKING CORPORATION
By: /s/ Myron C. Warshauer
-----------------------------------------
Name: Myron C. Warshauer
Title: President
STANDARD PARKING OF CANADA, L.P.
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.
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.
<PAGE> 30
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
<PAGE> 1
Exhibit 10.3
EXECUTION COPY
================================================================================
STOCKHOLDERS AGREEMENT
by and among
DOSHER PARTNERS, L.P.
and
SP ASSOCIATES
and
HOLBERG INDUSTRIES, INC.
and
AP HOLDINGS, INC.
dated as of
March 30, 1998
================================================================================
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.1 Definitions................................................. 1
ARTICLE II
CORPORATE GOVERNANCE
Section 2.1 Composition of the Boards of Directors...................... 6
Section 2.2 Removal..................................................... 6
Section 2.3 Vacancies................................................... 7
Section 2.4 Termination of Rights and Obligations....................... 7
Section 2.5 Indemnification............................................. 7
ARTICLE III
RESTRICTIONS ON TRANSFER
Section 3.1 General..................................................... 7
Section 3.2 Legend on Shares............................................ 8
Section 3.3 Permitted Transferees....................................... 8
ARTICLE IV
RIGHT OF FIRST OFFER; PREEMPTIVE RIGHTS
Section 4.1 Right of First Offer........................................ 9
Section 4.2 Preemptive Rights........................................... 9
Section 4.3 Transactions with Affiliates................................ 11
ARTICLE V
TAG-ALONG AND DRAG-ALONG RIGHTS
Section 5.1 Tag-Along Right............................................. 11
Section 5.2 Drag-Along Right............................................ 12
ARTICLE VI
PUT AND CALL RIGHTS
Section 6.1 Put Rights and Call Rights.................................. 13
Section 6.2 Exercise of Rights.......................................... 13
-i-
<PAGE> 3
Section 6.3 Certain Limitations......................................... 14
Section 6.4 Expiration of Obligations................................... 15
Section 6.5 Certain Additional Payments................................. 15
ARTICLE VII
REGISTRATION RIGHTS
Section 7.1 Incidental Registrations.................................... 16
Section 7.2 Holdback Agreements......................................... 17
Section 7.3 Registration Procedures..................................... 17
Section 7.4 Indemnification by the Company.............................. 18
Section 7.5 Indemnification by Participating Persons.................... 19
Section 7.6 Conduct of Indemnification Proceedings...................... 20
Section 7.7 Contribution................................................ 21
Section 7.8 Participation in Public Offering............................ 22
Section 7.9 Other Indemnification....................................... 22
ARTICLE VIII
CERTAIN COVENANTS AND AGREEMENTS
Section 8.1 Confidentiality............................................. 22
Section 8.2 Indirect Action; No Inconsistent Agreements................. 23
ARTICLE IX
MISCELLANEOUS
Section 9.1 Entire Agreement; Benefit................................... 23
Section 9.2 Interpretation; Absence of Presumption...................... 24
Section 9.3 Severability................................................ 24
Section 9.4 Assignability............................................... 24
Section 9.5 Notices..................................................... 24
Section 9.6 Headings; Definitions....................................... 26
Section 9.7 Counterparts................................................ 26
Section 9.8 Specific Enforcement........................................ 26
Section 9.9 Governing Law; Jurisdiction and Forum....................... 26
Section 9.10 Community Property States................................... 27
-ii-
<PAGE> 4
EXHIBITS
Exhibit A Affiliate Transactions
<PAGE> 5
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT, dated as of March 30, 1998 (this
"Agreement"), by and among Holberg Industries, Inc., a Delaware corporation
("Holberg") and AP Holdings, Inc., a Delaware corporation ("AP Holdings"), and
Dosher Partners, L.P., a Delaware limited partnership ("Dosher", and together
with its Permitted Transferees, the "MW Parties"), and SP Associates, an
Illinois general partnership ("SP Associates" and, together with Dosher, the
"Standard Parties", and the Standard Parties together with Holberg and AP
Holdings, the "Stockholders"), and APCOA, Inc., a Delaware corporation (the
"Company").
W I T N E S S E T H :
WHEREAS, pursuant to the Combination Agreement, dated as of January
15, 1998 (the "Combination Agreement"), by and among Myron C. Warshauer ("MW"),
Stanley Warshauer, Steven A. Warshauer, Dosher, SP Parking Associates, an
Illinois general partnership, and SP Associates (together, the "Standard
Owners"), and the Company, the Company is as of the date hereof acquiring
certain interests held by the Standard Owners in return for, among other things,
the issuance of Shares to the Standard Parties; and
WHEREAS, the parties hereto desire to enter into this Agreement to
govern certain of their rights, duties and obligations after the consummation of
the transactions contemplated by the Combination Agreement;
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
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The following terms, as used herein, have the following
meanings:
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person. For the purpose of this definition, the term "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" shall have the meaning set forth in the first paragraph
hereof.
<PAGE> 6
"AP Holdings" shall have the meaning set forth in the first
paragraph hereof and, to the extent that AP Holdings shall have transferred any
of its Shares to any Person, shall mean AP Holdings and such Person, taken
together, and any right or action that may be taken at the election of AP
Holdings may be taken at the election of AP Holdings and such Person, as the
case may be.
"Associates" shall have the meaning set forth in the definition of
"Permitted Transferee."
"Board" shall mean the board of directors of the Company.
"Business Day" shall mean any day except a Saturday, Sunday or other
day on which commercial banks in New York City are authorized by law to close.
"Cause" shall have the meaning set forth in Section 2.2.
"Call Right" shall have the meaning set forth in Section 6.1.
"Closing Date" shall have the meaning set forth in the Combination
Agreement.
"Combination Agreement" shall have the meaning set forth in the
recitals hereto.
"Company" shall have the meaning set forth in the first paragraph
hereof.
"Confidential Information" shall have the meaning set forth in
Section 8.1.
"control" shall have the meaning set forth in the definition of
Affiliate.
"Control Transaction" shall mean a transfer in a bona fide transfer
of Shares or of shares of AP Holdings by or Holberg or any Affiliate to any
Person or group of Persons (other than to an Affiliate of Holberg or to any
Standard Party or its Permitted Transferee) in which such Person obtains (i) the
right to directly or indirectly elect a majority of the Board or (ii) a majority
of the Fully Diluted Shares at such time.
"CTC" shall have the meaning set forth in Section 9.9.
"Dosher" shall have the meaning set forth in the first paragraph
hereof.
"Dosher First Offer" shall have the meaning set forth in Section
4.1.
"Drag-Along Right" shall have the meaning set forth in Section 5.2.
"Drag-Along Rights Notice" shall have the meaning set forth in
Section 5.2.
"Employment Agreement" shall have the meaning set forth in the
Combination Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
2
<PAGE> 7
"First Offer Notice" shall have the meaning set forth in Section
4.1.
"First Offer Period" shall mean the period beginning on the Closing
Date and ending on the earlier of (i) the seventh anniversary of the Closing
Date, (ii) such date as MW's employment under the Employment Agreement (as
defined in the Combination Agreement) is terminated, other than by the Company
without Cause or MW for Good Reason (in accordance with the terms of the
Employment Agreement), and (iii) the consummation of an Initial Public Offering.
"Fully Diluted" shall mean, without duplication, all outstanding
Shares and all Shares issuable in respect of securities convertible into or
exercisable or exchangeable for Shares, stock appreciation rights or options,
warrants and other irrevocable rights to purchase or subscribe for Shares or
securities convertible into or exercisable or exchangeable for Shares, and any
Person shall be deemed to own such number of Shares as such Person has the right
to acquire from any other Person (including the Company).
"Good Reason" shall have the meaning set forth in the Employment
Agreement.
"Holberg" shall have the meaning set forth in the first paragraph
hereof and, to the extent that Holberg shall have transferred any of its Shares
to any Person, shall mean Holberg and such Person, taken together, and any right
or action that may be taken at the election of Holberg may be taken at the
election of Holberg and such Person, as the case may be, and shall also include,
to the extent applicable, any Subsidiary of Holberg (including AP Holdings) that
hold Shares.
"Incidental Registration" shall have the meaning set forth in
Section 7.1.
"Indemnified Party" shall have the meaning set forth in Section 7.6.
"Indemnifying Party" shall have the meaning set forth in Section
7.6.
"Initial Public Offering" shall mean any bona fide sale of Shares
(including in connection with a merger or other reorganization transaction)
pursuant to an effective registration statement under the Securities Act (other
than a registration statement on Form S-8 or any successor form), covering at
least 20% of the Fully Diluted Shares and in which gross proceeds of at least
$20 million are realized.
"Issuance Notice" shall have the meaning set forth in Section 4.2.
"Maintenance Shares" shall have the meaning set forth in Section
4.2.
"Maximum Offering Size" shall have the meaning set forth in Section
7.1.
"MW" shall have the meaning set forth in the recitals hereof.
"MW Parties" shall have the meaning set forth in the first paragraph
hereof.
3
<PAGE> 8
"NASD" shall have the meaning set forth in the definition of
"Registration Expenses".
"Option Notice" shall have the meaning set forth in Section 6.2.
"Option Shares" shall have the meaning set forth in Section 6.2.
"Participating Stockholder" shall have the meaning set forth in
Section 5.1.
"Participation Notice" shall have the meaning set forth in Section
5.1.
"Percentage Ownership" shall mean, with respect to any Stockholder
or any group of Stockholders at any time, (i) the number of Fully Diluted Shares
that such Stockholder or group of Stockholders owns at such time, divided by
(ii) the total number of Fully Diluted Shares at such time.
"Permitted Transferee" shall mean, (A) in the case of any natural
person, the spouse and direct descendants of such Person and the heirs,
executors, administrators, testamentary trustees, legatees or beneficiaries of
such Person's estate upon death (collectively, "Associates"), (B) any trust, the
beneficiaries of which, or any corporation, limited liability company or
partnership, the stockholders, members or general or limited partners of which,
consist solely of Standard Parties or their Associates (and only for so long as
there are no other stockholders, members or partners), or (C) in the case of any
Standard Party other than an MW Party, any other Standard Party or any Person
that is today a direct or indirect owner of any Standard Party (as such Persons
are listed on Schedule PT), in each case for so long as no change in control of
such Person shall occur.
"Person" shall mean an individual, corporation, partnership,
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Preemptive Rights" shall have the meaning set forth in Section 4.2.
"Price" shall have the meaning set forth in Section 6.2.
"Put Right" shall have the meaning set forth in Section 6.1.
"Registrable Shares" shall mean any Shares, until (i) a registration
statement covering such Shares has been declared effective by the SEC and such
securities have been disposed of pursuant to such effective registration
statement, (ii) such Shares are sold under circumstances in which all of the
applicable conditions of Rule 144 (or any similar provisions then in force)
under the Securities Act are met or such Shares may be sold pursuant to Rule
144(k), or (iii) such shares may be sold without registration under the
Securities Act and the Company has delivered a new certificate or other evidence
of ownership for such Shares not bearing the legend required pursuant to this
Agreement.
4
<PAGE> 9
"Registration Expenses" shall mean (i) all registration and filing
fees, (ii) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the securities registered), (iii) printing expenses, (iv)
internal expenses of the Company (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), (v) reasonable fees and disbursements of counsel for the Company and
customary fees and expenses for independent certified public accountants
retained by the Company (including expenses relating to any comfort letters or
costs associated with the delivery by independent certified public accountants
of a comfort letter or comfort letters requested in connection therewith, (vi)
the reasonable fees and expenses of any special experts retained by the Company
in connection with such registration, (vii) fees and expenses in connection with
any review of underwriting arrangements by the National Association of Shares
Dealers, Inc. (the "NASD"), including fees and expenses of any "qualified
independent underwriter," and (viii) fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but shall not include any
underwriting fees, discounts or commissions attributable to the sale of
Registrable Shares.
"Rule 144 or Rule 144A" shall mean Rule 144 and Rule 144A,
respectively (or any successor provisions) under the Securities Act.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Shares" shall mean all shares of Common Stock, par value $1.00 per
share, of the Company.
"SP Associates" shall have the meaning set forth in the first
paragraph hereof.
"Standard Director" shall have the meaning set forth in Section
2.1.
"Standard Parties" shall have the meaning set forth in the first
paragraph hereof and, to the extent such parties shall have transferred any of
their Shares to Permitted Transferees, shall mean the Standard Parties and the
Permitted Transferees of the Standard Parties, taken together, and any right or
action that may be taken at the election of the Standard Parties may be taken at
the election of the Standard Parties and such Permitted Transferees, as the case
may be.
"Standard Owners" shall have the meaning set forth in the
recitals hereto.
"Stockholders" shall have the meaning set forth in the first
paragraph hereof.
"Subscription Notice" shall have the meaning set forth in Section
4.2.
"Subscription Period" shall have the meaning set forth in Section
4.2.
"Subsidiary" shall mean, with respect to any Person, any entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of
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directors or other persons performing similar functions are at the time directly
or indirectly owned by such Person.
"Tag-Along Right" shall have the meaning set forth in Section 5.1.
"Tag-Along Rights Notice" shall have the meaning set forth in
Section 5.1.
"transfer" shall have the meaning set forth in Section 3.1.
"Underwritten Public Offering" shall mean an underwritten public
offering of Registrable Shares of the Company pursuant to an effective
registration statement under the Securities Act.
ARTICLE II
CORPORATE GOVERNANCE
Section 2.1 Composition of the Boards of Directors. Subject to
Section 2.4, and subject to the terms of the Employment Agreement as to MW's
service as a director (which the parties hereto agree to respect and give effect
to), one member of the Board (the "Standard Director") shall be designated by
the Standard Parties (other than any MW Parties) and the other members shall be
designated by Holberg. Each Stockholder entitled to vote for the election of
directors to the Board agrees that it shall vote its Shares or execute written
consents, as the case may be, and take all other necessary action (including
causing the Company to call a special meeting of stockholders) in order to
ensure that the composition of the Board is as set forth in this Section 2.1 and
as contemplated by the Employment Agreement.
Section 2.2 Removal. (a) Each Stockholder agrees that at any time
that it is then entitled to vote or execute a written consent for the removal
and/or replacement of any director of the Company, it shall not vote or execute
a written consent for any of its Shares in favor of the removal and/or
replacement of any individual who shall have been designated pursuant to Section
2.1, unless such removal and/or replacement shall be for Cause or the Person
entitled to designate such director shall have requested such removal and/or
replacement in writing.
(b) For purposes of this Section 2.2, "Cause", with respect to a
director, shall mean the (i) willful and continued failure to perform
substantially his duties with the Company as a director, (ii) willful conduct
which is or is reasonably likely to be significantly injurious to the Company
monetarily or otherwise, (iii) abuse of any illegal drug or other controlled
substance or habitual intoxication, (iv) conviction for, or guilty plea to, a
crime involving moral turpitude, or (v) conviction for, or guilty plea to, a
felony. Subject to Section 2.4, nothing contained in this Section 2.2 shall
affect the right of any Stockholder to designate a member of the Board pursuant
to Section 2.1.
Section 2.3 Vacancies. (a) If, as a result of the death, disability,
retirement, resignation, removal (with or without Cause) or otherwise there
shall exist or occur any vacancy on the Board, then the Person entitled under
Section 2.1 to designate or nominate such director
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whose death, disability, retirement, resignation or removal resulted in such
vacancy, may, subject to the provisions of Sections 2.1 and 2.4, designate
another individual to fill such capacity and serve as a director of the Company.
Each Stockholder agrees that if such Stockholder is then entitled to vote for
the election of such designee as a director of the Company, it shall vote or
execute a written consent for its Shares in order to ensure that such designee
be elected to the Board.
(b) The Board shall cause such other committees to be established as
it may determine, and the Standard Director shall be a member of each such
committee.
Section 2.4 Termination of Rights and Obligations. The right of the
Standard Parties to designate one member of the Board pursuant to this Article
II, and all related obligations contained in this Article II, shall terminate on
the earlier of (i) such date as an Initial Public Offering is consummated and
(ii) such date as the Standard Parties and their Permitted Transferees (other
than any MW Party or its Permitted Transferee) in the aggregate own 5% or less
of the total Fully Diluted Shares as of such date.
Section 2.5 Indemnification. The Company shall indemnify and hold
harmless the Standard Director in accordance with the provisions of the
Company's Certificate of Incorporation and By-Laws, copies of which are attached
hereto, and which shall not be amended other than as may be required by law so
as to limit the rights of the Standard Director without the consent of the
Standard Director.
ARTICLE III
RESTRICTIONS ON TRANSFER
Section 3.1 General. (a) Until the consummation of an Initial Public Offering,
no Standard Party may, directly or indirectly, sell, assign, transfer, grant a
participation or other interest in, pledge or otherwise dispose of ("transfer")
any Shares (or solicit any offers to buy or otherwise acquire, or to take a
pledge of, any Shares or any interest therein), except transfers permitted by
this Agreement, and any other attempted transfer shall be null and void and of
no effect for all purposes.
(b) No Stockholder may transfer any Shares at any time except in
compliance with applicable federal or state securities laws.
Section 3.2 Legend on Shares. (a) In addition to any other legend
that may be required, each certificate for Shares shall bear a legend in
substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURI-TIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE
OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS
ALSO SUBJECT TO AND THE HOLDER OF THIS SECURITY HAS OBLIGATIONS
UNDER THE STOCKHOLDERS AGREEMENT, DATED AS OF MARCH 30, 1998, COPIES
OF WHICH MAY
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BE OBTAINED UPON REQUEST FROM THE SECRETARY OF APCOA, INC."
(b) If any Shares shall cease to be Registrable Shares, the Company
shall, upon the written request of the holder thereof and such other
documentation as may be reasonably requested, issue to such holder a new
certificate evidencing such Shares without the first sentence of the legend
required by Section 3.2(a) endorsed thereon. If any Shares cease to be subject
to this Agreement, the Company shall, upon the written request of the holder
thereof and such other documentation as may be reasonably requested, issue to
such holder a new certificate evidencing such Shares without the second sentence
of the legend required by Section 3.2(a) endorsed thereon.
Section 3.3 Permitted Transferees. Notwithstanding anything in this
Agreement to the contrary, any Standard Party may at any time transfer any or
all of its Shares to one or more of its Permitted Transferees, and Holberg or AP
Holdings may at any time transfer any or all of its Shares to one or more
Persons (subject to Section 4.1), if (a) such Permitted Transferees or Persons
shall have agreed in writing to be bound by the terms of this Agreement with
respect to such Shares and (b) the transfer to such Permitted Transferees or
Persons is not in violation of applicable federal or state securities laws.
ARTICLE IV
RIGHT OF FIRST OFFER; PREEMPTIVE RIGHTS
Section 4.1 Right of First Offer. During the First Offer Period,
Holberg and/or its Affiliates (including AP Holdings) shall not engage in a
Control Transaction unless Holberg and/or its Affiliates shall first offer to
Dosher the opportunity to acquire all, but not less than all, of Holberg's
and/or its Affiliates' Shares by giving a written notice to Dosher to such
effect (a "First Offer Notice"). If within 60 days following the delivery of
such First Offer Notice, Dosher fails to deliver to Holberg a written offer to
acquire all capital stock of the Company which is not subject to any conditions
not customary for stock purchase agreements relating to acquisitions of
businesses such as the Company and which shall be irrevocable for 150 days from
delivery, and which shall specify the cash price and other material terms upon
which Dosher is prepared to make such acquisition (an "Dosher First Offer") or
Dosher delivers an Dosher First Offer to Holberg and such Dosher First Offer is
not accepted by Holberg, Holberg may enter into a definitive agreement
respecting a Control Transaction with another party without prior notice to
Dosher for 150 days after the earlier of the expiration of such 60-day period or
the delivery of the Dosher First Offer, provided that the terms of such
definitive agreement shall be more favorable to Holberg than those offered in
the Dosher First Offer and such transaction must be consummated within 180 days
after entering into a definitive agreement. If no definitive agreement is
entered into within such 150-day period or the transaction is not consummated
within 180 days after entering into a definitive agreement, the provisions of
this Section 4.1 shall apply again prior to Holberg and/or its Affiliates
engaging in a Control Transaction. Each of Holberg, the Company and any other
party to any intended transaction shall have the right, in its sole discretion,
at all times prior to consummation of the intended transaction to abandon,
rescind, annul, withdraw or
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otherwise terminate such transaction, whereupon none of Holberg, the Company nor
any other such party shall have any liability or obligation to any Person with
respect thereto. Nothing herein shall be construed to obligate Holberg, the
Company or Dosher to accept any offer or terms for, or to consummate, any
Control Transaction or other transaction.
Section 4.2 Preemptive Rights. (a) Except as provided in (d) below,
until the consummation of an Initial Public Offering, the Company shall not
issue or sell any Shares (or securities or other instruments or rights
convertible into, or exercisable or exchangeable for or to subscribe for or
purchase Shares) unless the provisions of this Section 4.2 shall have been
complied with by the Company. Prior to any such proposed issuance or sale, the
Company shall notify each Standard Party in writing (the "Issuance Notice") of
the number of Shares (or securities or other instruments convertible into, or
exercisable or exchangeable for Shares) proposed to be issued or sold, the
proposed price and the other material terms of such proposed issuance or sale.
During the period of 30 days following the date of such notice (the
"Subscription Period"), each Standard Party shall have the right to deliver to
the Company a notice (a "Subscription Notice") electing to purchase, at the
proposed issuance price and on the same terms as the proposed issuance, an
amount of Shares (or securities or other instruments convertible into, or
exercisable or exchangeable for Shares) (the "Maintenance Shares") as is
necessary for such Standard Party to maintain its Percentage Ownership as of
immediately prior to such proposed issuance ("Preemptive Rights").
(b) Any Standard Party which does not deliver to the Company a duly
completed Subscription Notice within 30 days after such Standard Party's receipt
of the Issuance Notice shall be deemed to have waived its right to purchase all
or any part of its Maintenance Shares. In any such case, the Company shall have
180 days following such deemed waiver in which to issue or sell the applicable
Shares (or securities or other instruments convertible into, or exercisable or
exchangeable for Shares) on terms not materially different from those contained
in the Issuance Notice. Promptly after any issuance or sale pursuant to this
Section 4.2(b), the Company shall notify the Standard Parties of the
consummation thereof. If the Company does not complete the issuance or sale of
Shares (or securities or other instruments convertible into, or exercisable or
exchangeable for Shares) within the 180-day period specified in this Section
4.2(b), the Company may not issue or sell such Shares (or securities or other
instruments convertible into, or exercisable or exchangeable for Shares) without
repeating the procedures in this Section 4.2.
(c) If the proposed issuance or sale of the Shares (or securities or
other instruments or rights convertible into, or exercisable or exchangeable for
or to subscribe for or purchase Shares) is consummated, each Standard Party
delivering a Subscription Notice shall purchase from the Company, and the
Company shall issue and sell to each such Standard Party, such Shares (or
securities or other instruments or rights convertible into, or exercisable or
exchangeable for or to subscribe for or purchase Shares) on such terms and at
the price set forth in the Issuance Notice. The closing of such sale(s) shall
occur, subject to the Company's receipt of necessary approvals, on the day of
consummation of the issuance or sale of such Shares (or securities or other
instruments or rights convertible into, or exercisable or exchangeable for or to
subscribe for or purchase Shares) to Persons other than the Standard Parties.
Any default in per-
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formance by any Standard Party shall relieve the Company of its obligations
under this Section 4.2 with respect to such Standard Party.
(d) The Preemptive Rights set forth above shall not apply to (i) the
issuance of Shares (or securities or other instruments or rights convertible
into, or exercisable or exchangeable for or to subscribe for or purchase Shares)
(x) upon exercise of any option, warrant, convertible or exchangeable security
or other rights to purchase or subscribe for Shares or (y) to employees,
officers, directors, consultants, contractor or similar persons of (A) the
Company or any Subsidiary or (B) any Affiliate of the Company engaged in the
parking business, (ii) securities issued pursuant to any stock split, stock
dividend or other similar stock recapitalization, (iii) the issuance of Shares
(or securities or other instruments or rights convertible into, or exercisable
or exchangeable for or to subscribe for or purchase Shares) in connection with
any public offering, (iv) the issuance of Shares (or securities or other
instruments or rights convertible into, or exercisable or exchangeable for or to
subscribe for or purchase Shares) in connection with an acquisition or financing
(but not any such issued for cash to a Person not otherwise engaging in a
related transaction), or (v) the issuance of Shares (or securities or other
instruments or rights convertible into, or exercisable or exchangeable for or to
subscribe for or purchase Shares) representing less than 4% of the Shares
outstanding as of the date of issuance. The Company shall not be under any
obligation to consummate any proposed issuance or sale of Shares (or securities
or other instruments or rights convertible into, or exercisable or exchangeable
for or to subscribe for or purchase Shares), regardless of whether it shall have
delivered an Issuance Notice pursuant to this Section 4.2.
(e) The Company shall have the right, in its sole discretion, at all
times prior to consummation of any issuance or sale to abandon, rescind, annul,
withdraw or otherwise terminate such transaction, whereupon all Preemptive
Rights in respect of such transaction pursuant to this Article shall become null
and void, and the Company shall have no liability or obligation to any Person
with respect thereto. Nothing herein shall be construed to obligate the Company
to accept any offer or terms for, or to consummate, any transaction.
Section 4.3 Transactions with Affiliates. The Company shall not
engage in any transaction with any Affiliate of the Company not a Subsidiary of
the Company, other than pursuant to agreements and arrangements set forth on
Exhibit A hereto and other than any transaction on terms no less favorable to
the Company than would be available in a transaction with an independent third
party on an arm's-length basis.
ARTICLE V
TAG-ALONG AND DRAG-ALONG RIGHTS
Section 5.1 Tag-Along Right. Holberg and/or its Affiliates
(including AP Holdings) shall not engage in (x) a Control Transaction or (y) a
sale of Shares (other than through a Control Transaction or an Underwritten
Public Offering and other than to any sale to an Affiliate of Holberg or to any
Standard Party or its Permitted Transferee) representing at least 25% of the
Shares outstanding at such time, unless it shall have offered each Standard
Party a right (a "Tag-Along Right") to participate in such transaction by
including in such transaction a number of such Stan-
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dard Party's Shares as represents the same percentage of such Standard Party's
Shares as the subject Shares of Holberg (including AP Holdings) represent of
Holberg's (including AP Holdings) Shares, as follows:
(a) Holberg shall deliver to each Standard Party a written notice (a
"Tag-Along Rights Notice") of such transaction at least 35 days prior to
consummating any such transaction setting forth all material details of the
intended transaction.
(b) Any Standard Party desiring to participate in such transaction
(a "Participating Stockholder") must deliver to Holberg, within 20 days of
receiving a Tag-Along Rights Notice, written notice (a "Participation Notice")
of Participating Stockholder's desire to participate in such transaction. Any
Standard Party which does not deliver to Holberg a Participation Notice with
respect to such Standard Party within the applicable time period shall be deemed
to have waived its right to participate in such transaction. In any such case,
Holberg shall have 180 days following the expiration of such 20-day period in
which to consummate the transaction on terms not materially more favorable to
Holberg than those contained in the Tag-Along Rights Notice. Promptly after the
consummation of any such transaction, Holberg shall notify the Standard Parties
of the consummation thereof. If Holberg does not complete the transaction within
the 180-day period specified in this Section 5.1(b), Holberg may not engage in
such transaction without repeating the procedures in this Section 5.1.
(c) Concurrently with the Tag-Along Rights Notice, Holberg shall
provide each Participating Stockholder with such information and instructions as
shall be necessary to enable such Participating Stockholder to participate in
the transaction on substantially the same terms and conditions as Holberg, and
each Participating Stockholder shall cooperate in such transaction by providing
Holberg all materials, such as executed purchase and sale agreements and stock
transfer documentation, as Holberg may reasonably request.
(d) Any material default in performance by any Standard Party shall
relieve Holberg of its obligations under this Section 5.1 with respect to such
Standard Party.
(e) Each of Holberg and any other party to any transaction shall
have the right, in its sole discretion, at all times prior to consummation of
the transaction to abandon, rescind, annul, withdraw or otherwise terminate such
transaction, whereupon all Tag-Along Rights in respect of such transaction
pursuant to this Article shall become null and void, and neither Holberg nor any
other such party shall have any liability or obligation to any Participating
Stockholder with respect thereto. If such transaction is not consummated, the
provisions of this Section 5.1 shall apply again to subsequent proposed
transactions. Nothing herein shall be construed to obligate Holberg to accept
any offer or terms for, or to consummate, any Control Transaction or other
transaction.
Section 5.2 Drag-Along Right. In the event that Holberg engages in a
Control Transaction, Holberg shall have the right (a "Drag-Along Right") to
require each Standard Party to participate in such transaction by including in
such transaction a number of such Standard Party's Shares as represents the same
percentage of such Standard Party's Shares as the subject
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Shares of Holberg (including AP Holdings) represent of Holberg's (including AP
Holdings) Shares, as follows:
(a) Holberg shall deliver to each Standard Party a written notice (a
"Drag-Along Rights Notice") of Holberg's exercise of its Drag-Along Right in
such transaction at least 30 days prior to consummating any such transaction
setting forth all material details of such transaction.
(b) Holberg shall provide each Standard Party with such information
and instructions as shall be necessary to enable such Standard Party to
participate in the intended transaction on substantially the same terms and
conditions as Holberg, and each Standard Party shall cooperate in such
transaction by providing Holberg all materials, such as executed purchase and
sale agreements and stock transfer documentation, as Holberg may reasonably
request.
(c) Holberg shall have the right, in its sole discretion, at all
times prior to consummation of the transaction to abandon, rescind, annul,
withdraw or otherwise terminate such transaction, and neither Holberg shall have
any liability or obligation to any Participating Stockholder with respect
thereto. Nothing herein shall be construed to obligate Holberg to accept any
offer or terms for, or to consummate, any Control Transaction or other
transaction.
ARTICLE VI
PUT AND CALL RIGHTS
Section 6.1 Put Rights and Call Rights. Upon and at any time
following the third anniversary of the Closing (as defined in the Combination
Agreement), at the Company's election, the Company shall have the right to
purchase from any Standard Party and such Standard Party shall be obligated to
sell (a "Call Right"), and, at any Standard Party's election, such Standard
Party shall have the right to sell to the Company and the Company shall be
obligated to purchase (a "Put Right"), any or all of the Shares held by such
Standard Party, on the terms and conditions described in this Article VI below.
Section 6.2 Exercise of Rights. (a) To exercise a Put Right or a
Call Right, the exercising party shall deliver a written notice (the "Option
Notice") to the Company or Standard Party, as applicable specifying the number
of Shares to be put or called consistent with the provisions hereof (the "Option
Shares"), the applicable aggregate Price (as of the date of the Option Notice)
and the applicable date for the consummation of the put or call, provided that
in no event shall any party be permitted to exercise a Put Right in anticipation
of or in connection with an Initial Public Offering (or in any event during a
60-day period following such time as the Company shall have given notice that it
anticipates effecting an Initial Public Offering).
(b) For purposes of this Section, the "Price" of any Share, as of
any date, shall be the quotient of (i) (I) the product of (A) 10.5 and (B) the
earnings before interest expense and interest income, taxes, depreciation and
amortization of the Company as reflected in the Company's consolidated financial
statements prepared consistently in accordance with past practice for the most
recent twelve-calendar-month period less (II) the amount of all consolidated
debt
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(including capital lease obligations, but excluding trade payables) and
preferred stock and minority interests of the Company at the end of such
twelve-calendar-month period plus (III) the amount of cash and cash equivalents
of the Company as of the end of the twelve-month period described in (I) in
excess of the amount of such cash and cash equivalents normally held by the
Company (which it is agreed shall be the amount of cash recorded on the
financial records of the Company on the last day of such 12-month period, adding
back any outstanding check balances which remain as credits in the cash accounts
on the financial records of the Company and subtracting the revenues of the
Company for the final three business days of such 12-month period for locations
that deposit and record cash into cash accounts on the financial records of the
Company), plus (IV) the net cash proceeds which would be received by the Company
as of the relevant date of determination in respect of the issuance of Shares
issuable in respect of securities convertible into or exercisable or
exchangeable for Shares, stock appreciation rights or options, warrants and
other irrevocable rights to purchase or subscribe for Shares or securities
convertible into or exercisable or exchangeable for Shares, if all such
securities, rights, options, warrants were converted, exercised or exchanged as
of such date, plus (V) the product of (A) the net operating loss of the Company
for federal income tax purposes that, pursuant to the provisions of the Internal
Revenue Code of 1986, as amended (or any successor federal tax statute) (the
"Code"), is available for carryforward at the end of the twelve-month period
described in (I) and (B) 28%, divided by the (ii) the number of Fully Diluted
Shares as of such date.
(c) The Option Notice shall be irrevocable. The closing of the
purchase of the Option Shares shall take place at the principal offices of the
Company on the 10th business day after the date of the Option Notice. At such
Closing, the Company shall deliver to the selling Standard Party, against
delivery of duly endorsed certificates representing the Option Shares, a
certified check or checks or wire transfer (as specified by the selling Standard
Party) in the amount of the applicable aggregate Price.
Section 6.3 Certain Limitations. (a) Notwithstanding anything to the
contrary contained in Section 6.2, the Company shall not be obligated to
purchase Option Shares on the date set forth in Section 6.2(c) above if (i) such
purchase would violate any covenants binding on the Company (including those
contained in debt instruments and other than those solely in favor of Holberg or
its Affiliate) or (ii) if, in the case of a Put Right, upon such purchase, the
Company would have purchased Option Shares pursuant to Put Rights representing
in any calendar year 5% or more of the Fully Diluted Shares outstanding at the
time of such purchase (however, if the consummation of a Put Right in full would
result in the Company purchasing more than such 5% in such period, the Company
shall consummate such Put Right in part up to the 5% limitation). In the event
that the Company does not consummate any purchase of Option Shares on any date
because of either of the events described in clauses (i) or (ii) of the
immediately preceding sentence, the Company (and the Standard Party owning the
applicable Option Shares) shall nonetheless be obligated to consummate such
purchase as promptly as practicable following such events no longer being
applicable, and shall pay upon such purchase the Price (as of the date of the
Option Notice) plus accumulated interest thereon at a rate equal to the lesser
of (x) 13% 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 by the Combination Agreement (compounded on a
quarterly basis) to the date of consummation of the purchase, pro-
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vided that, notwithstanding the foregoing, in the event that MW is terminated as
Chief Executive Officer of the Company without Cause (as defined in the
Employment Agreement) and the Company is thereafter not obligated to purchase
Option Shares held by any MW Party or its Permitted Transferee because of either
of the events described in clauses (i) or (ii) of the immediately preceding
sentence, Holberg shall nonetheless be obligated to consummate such purchase as
promptly as practicable. The Company shall not exercise its Call Right if it
cannot for any reason purchase the Shares on the date determined pursuant to
Section 6.2(c).
(b) Notwithstanding anything to the contrary contained in Section
6.2, no MW Party or its Permitted Transferee shall be permitted to exercise any
Put Right, and the Company shall not be permitted to exercise any Call Right
with respect to any Shares held by any MW Party or its Permitted Transferee, for
so long as MW is the Chief Executive Officer of the Company.
(c) Notwithstanding anything to the contrary contained in Section
6.2, the Company shall not be permitted to exercise any Call Right with respect
to any Shares held by any MW Party or its Permitted Transferee unless the
Company shall exercise Call Rights at such time with respect to Shares
representing at least, in the aggregate, at the lesser of (i) all Shares held by
such Persons and (ii) Shares representing at least 5% of the Shares outstanding
at the date of the Option Notice with respect to such Shares.
Section 6.4 Expiration of Obligations. The foregoing obligations
contained in this Article VI (but not any outstanding payment obligations under
this Article VI (which shall be paid in full in cash upon consummation of the
Initial Public Offering) and the obligations contained in Section 6.5) shall
terminate upon the consummation of an Initial Public Offering.
Section 6.5 Certain Additional Payments. In the event that the
Company purchases any Option Shares upon the exercise of any Call Right pursuant
to Section 6.2 and, within 18 months following such purchase of Option Shares,
the Company consummates an Initial Public Offering or Control Transaction, upon
consummation of such Initial Public Offering or Control Transaction, the Company
shall pay in cash to the Standard Parties selling such Option Shares the product
of (A) the number of Option Shares and (B) the excess, if any, of (i) the per
Share net proceeds received by the Company in such Initial Public Offering or
Control Transaction over (ii) the Price per Option Share paid by the Company in
such purchase, provided that the Company shall not be obligated to make any
payment under this Section 6.5 with respect to any Option Shares purchased from
any MW Party or its Permitted Transferee following the resignation of MW as
Chief Executive Officer of the Company other than for Good Reason or his
termination for Cause.
ARTICLE VII
REGISTRATION RIGHTS
Section 7.1 Incidental Registrations. (a) If the Company proposes to register
any Shares under the Securities Act for sale by Holberg and/or its Affiliates
(other than the Company, but including AP Holdings) in an Underwritten Public
Offering, it shall each such time, subject to
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the provisions of Section 7.1(b), give prompt written notice at least 30 days
prior to the anticipated filing date of the registration statement relating to
such registration to each Standard Party, which notice shall set forth the
rights of such Standard Party under this Section 7.1 and shall offer each
Standard Party the opportunity to include in such registration statement such
Registrable Shares as each such Standard Party may request (an "Incidental
Registration"). Upon the written request of any such Standard Party made within
15 days after the receipt of notice from the Company (which request shall
specify the number of Registrable Shares intended to be disposed of by such
Standard Party), the Company shall use its reasonable efforts to effect the
registration under the Securities Act of all Registrable Shares which the
Company has been so requested to register by such Standard Party, to the extent
requisite to permit the disposition of the Registrable Shares so to be
registered, provided that (i) all such Standard Parties requesting to be
included in the registration must sell their Registrable Shares to the
underwriters selected by Holberg on the same terms and conditions as apply to
Holberg, and (ii) if, at any time after giving written notice of its intention
to register any securities pursuant to this Section 7.1(a) and prior to the
effective date of the registration statement filed in connection with such
registration, the Company or Holberg (as applicable) shall determine for any
reason not to register or to delay registration of such Shares, the Company
shall give written notice to all such Standard Parties and, thereupon, (A) in
the case of a determination not to register, the Company shall be relieved of
its obligation to register any Registrable Shares in connection with such
registration and (B) in the case of a determination to delay such registration,
the Company shall be permitted to delay registration of any Registrable Shares
requested to be included in such Incidental Registration Statement for the same
period as the delay in registering such other Shares. The Company shall pay all
Registration Expenses in connection with each registration of Shares requested
pursuant to this Section 7.1.
(b) If the managing underwriter of such Underwritten Public Offering
advises the Company that, in its view, the amount of Registrable Shares which
the Company and/or Holberg and such Standard Parties intend to include in such
registration exceeds the largest number of Registrable Shares which can be sold
without having an adverse effect on such offering, including the price at which
such Registrable Shares can be sold (the "Maximum Offering Size"), the Company
shall include in such registration, up to the Maximum Offering Size, all
Registrable Shares requested to be included in such registration by Holberg or
any Standard Party pursuant to this Section 7.1 (allocated, if necessary for the
offering not to exceed the Maximum Offering Size, pro rata among such entities
on the basis of the relative number of Registrable Shares so requested to be
included in such registration).
Section 7.2 Holdback Agreements. Each Standard Party agrees not to
effect any public sale or distribution, including any sale pursuant to Rule 144,
or any successor provision, under the Securities Act, of any Registrable Shares,
and not to effect any such public sale or distribution of any other Shares or of
any security or right convertible into or exchangeable or exercisable for or to
subscribe for or purchase any Shares (in each case, other than as part of such
Underwritten Public Offering) during the 14 days (or such lesser period of time
as the underwriters may agree to) prior to the effective date of such
registration statement (except as part of such registration) or during the
180-day period after such effective date.
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<PAGE> 20
Section 7.3 Registration Procedures. Whenever any of the Standard
Parties requests that any Registrable Shares be registered pursuant to Section
7.1 or 7.2, the Company shall, subject to the provisions of such Sections, use
its reasonable efforts to effect the registration of such Registrable Shares in
accordance with the intended method of disposition thereof as quickly as
reasonably practicable, and in connection with any such request:
(a) The Company shall as promptly as practicable prepare and file
with the SEC a registration statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of the Registrable Shares to be registered
thereunder in accordance with the intended method of distribution thereof, and
use its reasonable efforts to cause such filed registration statement to become
effective.
(b) The Company shall, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish to each
Person which is participating in a registration and each underwriter, if any, of
the Registrable Shares covered by such registration statement copies of such
registration statement as proposed to be filed, and thereafter the Company shall
furnish to each such Person and underwriter, if any, such number of copies of
such registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference therein),
the prospectus included in such registration statement (including each
preliminary prospectus and all amendments and supplements thereto) and such
other documents as such Person or underwriter may reasonably request in order to
facilitate the disposition of the Registrable Shares owned by such Person which
are covered by such registration statement.
(c) After the filing of the registration statement, the Company
shall (i) cause the related prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, (ii) comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Shares covered by such
registration statement during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
registration statement or supplement to such prospectus, and (iii) promptly
notify each Person holding Registrable Shares covered by such registration
statement of any stop order issued or threatened by the SEC and shall take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.
(d) The Company shall use its reasonable efforts to (i) register or
qualify the Registrable Shares covered by such registration statement under such
other securities or blue sky laws of such jurisdictions in the United States as
any Person holding such Registrable Shares reasonably (in light of such Person's
intended plan of distribution) requests, (ii) cause such Registrable Shares to
be registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations of the
Company, and (iii) do any and all other acts and things that may be reasonably
necessary or advisable to enable such Person to consummate the disposition of
the Registrable Shares owned by such Person, provided that the Company shall not
be required to (A) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph (d), (B)
subject itself to
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<PAGE> 21
taxation in any such jurisdiction, or (C) consent to general service of process
in any such jurisdiction.
(e) The Company shall promptly notify each Person holding such
Registrable Shares covered by such registration statement, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the occurrence of an event requiring the preparation of a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Shares, such prospectus shall not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading and
promptly prepare and make available to each such Person and file with the SEC
any such supplement or amendment.
(f) The Company may require each such Person to promptly furnish in
writing to the Company such information regarding the distribution of the
Registrable Shares as the Company may from time to time reasonably request and
such other information as may be legally required in connection with such
registration.
(g) Each such Person agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
7.3(e), such Person shall forthwith discontinue disposition of Registrable
Shares pursuant to the registration statement covering such Registrable Shares
until such Person receives the copies of the supplemented or amended prospectus
contemplated by Section 7.3(e), and, if so directed by the Company, such Person
shall deliver to the Company all copies, other than any permanent file copies
then in such Person's possession, of the most recent prospectus covering such
Registrable Shares at the time of receipt of such notice.
Section 7.4 Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Person holding Registrable Shares covered by a
registration statement, its officers, directors and agents, and each Person, if
any, who controls such Person within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any and all losses,
claims, damages and liabilities caused by any untrue statement or alleged untrue
statement of a material fact contained in any registration statement or
prospectus relating to the Registrable Shares (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, 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, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission so made in reliance upon and in conformity
with information furnished in writing to the Company by such Person or on such
Person's behalf expressly for use therein, provided that with respect to any
untrue statement or omission or alleged untrue statement or omission made in any
preliminary prospectus, or in any prospectus, as the case may be, the indemnity
agreement contained in this paragraph shall not apply to the extent that any
such loss, claim, damage, liability or expense results from the fact that a
current copy of the prospectus (or, in the case of a prospectus, the prospectus
as amended or supplemented) was not sent or given to the Person asserting any
such loss, claim, damage, liability or expense at or prior to the written
con-
17
<PAGE> 22
firmation of the sale of the Registrable Shares concerned to such Person if
the Company had provided such prospectus and it was the responsibility of such
Person to provide such Person with a current copy of the prospectus (or such
amended or supplemented prospectus, as the case may be) and such current copy of
the prospectus (or such amended or supplemented prospectus, as the case may be)
would have cured the defect giving rise to such loss, claim, damage, liability
or expense. The Company also agrees to indemnify any underwriters of the
Registrable Shares, their officers and directors and each Person who controls
such underwriters on substantially the same basis as that of the indemnification
of the Person provided in this Section 7.4.
Section 7.5 Indemnification by Participating Persons. (a) Subject to
Section 7.5(b), each Person holding Registrable Shares included in any
registration statement agrees, severally but not jointly, to indemnify and hold
harmless the Company, its officers, directors and agents and each Person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Person, but only (i) with respect
to untrue statements or omissions, or alleged untrue statements or omissions in
a registration statement (or any amendment thereto) or any prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
information furnished in writing by such Person or on such Person's behalf
expressly for use in any registration statement or prospectus relating to the
Registrable Shares, or any amendment or supplement thereto, or any preliminary
prospectus, or (ii) to the extent that any loss, claim, damage, liability or
expense results from the fact that a current copy of the prospectus (or, in the
case of a prospectus, the prospectus as amended or supplemented) was not sent or
given to the Person asserting any such loss, claim, damage, liability or expense
at or prior to the written confirmation of the sale of the Registrable Shares
concerned to such Person if it is determined that it was the responsibility of
such Person to provide such Person with a current copy of the prospectus (or
such amended or supplemented prospectus, as the case may be) and such current
copy of the prospectus (or such amended or supplemented prospectus, as the case
may be) would have cured the defect giving rise to such loss, claim, damage,
liability or expense and reasonable quantities of such prospectus (or amendments
or supplements thereto) had been timely provided to such Person by the Company.
Subject to Section 7.5(b), each such Person also agrees to indemnify and hold
harmless underwriters of the Registrable Shares, their officers and directors
and each Person who controls such underwriters on substantially the same basis
as that of the indemnification of the Company provided in this Section 7.5. As a
condition to including Registrable Shares in any registration statement filed in
accordance with this Article, the Company may require that it shall have
received an undertaking reasonably satisfactory to it from any underwriter to
indemnify and hold it harmless to the extent customarily provided by
underwriters with respect to similar securities.
(b) No Person shall be liable under Section 7.5(a) for any damage
thereunder in excess of the net proceeds realized by such Person in the sale of
the Registrable Shares of such Person.
Section 7.6 Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
this Article VII, such Person (an "Indemnified
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<PAGE> 23
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 thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Party, and shall assume the payment of all fees
and expenses, provided that the failure of any Indemnified Party to so notify
the Indemnifying Party shall not relieve the Indemnifying Party of its
obligations hereunder except to the extent that the Indemnifying Party is
prejudiced by such failure to notify. In any such proceeding, any Indemnified
Party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to the
retention of such counsel, or (ii) in the reasonable judgment of such
Indemnified Party representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) at any time for all such Indemnified Parties, and
that all such fees and expenses shall be reimbursed as they are incurred. In the
case of any such separate firm for the Indemnified Parties, such firm shall be
designated in writing by the Indemnified Parties. The Indemnifying Party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent, or if there be a final judgment for
the plaintiff, the Indemnifying Party shall indemnify and hold harmless such
Indemnified Parties from and against any and all losses, claims, damages,
liabilities and expenses (to the extent stated above) by reason of such
settlement or judgment. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Party is or could have
been a party and indemnity could have been sought hereunder by such Indemnified
Party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such proceeding.
Section 7.7 Contribution. (a) If the indemnification provided for in
this Article VII is held by a court of competent jurisdiction to be unavailable
to the Indemnified Parties in respect of any losses, claims, damages or
liabilities referred to herein, then each such 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 or
liabilities (i) as between the Company and the Persons holding Registrable
Shares covered by a registration statement on the one hand and the underwriters
on the other, in such proportion as is appropriate to reflect the relative
benefits received by the Company and such Persons on the one hand and the
underwriters on the other, from the offering of the Registrable Shares, or if
such allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits but also the relative
fault of the Company and such Persons on the one hand and of such underwriters
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations and (ii) as between the Company on the one hand and
each such Person on the other, in such proportion as is appropriate to reflect
the relative fault of the Company and of each such Person in connection with
such statements or omissions, as well as any other relevant equitable
considerations. The relative benefits received by the Company and such Persons
on the one hand and such underwriters on the other shall be deemed to be in the
same proportion as the total proceeds
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<PAGE> 24
from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company and such Persons bear to the total
underwriting discounts and commissions received by such underwriters, in each
case as set forth in the table on the cover page of the prospectus. The relative
fault of the Company and such Persons on the one hand and of such underwriters
on the other 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 and such Persons or by such underwriters. The relative fault of the
Company on the one hand and of each such Person on the other 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 such party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(b) The Company and the Persons agree that it would not be just and
equitable if contribution pursuant to this Section 7.7 were determined by pro
rata allocation (even if the underwriters were treated as one entity for such
purpose) 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 or liabilities 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 such action or claim.
Notwithstanding the provisions of this Section 7.7, no underwriter shall be
required to contribute any amount in excess of the amount by which the
underwriting discount applicable to Registrable Shares purchased by such
underwriter in such offering exceeds the amount of any damages which such
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no Person shall be
required to contribute any amount in excess of the amount by which the net
proceeds realized on the sale of the Registrable Shares of such Person exceeds
the amount of any damages which such Person 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 Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. Each
Person's obligation to contribute pursuant to this Section 7.7 is several in the
proportion that the proceeds of the offering received by such Person bears to
the total proceeds of the offering received by all such Persons and not joint.
Section 7.8 Participation in Public Offering. No Person may
participate in any Underwritten Public Offering hereunder unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
requested in connection with such Underwritten Public Offering.
Section 7.9 Other Indemnification. Indemnification similar to that
specified herein (with appropriate modifications) shall be given by the Company
and each Stockholder participating therein with respect to any required
registration or other qualification of securities
20
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under any federal or state law or regulation or governmental authority other
than the Securities Act.
ARTICLE VIII
CERTAIN COVENANTS AND AGREEMENTS
Section 8.1 Confidentiality. (a) Each Stockholder hereby agrees that
Confidential Information furnished and to be furnished to it was and shall be
made available in connection with such Stockholder's investment in the Company.
Each Stockholder agrees that it shall not use the Confidential Information in
any way to the competitive disadvantage of the Company. Each Stockholder further
acknowledges and agrees that it shall not disclose any Confidential Information
to any Person, provided that Confidential Information may be disclosed (i) to
such Stockholder's Representatives (as defined in the Combination Agreement) in
the normal course of the performance of their duties as long as such
Stockholder's Representatives are advised of the confidential nature of such
information and agree to be bound by the provisions hereof, (ii) to the extent
required by applicable law, rule or regulation (including complying with any
oral or written questions, interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process to which a
Person is subject) provided that, in the event that such Stockholder is so
required to disclose any Confidential Information, such Stockholder shall give
the Company prompt notice of such request so that the Company may seek an
appropriate protective order and if such Stockholder is nonetheless so compelled
to disclose Confidential Information, such Stockholder may disclose such
information without liability hereunder, (iii) to any Person to whom such
Stockholder is contemplating a transfer of its Shares (provided that such
transfer would not be in violation of the provisions of this Agreement and as
long as such potential transferee is advised of the confidential nature of such
information and agrees to be bound by a confidentiality agreement in form and
substance satisfactory to the Company and consistent with the provisions
hereof), or (iv) if the prior written consent of the Board shall have been
obtained. Nothing contained herein shall prevent the use of Confidential
Information in connection with the assertion or defense of any claim by or
against the Company or any Stockholder.
(b) "Confidential Information" shall mean any information concerning
the Company, its financial condition, business, operations or prospects in the
possession of or to be furnished to any Stockholder in its capacity as a
stockholder or potential stockholder of the Company or by virtue of its present
or former right to designate a director of the Company and shall also include
the identity of the owners of equity interests in the Standard Parties, provided
that the term "Confidential Information" does not include information which (i)
becomes generally available to the public other than as a result of a disclosure
by a Stockholder or its Representatives in violation of such Person's
obligations, (ii) is or was available to such Stockholder on a nonconfidential
basis prior to its disclosure to such Stockholder or its Representatives by the
Company, or (iii) was or becomes available to such Stockholder on a
non-confidential basis from a source other than the Company, provided that such
source is or was (at the time of receipt of the relevant information) not, to
the best of such Stockholder's knowledge, bound by a confidentiality agreement
with (or other confidentiality obligation to) the Company or another Person.
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Section 8.2 Indirect Action; No Inconsistent Agreements. Each party
hereto agrees not to take, or cause or permit to be taken indirectly, any action
which if taken, caused or permitted to be taken by such Person directly would
constitute a violation of this Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Entire Agreement; Benefit. This Agreement (including
agreements incorporated herein) contains the entire agreement between the
parties hereto with respect to the subject matter hereof and there are no
agreements, understandings, representations or warranties between the parties
hereto other than those set forth or referred to herein. 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 9.2 Interpretation; Absence of Presumption. (a) For the
purposes hereof, (i) 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, (ii) 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 and not to any particular provision of this Agreement,
and Article, Section and paragraph references are to the Articles, Sections and
paragraphs to this Agreement unless otherwise specified, (iii) 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, (iv) the word "or" shall not be exclusive, and (v)
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.
Section 9.3 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.
Section 9.4 Assignability. This Agreement and any rights or
obligations contained herein shall not be assignable, provided that any Person
acquiring Shares who is required by the terms of this Agreement to become a
party hereto shall execute and deliver to the Company an agreement to be bound
by this Agreement and shall thenceforth be a Stockholder for purposes of this
Agreement, having such rights and obligations as are consistent with those
rights and obligations applicable to the transferor of such Shares, except as
otherwise provided in this Agreement.
(a) Amendment; Waiver; Termination. 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
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<PAGE> 27
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 9.5 Notices. All notices and other communications hereunder
shall be sufficiently given for all purposes hereunder if in writing and
delivered personally, sent by documented overnight delivery service or, to the
extent receipt is confirmed, telecopy, telefax or other electronic transmission
service to the appropriate address or number as set forth below. Notices to
Holberg or AP Holdings or the Company shall be addressed to:
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 at such other address and to the attention of such other person as Holberg or
AP Holdings or the Company may designate by written notice to the Standard
Parties. Notices to the Standard Parties shall be addressed to:
Dosher Partners, 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 Wolf
Telecopy Number: (312) 240-0191
and
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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
and
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 the
Standard Parties may designate by written notice to Holberg and AP Holdings and
the Company. In addition, any Person who becomes an Stockholder shall provide
its notices information to the Company, which shall promptly provide such
information to each other Stockholder.
Section 9.6 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
capitalized terms defined herein are equally applicable to both the singular and
plural forms of such terms.
Section 9.7 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 hereto and delivered to the other parties hereto. Copies of
executed counterparts transmitted by telecopy, telefax or other electronic
transmission service shall be considered original executed counterparts for
purposes of this Section, provided that receipt of copies of such counterparts
is confirmed.
Section 9.8 Specific Enforcement. Each party hereto acknowledges
that remedies at law may be inadequate to protect the other party against any
actual or threatened breach of this Agreement by the other parties and, without
prejudice to any other rights and remedies otherwise available to any party,
each party agrees to the granting of injunctive relief in any other party's
favor without proof of actual damages. In the event of litigation relating to
this Agree-
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<PAGE> 29
ment, if a court of competent jurisdiction determines that this Agreement has
been breached by a party, then such party shall reimburse the other party for
costs and expenses (including, but not limited to, reasonable legal fees and
expenses) incurred in connection with all such litigation.
Section 9.9 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 no party
hereto 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 hereto to obtain execution of judgment in any other jurisdiction.
The parties hereto 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
hereto (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 hereto 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 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 hereto to serve
process in any other manner permitted by law.
(d) To the extent that any party hereto 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 9.10 Community Property States. Each Standard Party, if such
Standard Party is a natural person, represents that (a) such Standard Party's
spouse has duly executed the Consent of Spouse attached hereto, (b) such Consent
of Spouse was delivered along with such Standard Party's signature page hereto
and (c) such Consent of Spouse was duly authorized,
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<PAGE> 30
executed and delivered by such spouse and effectively binds such spouse to the
terms set forth therein.
26
<PAGE> 31
IN WITNESS WHEREOF, the parties hereto have caused this Stockholders
Agreement to be duly executed as of the day and year first above written.
DOSHER PARTNERS, L.P.
By: /s/ Myron C. Warshauer
------------------------------------------
Name: Myron C. Warshauer
Title: General Partner of Dosher Partners,
L.P.
SP ASSOCIATES
By: SP MANAGERS, L.P. MANAGING PARTNER
By: STANDARD MANAGERS, INC.,
GENERAL PARTNER
By: /s/ Patrick Meara
------------------------------------------
Name: Patrick Meara
Title: Vice President
APCOA, INC.
By: /s/ Michael J. Celebrezze
------------------------------------------
Name: Michael J. Celebrezze
Title: Chief Financial Officer
HOLBERG INDUSTRIES, INC.
By: /s/ A. Petter 0stberg
------------------------------------------
Name: A. Petter 0stberg
Title: Senior Vice President, Chief Financial
Officer and Treasurer
27
<PAGE> 32
AP HOLDINGS, INC.
By: /s/ Michael J. Celebrezze
------------------------------------------
Name: Michael J. Celebrezze
Title: Treasurer
28
<PAGE> 33
Consent of Spouse
The undersigned is the spouse of one of the Standard Parties and
hereby acknowledges that he/she has read the attached Stockholders Agreement and
knows its contents. The undersigned is aware that by its provisions, his/her
spouse agrees to sell all of his/her Shares [and other securities], including
his/her community property interest therein, if any, on the occurrence of
certain events. The undersigned hereby consents to the sale, approves the
provisions of the Stockholders Agreement, and agrees that those securities and
his/her interest in them, if any, are subject to the provisions of the
Stockholders Agreement and that he/she will take no action at any time to hinder
operation of the Stockholders Agreement on those securities or his/her interest,
if any, in them, and, to the extent required, will take any further actions
necessary to effectuate the provisions of the Stockholders Agreement.
--------------------------------
[Spouse]
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Exhibit A
AFFILIATE TRANSACTIONS
The Company has certain agreements and arrangements under which it
engages, and expects in the future to continue to engage, in transactions with
Affiliates of the Company which are not Subsidiaries of the Company, as follows:
o As set forth in the Offering Memorandum (the "Offering
Memorandum") dated March 25, 1998 relating to $140,000,000 of
the Company's 9 1/4 % Senior Subordinated Noted due 2008 (the
"Notes"), a copy of which has been provided to each party to
this Agreement and which is hereby incorporated herein by
reference.
o As permitted by the provisions of the Indenture (as defined in
the Offering Memorandum) and the New Credit Facility (as
defined in the Offering Memorandum), a copy of each of which
has been provided to each party to this Agreement and which is
hereby incorporated herein by reference.
A-1
<PAGE> 1
Exhibit 10.8
EXECUTIVE TRANSITION EMPLOYMENT AGREEMENT
THIS AGREEMENT is executed as of the 1st day of April, 1998 by and between
APCOA, INC., a Delaware corporation with offices at 800 Superior Avenue,
Cleveland, Ohio 44114 (the "Company"), and JAMES V. LaROCCO (the "Executive").
W I T N E 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 in a
transition capacity and the Executive desires to continue to work for the
Company in this capacity 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, as a transition employee to
serve as Executive Vice President Corporate Development of the Company (or
under such title as the
<PAGE> 2
President may hereafter assign to him), since Executive's previous position was
eliminated as of April 1, 1998. 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 or his designee 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.
The term of this Agreement shall be for a period eighteen (18) months
commencing on April 1, 1998 and ending on September 30, 1999.
3. Compensation and Other Benefits.
For the services to be rendered by him pursuant to this Transition
Employment 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 $190,000.00 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 President. 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.
2
<PAGE> 3
(b) Bonus for 1998 of $76,000.00 will be paid on or before April 15, 1999.
Bonus for 1999 shall be paid on or before April 15, 2000, according to the
Executive Bonus Plan set forth in Exhibit B 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.
(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.
3
<PAGE> 4
(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 continue to provide a Supplemental Pension Plan as
described in Exhibit C.
(i) The Company will provide Executive severance pay in the gross amount
of $157,872.00 on April 10, 1998.
(j) The Company shall pay Executive a severance bonus in the amount of
$66,500.00 on September 30, 1998.
(k) 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.
4
<PAGE> 5
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 by 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.
5
<PAGE> 6
(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
(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.
6
<PAGE> 7
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.
In the event 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 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
7
<PAGE> 8
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 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
-8-
<PAGE> 9
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 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,
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<PAGE> 10
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 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
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<PAGE> 11
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 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 President 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 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
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<PAGE> 12
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
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
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<PAGE> 13
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 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.
(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.
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<PAGE> 14
(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, intending to be legally bound,
have executed this Agreement this 1 day of April, 1998.
ATTEST: APCOA, INC.
(the "Company")
/s/ Carolyn R. Bodden BY: /s/ G. W. Stuelpe
- ------------------------- ------------------------
CAROLYN R. BODDEN G. W. STUELPE
President
WITNESS:
/s/ Cynthia R. LaRocco /s/ James V. LaRocco
- ------------------------- ------------------------
CYNTHIA R. 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 exercise of sound ethical business
judgment should not be in any manner limited by any relationship, any activity
or any practice.
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<PAGE> 16
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 adhere to any contract, agreement or the condition or
understanding that purchases made by
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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.
(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> 18
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> 19
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.
(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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(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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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 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
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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 doing so 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 in regard to prices,
discounts, terms or conditions of or refusing to
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<PAGE> 23
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> 24
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:
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> 25
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
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 Four Hundred Ninety One Thousand ($491,000.00)
Dollars in 60 equal monthly installments of Eight Thousand One Hundred Eighty
Three Dollars Thirty Three Cents ($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> 26
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, 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 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
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<PAGE> 27
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 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.
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> 28
EXHIBIT D TO EXECUTIVE TRANSITION EMPLOYMENT AGREEMENT
DESIGNATION OF BENEFICIARY
Effective April 1, 1998, I, the undersigned, entered into an Executive
Transition 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 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/ James V. LaRocco
_____________________
JAMES V. LaROCCO
Date: 4-1-1998
_________________
__________________________
Receipt of this Designation of Beneficiary form is acknowledged by the
undersigned Secretary of APCOA, INC.
APCOA, INC.
By: /s/
_____________________________
Secretary
Date: 4-1-1998
_________________
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<PAGE> 1
Exhibit 10.9
AGREEMENT
THIS AGREEMENT, is made and entered into by and between APCOA, INC.
("Company") and Trevor R. Van Horn ("Employee") on the dates written below.
WITNESSETH:
WHEREAS, Employee has been employed by the Company, and such employment is
terminated effective February 26, 1998; and
WHEREAS, the Company and Employee wish to resolve all matters and issues
between them arising from or relating to Employee's employment by the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, Employee and the Company hereby agree as follows:
ARTICLE I
CONSIDERATION
Section 1.1. Severance. Upon the effective date of this Agreement as set
forth in Section 3.3 following the execution and delivery of this Agreement and
following the expiration of the consideration and revocation periods set forth
in Section 2.4 herein, the Company shall, in consideration of his release and
settlement of all claims, pay Employee, in accordance with the Company's regular
payroll practices, thirty (30) weeks of severance pay at Employee's rate
immediately preceding the termination, less applicable payroll taxes and
withholdings beginning February 26, 1998 and through September 23, 1998. In the
event Employee fails to execute this Agreement immediately following the
expiration of the consideration period set forth herein and/or revokes this
Agreement in accordance with its terms, no severance pay or any other monies
payable hereunder shall be due and owing.
Section 1.2. Vacation Pay. On April 30, 1998, the Company shall present a
check to Employee, for nine (9) weeks vacation pay at his regular rate of pay,
less applicable payroll taxes and withholdings.
Section 1.3. Notification. Employee acknowledges that on February 26, 1998,
he received a thirty (30) days notice from the Company and between that date and
March 31, 1998 he received his regular pay on regular paydays.
Section 1.4. Severance Retention Bonus. The Company shall pay Employee a
bonus equal to 35% of Employee's base pay, less applicable payroll taxes and
withholdings on April 30, 1998.
<PAGE> 2
ARTICLE 1 - CONSIDERATION (Continued)
Section 1.5. Pro Rata Bonus. The Company shall pay employee a pro rata
(January, February and March, 1998) bonus of $12,285 on or before April 15,
1999.
Section 1.6. Other Benefits. The Company shall provide and pay for COBRA
coverage to Employee through February 26, 1999.
Section 1.7. Company Car. The Company shall turn over title of the 1996
Buick to Employee on April 1, 1998, free and clear.
Section 1.8. 401(k) Plan. The Company shall continue the 401(k) Plan
through September 23, 1998.
Section 1.9. Relocation. The Company shall pay $10,000 (net) to Employee
toward relocation expenses with such payment due on April 30, 1998.
Section 1.10. Desk Top Computer. The Company shall provide Employee with
his current desk top computer on March 31, 1998, free and clear.
Section 1.11. Home. The Company shall pay up to $15,000 to Employee to
offset real estate commission and any loss on the sale of his home in Mentor,
Ohio.
ARTICLE II
------------
RELEASE OF CLAIMS
Section 2.1. Employee's Release. In consideration of the promises and
agreements set forth herein, Employee does hereby for himself and for his
heirs, executors, successors and assigns, release and forever discharge the
Company and all of the Company's related and affiliated entities and all of
their respective directors, officers, employees, agents and all other persons,
firms and corporations, both known and unknown, of and from any and all claims,
demands, damages, actions or causes of action, suits, claims, charges,
complaints, contracts, whether oral or written, express or implied and
promises, at law or in equity, of whatsoever kind or nature, including but not
limited to any alleged violation of any state or federal anti-discrimination
statutes or regulations, including but not limited to the Americans with
Disabilities Act of 1990, Age Discrimination in Employment Act of 1967, as
amended, the Older Workers Benefit Protection Act, breach of any express or
implied contract or promise, wrongful discharge, violation of public policy,
contract or tort, all demands for attorney's fees, back pay, holiday pay,
vacation pay, bonus, group insurance, any claims for reinstatement, all employee
benefits and claims for money, out-of-pocket expenses, any claims for emotional
distress, degradation, humiliation, failing to obtain employment at any other
company of employer, that Employee might now have or
Page 2
<PAGE> 3
ARTICLE II - RELEASE OF CLAIMS (Continued)
may subsequently have, whether known or unknown, suspected or unsuspected, by
reason of any matter or thing, arising out of or in any way connected with,
directly or indirectly any acts or omissions of the Company or any of its
directors, officers, shareholders, employees and/or agents arising out of
Employee's employment and resignation from employment which have occurred prior
to and throughout the term of this Agreement, except those matters specifically
set forth herein and except for 401(k) benefits which have vested on his behalf.
Section 2.2. Company's Release. The Company, on behalf of itself, its
successors and assigns, does hereby release Employee from any and all claims,
demands, actions or causes of action, suits, claims, charges, complaints,
contracts, whether oral or written, express or implied and promises at law or
in equity of whatsoever kind or nature, which it may now have or subsequently
have, whether known or unknown, suspected or unsuspected, by reason of any
matter or thing arising out of or in any way connected with directly or
indirectly, any actions or omissions of Employee arising out of Employee's
employment by the Company, which have occurred prior to this Agreement, except
those matters specifically set forth herein.
Section 2.3. Covenant Not to Sue. Employee shall not directly or
indirectly institute or initiate any proceedings, charges, claims and/or actions
against the Company and/or its related or affiliated entities or their
respective directors, officers, employees, agents or representatives arising out
of or in any way connected with, directly or indirectly, any acts or omissions
of the Company and/or its respective directors, officers, employees, agents or
representatives which have occurred prior to and including the date hereof.
Section 2.4. Employee's Rights. Employee acknowledges that he has been
advised that he has the following specific rights:
(a) to consult with an attorney with regard to the meaning and effect of
this Agreement.
(b) to consider the meaning and effect of this Agreement and the Release
contained therein for a period of twenty one (21) days ("consideration
period") following the presentation of this Agreement to him; and
(c) to revoke this Agreement within seven (7) days ("revocation period")
of execution of this Agreement.
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<PAGE> 4
ARTICLE II -- RELEASE OF CLAIMS (Continued)
Section 2.5. Notice of Revocation. To be effective, any revocation by
Employee must be delivered on or before the close of business on the seventh
day following execution of this Agreement to:
Mr. Michael J. Machi
Senior Vice President, Administration
APCOA, Inc.
1000 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114-2615
Section 2.6. Sufficiency of Consideration. Employee acknowledges that he
is receiving consideration for his release of claims under the terms and
conditions of this Agreement over and above what he is otherwise entitled to
and that such is sufficient and adequate consideration for his release for any
common law and/or statutory law claims he may have, if any.
Section 2.7. Presentation of Agreement. Employee acknowledges that this
Agreement was presented to him for his consideration on February 26, 1998, and
that he was SPECIFICALLY ADVISED THAT HE SHOULD NOT EXECUTE THIS AGREEMENT
UNTIL TWENTY-ONE (21) DAYS AFTER THE DATE SET FORTH IN THIS SECTION, AND
EMPLOYEE ACKNOWLEDGES THAT HE MAY NOT EXECUTE THIS AGREEMENT UNTIL MARCH 19,
1998.
Section 2.8. Confidentiality of Agreement. Employee and his heirs,
executors, successors, assigns, agents, representatives, and attorneys and the
Company shall hold the terms of this Agreement in strict confidence and shall
not communicate, reveal, or disclose the terms of this Agreement to any other
persons, except Employee's immediate family or as required by law. It is
understood and agreed by Employee and the Company that any disclosure other
than that authorized by this paragraph shall be deemed a material breach of
this Agreement will subject the party or entity in breach to appropriate
injunctive relief, compensatory and/or punitive damages, and possible civil
contempt, as determined by a court of law.
Section 2.9. Acknowledgements. Employee acknowledges that he has carefully
read and fully understands all of the provisions of this Agreement, that he has
not relied on any representations of the Company or any of its representatives,
directors, officers, employees and/or agents to induce him to enter this
Agreement, other than as specifically set forth herein and that he is fully
competent to enter into this Agreement and has not been pressured, coerced or
otherwise unduly influenced to enter into this Agreement and that he has
voluntarily entered into this Agreement of his own free will.
Page 4
<PAGE> 5
ARTICLE III
ADDITIONAL PROVISIONS
Section 3.1. Entire Agreement. Except as provided above, this Agreement
contains the entire agreement between the parties hereto and replaces any prior
agreements, contracts and/or promises, whether written or oral, with respect to
the subject matters included herein. This Agreement may not be changed orally,
but only in writing, signed by each of the parties hereto. This Agreement and
any disputes arising hereunder shall be governed by the laws of the State of
Ohio.
Section 3.2. Effective Date. This Agreement shall only become effective
upon the delivery of this Agreement after execution by Employee following the
expiration of the twenty-one (21) day consideration period and, if not sooner
revoked in accordance with Sections 2.4 and 2.5, after the expiration of the
seven (7) day revocation period.
Section 3.3. Withdrawal If Not Timely Executed. If this Agreement is not
executed by Employee by 5:00 o'clock p.m. EST March 19, 1998, it is withdrawn
and of no further force and effect.
IN WITNESS WHEREOF, Trevor R. Van Horn, and APCOA, Inc. have executed this
Agreement effective as of the date of the Employee's execution of this Agreement
written below by their respective signatures, all duly authorized in the
premises.
CAUTION TO TREVOR R. VAN HORN: READ BEFORE SIGNING, THIS DOCUMENT CONTAINS
A RELEASE OF ALL YOUR RIGHTS TO AGE DISCRIMINATION CLAIMS AGAINST THE
ABOVE-MENTIONED COMPANY AND PERSONS ARISING BEFORE THE EFFECTIVE DATE OF THIS
AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ANY AND ALL CLAIMS YOU MAY HAVE UNDER
THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, 29 U.S.C. 621 ET SEQ. AS
AMENDED.
I, TREVOR R. VAN HORN, acknowledge receiving this Agreement on February 26,
1998; I recognize and understand that I may not execute this Agreement until
twenty-one (21) calendar days have passed from the date I received this
Agreement. That is, the first day I may execute this Agreement is March 19,
1998.
Date of Van Horn's RECEIPT:
/s/ Trevor R. Van Horn 3-31-98
- ------------------------------ ------------------------------
Trevor R. Van Horn
WITNESS:
- ------------------------------
Page 5
<PAGE> 6
Having considered this Agreement for at least twenty-one (21) calendar
days, I, TREVOR R. VAN HORN, hereby execute this Agreement; I agree and
recognize that I have seven (7) calendar days from my execution of this
Agreement to REVOKE this Agreement, should I so choose. I understand that if I
execute this Agreement on March 19, 1998, the last day I may revoke this
Agreement is March 26, 1998.
Date of Van Horn's SIGNATURE:
/s/ Trevor R. Van Horn 3-31-98
- ------------------------------- ----------------------------------
Trevor R. Van Horn
WITNESS:
- -------------------------------
DATE: 26 Feb 98
-------------------------- APCOA, Inc.
By: /s/ Michael J. Machi
-------------------------------
Michael J. Machi
Sr. Vice President, Administration
APCOA, Inc.
WITNESS:
/s/ Marian P. Fabec
----------------------------
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<PAGE> 1
Exhibit 10.10
EMPLOYMENT AGREEMENT
AGREEMENT by and between APCOA, Inc., a Delaware corporation (the
"Company"), and Herb Anderson (the "Executive"), dated as of the 14 day of May,
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. were 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 March 30, 1998 (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 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 Executive Vice President, Midwest Operations of the Company,
with the duties, authority and responsibilities as are commensurate with such
position and as are customarily associated with such position and shall perform
such other duties as may be assigned to the Executive from time to time. 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.
<PAGE> 2
3. Compensation. (a) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary of $175,000 (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 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 40% 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 fiscal year, the Executive's Annual Bonus
shall not be less than 40% of the Annual Base Salary.
(c) Equity Plan. 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 and on the same basis as peer executives.
(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 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 the Executive upon his submission of a written
purchase offer for a residence in the vicinity of Chicago, Illinois. The
principal amount of the 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 of the Agreement (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
(as hereinafter defined) or the Executive terminates his employment without
Good Reason (as hereinafter defined), the Executive shall be obligated to repay
the remaining principal balance of the Loan and any accrued and unpaid interest
thereon within thirty (30) days of the Date of Termination; 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
2
<PAGE> 3
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 federal, state and local
income tax consequences to the Executive with respect to such forgiven amount.
In the event the Executive's employment hereunder is terminated by the Company
for any reason other than for Cause, including a termination on account of
death or Disability, or in the event the Executive terminates his employment
for Good Reason, the remaining principal balance of the Loan and any accrued
and unpaid interest thereon 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 federal, state and local income 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 the
Executive's benefits under this Agreement shall be substantially similar in the
aggregate to the benefits available to him and his family under the Executive
Employment Agreement between the Company and the Executive, dated December 11,
1995.
(f) The Company shall provide the Supplemental Pension Plan, as described
in Exhibit C of the Executive Employment Agreement between the Company and the
Executive, dated December 11, 1995, which Exhibit is attached to and
incorporated herein.
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
3
<PAGE> 4
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. For purposes of this Agreement, "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, including, without limitation, a failure to comply
with Section 6 hereof.
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) By the Executive. The Executive may voluntarily terminate his
employment by giving written notice thereof to the Company. The Executive may
terminate his employment during the Employment Period for Good Reason. For
purposes of this Agreement, "Good Reason" means:
(i) a reduction in the Executive's Annual Base Salary; or
(ii) any change in the Executive's duties and responsibilities that
requires him to relocate his residence outside of the Chicago, Illinois
vicinity.
A termination of employment by the Executive for Good Reason shall be
effectuated by giving the Company written notice ("Notice of Termination for
Good Reason") of the termination, setting forth in reasonable detail the
specific conduct of the Company that constitutes Good Reason and the specific
provision(s) of this Agreement on which the Executive relies. A termination of
employment by the Executive for Good Reason shall be effective on the date when
the Notice of Termination for Good Reason is given, unless the notice sets
forth a later date (which date shall in no event be later than thirty (30) days
after the notice is given).
(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 or other
than for Cause or Disability), as set forth in the notice from the Company, is
effective, or the date on which the Executive gives the
4
<PAGE> 5
Company notice of a termination of employment for Good Reason (unless otherwise
stated in the Notice of Termination for Good Reason) or without Good Reason, as
the case may be.
5. Obligations of the Company upon Termination. (a) By the Company Other
Than for Cause or Disability; By the Executive for Good Reason. If, during the
Employment Period, the Company terminates the Executive's employment, other
than for Cause 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), or the Executive terminates employment for Good
Reason, 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 the Annual Bonus 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 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. 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, or by the Executive for Good
Reason, 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
thirty (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 immediately
before 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 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
5
<PAGE> 6
Employment Period, 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 to the Executive under this
Agreement.
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" 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.
6
<PAGE> 7
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 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:
If to the Company: APCOA, Inc.
Attention:
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.
7
<PAGE> 8
(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 Employment Terms and the Executive Employment Agreement dated as of
December 11, 1995.
(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.
8
<PAGE> 9
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/ HERB ANDERSON
-------------------------------
HERB ANDERSON
APCOA, INC.
/s/ G. WALTER STUEPLE, JR.
-------------------------------
Name: G. Walter Stueple, Jr.
Title: President
9
<PAGE> 1
EXHIBIT 12.1
APCOA, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(AMOUNTS IN THOUSANDS, EXCEPT RATIO DATA)
<TABLE>
<CAPTION>
THREE MONTHS PRO FORMA
YEAR ENDED DECEMBER 31, ENDED MARCH 31, ------------------------
--------------------------------------------- ----------------- THREE MONTHS
1993 1994 1995 1996 1997 1997 1998 1997 1998
------- ------- ------- ------ ------ ------ -------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Income (loss) before
income taxes,
minority interest
and extraordinary
item............... $(4,037) $(2,880) $(2,273) $1,469 $2,320 $ (345) $(14,675) $(2,363) $(15,961)
Fixed charges........ 2,966 3,129 4,216 4,261 4,611 1,074 1,277 24,687 6,137
------- ------- ------- ------ ------ ------ -------- ------- --------
Earnings............. $(1,071) $ 249 $ 1,943 $5,730 $6,931 $ 729 $(13,398) $22,324 $ (9,824)
======= ======= ======= ====== ====== ====== ======== ======= ========
Interest expense..... $ 2,084 $ 2,437 $ 3,101 $3,409 $3,713 $ 869 $ 1,037 $14,225 $ 3,521
Amortization of
deferred financing
costs.............. 361 198 574 228 180 42 48 759 190
Interest portion of
rent expense....... 521 494 541 624 718 163 192 9,703 2,426
------- ------- ------- ------ ------ ------ -------- ------- --------
Fixed charges........ $ 2,966 $ 3,129 $ 4,216 $4,261 $4,611 $1,074 $ 1,277 $24,687 $ 6,137
======= ======= ======= ====== ====== ====== ======== ======= ========
Ratio of earnings to
fixed charges...... Note 1 Note 1 Note 1 1.3x 1.5x Note 1 Note 1 Note 1 Note 1
======= ======= ======= ====== ====== ====== ======== ======= ========
</TABLE>
- ---------------
Note 1: Earnings were inadequate to cover fixed charges by $4,037, $2,880,
$2,273, $345, $14,675, $2,363 and $15,961 for the years ended December 31, 1993,
1994 and 1995, the three months ended March 31, 1997 and 1998, the pro forma
year ended December 31, 1997, and the pro forma three months ended March 31,
1998, respectively.
<PAGE> 1
Exhibit 21.1
Subsidiaries of APCOA/Standard Parking, Inc.
Subsidiary Guarantors
---------------------
Organized Percentage
Name of Entity Under Laws of of Ownership
- -------------- ------------- ------------
Tower Parking, Inc. Ohio 100
Graelic, Inc. Ohio 100
APCOA Capital Corporation Delaware 100
A-1 Auto Park, Inc. Georgia 100
Metropolitan Parking
System, Inc. Massachusetts 100
Events Parking Company, Inc. Massachusetts 100
Standard Parking Corporation Illinois 100
Standard Parking Corporation IL Illinois 100
Standard Auto Park, Inc. Illinois 100
S & S Parking, Inc. California 100
Century Parking, Inc. California 100
Sentry Parking Corporation California 100
Non-Guarantor Subsidiaries
--------------------------
Organized Percentage
Name of Entity Under laws of of Ownership
- -------------- ------------- ------------
APCOA Australia Pty
Limited Australia 100
APCOA-Hawaii, Inc. Hawaii 100
APCOA Holdings Canada, Inc. Canada 100
APCOA Pacific Holdings
Pty Limited Australia 100
APCOA Parking Development
& Management Ltd. Canada 100
Atrium Parking, Inc. Delaware 100
Hawaii Parking Maintenance,
Inc. Hawaii 100
SBR GP, Inc. Delaware 100
Steamboat Management, Inc. Delaware 100
Steamboat Properties, Inc. Delaware 100
A-M Elmira Parking Company Ohio 65
A-M Frontier Field Parking
Company Ohio 50
A-M Monroe Parking Ohio 50
A-M New York Parking Company Ohio 50
APCOA-Common Street I Parking
Company Ohio 60
APCOA-Etna Parking #1 Ohio 90
APCOA-Etna Parking #2 Ohio 80
APCOA-Etna Parking #3 Ohio 80
APCOA-Miami Parking Ohio 49
APCOA-Progressive Parking #1 Ohio 75
APCOA-Progressive Parking #2 Ohio 75
APCOA-R&G Parking Ohio 80
APCOA-RSN Shuttle Operation Ohio 70
APCOA-SRP Parking V Ohio 51
APCOA-SRP Parking XIII Ohio 51
APCOA-Wilford Parking Ohio 80
APCOA-Parking Venture 1 Ohio 99
APCOA-Atrium Parking Venture Ohio 99
APCOA Parking Venture III Ohio 99
APCOA-S.R.P. Parking XVII Ohio 51
APCOA-Progressive Parking II Ohio 70
APCOA-M&M Parking II Ohio 80
<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 Amendment No. 1 to the Registration Statement (Form
S-4 No. 333-50437) and related Prospectus of APCOA/Standard Parking, Inc. for
the registration of $140,000,000 of 9 1/4% Senior Subordinated Notes.
Cleveland, Ohio ERNST & YOUNG LLP
June 9, 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 Amendment No. 1 to the Registration Statement (Form
S-4 No. 333-50437) and related Prospectus of APCOA/Standard Parking, Inc. for
the registration of $140,000,000 of 9 1/4% Senior Subordinated Notes.
ALTSCHULER, MELVOIN AND GLASSER LLP
Chicago, Illinois
June 9, 1998
<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 the three months ended March 31, 1997 and
1998 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001059262
<NAME> APCOA INC.
<S> <C> <C> <C> <C> <C>
<PERIOD-TYPE> YEAR YEAR YEAR 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1996 DEC-31-1997 DEC-31-1997 DEC-31-1998
<PERIOD-START> JAN-01-1995 JAN-01-1996 JAN-01-1997 JAN-01-1997 JAN-01-1998
<PERIOD-END> DEC-31-1995 DEC-31-1996 DEC-31-1997 MAR-31-1997 MAR-31-1998
<CASH> 0 2,532,000 3,332,000 0 60,480,000
<SECURITIES> 0 0 0 0 0
<RECEIVABLES> 0 10,556,000 14,249,000 0 20,040,000
<ALLOWANCES> 0 (315,000) (443,000) 0 (579,000)
<INVENTORY> 0 0 0 0 0
<CURRENT-ASSETS> 0 14,116,000 18,254,000 0 81,536,000
<PP&E> 0 56,582,000 55,715,000 0 65,521,000
<DEPRECIATION> 0 (44,906,000) (43,375,000) 0 (43,214,000)
<TOTAL-ASSETS> 0 52,823,000 59,095,000 0 213,510,000
<CURRENT-LIABILITIES> 0 33,571,000 35,313,000 0 53,845,000
<BONDS> 0 32,129,000 34,181,000 0 149,040,000
0 7,841,000 8,728,000 0 40,683,000
0 0 0 0 0
<COMMON> 0 1,000 1,000 0 1,000
<OTHER-SE> 0 (23,232,000) (22,260,000) 0 (45,707,000)
<TOTAL-LIABILITY-AND-EQUITY> 0 52,823,000 59,095,000 0 213,510,000
<SALES> 141,540,000 135,752,000 115,676,000 27,019,000 28,804,000
<TOTAL-REVENUES> 141,540,000 135,752,000 115,676,000 27,019,000 28,804,000
<CGS> 120,215,000 113,501,000 92,818,000 22,547,000 23,576,000
<TOTAL-COSTS> 120,215,000 113,501,000 92,818,000 22,547,000 23,576,000
<OTHER-EXPENSES> 20,893,000 17,905,000 17,295,000 4,050,000 19,015,000
<LOSS-PROVISION> 0 0 0 0 0
<INTEREST-EXPENSE> 3,101,000 3,409,000 3,713,000 869,000 1,037,000
<INCOME-PRETAX> (2,273,000) 1,469,000 2,320,000 (345,000) (14,675,000)
<INCOME-TAX> 240,000 106,000 140,000 60,000 30,000
<INCOME-CONTINUING> (3,117,000) 939,000 1,859,000 (443,000) (14,848,000)
<DISCONTINUED> 0 0 0 0 0
<EXTRAORDINARY> 0 0 0 0 (2,816,000)
<CHANGES> 0 0 0 0 0
<NET-INCOME> (3,117,000) 939,000 1,859,000 (443,000) (17,664,000)
<EPS-PRIMARY> 0 0 0 0 0
<EPS-DILUTED> 0 0 0 0 0
</TABLE>
<PAGE> 1
LETTER OF TRANSMITTAL
APCOA/STANDARD PARKING, 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/Standard Parking, 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 "Depositary") 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 DEPOSITARY 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 a broker-dealer that acquired Notes directly from the Company or
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/STANDARD PARKING, 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
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW number
--------------------
OR
--------------------
Employer
identification number
-----------------------------------------------------------------------
Part 2 -- Check the box if you are NOT subject to backup withholding
Department of the Treasury under the provisions of Section 3406(A)(1)(C) of the Internal Revenue
Internal Revenue Service Code because (1) you are exempt from 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
IDENTIFICATION NUMBER (TIN) INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.
SIGNATURE: ------------------------- DATE:---------------------
- -------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C>
SUBSTITUTE Part 1 -- PLEASE PROVID Social security
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW number number
-------------------- Employer
OR identification numbe
r
--------------------
Employer
identification number
-----------------------------------------------------------------------
Department of the Treasury 3406(A)(1)(C) of the
Internal Revenue Service Internal Revenue Code
because (1) you are
exempt from 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
-----------------------------------------------------------------------
PAYER'S REQUEST FOR TAXPAYER Part 3 --
IDENTIFICATION NUMBER (TIN)
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 Depositary) 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 Depositary) 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 Depositary 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
Depositary, 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 Depositary 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
Depositary 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 Depositary) 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 Depositary.
<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/Standard Parking, 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
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
9 1/4% SENIOR SUBORDINATED NOTES DUE 2008
(INCLUDING THOSE IN BOOK-ENTRY FORM)
OF
APCOA/STANDARD PARKING, INC.
This form or one substantially equivalent hereto must be used to accept the
Exchange Offer of APCOA/Standard Parking, 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
- ------------------------------------------------------------ ------------------------------------
- ------------------------------------------------------------ ------------------------------------
Date
Signature(s) of Owner(s)
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:
------------------------------------------------------------
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Address(es):
------------------------------------------------------------
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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.
