-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CGqiSuxW13AvGIFlfEPxZvL/r40IYZiDX416v2FVY1l4Clf9FV8fKsAnrwfXTdPo qBXyJueqL4FYxjrLNTK5CA== 0000950123-98-003933.txt : 19980421 0000950123-98-003933.hdr.sgml : 19980421 ACCESSION NUMBER: 0000950123-98-003933 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 55 FILED AS OF DATE: 19980417 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: APCOA INC CENTRAL INDEX KEY: 0001059262 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-50437 FILM NUMBER: 98596856 BUSINESS ADDRESS: STREET 1: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114-2601 BUSINESS PHONE: 2185220700 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOWER PARKING INC CENTRAL INDEX KEY: 0001059985 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 310878291 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-50437-01 FILM NUMBER: 98596857 BUSINESS ADDRESS: STREET 1: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114-2601 BUSINESS PHONE: 2165220700 MAIL ADDRESS: STREET 1: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114-2601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRAELIC INC CENTRAL INDEX KEY: 0001059986 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 341327948 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-50437-02 FILM NUMBER: 98596858 BUSINESS ADDRESS: STREET 1: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114-2601 BUSINESS PHONE: 2165220700 MAIL ADDRESS: STREET 1: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114-2601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: APCOA CAPITAL CORP CENTRAL INDEX KEY: 0001059987 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 061334158 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-50437-03 FILM NUMBER: 98596859 BUSINESS ADDRESS: STREET 1: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114-2601 BUSINESS PHONE: 2165220700 MAIL ADDRESS: STREET 1: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114-2601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: A-1 AUTO PARK INC CENTRAL INDEX KEY: 0001059988 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 581336837 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-50437-04 FILM NUMBER: 98596860 BUSINESS ADDRESS: STREET 1: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114-2601 BUSINESS PHONE: 2165220700 MAIL ADDRESS: STREET 1: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114-2601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: METROPOLITAN PARKING SYSTEM INC CENTRAL INDEX KEY: 0001059989 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 042607263 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-50437-05 FILM NUMBER: 98596861 BUSINESS ADDRESS: STREET 1: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114-2601 BUSINESS PHONE: 2165220700 MAIL ADDRESS: STREET 1: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114-2601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVENTS PARKING CO INC CENTRAL INDEX KEY: 0001059991 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 043223993 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-50437-06 FILM NUMBER: 98596862 BUSINESS ADDRESS: STREET 1: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114-2601 BUSINESS PHONE: 2165220700 MAIL ADDRESS: STREET 1: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114-2601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANDARD PARKING L P CENTRAL INDEX KEY: 0001059992 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 363922900 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-50437-07 FILM NUMBER: 98596863 BUSINESS ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 BUSINESS PHONE: 3126964000 MAIL ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANDARD PARKING CORP CENTRAL INDEX KEY: 0001059993 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 362932936 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-50437-08 FILM NUMBER: 98596864 BUSINESS ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 BUSINESS PHONE: 3126964000 MAIL ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANDARD PARKING CORP MW CENTRAL INDEX KEY: 0001059995 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 363880813 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-50437-09 FILM NUMBER: 98596865 BUSINESS ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 BUSINESS PHONE: 3126964000 MAIL ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANDARD PARKING CORP IL CENTRAL INDEX KEY: 0001059996 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 363880811 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-50437-10 FILM NUMBER: 98596866 BUSINESS ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 BUSINESS PHONE: 3126964000 MAIL ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANDARD AUTO PARK INC CENTRAL INDEX KEY: 0001059997 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 362439841 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-50437-11 FILM NUMBER: 98596867 BUSINESS ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 BUSINESS PHONE: 3126964000 MAIL ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANDARD WABASH PARKING CORP CENTRAL INDEX KEY: 0001059998 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 363485873 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-50437-12 FILM NUMBER: 98596868 BUSINESS ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 BUSINESS PHONE: 3126964000 MAIL ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANDARD PARKING OF CANADA L P CENTRAL INDEX KEY: 0001059999 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 364093705 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-50437-13 FILM NUMBER: 98596869 BUSINESS ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 BUSINESS PHONE: 3126964000 MAIL ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANDARD PARKING I LLC CENTRAL INDEX KEY: 0001060000 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 364015802 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-50437-14 FILM NUMBER: 98596870 BUSINESS ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 BUSINESS PHONE: 3126964000 MAIL ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANDARD PARKING II LLC CENTRAL INDEX KEY: 0001060001 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 364015804 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-50437-15 FILM NUMBER: 98596871 BUSINESS ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 BUSINESS PHONE: 3126964000 MAIL ADDRESS: STREET 1: 200 EAST RANDOLPH DR STREET 2: STE 4800 CITY: CHICAGO STATE: IL ZIP: 60601 S-4 1 APCOA, INC. 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 17, 1998. REGISTRATION NO. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ APCOA, INC.* (EXACT NAME OF REGISTRANT SPECIFIED IN ITS CHARTER) DELAWARE 7521 16-1171179 (STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
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) ------------------------ 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)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: Upon consummation of the Exchange Offer referred to herein. ------------------------ If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] ------------------------ CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------ PROPOSED PROPOSED MAXIMUM TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF SECURITIES TO BE REGISTERED REGISTERED PER NOTE(1) OFFERING PRICE REGISTRATION FEE - ------------------------------------------------------------------------------------------------------------ 9 1/4% New Senior Subordinated Notes due 2008................................ $140,000,000 100% $140,000,000 $42,424.25 - ------------------------------------------------------------------------------------------------------------ Guarantees for the New Senior Subordinated Notes due 2008(2)(3).................... $0 0% $0(2) $0 - ------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of determining the registration fee. (2) Calculated pursuant to Rule 457. (3) Pursuant to Rule 457(n), no registration fee is required with respect to the guarantees. ------------------------ THE REGISTRANTS HEREBY AMEND THE REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. ================================================================================ 2 *TABLE OF ADDITIONAL REGISTRANTS
STATE OR OTHER JURISDICTION OF PRIMARY STANDARD I.R.S. EMPLOYER INCORPORATION OR INDUSTRY IDENTIFICATION NAME, ADDRESS AND TELEPHONE NUMBER ORGANIZATION CLASSIFICATION NUMBER NUMBER ---------------------------------- ---------------- --------------------- ---------------- Tower Parking, Inc.(1).......................... Ohio 7521 31-0878291 Graelic, Inc.(1)................................ Ohio 7521 34-1327948 APCOA Capital Corporation(1).................... Delaware 7521 06-1334158 A-1 Auto Park, Inc.(1).......................... Georgia 7521 58-1336837 Metropolitan Parking System, Inc.(1)............ Massachusetts 7521 04-2607263 Events Parking Company, Inc.(1)................. Massachusetts 7521 04-3223993 Standard Parking, L.P.(2)....................... Delaware 7521 36-3922900 Standard Parking Corporation(2)................. Illinois 7521 36-2932936 Standard Parking Corporation MW(2).............. Illinois 7521 36-3880813 Standard Parking Corporation IL(2).............. Illinois 7521 36-3880811 Standard Auto Park, Inc.(2)..................... Illinois 7521 36-2439841 Standard/Wabash Parking Corporation(2).......... Illinois 7521 36-3485873 Standard Parking of Canada, L.P.(2)............. Illinois 7521 36-4093705 Standard Parking I, L.L.C.(2)................... Delaware 7521 36-4015802 Standard Parking II, L.L.C.(2).................. Delaware 7521 36-4015804
- --------------- (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. 3 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION, DATED APRIL 17, 1998 [STANDARD PARKING LOGO] [APCOA LOGO] OFFER TO EXCHANGE ALL OUTSTANDING 9 1/4% SENIOR SUBORDINATED NOTES DUE 2008 ($140,000,000 PRINCIPAL AMOUNT OUTSTANDING) FOR 9 1/4% NEW SENIOR SUBORDINATED NOTES DUE 2008 ($140,000,000 PRINCIPAL AMOUNT) OF APCOA, INC. THE EXCHANGE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON , 1998, UNLESS EXTENDED APCOA, Inc., a Delaware corporation (the "Company"), hereby offers (the "Exchange Offer"), upon the terms and subject to the conditions set forth in this Prospectus and the accompanying Letter of Transmittal (the "Letter of Transmittal"), to exchange up to an aggregate principal amount of $140,000,000 of its 9 1/4% New Senior Subordinated Notes due 2008 (the "New Notes") for an equal principal amount of its outstanding 9 1/4% Senior Subordinated Notes due 2008 (the "Notes"), in integral multiples of $1,000. The New Notes will be fully and unconditionally guaranteed on an unsecured basis (the "New Note Guarantees") by, and will be joint and several obligations of, the following subsidiaries of the Company: Tower Parking, Inc., an Ohio corporation, Graelic, Inc., an Ohio corporation, APCOA Capital Corporation, a Delaware corporation, A-1 Auto Park Inc., a Georgia corporation, Metropolitan Parking System, Inc., a Massachusetts corporation, Events Parking Company, Inc., a Massachusetts corporation, Standard Parking, L.P., a Delaware limited partnership, Standard Parking Corporation, an Illinois corporation, Standard Parking Corporation MW, an Illinois corporation, Standard Parking Corporation IL, an Illinois Corporation, Standard Auto Park, Inc., an Illinois corporation, Standard/Wabash Parking Corporation, an Illinois corporation, Standard Parking of Canada, L.P., an Illinois limited partnership, Standard Parking I, L.L.C., a Delaware limited liability company and Standard Parking II, L.L.C., a Delaware limited liability company (the "Subsidiary Guarantors"). The New Notes will be general unsecured obligations of the Company and are substantially identical (including principal amount, interest rate, maturity and redemption rights) to the Notes for which they may be exchanged pursuant to this offer, except that (i) the offering and sale of the New Notes will have been registered under the Securities Act of 1933, as amended (the "Securities Act"), and (ii) holders of New Notes will not be entitled to certain rights of holders under a Registration Rights Agreement of the Company and the Subsidiary Guarantors dated as of March 30, 1998 (the "Registration Rights Agreement"). The Notes have been, and the New Notes will be, issued under an Indenture dated as of March 30, 1998 (the "Indenture"), among the Company, the Subsidiary Guarantors and State Street Bank & Trust Company, as trustee (the "Trustee"). See "Description of New Notes." There will be no proceeds to the Company from this offering; however, pursuant to the Registration Rights Agreement, the Company will bear certain offering expenses. ------------------------ SEE "RISK FACTORS," COMMENCING ON PAGE 15, FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY HOLDERS WHO TENDER NOTES IN THE EXCHANGE OFFER. ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE DATE OF THIS PROSPECTUS IS , 1998. (cover page continued) 4 The Company will accept for exchange any and all validly tendered Notes on or prior to 12:00 midnight New York City time, on , 1998; unless the Exchange Offer is extended (the "Expiration Date"). Tenders of Notes may be withdrawn at any time prior to 12:00 midnight, New York City time, on the Expiration Date; otherwise such tenders are irrevocable. State Street Bank & Trust Company will act as Exchange Agent with respect to the Notes (in such capacity, the "Exchange Agent") in connection with the Exchange Offer. The Exchange Offer is not conditioned upon any minimum principal amount of Notes being tendered for exchange, but is otherwise subject to certain customary conditions. The Notes were sold by the Company on March 25, 1998 in transactions not registered under the Securities Act in reliance upon the exemption provided in Section 4(2) of the Securities Act. A portion of the Notes were subsequently resold to qualified institutional buyers in reliance upon Rule 144A under the Securities Act, to a limited number of institutional accredited investors in a manner exempt from registration under the Securities Act and to persons outside the United States in reliance on Regulation S under the Securities Act. Accordingly, the Notes may not be reoffered, resold or otherwise transferred in the United States unless registered under the Securities Act or unless an applicable exemption from the registration requirements of the Securities Act is available. The New Notes are being offered hereunder in order to satisfy certain obligations of the Company under the Registration Rights Agreement. See "The Exchange Offer." The New Notes will bear interest from March 25, 1998, the date of issuance of the Notes that are tendered in exchange for the New Notes (or the most recent Interest Payment Date (as defined herein) to which interest on such Notes has been paid), at a rate equal to 9 1/4% per annum. Interest on the New Notes will be payable semiannually on March 15 and September 15 of each year, commencing September 15, 1998. The New Notes are redeemable at the option of the Company, in whole or in part, at any time on or after March 15, 2003, at the redemption prices set forth herein, plus accrued and unpaid interest and liquidated damages, if any, thereon to the date of redemption. See "Description of New Notes -- Optional Redemption," and "Prospectus Summary -- Summary of Terms of New Notes." At any time prior to March 15, 2001, the Company may redeem up to 35% of the initially outstanding aggregate principal amount of New Notes at a redemption price equal to 109.25% of the principal amount thereof, plus accrued and unpaid interest, and Liquidated Damages, if any, thereon to the date of redemption, with the net cash proceeds, of a Public Equity Offering; provided that, in each case, at least 65% of the initially outstanding aggregate principal amount of New Notes remains outstanding immediately after any such redemption. Upon the occurrence of a Change of Control (as defined in the Indenture), each Holder (as defined herein) of New Notes may require the Company to repurchase all or a portion of such Holder's New Notes at 101% of the aggregate principal amount of the New Notes, together with accrued and unpaid interest, and Liquidated Damages, if any, to the date of repurchase. There can be no assurance that sufficient funds will be available at the time of any Change of Control to make any required repurchase of the New Notes tendered. See "Risk Factors -- Payment Upon a Change of Control" and "Description of New Notes -- Repurchase at the Option of Holders." The New Notes will be general unsecured obligations of the Company, will rank subordinate in right of payment to all Senior Debt of the Company and senior or pari passu in right of payment to all existing and future subordinated indebtedness of the Company. The New Note Guarantees will be general unsecured obligations of the Subsidiary Guarantors, will rank subordinate in right of payment to all Senior Debt of the Subsidiary Guarantors and senior or pari passu in right of payment to all existing and future subordinated indebtedness of the Subsidiary Guarantors. The New Notes and the New Note Guarantees will be effectively Subordinated to all indebtedness, including trade payables, of the Company's subsidiaries that are not Subsidiary Guarantors. As of December 31, 1997, on a pro forma basis, after giving effect to the Combination and the related financings and other transactions described herein, there would have been no Senior Debt outstanding. Upon the closing of the Offering, the Company entered into a $40.0 million revolving credit facility pursuant to which $4.9 million in letters of credit were issued as of the closing of the Offering. See "Capitalization" and "Risk Factors -- Subordination." Based on an interpretation by the staff of the SEC (as defined herein) set forth in no-action letters issued to third parties, the Company believes that New Notes issued pursuant to the Exchange Offer in exchange for Notes may be offered for resale, resold and otherwise transferred by any holder thereof (other than any such holder which is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided (cover page continued) 2 5 that such New Notes are acquired in the ordinary course of such holder's business and that such holder does not intend to participate in the distribution of such New Notes. Each broker-dealer that receives New Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with the initial resale of such New Notes. The Letter of Transmittal delivered with this Prospectus states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Notes received in exchange for Notes where such Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that for a period of 120 days after the consummation of the Exchange Offer, it will make this Prospectus available to any broker-dealer for use in connection with any such resale. Any Holder who tenders in the Exchange Offer with the intention to participate, or for purpose of participating, in a distribution of the New Notes cannot rely on the position of the staff of the SEC enunciated in Exxon Capital Holdings Corporation (available April 13, 1989), or Morgan Stanley & Co., Inc. (available June 5, 1991) or similar no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with the resale of the New Notes. Failure to comply with such requirements in such instance may result in such Holder incurring liability under the Securities Act for which the Holder is not indemnified by the Company. The Company does not intend to list the New Notes on any securities exchange, or to seek admission thereof to trading in the National Association of Securities Dealers Automated Quotation System. Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") and First Chicago Capital Market, Inc. ("First Chicago" and, together with DLJ, the "Initial Purchasers") have advised the Company that they intend to make a market in the New Notes; however, they are not obligated to do so and any market-making may be discontinued at any time. As a result, the Company cannot determine whether an active public market will develop for the New Notes. ANY NOTES NOT TENDERED AND ACCEPTED IN THE EXCHANGE OFFER WILL REMAIN OUTSTANDING. TO THE EXTENT ANY NOTES ARE TENDERED AND ACCEPTED IN THE EXCHANGE OFFER, A HOLDER'S ABILITY TO SELL UNTENDERED NOTES COULD BE ADVERSELY AFFECTED. FOLLOWING CONSUMMATION OF THE EXCHANGE OFFER, THE HOLDERS OF NOTES WILL CONTINUE TO BE SUBJECT TO THE EXISTING RESTRICTIONS UPON TRANSFER THEREOF AND THE COMPANY WILL HAVE FULFILLED ONE OF ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS AGREEMENT. HOLDERS OF NOTES WHO DO NOT TENDER THEIR NOTES GENERALLY WILL NOT HAVE ANY FURTHER REGISTRATION RIGHTS UNDER THE REGISTRATION RIGHTS AGREEMENT OR OTHERWISE. SEE "THE EXCHANGE OFFER -- CONSEQUENCES OF FAILURE TO EXCHANGE." The New Notes issued pursuant to this Exchange Offer generally will be issued in the form of Global New Notes (as defined herein), which will be deposited with, or on behalf of, The Depository Trust Company (the "Depository" or "DTC") and registered in its name or in the name of Cede & Co., its nominee. Beneficial interests in the Global New Notes representing the New Notes will be shown on, and transfers thereof will be effected through, records maintained by the Depository and its participants. Notwithstanding the foregoing, Notes held in certificated form will be exchanged solely for New Notes in certificated form. After the initial issuance of the Global New Notes, New Notes in certificated form will be issued in exchange for the Global New Notes only on the terms set forth in the Indenture. See "Description of New Notes -- Book-Entry, Delivery and Form." ------------------------ NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE NEW NOTES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY OF THE NEW NOTES TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF. UNTIL , 1998 (90 DAYS AFTER COMMENCEMENT OF THIS OFFERING), ALL DEALERS EFFECTING TRANSACTIONS IN THE NEW NOTES, WHETHER OR NOT PARTICIPATING IN THE EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS. 3 6 AVAILABLE INFORMATION The Company has filed with the Securities and Exchange Commission (the "SEC" or the "Commission") a Registration Statement on Form S-4 under the Securities Act for the registration of the New Notes offered hereby (the "Registration Statement"). This Prospectus, which constitutes a part of the Registration Statement, does not contain all of the information set forth in the Registration Statement, certain items of which are contained in exhibits and schedules to the Registration Statement as permitted by the rules and regulations of the SEC. For further information with respect to the Company or the New Notes offered hereby, reference is made to the Registration Statement, including the exhibits and financial statement schedules thereto, which may be inspected without charge at the public reference facility maintained by the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and copies of which may be obtained from the SEC at prescribed rates. Statements made in this Prospectus concerning the contents of any document referred to herein are not necessarily complete. With respect to each such document filed with the SEC as an exhibit to the Registration Statement, reference is made to the exhibit for a more complete description of the matter involved, and each such statement shall be deemed qualified in its entirety by such reference. Such documents and other information filed by the Company can be inspected and copied at the public reference facilities of the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at the web site maintained by the SEC (http://www.sec.gov) and at the regional offices of the SEC located at 7 World Trade Center, 13th Floor, New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials may be obtained from the Public Reference Section of the SEC, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at its public reference facilities in New York, New York and Chicago, Illinois at prescribed rates. The Company and the Subsidiary Guarantors are not currently subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As a result of the offering of the New Notes, each of the Company and the Subsidiary Guarantors will become subject to the informational requirements of the Exchange Act. The Company will fulfill its obligations with respect to such requirements by filing periodic reports with the Commission on its own behalf or, in the case of the Subsidiary Guarantors, by including information regarding the Subsidiary Guarantors in the Company's periodic reports. In addition, the Company will send to each holder of New Notes copies of annual reports and quarterly reports containing the information required to be filed under the Exchange Act. So long as the Company is subject to the periodic reporting requirements of the Exchange Act, it is required to furnish the information required to be filed with the SEC to the Trustees and the holders of the Notes and the New Notes. The Company has agreed that, even if it is not required under the Exchange Act to furnish such information to the SEC, it will nonetheless continue to furnish information that would be required to be furnished by the Company by Section 13 of the Exchange Act to the Trustees and the holders of the Notes or New Notes as if it were subject to such periodic reporting requirements. In addition, the Company and the Subsidiary Guarantors have agreed that, for so long as any of the Notes remain outstanding, they will make available to any prospective purchaser of the Notes or Holder of the Notes in connection with any sale thereof, the information required by Rule 144A(d)(4) under the Securities Act. THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM APCOA INC., 800 SUPERIOR AVENUE, CLEVELAND, OHIO 44114-2601, (216) 522-0700; ATTENTION: ROBERT N. SACKS. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY , 1998. 4 7 PROSPECTUS SUMMARY The following summary is qualified in its entirety by reference to and should be read in conjunction with the more detailed information and financial statements, including the notes thereto, appearing elsewhere in this Prospectus. Unless otherwise indicated, all references in this Prospectus to the Company's business and all pro forma data give effect to the Transactions described below. An index of certain defined terms used herein can be found on page 97. Unless the context indicates or otherwise requires, (i) references in this Prospectus to "APCOA" are to APCOA, Inc., and its subsidiaries; (ii) references in this Prospectus to "Standard" are to the combined operations of the group of affiliated entities controlled by the Standard Owners as defined in "The Transactions -- The Combination"; and (iii) references in this Prospectus to the "Company" are to APCOA and Standard, on a combined basis after giving effect to the Combination. THE COMPANY The Company is a leading national provider of parking facility management services. The Company provides on-site management services at multi-level and surface parking facilities in the two major markets of the parking industry: urban parking and airport parking. Following consummation of the Combination, the Company manages approximately 1,100 parking facilities, containing approximately 580,000 parking spaces in over 45 cities across the United States and Canada. The Company's pro forma gross customer collections, pro forma parking services revenue, pro forma EBITDA and pro forma net loss for the year ended December 31, 1997 were $948.6 million, $186.1 million, $19.9 million and $2.8 million, respectively. The Company believes that its superior management services coupled with its focus on increasing market share in select core cities leads to higher profitability per parking facility than its competitors. The Company believes that it enhances its leading position by providing: (i) Ambiance in Parking(R), an approach to parking that includes a number of premium, on-site, value-added services and amenities; (ii) state-of-the-art information technology, including Client View(C), a proprietary client reporting system which allows the Company to provide clients with real-time access to site-level financial and operating information; and (iii) award-winning training programs for on-site employees that promote customer service and client retention. In addition, the Company believes that it distinguishes itself from its competitors because of its ability to leverage its long-standing experience in securing contracts, particularly with regard to the airport parking market. The Company's diversified client base includes some of the nation's largest owners and developers of major office building complexes, shopping centers, sports complexes, hotels and hospitals. In addition, the Company manages parking operations at many of the major airports in North America. In the urban parking market, the Company's clients include CB Commercial Real Estate Group, Equity Office Properties, the Taubman Company, Harvard Medical School, Northwestern University, Children's Memorial Medical Center in Chicago and Cedars Sinai Medical Center in Los Angeles. Parking facilities managed by the Company include the CNN Center in Atlanta, the Kennedy Center for the Performing Arts in Washington, D.C. and the Gateway Sports Complex in Cleveland. In the airport parking market, the Company's clients include Chicago O'Hare International and Chicago Midway, Cleveland-Hopkins International, Minneapolis-St. Paul International and Detroit Metropolitan airports. The Company operates its clients' parking properties through two types of arrangements: management contracts and leases. The Company does not own any parking facilities and, as a result, the Company assumes fewer of the risks of real estate ownership. Under a management contract, the Company typically receives a base monthly fee for managing the property, and may also receive an incentive fee based on the achievement of facility revenues above a base amount. In some instances, the Company also receives certain fees for ancillary services. Typically, all of the underlying revenues and expenses under a management contract flow through to the property owner, not to the Company. Under lease arrangements, the Company generally pays either a fixed annual rental, a percentage of gross customer collections, or a combination thereof to the property owner. The Company collects all revenues under lease arrangements and is responsible for most operating expenses, but it is typically not responsible for major maintenance or capital expenditures. As of December 31, 1997, the Company operated approximately 72% of its approximately 1,100 parking facilities 5 8 under management contracts and approximately 28% under leases. Renewal rates for the Company's management contracts and leases were approximately 96% for each of the last three years. THE INDUSTRY The International Parking Institute, a trade organization of parking professionals, estimates that there are 35,000 parking facilities in the United States generating over $26.0 billion in gross customer collections. The parking industry is highly fragmented, with over 1,700 commercial parking operators in the United States, as estimated by the Parking Market Research Company, an independent research company. Industry participants, the vast majority of which are privately-held companies, consist of relatively few nationwide companies and a large number of small regional or local operators, including a substantial number of companies providing parking as an ancillary service in connection with property management or ownership. Clients of parking facility managers include the owners of office buildings, major airports, shopping centers, sports complexes, hotels and hospitals, which provide parking to customers. The parking industry is comprised of two major markets: urban parking and airport parking. The urban parking market consists of many sub-markets with differing clients including commercial, office, residential, event, entertainment, retail, shopping centers, hospitals and hotels. In contrast, the airport parking market consists of a relatively small number of clients with large revenue-generating parking operations and similar needs that are unique to airport parking facilities. THE COMBINATION AND EXPECTED BENEFITS Pursuant to the terms of the Combination Agreement, APCOA has combined its operations with the operations of Standard. After consummation of the Combination, the Company is one of the largest parking facility managers in the United States, operating approximately 1,100 parking locations, providing first-class, customer-oriented parking services, and using proprietary, award-winning management information systems and technology to improve services and reduce costs. Through the Combination, the Company believes that it will be able to achieve approximately $6.3 million of annualized cost savings within 12 to 18 months following the Combination as a result of the elimination of certain duplicative costs and achievement of operating efficiencies. Specific anticipated benefits include: - Reduced Personnel Expenses. Subsequent to the Combination, the Company intends to consolidate headquarters in Chicago and eliminate redundant corporate functions. In addition, the Company expects to reduce the number of field managers and administrative staff with overlapping functions in certain core cities. The Company also expects to realize additional net savings from the restructuring of certain executive compensation packages. - Operational Improvements and Elimination of Redundant Services Provided by Third Parties. The Company plans to rely on APCOA's state-of-the-art proprietary management information and reporting systems to perform many services which Standard previously outsourced to third parties, such as payroll and accounts receivable processing. The Company also expects to realize purchasing economies and eliminate redundant services from consolidating certain third-party service providers. In addition, since January 1, 1997, the Company completed four small acquisitions and entered into a binding letter of intent to acquire a fifth company (the "Other Acquisitions" as defined below under "Management's Discussion and Analysis of Financial Condition and Results of Operations of APCOA"). The Company expects to realize $1.9 million of cost savings related to the Other Acquisitions. Of the aggregate potential $8.2 million in annualized cost savings discussed above, approximately $4.9 million are reflected in the Pro Forma Condensed Consolidated Financial Statements included elsewhere herein. Actual cost savings achieved by the Company may vary considerably from the estimates discussed above. See "Summary Unaudited Pro Forma Consolidated Financial Data" and "Risk Factors--Ability to Integrate Acquisitions." 6 9 BUSINESS STRATEGY & COMPETITIVE ADVANTAGES The Company believes its innovative parking facility amenities, services and management, coupled with its state-of-the-art information technology and reporting systems, position the Company to enhance its standing as a leading provider of parking services. Specific elements of the Company's business strategy and competitive advantages include: - Focus on Core Cities. Part of the Company's business strategy is to focus on increasing system-wide profitability by maximizing operating leverage. As part of this strategy, the Company operates in certain core cities and realizes certain economies of scale, including the ability to spread administrative overhead costs across a large number of parking facilities in a single market. As a result, the Company has been able to significantly increase profitability per contract. For example, in 1997, management estimates that the Company's average profit per contract in cities in which it operated more than 35 parking locations was nearly double the Company's profit per contract in cities in which it operated fewer than 35 locations. - Strong Operating Performance and Stable Cash Flow. From 1993 to 1997, the Company's EBITDA increased from $7.2 million to $15.0 million, representing a compounded annual growth rate ("CAGR") of 20.0%. Over the same period, the Company's capital expenditures averaged less than $3.0 million per year. In addition, the Company reduced exposure to increasing cost of parking services by (i) increasing the proportion of its management contracts, which generally pass cost of parking services onto the Company's clients, and (ii) maintaining low minimum rental commitments under its non-cancelable leases. The Company's average management and lease contract renewal rate over the last three years was approximately 96%. As a result of the Company's operating performance, as well as the low capital expenditure requirements and low risk portfolio of management contracts and leases, the Company has been able to generate consistent cash flow. - Strategic Growth Through Acquisitions. The parking industry is highly fragmented, with over 1,700 industry participants. In addition to pursuing individual contracts, the Company is seeking to capitalize on this industry fragmentation by pursuing a focused acquisition strategy which includes: (i) acquiring parking management companies within core cities and target cities where the Company believes it can attain a significant market share, and (ii) acquiring larger, regional parking management companies. As a part of this strategy, APCOA and Standard, combined, have successfully acquired and integrated 6 companies with 138 new facilities and 252 net individual contracts over the past five years. - Leading Client Base. The Company's diversified, long-standing customer base comprises many of the premier national property management and ownership organizations in the United States and Canada. The Company is a market leader in airport parking, operating approximately 100 parking facilities at airports in the United States and Canada. Management believes that the Company's focus on select core cities enables the Company to maintain broader and stronger relationships with the local client base and improves its client retention rates and its ability to compete for new contracts. - Value-Added Services and Award-Winning Information Systems. The Company believes that it can continue to increase profitability and attract new clients by providing: (i) Ambiance in Parking(R); (ii) state-of-the-art information technology, including Client View(C); and (iii) award-winning training programs for on-site employees. Management believes that these capabilities facilitate development opportunities that typically lead to long-term lease and management contracts on new facilities. Also, the Company has developed state-of-the-art information technology systems which connect local offices across the country to its corporate office. These systems, which received the 1994 Esprit Award sponsored by Booz-Allen & Hamilton and CIO magazine, enable a centralized staff to eliminate inefficient duplication of administrative and accounting functions at the field level and also help provide key operational information to clients. Management believes that these systems will enable the Company to add many new clients and contracts without incurring additional administrative staff and expense. 7 10 - Experienced Management Team. Myron C. Warshauer, the Company's Chief Executive Officer and the third generation of his family to direct Standard, has over 35 years of industry experience. G. Walter Stuelpe, Jr., the Company's President, has been with APCOA for over 25 years, serving as Chief Executive Officer since 1986. Other members of the Company's executive team are the most experienced, talented executives from both companies. Overall, the members of the Company's executive team have an average of over 15 years of industry experience. THE TRANSACTIONS In connection with the Combination, the Company: (i) consummated the Offering; (ii) entered into the New Credit Facility; and (iii) received the Preferred Stock Contribution. The Combination, the issuance of the Notes, the New Credit Facility, the Preferred Stock Contribution, the application of proceeds therefrom and the payment of related fees and expenses are collectively referred to herein as the "Transactions." ------------------------ APCOA's principal executive offices are presently located at 800 Superior Avenue, Cleveland, Ohio 44114-2601, and its telephone number is (216) 522-0700. The Company expects to move its principal executive offices to Chicago, Illinois, at a location to be determined. 8 11 THE OFFERING The Notes.................. The Notes were sold by the Company on March 25, 1998 and were subsequently resold to qualified institutional buyers pursuant to Rule 144A under the Securities Act, to institutional investors that are accredited investors in a manner exempt from registration under the Securities Act and to persons in transactions outside the United States in reliance on Regulation S under the Securities Act (the "Offering"). Registration Rights Agreement.................. In connection with the Offering, the Company entered into the Registration Rights Agreement, which grants Holders of the Notes certain exchange and registration rights, which generally terminate upon the consummation of the Exchange Offer. THE EXCHANGE OFFER Securities Offered......... $140.0 million in aggregate principal amount of the Company's 9 1/4% New Senior Subordinated Notes due 2008. The Exchange Offer......... $1,000 principal amount of New Notes in exchange for each $1,000 principal amount of the Notes. As of the date hereof, $140.0 million aggregate principal amount of Notes are outstanding. The Company will issue the New Notes to Holders on or promptly after the Expiration Date. Expiration Date............ 12:00 midnight, New York City time on , 1998, unless the Exchange Offer is extended, in which case the term "Expiration Date" means the latest date and time to which the Exchange Offer is extended. Interest on the New Notes and the Notes.............. The New Notes will bear interest from March 25, 1998, the date of issuance of the Notes that are tendered in exchange for the New Notes (or the most recent Interest Payment Date (as defined below in the Summary of Terms of New Notes) to which interest on such Notes has been paid). Accordingly, Holders of Notes that are accepted for exchange will not receive interest on the Notes that is accrued but unpaid at the time of tender, but such interest will be payable on the first Interest Payment Date after the Expiration Date. Conditions to the Exchange Offer.................... The Exchange Offer is subject to certain customary conditions, which may be waived by the Company. See "The Exchange Offer -- Conditions." Procedures for Tendering Notes.................... Each Holder of Notes wishing to accept the Exchange Offer must complete, sign and date the relevant accompanying Letter of Transmittal, or a facsimile thereof, in accordance with the instructions contained herein and therein, and mail or otherwise deliver such Letter of Transmittal, or such facsimile, together with the Notes and any other required documentation to the relevant Exchange Agent at the address set forth in the Letter of Transmittal. The Letter of Transmittal should be used to tender Notes. By executing the Letter of Transmittal, each Holder will represent to the Company that, among other things, the Holder or the person receiving such New Notes, whether or not such person is the Holder, is acquiring the New Notes in the ordinary course of business 9 12 and that neither the Holder nor any such other person has any arrangement or understanding with any person to participate in the distribution of such New Notes. In lieu of physical delivery of the certificates representing Notes, tendering Holders may transfer Notes pursuant to the procedure for book-entry transfer as set forth under "The Exchange Offer -- Procedures for Tendering." Special Procedures for Beneficial Owners.......... Any beneficial owner whose Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such registered Holder promptly and instruct such registered Holder to tender on such beneficial owner's behalf. If such beneficial owner wishes to tender on such beneficial owner's own behalf, such beneficial owner must, prior to completing and executing the Letter of Transmittal and delivering its Notes, either make appropriate arrangements to register ownership of the Notes in such beneficial owner's name or obtain a properly completed bond power from the registered Holder. The transfer of registered ownership may take considerable time. Guaranteed Delivery Procedures............... Holders of Notes who wish to tender their Notes and whose Notes are not immediately available or who cannot deliver their Notes, the Letter of Transmittal or any other documents required by the Letter of Transmittal to the Exchange Agent (or comply with the procedures for book-entry transfer) prior to the Expiration Date must tender their Notes according to the guaranteed delivery procedures set forth in "The Exchange Offer -- Guaranteed Delivery Procedures." Withdrawal Rights.......... Tenders may be withdrawn at any time prior to 12:00 midnight, New York City time, on the Expiration Date pursuant to the procedures described under "The Exchange Offer -- Terms of the Exchange Offer." Acceptance of Notes and Delivery of New Notes.... The Company will accept for exchange any and all Notes that are properly tendered in the Exchange Offer prior to 12:00 midnight, New York City time, on the Expiration Date. The New Notes issued pursuant to the Exchange Offer will be delivered promptly following the Expiration Date. See "The Exchange Offer -- Terms of the Exchange Offer." Federal Income Tax Consequences............. The issuance of the New Notes to Holders of the Notes pursuant to the terms set forth in this Prospectus will not constitute an exchange for federal income tax purposes. Consequently, no gain or loss would be recognized by Holders of the Notes upon receipt of the New Notes. See "Certain Federal Income Tax Consequences of the Exchange Offer." Use of Proceeds............ There will be no proceeds to the Company from the exchange of Notes pursuant to the Exchange Offer. Effect on Holders of Notes...................... As a result of the making of this Exchange Offer, the Company will have fulfilled certain of its obligations under the Registration Rights Agreement, and Holders of Notes who do not tender their Notes will generally not have any further registration rights under the Registration Rights Agreement or otherwise. Such Holders will continue to hold the un- 10 13 tendered notes and will be entitled to all the rights and subject to all the limitations applicable thereto under the Indentures, except to the extent such rights or limitations, by their terms, terminate or cease to have further effectiveness as a result of the Exchange Offer. All untendered Notes will continue to be subject to certain restrictions on transfer. Accordingly, if any Notes are tendered and accepted in the Exchange Offer, the trading market for the untendered Notes could be adversely affected. Exchange Agent............. State Street Bank and Trust Company is serving as exchange agent in connection with the Exchange Offer. See "The Exchange Offer -- Exchange Agent." SUMMARY OF TERMS OF NEW NOTES The form and terms of the New Notes are the same as the form and terms of the Notes (which they will replace) except that (i) the New Notes have been registered under the Securities Act and, therefore, will not bear legends restricting the transfer thereof and (ii) the Holders of the New Notes generally will not be entitled to further registration rights under the Registration Rights Agreement, which rights generally will be satisfied when the Exchange Offer is consummated. The New Notes will evidence the same debt as the Notes and will be entitled to the benefits of the Indenture. See "Description of New Notes." Securities Offered......... $140.0 million in aggregate principal amount of 9 1/4% New Senior Subordinated Notes due 2008. Maturity Date.............. March 15, 2008. Interest Rate.............. The New Notes will bear interest at the rate of 9 1/4% per annum, payable semi-annually in cash on March 15 and September 15 of each year, commencing September 15, 1998. Optional Redemption........ The New Notes will be redeemable at the option of the Company, in whole or in part, at any time on or after March 15, 2003 in cash at the redemption prices set forth herein, plus accrued and unpaid interest and Liquidated Damages (as defined), if any, thereon to the date of redemption. In addition, at any time prior to March 15, 2001, the Company may redeem up to 35% of the initially outstanding aggregate principal amount of New Notes at a redemption price equal to 109.25% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the redemption date, with the net cash proceeds of a Public Equity Offering (as defined); provided that, in each case, at least 65% of the initially outstanding aggregate principal amount of Notes remains outstanding immediately after the occurrence of any such redemption. See "Description of Notes--Optional Redemption." Change of Control.......... Upon the occurrence of a Change of Control (as defined), each holder of New Notes will have the right to require the Company to repurchase all or any part of such holder's New Notes at an offer price in cash equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the date of repurchase. See "Description of Notes--Repurchase at the Option of Holders--Change of Control." There can be no assurance that, in the event of a Change of Control, the Company would have sufficient funds to purchase all New Notes tendered. See "Risk Factors--Payment Upon a Change of Control." 11 14 Note Guarantees............ The New Notes will be fully and unconditionally guaranteed on a joint and several basis by all of the Company's existing and future wholly owned domestic subsidiaries with material operations (the "Subsidiary Guarantors"). Ranking.................... The New Notes will be general unsecured obligations of the Company, will rank subordinate in right of payment to all Senior Debt of the Company and senior or pari passu in right of payment to all existing and future subordinated indebtedness of the Company. The New Note Guarantees will be general unsecured obligations of the Subsidiary Guarantors, will rank subordinate in right of payment to all Senior Debt of the Subsidiary Guarantors and senior or pari passu in right of payment to all existing and future subordinated indebtedness of the Subsidiary Guarantors. The New Notes and the New Note Guarantees will be effectively subordinated to all indebtedness, including trade payables, of the Company's subsidiaries that are not Subsidiary Guarantors. As of December 31, 1997, on a pro forma basis, after giving effect to the Combination and the related financings and other transactions described herein, there would have been no Senior Debt outstanding. Upon the closing of the Offering, the Company entered into a $40.0 million revolving credit facility pursuant to which $4.9 million in letters of credit were issued as of the closing of the Offering. See "Risk Factors--Subordination." Certain Covenants.......... The Indenture contains certain covenants that limit, among other things, the ability of the Company and its Restricted Subsidiaries to: (i) pay dividends, redeem capital stock or make certain other restricted payments or investments; (ii) incur additional indebtedness or issue preferred equity interests; (iii) merge, consolidate or sell all or substantially all of its assets; (iv) create liens on assets; and (v) enter into certain transactions with affiliates or related persons. See "Description of New Notes--Certain Covenants." Form and Denomination...... The certificates representing the New Notes will be issued in fully registered form, deposited with a custodian for and registered in the name of a nominee of the Depositary in the form of a Global New Note certificate. Beneficial interests in the certificates representing the Global New Note will be shown on, and transfers thereof will be effected through, records maintained by the Depositary and its Participants. See "Book Entry, Delivery and Form." Exchange Offer; Registration Rights........ If any Holder of an aggregate of at least $2.0 million in principal amount of Notes notifies the Company within 20 business days of the consummation of the Exchange Offer that (A) such Holder is prohibited by law or SEC policy from participating in the Exchange Offer, or (B) such Holder may not resell the New Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder, or (C) such Holder is a broker-dealer and holds Notes acquired directly from the Company or one of its respective affiliates, then the Company and the Subsidiary Guarantors will be required to provide a shelf registration statement (the "Shelf Registration Statement") to cover resales of the Notes by the 12 15 Holders thereof. Notwithstanding the foregoing, at any time after consummation of the Exchange Offer, the Company may allow the Shelf Registration Statement to cease to be effective and usable if (i) the Board of Directors of the Company determines in good faith that it is in the best interests of the Company not to disclose the existence of or facts surrounding any proposed or pending material corporate transaction involving the Company, and the Company notifies the Holders within a certain period of time after the Board of Directors makes such determination, or (ii) the prospectus contained in the Shelf Registration Statement contains an untrue statement of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company will pay certain liquidated damages to Holders of Notes and Holders of New Notes if the Company is not in compliance with its obligations under the Registration Rights Agreement. See "Exchange Offer; Registration Rights." FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PARTICIPANTS IN THE EXCHANGE OFFER, SEE "RISK FACTORS." 13 16 SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA (DOLLARS IN THOUSANDS) The following table sets forth summary unaudited pro forma consolidated balance sheet data of the Company at December 31, 1997 and summary unaudited pro forma consolidated income statement data of the Company for the year ended December 31, 1997. The pro forma consolidated balance sheet data at December 31, 1997 give effect to the Transactions and the Other Acquisitions as if they had occurred on December 31, 1997. The pro forma consolidated income statement data and other data for the year ended December 31, 1997 give effect to the Transactions and the Other Acquisitions as if they had occurred at the beginning of the period presented. The following information should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations of APCOA," "Management's Discussion and Analysis of Financial Condition and Results of Operations of Standard," the historical financial statements of APCOA, the unaudited pro forma financial statements of the Company, the historical financial statements of Standard and the related notes thereto included elsewhere herein.
YEAR ENDED DECEMBER 31, 1997 --------------------- INCOME STATEMENT DATA: Parking services revenue.................................. $186,078 Cost of parking services.................................. 146,165 General and administrative expenses....................... 20,045 Depreciation and amortization............................. 7,498 -------- Operating income.......................................... 12,370 Interest expense, net..................................... 14,696 Minority interest......................................... 321 Income tax expense........................................ 140 -------- Net income (loss)......................................... $ (2,787) ======== OTHER DATA: Gross customer collections................................ $948,612 Pro forma EBITDA(1)....................................... 19,868 Capital expenditures...................................... 3,249 Ratio of earnings to fixed charges(2)..................... N/A
AT DECEMBER 31, 1997 --------------------- BALANCE SHEET DATA: Cash and cash equivalents................................. $ 61,173 Working capital........................................... 37,531 Total assets.............................................. 216,594 Total debt................................................ 152,339 Redeemable preferred stock................................ 40,683 Common stock subject to put/call rights(3)................ 4,589 Stockholders' equity (deficit)............................ (28,828)
- ------------------------------ (1) Pro forma EBITDA represents pro forma operating income plus pro forma depreciation and amortization. EBITDA is presented because management believes it is a widely accepted financial indicator used by certain investors and analysts to analyze and compare companies on the basis of operating performance. The Company understands that EBITDA is not intended to represent cash flow for the period, nor has it been presented as an alternative to operating income as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles. (2) For purposes of computing this ratio, earnings consist of income before income taxes and minority interest plus fixed charges. Fixed charges consist of interest expense, amortization of deferred financing costs and one-third of the rent expense from operating leases, which management believes is a reasonable approximation of the interest factor of the rent. For the year ended December 31, 1997, on a pro forma basis, earnings were inadequate to cover fixed charges by $2.3 million. (3) In accordance with the Stockholders Agreement (as defined below under "Certain Relationships and Related Party Transactions -- Stockholders Agreement"), the Company will be obligated under certain circumstances to repurchase shares of common stock issued in connection with the Combination. The amount reflected herein has been calculated based on the formula in the Stockholders Agreement calculated on a pro forma basis giving effect to the consummation of the Combination as of December 31, 1997. The Company will not be obligated to repurchase such common stock prior to the third anniversary of the consummation of the Combination. 14 17 RISK FACTORS Holders of Notes should consider carefully the factors set forth below, as well as the other information set forth elsewhere in this Prospectus, before tendering Notes in the Exchange Offer. This Prospectus includes forward-looking statements, including statements concerning the Company's business strategy, operations, cost savings initiatives, economic performance, financial condition and liquidity and capital resources. Such statements are subject to various risks and uncertainties. The Company's actual results may differ materially from the results discussed in such forward-looking statements because of a number of factors, including those identified in this "Risk Factors" section and elsewhere in this Prospectus. See "Prospectus Summary," "Management's Discussion and Analysis of Financial Condition and Results of Operations of APCOA," "Management's Discussion and Analysis of Financial Condition and Results of Operations of Standard" and "Business." The forward-looking statements are made as of the date of this Prospectus, and the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements. SUBSTANTIAL LEVERAGE AND DEBT SERVICE REQUIREMENTS The Company is and will continue to be highly leveraged as a result of substantial indebtedness it has incurred in connection with the Transactions. After giving pro forma effect to the Transactions and the Other Acquisitions, the Company would have had total indebtedness of $152.3 million and a stockholders' deficit of $28.8 million as of December 31, 1997, and earnings would have been inadequate to cover fixed charges by $2.3 million for the year ended December 31, 1997. The Company may incur additional indebtedness in the future, subject to limitations imposed by the Indenture and the New Credit Facility. See "Capitalization," "Unaudited Pro Forma Combined Financial Statements," "The Transactions--The Combination" and "Description of Indebtedness." The Company's ability to make scheduled payments of principal of, or to pay interest on, or to refinance its indebtedness (including the New Notes) depends on its future performance, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors beyond its control. Based upon the current level of operations and anticipated growth, management of the Company believes that, together with available borrowings under the New Credit Facility, its cash flow and available cash will be adequate to meet the Company's anticipated future requirements for working capital, capital expenditures, scheduled payments of principal of and interest on its indebtedness, and interest on the New Notes. However, all or a portion of the principal payments at maturity on the New Notes may require refinancing. There can be no assurance that the Company's business will generate sufficient cash flow from operations or that future borrowings will be available in an amount sufficient to enable the Company to service its indebtedness, including the New Notes, or to make necessary capital expenditures, or that any refinancing would be available on commercially reasonable terms or at all. See "Management's Discussion and Analysis of Financial Condition and Results of Operations of APCOA--Liquidity and Capital Resources." The degree to which the Company is now leveraged and will continue to be leveraged following the Offering could have important consequences to holders of the New Notes, including, but not limited to, the following: (i) a substantial portion of the Company's cash flow from operations will be required to be dedicated to debt service and will not be available for other purposes; (ii) the Company's ability to obtain additional financing in the future could be limited and (iii) the Indenture and the New Credit Facility contain financial and restrictive covenants that limit the ability of the Company to, among other things, borrow additional funds, dispose of assets or pay cash dividends. Failure by the Company to comply with such covenants could result in an event of default, which, if not cured or waived, could have a material adverse effect on the Company. SUBORDINATION The New Notes will be subordinated in right of payment to all Senior Debt, including the principal of or premium, if any, and interest on and all other amounts due on or payable in connection with Senior Debt. At December 31, 1997, on a pro forma basis after giving effect to the Transactions, the Company would have had 15 18 no Senior Debt. However, the Company entered into a $40.0 million revolving credit facility pursuant to which $4.9 million in letters of credit were issued at Closing. The New Notes will rank subordinate in right of payment to borrowings under the revolving credit facility. By reason of such subordination, in the event of the insolvency, liquidation, reorganization, dissolution or other winding-up of the Company or upon a default in payment with respect to, or the acceleration of, any Senior Debt, the holders of such Senior Debt must be paid in full before the holders of the New Notes may be paid. If the Company incurs any additional pari passu debt, the holders of such debt would be entitled to share ratably with the holders of the New Notes in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding-up of the Company. This may have the effect of reducing the amount of proceeds paid to holders of the New Notes. In addition, no payments may be made with respect to the principal of, premium and Liquidated Damages, if any, or interest on the New Notes if a payment default exists with respect to Senior Debt and, under certain circumstances, no payments may be made with respect to the principal of, premium and Liquidated Damages, if any, or interest on the New Notes for a period of up to 179 days if a non-payment default exists with respect to Senior Debt. In addition, the Indenture and the New Credit Facility permit the Company and its subsidiaries to incur additional debt, including Senior Debt, if certain conditions are met. See "Description of Notes--Subordination." All extensions of credit under the New Credit Facility to the Company will be secured, subject to certain exceptions, by all existing and after-acquired personal property of the Company and its subsidiaries, including all outstanding capital stock of the Company's subsidiaries, and any intercompany debt obligations, and all existing and after-acquired real property fee and leasehold interests and management contracts, subject to prohibitions in certain of such arrangements relating to collateral assignments. In the event of a default on secured indebtedness (whether as a result of the failure to comply with a payment or other covenant, a cross-default, or otherwise), the lenders under the New Credit Facility (the "Lenders") will have a prior secured claim on such assets. If such Lenders should attempt to foreclose on their collateral, the Company's financial condition and the value of the New Notes could be materially adversely affected. See "Description of Indebtedness." The Company has subsidiaries that are not guaranteeing the New Notes. Accordingly, the New Notes will be effectively subordinated to all existing and future liabilities, including trade payables, of such non-guaranteeing subsidiaries. DEPENDENCE ON MANAGEMENT CONTRACTS AND LEASES The principal sources of the Company's revenues are management contracts and leases covering parking facilities. For the years ended December 31, 1996 and December 31, 1997, gross profits from management contracts accounted for 43.8% and 42.5%, respectively, of the Company's total gross profits, and for the years ended December 31, 1996 and December 31, 1997, gross profits from leased facilities accounted for 56.2% and 57.5%, respectively, of the Company's total gross profits. Under a management contract, the Company typically receives a base monthly fee for managing the property, and may also receive an incentive fee based on the achievement of facility revenues above a base amount. In some instances, the Company also receives certain fees for ancillary services. Typically, all of the underlying revenues and expenses under a management contract flow through to the property owner, not to the Company. Leases generally are for three to ten year terms. Certain of Standard's management contracts and leases contain provisions allowing the property owner to terminate such management contract or lease in the event of a transaction such as the Combination. There can be no assurance that property owners will not terminate such management contracts or leases upon consummation of the Combination, nor that any such terminations would not have a material adverse effect on the Company and its business, operations or financial condition. There also can be no assurance that the Company will be able to maintain or renew its management contracts and leases on favorable terms. In addition, because certain management contracts and leases are with state, local and quasi-governmental entities, changes to certain governmental entities' approaches to contracting regarding parking facilities could affect such contracts. The loss, or renewal on less favorable terms, of a substantial number of management contracts or leases could have a material adverse effect on the Company. In addition, a material reduction in the profit margins associated with ancillary services provided by the Company under its management contracts and leases, including increases in costs or claims associated with, or reductions in the number of clients 16 19 purchasing, insurance provided by the Company, could have a material adverse effect on the Company. See "Management's Discussion and Analysis of Financial Condition and Results of Operations of APCOA," "Management's Discussion and Analysis of Financial Condition and Results of Operations of Standard" and "Business--Insurance." DEPENDENCE ON PROPERTY PERFORMANCE The Company's leases generally require the Company to make a fixed monthly lease payment regardless of the parking fees collected. Some management contracts provide for payment to the Company based on a percentage of revenues generated by the parking facility. Accordingly, the Company's revenues and net income are dependent on the performance of the parking facilities it leases and manages. Such performance depends, in part, on the ability to negotiate favorable contract terms, the ability to control operating expenses, financial conditions prevailing generally and in areas where parking facilities are located, the nature and extent of competitive parking facilities in the area, weather conditions at certain properties (particularly with respect to airports), government-mandated security measures at airport parking facilities and the real estate market generally. See "Management's Discussion and Analysis of Financial Condition and Results of Operations of APCOA" and "Management's Discussion and Analysis of Financial Condition and Results of Operations of Standard." EXPANSION OF BUSINESS; ABILITY TO INTEGRATE ACQUISITIONS Following the Combination, the Company will have to integrate Standard's and APCOA's businesses. While the Company believes that such integration provides significant opportunities to reduce costs, there can be no assurance that the Company will be able to meet performance expectations or successfully integrate these businesses on a timely basis without disruption in the quality and reliability of service to its customers or clients or diversion of management resources. In addition, while each of APCOA and Standard has made acquisitions successfully before, the Combination is substantially larger than any of such prior acquisitions. Further, the Company intends to expand its business by adding leases and management contracts and by acquiring additional parking management companies. The Company's growth will be directly affected by results of operations of added parking facilities, which will depend, in turn, upon the Company's ability to obtain suitable financing, contract terms, government licenses and approvals, and the competitive environment for acquisitions. In that regard, the nature of licenses and approvals, and the timing and likelihood of obtaining them, vary widely from state to state and from country to country. Some of the acquired operations may be located in geographic markets in which the Company has little or no presence. Successful integration and management of additional facilities will depend on a number of factors, many of which are beyond the Company's control. There can be no assurance that suitable acquisition candidates will be identified, that such acquisitions can be consummated, or that the acquired operations can be integrated successfully. See "Management's Discussion and Analysis of Financial Condition and Results of Operations of APCOA--Liquidity and Capital Resources," "Management's Discussion and Analysis of Financial Condition and Results of Operations of Standard--Liquidity and Capital Resources," "Business--Business Strategy and Competitive Advantages" and "--Regulation." ENVIRONMENTAL AND OTHER REGULATIONS Under various federal, state, and local environmental laws, ordinances, and regulations, a current or previous owner or operator of real property may be liable for the costs of removal or remediation of hazardous or toxic substances on, under, or in such property. Such laws typically impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. In connection with the operation of parking facilities, the Company may be potentially liable for such costs. Although the Company is currently not aware of any material environmental claims pending or threatened against it or any of its operated parking facilities, no assurances can be given that a material environmental claim will not be asserted against the Company or against the parking facilities it operates. The cost of defending against claims of liability, or of remediating a contaminated property, could have a material adverse effect on the results of operations or financial condition of the Company. 17 20 Various other governmental regulations affect the Company's operation of parking facilities, both directly and indirectly, including air quality laws, licensing laws and the Americans with Disabilities Act of 1990 (the "ADA"). Under the ADA, all public accommodations, including parking facilities, are required to meet certain federal requirements related to access and use by disabled persons. Although management believes that the parking facilities it operates are in substantial compliance with these requirements, a determination that the Company or the facility owner is not in compliance with the ADA could result in the imposition of fines or damage awards against the Company. See "Business--Regulation." COMPETITION The parking industry is highly competitive with limited barriers to entry. The Company's competitors range from small single-lot operators to large regional and national multi-facility operators, and include municipal and other governmental entities. Some of the Company's present and potential competitors have or may obtain greater financial and marketing resources than those of the Company. Furthermore, the Company competes for qualified management personnel with other parking facility operators, with property management companies, and with property owners. The Company competes for acquisitions with other parking facility operators. There can be no assurance that the Company will not encounter increased competition for acquisitions in the future and that such competition will not have an adverse effect on the Company's ability to complete acquisitions or on prices paid for acquisitions. See "Business--Competition." DEPENDENCE ON KEY PERSONNEL The Company's success is, and will continue to be, substantially dependent upon the continued services of the Company's management team. The loss of the services of one or more members of senior management could have a material adverse effect on the Company's financial condition and results of operations. Although the Company has entered into employment agreements with, and historically has been successful in retaining the services of, its senior management, there can be no assurance that the Company will be able to retain such personnel in the future. In addition, the Company's continued growth depends on the ability to attract and retain skilled operating managers and employees and the ability of its key personnel to manage the Company's growth and consolidate and integrate its operations. See "Management." CONTROL BY PRINCIPAL STOCKHOLDER Following the consummation of the Transactions, Holberg Industries, Inc. ("Holberg") indirectly owns a majority of the issued and outstanding capital stock of the Company. See "Security Ownership of Certain Beneficial Holders and Management." Holberg has sufficient rights and/or voting power to elect the majority of the Board of Directors of the Company, and thereby exercise control over the business, policies and affairs of the Company, and, in general, determine the outcome of any corporate transaction or other matters submitted to stockholders for approval, such as any amendment to the certificate of incorporation of the Company (the "Certificate of Incorporation"), the authorization of additional shares of capital stock, and any merger, consolidation or sale of all or substantially all of the assets of the Company, all of which could adversely affect the Company and holders of the New Notes. See "Security Ownership of Certain Beneficial Holders and Management." PAYMENT UPON A CHANGE OF CONTROL Upon the occurrence of a Change of Control, each holder of New Notes may require the Company to repurchase all or a portion of such holder's Notes at 101% of the principal amount of the New Notes, together with accrued and unpaid interest, if any, and Liquidated Damages, if any, to the date of repurchase. The Indenture requires that prior to such a repurchase, the Company must either repay all outstanding indebtedness under the New Credit Facility or obtain any required consent to such repurchase. If a Change of Control were to occur, the Company may not have the financial resources to repay all of its obligations under 18 21 the New Credit Facility, the New Notes and the other indebtedness that would become payable upon such event. See "Description of New Notes--Repurchase at the Option of Holders--Change of Control." FRAUDULENT CONVEYANCE RISKS Management of the Company believes that the indebtedness represented by the New Notes is being incurred for proper purposes and in good faith, and that, based on present forecasts, asset valuations and other financial information, after the consummation of the Transactions, the Company will be solvent, will have sufficient capital for carrying on its business and will be able to pay its debts as they mature. See "--Substantial Leverage and Debt Service Requirements." Notwithstanding management's belief, however, if a court of competent jurisdiction in a suit by an unpaid creditor or a representative of creditors (such as a trustee in bankruptcy or a debtor-in-possession) were to find that, at the time of the incurrence of such indebtedness, the Company was insolvent, was rendered insolvent by reason of such incurrence, was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital, intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they matured, or intended to hinder, delay or defraud its creditors, and that the indebtedness was incurred for less than reasonably equivalent value, then such court could, among other things, (i) void all or a portion of the Company's obligations to the holders of the New Notes, the effect of which would be that the holders of the New Notes may not be repaid in full and/or (ii) subordinate the Company's obligations to the holders of the New Notes to other existing and future indebtedness of the Company to a greater extent than would otherwise be the case, the effect of which would be to entitle such other creditors to be paid in full before any payment could be made on the New Notes. The Company's obligations under the New Notes will be fully and unconditionally guaranteed, jointly and severally, on a senior subordinated basis, by each of the Subsidiary Guarantors. Management of the Company believes that indebtedness represented by the New Note Guarantees is being incurred by the Subsidiary Guarantors for proper purposes and in good faith, and that, based on present forecasts, asset valuations and other financial information, after consummation of the Transactions, each of the Subsidiary Guarantors will be solvent, will have sufficient capital for carrying on its business, and will be able to pay its debts as they mature. See "--Substantial Leverage and Debt Service Requirements." Notwithstanding management's belief, however, if a court of competent jurisdiction in a suit by an unpaid creditor or a representative of creditors (such as a trustee in bankruptcy or a debtor-in-possession) were to find that, at the time of the incurrence of such indebtedness, the Subsidiary Guarantors were insolvent, were rendered insolvent by reason of such incurrence, were engaged in a business or transaction for which their remaining assets constituted unreasonably small capital, intended to incur, or believed that they would incur, debts beyond their ability to pay such debts as they matured, or intended to hinder, delay or defraud their creditors, and that the indebtedness was incurred for less than reasonably equivalent value, then such court could, among other things, (i) void all or a portion of such Subsidiary Guarantors' obligations to the holders of the New Notes, the effect of which would be that the holders of the New Notes may not be repaid in full or at all and/or (ii) subordinate such Subsidiary Guarantors' obligations to the holders of the New Notes to other existing and future indebtedness of such Subsidiary Guarantors, the effect of which would be to entitle such other creditors to be paid in full before any payment could be made on the New Notes. Among other things, a legal challenge to a New Note Guarantee on fraudulent conveyance grounds may focus on the benefits, if any, realized by the Subsidiary Guarantors as a result of the issuance by the Company of the New Notes. ABSENCE OF PUBLIC MARKET FOR THE NEW NOTES; RESTRICTIONS ON TRANSFERS The Notes are currently owned by a relatively small number of beneficial owners. The Notes have not been registered under the Exchange Act and will be subject to restrictions on transferability to the extent that they are not exchanged for the New Notes. The New Notes will constitute a new issue of securities with no established trading market. Although the New Notes will generally be permitted to be resold or otherwise transferred by Holders who are not affiliates of the Company without compliance with the registration requirements under the Securities Act, the Company does not intend to list the New Notes on any securities exchange or to seek admission thereof to trading in the National Association of Securities Dealers Automated 19 22 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. 20 23 THE EXCHANGE OFFER The following discussion sets forth or summarizes what the Company believes are the material terms of the Exchange Offer, including those set forth in the Letter of Transmittal distributed with this Prospectus. This summary is qualified in its entirety by reference to the full text of the documents underlying the Exchange Offer, copies of which are filed as exhibits to the Registration Statement of which this Prospectus is a part, and are incorporated by reference herein. PURPOSE AND EFFECT OF THE EXCHANGE OFFER The Notes were sold by the Company on March 25, 1998, and were subsequently resold to qualified institutional buyers pursuant to Rule 144A under the Securities Act, to institutional investors that are accredited investors in a manner exempt from registration under the Securities Act and to certain persons in transactions outside the United States in reliance on Regulation S under the Securities Act. In connection with the Offering, the Company entered into the Registration Rights Agreement, which requires, among other things, that promptly following the completion of the Offering, the Company and the Subsidiary Guarantors (i) file with the SEC a registration statement under the Securities Act with respect to an issue of new Notes of the Company identical in all material respects to the Notes, (ii) use their best efforts to cause such registration statement to become effective under the Securities Act and (iii) upon the effectiveness of that registration statement, offer to the Holders of the Notes the opportunity to exchange their Notes for a like principal amount of New Notes, which would be issued without a restrictive legend and may be reoffered and resold by the holder without restrictions or limitations under the Securities Act (other than any such holder that is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act). A copy of the Registration Rights Agreement has been filed as an exhibit to the Registration Statement of which this Prospectus is a part. The term "Holder" with respect to the Exchange Offer means any person in whose name the Notes are registered on the books of the Company or any other person who has obtained a properly completed bond power from the registered holder. Because the Exchange Offer is for any and all Notes, the number of Notes tendered and exchanged in the Exchange Offer will reduce the principal amount of Notes outstanding. Following the consummation of the Exchange Offer, Holders of the Notes who did not tender their Notes generally will not have any further registration rights under the Registration Rights Agreement, and such Notes will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market for such Notes could be adversely affected. The Notes are currently eligible for sale pursuant to Rule 144A through the PORTAL System of the National Association of Securities Dealers, Inc. Because the Company anticipates that most holders of Notes will elect to exchange such Notes for New Notes due to the absence of restrictions on the resale of New Notes under the Securities Act, the Company anticipates that the liquidity of the market for any Notes remaining after the consummation of the Exchange Offer may be substantially limited. TERMS OF THE EXCHANGE OFFER Upon the terms and subject to the conditions set forth in this Prospectus and in the Letter of Transmittal, the Company will accept any and all Notes validly tendered and not withdrawn prior to 12:00 midnight, New York City time, on the Expiration Date. The Company will issue $1,000 principal amount of New Notes in exchange for each $1,000 principal amount of outstanding Notes accepted in the Exchange Offer. Holders may tender some or all of their Notes pursuant to the Exchange Offer. However, Notes may be tendered only in integral multiples of $1,000. The form and terms of the New Notes are the same as the form and terms of the Notes except that (i) the New Notes have been registered under the Securities Act and hence will not bear legends restricting the transfer thereof and (ii) the holders of the New Notes generally will not be entitled to certain rights under the Registration Rights Agreement, which rights generally will terminate upon consummation of the Exchange Offer. The New Notes will evidence the same debt as the Notes and will be entitled to the benefits of the Indentures. Holders of Notes do not have any appraisal or dissenters' rights under the General Corporation Law of Delaware or the Indenture in connection with the Exchange Offer. The Company intends to conduct the 21 24 Exchange Offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the SEC thereunder, including Rule 14e-1 thereunder. The Company shall be deemed to have accepted validly tendered Notes when, as and if the Company has given oral or written notice thereof to the Exchange Agents. The Exchange Agent will act as agent for the tendering Holders for the purpose of receiving the New Notes from the Company. If any tendered Notes are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth herein or otherwise, the certificates for any such unaccepted Notes will be returned, without expense, to the tendering Holder thereof as promptly as practicable after the Expiration Date. Holders who tender Notes in the Exchange Offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the Letter of Transmittal, transfer taxes with respect to the exchange of Notes pursuant to the Exchange Offer. The Company will pay all charges and expenses, other than transfer taxes in certain circumstances, in connection with the Exchange Offer. See "-- Fees and Expenses." EXPIRATION DATE; EXTENSIONS; AMENDMENTS The term "Expiration Date" shall mean 12:00 midnight, New York City time, on , 1998, unless the Company, in its sole discretion, extends the Exchange Offer, in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended. To extend the Exchange Offer, the Company will notify the Exchange Agent of any extension by oral or written notice, followed by a public announcement thereof no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. The Company reserves the right, in its reasonable judgment, (i) to delay accepting any Notes, to extend the Exchange Offer or to terminate the Exchange Offer if any of the conditions set forth below under "-- Conditions" shall not have been satisfied, by giving oral or written notice of such delay, extension or termination to the Exchange Agent or (ii) to amend the terms of the Exchange Offer in any manner. Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by a public announcement thereof. If the Exchange Offer is amended in a manner determined by the Company to constitute a material change, the Company will promptly disclose such amendment by means of a prospectus supplement that will be distributed to the registered Holders, and, depending upon the significance of the amendment and the manner of disclosure to the registered Holders, the Company will extend the Exchange Offer for five to ten business days if the Exchange Offer would otherwise expire during such five to ten business-day period. If the Company does not consummate the Exchange Offer, or, in lieu thereof, the Company does not file and cause to become effective a resale shelf registration for the New Notes within the time periods set forth herein, liquidated damages will accrue and be payable on the New Notes either temporarily or permanently. See "Description of New Notes -- Registration Rights; Liquidated Damages." INTEREST ON NEW NOTES The New Notes will bear interest from March 25, 1998, the date of issuance of the Notes that are tendered in exchange for the New Notes (or the most recent Interest Payment Date to which interest on such Notes has been paid). Accordingly, Holders of Notes that are accepted for exchange will not receive interest that is accrued but unpaid on the Notes at the time of tender, but such interest will be payable on the first Interest Payment Date after the Expiration Date. Interest on the New Notes will be payable semiannually on each March 15 and September 15, commencing on September 15, 1998. PROCEDURES FOR TENDERING Only a Holder of Notes may tender such Notes in the Exchange Offer. To tender in the Exchange Offer, a Holder must complete, sign and date the relevant Letter of Transmittal, or a facsimile thereof, have the signatures thereon guaranteed if required by the Letter of Transmittal and mail or otherwise deliver such Letter of Transmittal or such facsimile, together with the Notes and any other required documents, to the Exchange Agent so as to be received by the Exchange Agent at the address set forth below prior to 12:00 midnight, New York City time, on the Expiration Date. The Letter of Transmittal must be used to tender Notes. Delivery of the Notes may be made by book-entry transfer in accordance with the procedures described 22 25 below. Confirmation of such book-entry transfer must be received by the Exchange Agent prior to the Expiration Date. By executing the Letter of Transmittal, each Holder will make to the Company the representation set forth below in the second paragraph under the heading "-- Resale of New Notes." The tender by a Holder and the acceptance thereof by the Company will constitute an agreement between such Holder and the Company in accordance with the terms and subject to the conditions set forth herein and in the Letter of Transmittal. THE METHOD OF DELIVERY OF NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS. Any beneficial owner whose Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered Holder promptly and instruct such registered Holder to tender on such beneficial owner's behalf. Signatures on the Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an Eligible Institution (as defined below) unless the Notes tendered pursuant thereto are tendered (i) by a registered Holder who has not completed the box entitled "Special Registration Instructions" or "Special Delivery Instructions" on the Letter of Transmittal or (ii) for the account of an Eligible Institution. In the event that signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantee must be by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution"). If the Letter of Transmittal is signed by a person other than the registered Holder of any Notes listed therein, such Notes must be endorsed or accompanied by a properly completed bond power, signed by such registered Holder as such registered Holder's name appears on such Notes with the signature thereon guaranteed by an Eligible Institution. If the Letter of Transmittal or any Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by the Company, evidence satisfactory to the Company of their authority to so act must be submitted with the Letter of Transmittal. The Company understands that each Exchange Agent will make a request promptly after the date of this Prospectus to establish accounts with respect to the Notes at the Depository for the purpose of facilitating the Exchange Offer, and subject to the establishment thereof, any financial institution that is a participant in the Depository's system may make book-entry delivery of the Notes by causing the Depository to transfer such Notes into the Exchange Agent's account with respect to the Notes in accordance with the Depository's procedures for such transfer. Although delivery of the Notes may be effected through book-entry transfer into the Exchange Agent's account at the Depository, an appropriate Letter of Transmittal properly completed and duly executed with any required signature guarantee and all other required documents must in each case be transmitted to and received or confirmed by the Exchange Agent at its address set forth below on or prior to the Expiration Date, or, if the guaranteed delivery procedures described below are complied with, within the time period provided under such procedures. Delivery of documents to the Depository does not constitute delivery to the Exchange Agent. All questions as to the validity, form, eligibility (including time of receipt), acceptance of tendered Notes and withdrawal of tendered Notes will be determined by the Company in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Notes 23 26 not properly tendered or any Notes the Company's acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right to waive any defects, irregularities or conditions of tender as to particular Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in the Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Notes must be cured within such time as the Company shall determine. Although the Company intends to notify Holders of defects or irregularities with respect to tenders of Notes, none of the Company, the Exchange Agent or any other person shall incur any liability for failure to give such notification. Tenders of Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering Holders, unless otherwise provided in the Letter of Transmittal, as soon as practicable following the Expiration Date. GUARANTEED DELIVERY PROCEDURES Holders who wish to tender their Notes and (i) whose New Notes are not immediately available, (ii) who cannot deliver their Notes, the Letter of Transmittal or any other required documents to the relevant Exchange Agent or (iii) who cannot complete the procedures for book-entry transfer, prior to the Expiration Date, may effect a tender if: (a) the tender is made through an Eligible Institution; (b) prior to the Expiration Date, the relevant Exchange Agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the Holder, the certificate number(s) of such Notes and the principal amount of Notes tendered, stating that the tender is being made thereby and guaranteeing that, within three New York Stock Exchange trading days after the Expiration Date, the Letter of Transmittal (or facsimile thereof), together with the certificates(s) representing the Notes (or a confirmation of book-entry transfer of such Notes into the Exchange Agent's account at the Depository) and any other documents required by the Letter of Transmittal, will be deposited by the Eligible Institution with the Exchange Agent; and (c) such properly completed and executed Letter of Transmittal (or facsimile thereof), as well as the certificate(s) representing all tendered Notes in proper form for transfer (or a confirmation of book-entry transfer of such Notes into the Exchange Agent's account at the Depository) and all other documents required by the Letter of Transmittal, are received by the Exchange Agent within three New York Stock Exchange trading days after the Expiration Date. Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be sent to Holders who wish to tender their Notes according to the guaranteed delivery procedures set forth above. WITHDRAWALS OF TENDERS Except as otherwise provided herein, tenders of Notes may be withdrawn at any time prior to 12:00 midnight New York City time, on the Expiration Date. To withdraw a tender of Notes in the Exchange Offer, a written or facsimile transmission notice of withdrawal must be received by the Exchange Agent at its address set forth herein prior to 12:00 midnight New York City time, on the Expiration Date. Any such notice of withdrawal must (i) specify the name of the person having deposited the Notes to be withdrawn (the "Depositor"), (ii) identify the Notes to be withdrawn (including the certificate number(s) and principal amount of such Notes, or, in the case of Notes transferred by book-entry transfer, the name and number of the account at the Depository to be credited), (iii) be signed by the Holder in the same manner as the original signature on the Letter of Transmittal by which such Notes were tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the Trustee with respect to the Notes register the transfer of such Notes into the name of the person withdrawing the tender, and (iv) specify the name in which any such Notes are to be registered, if different from that of the Depositor. All questions as to the validity, form and eligibility (including time or receipt) of such notices will be determined by the Company, whose determination shall be final and binding on all parties. Any Notes so withdrawn will be deemed not to have been validly tendered for purposes of the 24 27 Exchange Offer and no New Notes will be issued with respect thereto unless the Notes so withdrawn are validly retendered. Any Notes which have been tendered but which are not accepted for exchange will be returned to the Holder thereof without cost to such Holder as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Notes may be retendered by following one of the procedures described above under "-- Procedures for Tendering" at any time prior to the Expiration Date. CONDITIONS Notwithstanding any other term of the Exchange Offer, the Company shall not be required to accept for exchange, or to exchange New Notes for, any Notes, and may terminate or amend the Exchange Offer as provided herein before the acceptance of such Notes, if any law, statute, rule, regulation or interpretation by the staff of the SEC is proposed, adopted or enacted, which, in the reasonable judgment of the Company, might materially impair the ability of the Company to proceed with the Exchange Offer or materially impair the contemplated benefits of the Exchange Offer to the Company. If the Company determines in its reasonable judgment that any of the conditions are not satisfied, the Company may (i) refuse to accept any Notes and return all tendered Notes to the tendering Holders, (ii) extend the Exchange Offer and retain all Notes tendered prior to the expiration of the Exchange Offer, subject, however, to the rights of Holders to withdraw such Notes (see "Withdrawals of Tenders") or (iii) waive such unsatisfied conditions with respect to the Exchange Offer and accept all properly tendered Notes which have not been withdrawn. If such waiver constitutes a material change to the Exchange Offer, the Company will promptly disclose such waiver by means of a prospectus supplement that will be distributed to the registered Holders, and, depending upon the significance of the waiver and the manner of disclosure to the registered Holders, the Company will extend the Exchange Offer for a period of five to ten business days if the Exchange Offer would otherwise expire during such five to ten business-day period. EXCHANGE AGENT State Street Bank & Trust Company will act as Exchange Agent for the Exchange Offer with respect to the Notes (the "Exchange Agent"). Questions and requests for assistance, requests for additional copies of this Prospectus or of the Letter of Transmittal for the Notes and requests for copies of Notice of Guaranteed Delivery should be directed to the Exchange Agent, addressed as follows: 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
FEES AND EXPENSES The expenses of soliciting tenders will be borne by the Company. The principal solicitation is being made by mail; however, additional solicitation may be made by telegraph, telephone, facsimile or in person by officers and regular employees of the Company and its affiliates. The Company has not retained any dealer-manager in connection with the Exchange Offer and will not make any payments to brokers or other persons soliciting acceptances of the Exchange Offer. The Company, however, will pay the Exchange Agent reasonable and customary fees for their services and will reimburse them for their reasonable out-of-pocket expenses in connection therewith and pay other registration expenses, including fees and expenses of the Trustees, filing fees, blue sky fees and printing and distribution expenses. The Company will pay all transfer taxes, if any, applicable to the exchange of the Notes pursuant to the Exchange Offer. If, however, certificates representing the New Notes or the Notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered Holder of the Notes tendered, or if tendered Notes are registered in the name of any person 25 28 other than the person signing the Letter of Transmittal, or if a transfer tax is imposed for any reason other than the exchange of the Notes pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered Holder or any other person) will be payable by the tendering Holder. ACCOUNTING TREATMENT The New Notes will be recorded at the same carrying value as the Notes, which is the aggregate principal amount in the case of the Notes, as reflected in the Company's accounting records on the date of exchange. Accordingly, no gain or loss for accounting purposes will be recognized in connection with the Exchange Offer. The expenses of the Exchange Offer will be amortized over the term of the New Notes. RESALE OF NEW NOTES Based on an interpretation by the staff of the SEC set forth in no-action letters issued to third parties, the Company believes that New Notes issued pursuant to the Exchange Offer in exchange for Notes may be offered for resale, resold and otherwise transferred by any Holder of such New Notes (other than any such Holder which is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Notes are acquired in the ordinary course of such Holder's business and such Holder does not intend to participate, and has no arrangement or understanding with any person to participate, in the distribution of such New Notes. Any Holder who tenders in the Exchange Offer with the intention to participate, or for the purpose of participating, in a distribution of the New Notes may not rely on the position of the staff of the SEC enunciated in Exxon Capital Holdings Corporation (available April 13, 1989) and Morgan Stanley & Co., Incorporated (available June 5, 1991), or similar no-action letters, but rather must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. In addition, any such resale transaction should be covered by an effective registration statement containing the selling security holder's information required by Item 507 or 508 of Regulation S-K of the Securities Act, as applicable. Each broker-dealer that receives New Notes for its own account in exchange for Notes, where such Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, may be a statutory underwriter and must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. By tendering in the Exchange Offer, each Holder will represent to the Company that, among other things, (i) the New Notes acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such New Notes, whether or not such person is a Holder, (ii) neither the Holder nor any such other person has an arrangement or understanding with any person to participate in the distribution of such New Notes and (iii) the Holder and such other person acknowledge that if they participate in the Exchange Offer for the purpose of distributing the New Notes (a) they must, in the absence of an exemption therefrom, comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the New Notes and cannot rely on the no-action letters referenced above and (b) failure to comply with such requirements in such instance could result in such Holder incurring liability under the Securities Act for which such Holder is not indemnified by the Company. Further, by tendering in the Exchange Offer, each Holder that may be deemed an "affiliate" (as defined under Rule 405 of the Securities Act) of the Company will represent to the Company that such Holder understands and acknowledges that the New Notes may not be offered for resale, resold or otherwise transferred by that Holder without registration under the Securities Act or an exemption therefrom. As set forth above, affiliates of the Company are not entitled to rely on the foregoing interpretations of the staff of the SEC with respect to resales of the New Notes without compliance with the registration and prospectus delivery requirements of the Securities Act. In connection with the Offering, the Company entered into the Registration Rights Agreement pursuant to which the Company agreed to file and maintain, subject to certain limitations, a registration statement that would allow DLJ and First Chicago to engage in market-making transactions with respect to the Notes or the New Notes. The Company has agreed to bear all registration expenses incurred under such agreement, including printing and distribution expenses, reasonable fees of counsel, blue sky fees and expenses, reasonable fees of independent accountants in connection with the preparation of comfort letters, and SEC and the National Association of Securities Dealers, Inc. filing fees and expenses. 26 29 CONSEQUENCES OF FAILURE TO EXCHANGE As a result of the making of this Exchange Offer, the Company will have fulfilled one of its obligations under the Registration Rights Agreement, and Holders of Notes who do not tender their Notes generally will not have any further registration rights under the Registration Rights Agreement or otherwise. Accordingly, any Holder of Notes that does not exchange that Holder's Notes for New Notes will continue to hold the untendered Notes and will be entitled to all the rights and limitations applicable thereto under the Indentures, except to the extent that such rights or limitations, by their terms, terminate or cease to have further effectiveness as a result of the Exchange Offer. The Notes that are not exchanged for New Notes pursuant to the Exchange Offer will remain restricted securities. Accordingly, such Notes may be resold only (i) to the Company (upon redemption thereof or otherwise), (ii) pursuant to an effective registration statement under the Securities Act, (iii) so long as the Notes are eligible for resale pursuant to Rule 144A, to a qualified institutional buyer within the meaning of Rule 144A under the Securities Act in a transaction meeting the requirements of Rule 144A, (iv) outside the United States to a foreign person pursuant to the exemption from the registration requirements of the Securities Act provided by Regulation S thereunder, (v) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if available), or (vi) to an institutional accredited investor in a transaction exempt from the registration requirements of the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. See "Risk Factors--Absence of Public Market for the New Notes; Restrictions on Transfer." OTHER Participation in the Exchange Offer is voluntary and holders should carefully consider whether to accept. Holders of the Notes are urged to consult their financial and tax advisors in making their own decision on what action to take. The Company may in the future seek to acquire untendered Notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. The Company has no present plans to acquire any Notes that are not tendered in the Exchange Offer or to file a registration statement to permit resales of any untendered Notes. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OFFER The following discussion is based upon current provisions of the Internal Revenue Code of 1986, as amended, applicable Treasury regulations, judicial authority and administrative rulings and practice. There can be no assurance that the Internal Revenue Service (the "IRS") will not take a contrary view, and no ruling from the IRS has been or will be sought. Legislative, judicial or administrative changes or interpretations may be forthcoming that could alter or modify the statements and conditions set forth herein. Any such changes or interpretations may or may not be retroactive and could affect the tax consequences to Holders. Certain Holders of the Notes (including insurance companies, tax-exempt organizations, financial institutions, broker-dealers, foreign corporations and persons who are not citizens or residents of the United States) may be subject to special rules not discussed below. Each Holder of a Note should consult his, her or its own tax advisor as to the particular tax consequences of exchanging such Holder's Notes for New Notes, including the applicability and effect of any state, local or foreign tax laws. The issuance of the New Notes to Holders of the Notes pursuant to the terms set forth in this Prospectus will not constitute an exchange for federal income tax purposes. Consequently, no gain or loss would be recognized by Holders of the Notes upon receipt of the New Notes, and ownership of the New Notes will be considered a continuation of ownership of the Notes. For purposes of determining gain or loss upon the subsequent sale or exchange of the New Notes, a Holder's basis in the New Notes should be the same as such Holder's basis in the Notes exchanged therefor. A Holder's holding period for the New Notes should include the Holder's holding period for the Notes exchanged therefor. The issue price and other tax characteristics of the New Notes should be identical to the issue price and other tax characteristics of the Notes exchanged therefor. See also "Description of Certain Federal Income Tax Consequences." 27 30 THE TRANSACTIONS In connection with the Combination, the Company: (i) consummated the Offering, (ii) received the Preferred Stock Contribution, and (iii) entered into the New Credit Facility. The Offering, the Preferred Stock Contribution and the New Credit Facility, collectively, will be referred to herein as the "Financing." The Combination and the Financing will collectively be referred to as the "Transactions." See "Description of Indebtedness." THE COMBINATION Pursuant to the Combination Agreement, dated as of January 15, 1998 (the "Combination Agreement"), by and among Myron C. Warshauer, Stanley Warshauer, Steven A. Warshauer, Dosher Partners, L.P., a Delaware limited partnership, SP Parking Associates, an Illinois general partnership, and SP Associates, an Illinois general partnership (collectively, "Standard Owners") and APCOA, APCOA has, subject to the terms and conditions contained in the Combination Agreement, acquired all of the outstanding capital stock, partnership and other equity interests of Standard Parking Corporation, an Illinois corporation; Standard Auto Park, Inc., an Illinois corporation; Standard Parking Corporation MW, an Illinois corporation; Standard Parking, L.P., a Delaware limited partnership; Standard Parking Corporation IL, an Illinois corporation; and Standard/Wabash Parking Corporation, an Illinois corporation (all such interests collectively, "Standard") for consideration consisting of $65.0 million in cash, 16% of the common stock of the Company ("Company Common Stock") outstanding as of January 15, 1998 and the assumption of certain liabilities. In addition, following the Combination, APCOA paid to the Standard Owners $2.8 million, generally representing Standard's earnings through the date of the Combination and Standard's cash on hand at such time. See "Management's Discussion and Analysis of Financial Condition and Results of Operations of APCOA--Pro Forma Liquidity and Capital Resources." Pursuant to the Combination Agreement, the Company executed certain agreements including (a) a stockholders agreement among the stockholders of the Company, (b) an escrow agreement among the Company and the Standard Owners, (c) an employment agreement between the Company and Myron C. Warshauer, and (d) a consulting agreement between the Company and Sidney Warshauer. The Combination Agreement contains customary representations and warranties by the parties which generally survive for a period of two years after the consummation of the Combination. The Standard Owners and APCOA have agreed to indemnify each other for any loss resulting from such party's breach of a representation, warranty or covenant made by such party; provided, however, that such indemnity is limited, in the aggregate, to a basket of $2.0 million and is limited to a cap of $10.0 million, except for an indemnity by the Standard Owners related to taxes which shall not be subject to such limitations. THE FINANCING In addition to the Offering, the Financing consisted of the following: The Preferred Stock Contribution. In connection with the Combination, AP Holdings, Inc. ("AP Holdings"), a Delaware corporation and the parent of APCOA, contributed $40.7 million of cash to the Company (the "Preferred Stock Contribution") in exchange for $40.7 million of new preferred stock of the Company. The Preferred Stock Contribution was financed through AP Holdings' sale of $40.7 million in gross proceeds of its debt securities, the fees and expenses of which were borne by APCOA. The New Credit Facility. Upon the closing of the Offering, the Company entered into a $40.0 million secured revolving credit facility (the "New Credit Facility") with The First National Bank of Chicago (the "Agent"). Borrowings under the New Credit Facility bear interest at variable rates based, at the Company's option, either on LIBOR, the federal funds rate, or the Agent's base rate. See "Description of Indebtedness--New Credit Facility." 28 31 USE OF PROCEEDS (DOLLARS IN MILLIONS) The net proceeds from the Offering (after deducting discounts and commissions and estimated expenses), together with the Preferred Stock Contribution, were used by the Company: (i) to fund the cash portion of the consideration payable in connection with the Combination; (ii) to repay certain indebtedness; (iii) for general corporate purposes, including working capital needs and future acquisitions; (iv) to redeem preferred stock held by Holberg; and (v) to pay fees and expenses in connection with the Transactions. The existing indebtedness repaid in connection with the Offering included approximately $40.7 million of borrowings under APCOA's then-existing credit facility and approximately $0.35 million of borrowings under Standard's then-existing credit facility. See "Certain Relationships and Related Party Transactions." 29 32 CAPITALIZATION (DOLLARS IN THOUSANDS) The following table sets forth the actual cash and cash equivalents and capitalization of the Company as of December 31, 1997 and on a pro forma basis, adjusted to reflect the Transactions and the Other Acquisitions, and in each case on a consolidated basis. This table should be read in conjunction with the historical financial statements of APCOA and the related notes thereto, the historical financial statements of Standard and the related notes thereto and the unaudited pro forma financial statements of the Company and the related notes thereto, each included elsewhere herein. See "The Transactions."
AS OF DECEMBER 31, 1997 ----------------------- ACTUAL PRO FORMA --------- ---------- Cash and cash equivalents(1)................................ $ 3,322 $ 61,173 ======== ======== Long-term debt (including current portion): Existing bank debt........................................ $ 29,529 $ -- New Credit Facility(2).................................... -- -- 9 1/4% Senior Subordinated Notes due 2008................. -- 140,000 Other debt................................................ 8,754 12,339 -------- -------- Total long-term debt................................... 38,283 152,339 Redeemable preferred stock.................................. 8,728 40,683 Common stock subject to put/call rights(3).................. -- 4,589 Stockholders' equity (deficit): Common stock and additional paid-in capital............... 17,206 13,412 Retained earnings (deficit)............................... (39,465) (42,240) -------- -------- Total stockholders' equity (deficit)................... (22,259) (28,828) -------- -------- Total capitalization.............................. $ 24,752 $168,783 ======== ========
- ------------------------------ (1) As a result of anticipated normal fluctuations in working capital, the Company had approximately $7.5 million less in cash and cash equivalents at Closing than indicated above. (2) Following the Closing, $40.0 million is available under the New Credit Facility for working capital and general corporate purposes, including the issuance of letters of credit, $4.9 million of which were issued at Closing, subject to the achievement of certain financial ratios and compliance with certain conditions. See "Description of Indebtedness--New Credit Facility." (3) In accordance with the Stockholders Agreement (as defined below under "Certain Relationships and Related Party Transactions--Stockholders Agreement"), the Company will be obligated under certain circumstances to repurchase shares of common stock issued in connection with the Combination. The amount reflected herein has been calculated based on the formula in the Stockholders Agreement calculated on a pro forma basis giving effect to the consummation of the Combination as of December 31, 1997. The Company will not be obligated to repurchase such common stock prior to the third anniversary of the consummation of the Combination. 30 33 SELECTED HISTORICAL FINANCIAL DATA OF APCOA (DOLLARS IN THOUSANDS) The following table presents selected historical consolidated financial data of APCOA at and for the fiscal years 1993, 1994, 1995, 1996 and 1997 which have been derived from the audited financial statements of APCOA, audited by Ernst & Young LLP. The selected financial data set forth below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations of APCOA" and the historical consolidated financial statements of APCOA and the notes thereto included elsewhere herein.
YEAR ENDED DECEMBER 31, ---------------------------------------------------- 1993 1994 1995 1996 1997 INCOME STATEMENT DATA: Parking services revenue.................. $150,280 $148,398 $141,540 $135,752 $115,676 Cost of parking services.................. 132,598 129,175 120,215 113,501 92,818 General and administrative expenses....... 10,712 10,879 12,121 13,017 13,528 Depreciation and amortization............. 8,486 8,749 8,772 4,888 3,767 -------- -------- -------- -------- -------- Operating income (loss)................... (1,516) (405) 432 4,346 5,563 Interest expense, net..................... 2,021 2,350 2,705 2,877 3,243 Other expense............................. 500 125 -- -- -- Minority interest......................... 496 850 604 424 321 Income tax expense........................ 126 169 240 106 140 -------- -------- -------- -------- -------- Net income (loss)......................... $ (4,659) $ (3,899) $ (3,117) $ 939 $ 1,859 ======== ======== ======== ======== ======== OTHER DATA: Gross customer collections................ $352,466 $389,556 $408,952 $430,696 $476,183 Capital expenditures...................... 1,577 2,002 2,782 2,552 2,757 Ratio of earnings to fixed charges(1)..... N/A N/A N/A 1.3x 1.5x Number of managed locations............... 173 197 227 207 318 Number of leased locations................ 232 223 260 243 252 Number of total locations................. 405 420 487 450 570 Number of parking spaces.................. 268,000 235,000 226,000 225,000 273,000 BALANCE SHEET DATA (AT END OF PERIOD): Cash and cash equivalents................. $ 2,197 $ 2,021 $ 2,551 $ 2,532 $ 3,322 Working capital (deficiency).............. (24,065) (20,795) (20,990) (19,455) (17,059) Total assets.............................. 52,788 51,544 51,605 52,823 59,095 Total debt................................ 24,829 27,700 30,461 32,795 38,283 Redeemable preferred stock................ 6,000 6,330 7,045 7,841 8,728 Stockholders' equity (deficit)............ (14,137) (19,542) (23,374) (23,231) (22,259)
(1) For purposes of computing this ratio, earnings consist of income before income taxes and minority interest plus fixed charges. Fixed charges consist of interest expense, amortization of deferred financing costs and one-third of the rent expense from operating leases, which management believes is a reasonable approximation of the interest factor of the rent. For the years ended December 31, 1993, 1994 and 1995, earnings were inadequate to cover fixed charges by $4,037, $2,880 and $2,273, respectively. 31 34 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF APCOA The following discussion of APCOA's results of operations should be read in conjunction with the consolidated financial statements of APCOA and the notes thereto included elsewhere herein. OVERVIEW APCOA operates facilities under two types of arrangements: management contracts and leases. APCOA does not own any parking facilities and, as a result, APCOA assumes few of the risks of real estate ownership. Under a management contract, APCOA typically receives a base monthly fee for managing the property, and may also receive an incentive fee based on the achievement of facility revenues above a base amount. In some instances, APCOA also receives certain fees for ancillary services. Typically, all of the underlying revenues, expenses and capital expenditures under a management contract flow through to the property owner, not to APCOA. Under lease arrangements, APCOA generally pays to the property owner either a fixed annual rental, a percentage of gross customer collections or a combination thereof. APCOA collects all revenues under lease arrangements and is responsible for most operating expenses, but it is typically not responsible for major maintenance or capital expenditures. As of December 31, 1997, the Company (giving effect to the Combination and the Other Acquisitions) operated approximately 72% of its approximately 1,100 parking facilities under management contracts and approximately 28% under leases. Gross customer collections. Gross customer collections consist of gross receipts collected at all leased and managed properties, including unconsolidated affiliates. Parking services revenue--leases. Lease parking services revenues consist of all revenues received at a leased facility. Parking services revenue--management contracts. Management contract revenues consist of management fees, including both fixed and revenue-based, and fees for ancillary services such as accounting, equipment leasing, consulting, and other value-added services with respect to managed locations, but exclude gross customer collections at such locations. Management contracts generally provide APCOA a management fee regardless of the operating performance of the underlying facility. Cost of parking services--leases. Cost of parking services under lease arrangements consist of (i) contractual rental fees paid to the facility owner and (ii) all operating expenses incurred in connection with operating the leased facility. Contractual fees paid to the facility owner are based on either a fixed contractual amount or a percentage of gross revenue, or a combination thereof. Generally under a lease arrangement, APCOA is not responsible for major capital expenditures or property taxes. Cost of parking services--management contracts. Cost of parking services under management contracts are generally passed through to the facility owner. Most management contracts have no cost of parking services related to them as all costs are reimbursable to APCOA by the client. Several APCOA contracts, however, require APCOA to pay for certain costs which are offset by larger management fees. These contracts tend to be large airport properties with high cost structures. General and administrative expenses. General and administrative expenses include primarily salaries, wages, travel and office related expenses for the headquarters and field employees. SUMMARY OF OPERATING FACILITIES Pursuant to the terms of the Combination Agreement, APCOA paid to the Standard Owners $65.0 million in cash and 16.0% of the Company Common Stock outstanding as of January 15, 1998. In addition to the Combination, APCOA completed four acquisitions since January 1, 1997, as follows: (i) Colonial Richmond (March 1, 1997); (ii) Metropolitan Parking (June 1, 1997); (iii) the remaining 50% interest in APCOA Limited (November 1, 1997); and (iv) Dixie Parking (January 22, 1998). In addition, APCOA has entered into a binding letter of intent with respect to the acquisition of the remaining 76% interest in Executive Parking Industries LLC ("EPI") not currently owned by APCOA (such proposed acquisition, together with 32 35 the four completed acquisitions described above, the "Other Acquisitions"). The Other Acquisitions will contribute 233 additional parking locations. The following table reflects the Company's facilities at the end of the periods indicated taking into consideration the Combination and the Other Acquisitions, on a pro forma basis:
FISCAL YEAR --------------------- 1995 1996 1997 Managed facilities: APCOA..................................................... 227 207 263 Standard.................................................. 233 295 344 Other Acquisitions........................................ N/A N/A 187 --- --- ----- Combined............................................... 460 502 794 Leased facilities: APCOA..................................................... 260 243 227 Standard.................................................. 32 32 35 Other Acquisitions........................................ N/A N/A 46 --- --- ----- Combined............................................... 292 275 308 --- --- ----- Total facilities............................................ 752 777 1,102 === === ===== Contract retention rate..................................... 96% 96% 96%
RESULTS OF OPERATIONS APCOA has made a strategic decision to pursue management contracts primarily because its target client base generally prefers such arrangements and, therefore, management believes that there are greater growth opportunities in this area. APCOA does not believe that an analysis of margins is a meaningful indicator of operating performance with respect to management contracts because the cost of parking services in connection with the provision of management services is generally paid by the clients. Similarly, APCOA does not believe that an analysis of margins is a meaningful indicator of operating performance with respect to lease arrangements because margins are significantly impacted by variables other than operating performance, such as the ability to charge higher parking rates in different cities and widely varying space utilization by parking facility type. The following table sets forth, for the periods indicated, APCOA's results of operations expressed in thousands of dollars:
FISCAL YEAR -------------------------------- 1995 1996 1997 Gross customer collections......................... $408,952 $430,696 $476,183 ======== ======== ======== Parking services revenue: Lease contracts.................................. $128,745 $120,286 $ 99,594 Management contracts............................. 12,795 15,466 16,082 -------- -------- -------- 141,540 135,752 115,676 Cost of parking services: Lease contracts.................................. 113,337 104,718 83,327 Management contracts............................. 6,878 8,783 9,491 -------- -------- -------- 120,215 113,501 92,818 General and administrative expenses................ 12,121 13,017 13,528 Depreciation and amortization...................... 8,772 4,888 3,767 -------- -------- -------- Operating income................................... $ 432 $ 4,346 $ 5,563 ======== ======== ========
33 36 FISCAL 1997 COMPARED TO FISCAL 1996 Gross customer collections. Gross customer collections increased $45.5 million, or 10.6%, to $476.2 million in fiscal 1997 from $430.7 million in fiscal 1996. This increase resulted primarily from the net addition of 120 leased and managed locations, as well as a combination of rate increases and higher utilization of parking spaces at existing facilities. Parking services revenue--leases. Lease revenue decreased $20.7 million, or 17.2%, to $99.6 million in fiscal 1997 from $120.3 million in fiscal 1996. This decrease resulted from the loss of an airport lease ($31.7 million) partially offset by improvements at other lease facilities ($6.9 million) and new leases acquired in connection with the Other Acquisitions ($4.1 million). Parking services revenue--management contracts. Management contract revenue increased $0.6 million, or 4.0%, to $16.1 million in fiscal 1997 from $15.5 million in fiscal 1996. This increase resulted primarily from increased revenues at existing facilities ($0.4 million) and new contracts acquired in connection with the Other Acquisitions ($1.1 million), offset by APCOA's Los Angeles facilities that were contributed to EPI ($0.9 million). Cost of parking services--leases. Cost of parking for leases decreased $21.4 million, or 20.4%, to $83.3 million in fiscal 1997 from $104.7 million in fiscal 1996. The reduction in cost of parking services leases was due to the loss of a large airport lease ($31.2 million) partially offset by increases in costs at existing lease locations ($6.6 million) and new leases acquired in connection with the Other Acquisitions ($3.8 million). Cost of parking services--management contracts. Cost of parking for management contracts increased $0.7 million, or 8.1%, to $9.5 million in fiscal 1997 from $8.8 million in fiscal 1996. Most management contracts have no cost of parking services related to them as all costs are reimbursable to APCOA. However, several contracts (primarily large airport properties), require APCOA to pay for certain costs which are offset by larger management fees. The increase in cost of parking for management contracts was related to growth at two airport facilities ($0.8 million), costs related to new management contracts and the acquisition of Metropolitan in June 1997 ($0.4 million), offset by APCOA's Los Angeles facilities that were contributed to EPI ($0.5 million). General and administrative expenses. General and administrative expenses increased $0.5 million, or 3.9%, to $13.5 million in fiscal 1997 from $13.0 million in fiscal 1996. This increase was primarily a result of inflation. Depreciation and amortization expense. Depreciation and amortization expense decreased $1.1 million, or 22.9%, to $3.8 million in fiscal 1997 from $4.9 million in fiscal 1996. This decrease resulted primarily from the declining balance of the leasehold contracts which were amortized over seven years. The leasehold contracts were recorded in 1989 at their fair value in connection with the acquisition of APCOA by Holberg. FISCAL 1996 COMPARED TO FISCAL 1995 Gross customer collections. Gross customer collections increased $21.7 million, or 5.3%, to $430.7 million in fiscal 1996 from $409.0 million in fiscal 1995. This increase resulted primarily from a combination of rate increases and higher utilization of parking spaces at existing facilities. Parking services revenue--leases. Lease revenue decreased $8.4 million, or 6.6%, to $120.3 million in fiscal 1996 from $128.7 million in fiscal 1995. This decrease resulted from a strategic shift from leases to management contracts, particularly the conversion of one large airport lease ($10.7 million). This decrease was partially offset by growth in existing revenues at other locations ($2.3 million). Parking services revenue--management contracts. Management contract revenue increased $2.7 million, or 20.9%, to $15.5 million in fiscal 1996 from $12.8 million in fiscal 1995. This increase resulted from the conversion of one large lease to a management contract ($0.2 million), significant growth at two large airports ($1.4 million) and the increased revenues at existing facilities primarily as a result of rate increases ($1.1 million). 34 37 Cost of parking services--leases. Cost of parking for leases decreased $8.6 million, or 7.6%, to $104.7 million in fiscal 1996 from $113.3 million in fiscal 1995. The reduction in cost of parking services for leases is primarily related to the conversion of one airport lease to a management contract ($10.4 million). Cost of parking services--management contracts. Cost of parking for management contracts increased $1.9 million, or 27.7%, to $8.8 million in fiscal 1996 from $6.9 million in fiscal 1995. The increase in cost of parking services for management contracts reflects the significant growth at two airport facilities ($0.9 million), and additional costs at other management accounts ($1.0 million). General and administrative expenses. General and administrative expenses increased $0.9 million, or 7.4%, to $13.0 million in fiscal 1996 from $12.1 million in fiscal 1995. This increase was primarily a result of additions to the airport administrative staff designed to stimulate growth in that segment. Depreciation and amortization. Depreciation and amortization expenses decreased $3.9 million, or 44.3%, to $4.9 million in fiscal 1996 from $8.8 million in fiscal 1995. This decrease resulted primarily from the declining balance of the leasehold contracts which were amortized over seven years. The leasehold contracts were recorded in 1989 at their fair value in connection with the acquisition of APCOA by Holberg. HISTORICAL LIQUIDITY AND CAPITAL RESOURCES As a result of day-to-day activity at the parking locations, APCOA collects significant amounts of cash. Under lease contracts, this revenue is deposited into APCOA's bank account, with a portion remitted to the clients in the form of rental payments according to the terms of the leases. Under management contracts, some clients require APCOA to deposit the daily receipts into an APCOA bank account while others require the deposit into a client account. The locations with revenues deposited into the APCOA banks result in the Company operating with a negative working capital. This negative working capital arises from the liability that is created for the amount of revenue that will be remitted to the clients in the form of rents or net profit distributions subsequent to month end, after the books are closed and reconciled. Since the Company operates with a revolving working capital facility, all funds held for future remittance to the clients are used to reduce the line until the payments are made to the clients. APCOA had $17.1 million of negative working capital at December 31, 1997 as compared to $19.5 million at December 31, 1996. The reduction in negative working capital in fiscal 1997 resulted primarily from an increase in cash and accounts receivable attributable to the addition of management contracts during the year. This is partially offset by the increase in current portion of long-term debt which totaled $4.1 million at December 31, 1997 and $0.7 million at December 31, 1996. Net cash provided by operating activities totaled $0.9 million for fiscal 1997 and $2.0 million for fiscal 1996. The reduction of $1.1 million resulted from working capital uses primarily related to adding new management contracts and reductions in accrued rent and insurance reserves. The new management contracts were concentrated in the type that require the Company to deposit the receipts into the client's account. The reductions in accrued rent were primarily a result of a location that was lost in a competitive bid. Insurance reserves declined due to a concerted effort to close out old claims. Cash used in investing activities totaled $3.6 million in 1997 and $3.3 million in 1996. The primary use is for capital expenditures which are used to extend lease contracts, obtain new contracts and for management information system equipment and upgrades. The Company has historically expended about $2.0 million annually on capital expenditures at parking properties. These expenditures are generally used to acquire parking equipment, booths, or install paving or fencing. The average expenditure is $50,000 to $60,000 per project. In addition, the Company spends approximately $250,000 to $500,000 per year on management information system upgrades. Cash from financing activities totaled $3.5 million in 1997 up from $1.3 million in 1996. The primary reason for the increase was the acquisition of three small parking companies in 1997 that were funded partially with promissory notes issued by APCOA to the sellers in these transactions. 35 38 PRO FORMA LIQUIDITY AND CAPITAL RESOURCES In connection with the Offering, the Company has $55.8 million of additional cash on its balance sheet as of December 31, 1997. The Company anticipates using this cash to finance working capital needs, as well as for future acquisitions. The Company has lease commitments of $51.4 million for fiscal 1998. The leased properties generate sufficient cash flow to meet the base rent payments. In addition, following the Combination, APCOA paid to the Standard Owners $2.8 million, generally representing Standard's earnings through the date of the Combination and Standard's cash on hand at such time. See "The Transactions--The Combination." Also, the Company anticipates taking a one-time charge of $8.5 million in connection with the Transactions and Other Acquisitions, of which an estimated $6.6 million will be paid in cash. See Note 2 to the Unaudited Pro Forma Consolidated Statement of Operations. The Company entered into the New Credit Facility for $40.0 million of secured revolving credit. Borrowings under the New Credit Facility will bear interest at variable rates based, at the Company's option, either on LIBOR, overnight federal funds rate, or the bank's base rate. The New Credit Facility contains certain covenants with which the Company must comply, including restrictions on debt limits relative to EBITDA, capital expenditures, and other customary requirements. After the Transactions, the Company's primary capital requirements, on a pro forma basis, are for working capital, capital expenditures and debt service. The Company believes that cash flow from operating activities, cash and cash equivalents and borrowings under the New Credit Facility will be adequate to meet the Company's short-term and long-term liquidity requirements prior to the maturity of its long-term indebtedness, although no assurance can be provided in this regard. If the Company identifies investment opportunities requiring cash in excess of the Company's cash flows and the net proceeds from the Offering, the Company may borrow under the New Credit Facility, or may seek additional sources of capital including the sale or issuance of Company Common Stock. The Company has in the past and expects in the future to pursue a strategy of growth through acquisition. The Company is currently in negotiations with respect to several possible acquisitions. No binding agreements with respect to acquisitions are pending, other than with respect to the proposed acquisition of the interest in EPI not currently owned by the Company. There can be no assurance as to the Company's ability to effect future acquisitions, nor as to the effect of any such acquisition on the Company's operations, financial condition and profitability. IMPACT OF INFLATION AND CHANGING PRICES The primary sources of revenues to APCOA are parking revenues from leased locations and management contract revenue on managed parking facilities. APCOA believes that inflation has had a limited impact on its overall operations for fiscal years 1995, 1996 and 1997. YEAR 2000 APCOA has tested its computer systems and applications for compliance with Year 2000 issues and believes that its computer systems and applications are Year 2000 compliant and that Year 2000 issues will not have a significant impact on its operations or liquidity. 36 39 SELECTED HISTORICAL FINANCIAL DATA OF STANDARD (DOLLARS IN THOUSANDS) The following table presents selected historical financial data of Standard at and for the fiscal years 1993, 1994, 1995, 1996 and 1997. The selected historical financial data of Standard at and for the fiscal years 1994, 1995, 1996 and 1997 have been derived from the audited financial statements of Standard, audited by Altschuler, Melvoin and Glasser LLP. The selected historical financial data of Standard at and for the fiscal year 1993 have been derived from the unaudited financial statements of Standard. The selected financial data set forth below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations of Standard" and the historical consolidated financial statements of Standard and the notes thereto included elsewhere herein.
YEAR ENDED DECEMBER 31, -------------------------------------------------------- 1993 1994 1995 1996 1997 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
- ------------------------------ (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. 37 40 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF STANDARD The following discussion of Standard's results of operations should be read in conjunction with the Standard Consolidated Financial Statements and Notes thereto. OVERVIEW For a general discussion of parking revenues, costs and expenses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations of APCOA--Overview." As of December 31, 1997, Standard operated 344 facilities under management contracts and 35 facilities pursuant to leases. A summary of Standard's facilities is as follows:
FISCAL YEAR -------------------------------- 1995 1996 1997 Managed facilities......................................... 233 295 344 Leased facilities.......................................... 32 32 35 --- --- --- Total facilities (end of period)........................... 265 327 379 Contract retention rate.................................... 97% 97% 96%
RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, Standard's results of operations expressed in thousands of dollars:
FISCAL YEAR -------------------------------- 1995 1996 1997 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 ======== ======== ========
FISCAL 1997 COMPARED TO FISCAL 1996 Gross customer collections. Gross customer collections increased $50.2 million, or 12.2%, to $462.3 million in fiscal 1997 from $412.1 million in fiscal 1996. This increase resulted primarily from the net addition of 52 leased and managed locations as well as from a combination of rate increases and higher utilization of parking spaces at existing facilities. Parking services revenue--leases. Lease revenue increased $13.0 million, or 31.1%, to $54.8 million in fiscal 1997 compared to $41.8 million in fiscal 1996. This increase resulted from the net addition of two large leased properties. Parking services revenue--management contracts. Revenue at managed locations increased $0.4 million, or 4.1%, to $8.9 million in fiscal 1997 from $8.5 million in fiscal 1996. This increase resulted from the net addition of 49 managed locations. Cost of parking services. Cost of parking services increased $12.3 million, or 32.5%, to $50.1 million in fiscal 1997 from $37.8 million in fiscal 1996. This increase resulted from a net addition of two large leased 38 41 properties. There are no cost of parking services for management contracts because all such costs are reimbursed by the parking facility owner. General and administrative expenses. General and administrative expenses increased $0.4 million, or 4.1%, to $7.9 million in fiscal 1997 from $7.5 million in fiscal 1996. This modest increase was primarily due to an increase in employee compensation. Depreciation and amortization expenses. Depreciation and amortization expenses were $0.5 million in fiscal 1997 and $0.4 in fiscal 1996. FISCAL 1996 COMPARED TO FISCAL 1995 Gross customer collections. Gross customer collections increased $72.9 million, or 21.5%, to $412.1 million in fiscal 1996 from $339.2 million in fiscal 1995. This increase resulted primarily from the net addition of 62 leased and managed locations as well as from a combination of rate increases and higher utilization of parking spaces at existing facilities. Parking services revenue--leases. Lease revenue increased $3.4 million, or 8.7%, to $41.8 million in fiscal 1996 from $38.4 in fiscal 1995. This increase resulted from rate increases and increased volume. Parking services revenue--management contracts. Management contract revenue increased $1.7 million, or 25.4%, to $8.5 million in fiscal 1996 from $6.8 million in fiscal 1995. This increase resulted from the net addition of 62 managed locations. Cost of parking services. Cost of parking services increased $2.6 million, or 7.6%, to $37.8 million in fiscal 1996 from $35.2 million in fiscal 1995. This increase was due to increased volume. General and administrative expenses. General and administrative expenses increased $0.7 million, or 11.0%, to $7.5 million in fiscal 1996 from $6.8 million in fiscal 1995. This increase was primarily a result of increased compensation of key employees. Depreciation and amortization expenses. Depreciation and amortization expenses increased $0.1 million, or 19.0%, to $0.4 million in fiscal 1996 from $0.3 million in fiscal 1995. This increase resulted primarily from the headquarters office relocation late in 1995. LIQUIDITY AND CAPITAL RESOURCES During fiscal 1997, Standard generated cash flows from operating activities of $5.1 million compared to $5.3 million in fiscal 1996. This decrease in cash flow from operating activities resulted primarily from net changes in the components of working capital. Net cash used in investing activities was $0.5 million for the years ended December 31, 1997 and December 31, 1996. The primary use of these funds was the acquisition of capital assets. Net cash used by financing activities was $5.0 million for the year ended December 31, 1997 and $3.1 million for the year ended December 31, 1996. The primary use of these funds was distributions to partners. Standard has lease commitments of $23.3 million for fiscal 1998. The lease commitments are in the form of a fixed base rent with the majority of leases on a year-to-year renewal. The leased properties generate sufficient cash flow in order to meet the base rent payments. YEAR 2000 Standard has considered the impact of Year 2000 issues on its computer systems and applications and believes the impact of the Year 2000 will not have a significant impact on its operations or liquidity. As part of the Combination, Standard will convert to the APCOA computer system which has been tested to comply with Year 2000 issues. 39 42 BUSINESS GENERAL The Company is a leading national provider of parking facility management services. The Company provides on-site management services at multi-level and surface parking facilities in the two major markets of the parking industry: urban parking and airport parking. Following consummation of the Combination, the Company manages approximately 1,100 parking facilities, containing approximately 580,000 parking spaces in over 45 cities across the United States and Canada. The Company's pro forma gross customer collections, pro forma parking services revenue, pro forma EBITDA and pro forma net loss for the year ended December 31, 1997 were $948.6 million, $186.1 million, $19.9 million and $2.8 million, respectively. The Company believes that its superior management services coupled with its focus on increasing market share in select core cities leads to higher profitability per parking facility than its competitors. The Company believes that it enhances its leading position by providing: (i) Ambiance in Parking(C), an approach to parking that includes a number of premium, on-site, value-added services and amenities; (ii) state-of-the-art information technology, including Client View(C), a proprietary client reporting system which allows the Company to provide clients with real-time access to site-level financial and operating information; and (iii) award-winning training programs for on-site employees that promote customer service and client retention. In addition, the Company believes that it distinguishes itself from its competitors because of its ability to leverage its long-standing experience in securing contracts, particularly with regard to the airport parking market. The Company's diversified client base includes some of the nation's largest owners and developers of major office building complexes, shopping centers, sports complexes, hotels and hospitals. In addition, the Company manages parking operations at many of the major airports in North America. In the urban parking market, the Company's clients include CB Commercial Real Estate Group, Equity Office Properties, the Taubman Company, Harvard Medical School, Northwestern University, Children's Memorial Medical Center in Chicago and Cedars Sinai Medical Center in Los Angeles. Parking facilities managed by the Company include the CNN Center in Atlanta, the Kennedy Center for the Performing Arts in Washington, D.C. and the Gateway Sports Complex in Cleveland. In the airport parking market, the Company's clients include Chicago O'Hare International and Chicago Midway, Cleveland-Hopkins International, Minneapolis-St. Paul International and Detroit Metropolitan airports. The Company operates its clients' parking properties through two types of arrangements: management contracts and leases. The Company does not own any parking facilities and, as a result, the Company assumes fewer of the risks of real estate ownership. Under a management contract, the Company typically receives a base monthly fee for managing the property, and may also receive an incentive fee based on the achievement of facility revenues above a base amount. In some instances, the Company also receives certain fees for ancillary services. Typically, all of the underlying revenues and expenses under a management contract flow through to the property owner, not to the Company. Under lease arrangements, the Company generally pays either a fixed annual rental, a percentage of gross customer collections, or a combination thereof to the property owner. The Company collects all revenues under lease arrangements and is responsible for most operating expenses, but it is typically not responsible for major maintenance or capital expenditures. As of December 31, 1997, the Company operated approximately 72% of its approximately 1,100 parking facilities under management contracts and approximately 28% under leases. Renewal rates for the Company's management contracts and leases were approximately 96% for each of the last three years. INDUSTRY OVERVIEW General. The International Parking Institute, a trade organization of parking professionals, estimates that there are 35,000 parking facilities in the United States generating over $26.0 billion in gross customer collections. The parking industry is highly fragmented, with over 1,700 commercial parking operators in the United States, as estimated by the Parking Market Research Company, an independent research company. Industry participants, the vast majority of which are privately-held companies, consist of a relatively few 40 43 nationwide companies and a large number of small regional or local operators, including a substantial number of companies providing parking as an ancillary service in connection with property management or ownership. Clients of parking facility managers include the owners of office buildings, major airports, shopping centers, sports complexes, hotels and hospitals, which provide parking to customers. Operating Arrangements. Parking facilities operate under three general types of arrangements: management contracts, leases and fee ownership. The general terms and benefits of these three types of arrangements are as follows: Management Contracts. Under a management contract, the facility manager generally receives a base monthly fee for managing the facilities and often receives an incentive fee based on the achievement of facility revenues above a base amount. Facility managers generally charge fees for various ancillary services such as accounting, equipment leasing and consulting. Responsibilities under a management contract include hiring, training and staffing parking personnel, and providing collections, accounting, record-keeping, insurance and facility marketing services. In general, the facility manager is not responsible for structural or mechanical repairs, and typically is not responsible for providing security or guard services. Under typical management contracts, the facility owner is responsible for operating expenses such as taxes, license and permit fees, insurance premiums, payroll and accounts receivable processing and wages of personnel assigned to the facility. In addition, the facility owner is responsible for non-routine maintenance, repair costs and capital improvements. The typical management contract is for a term of one to three years (though the owner often reserves the right to terminate, without cause, on 30 days' notice) and may contain a renewal clause. Leases. Under a lease arrangement, the parking facility operator generally pays either a fixed annual rent, a percentage of gross customer collections, or a combination thereof to the property owner. The parking facility operator collects all revenues and is responsible for most operating expenses, but is typically not responsible for major maintenance. In contrast to management contracts, lease arrangements are typically for terms of three to ten years and typically contain a renewal term, and provide for a fixed payment to the facility owner regardless of the operating earnings of the parking facility. As a result, the leased facilities generally require a longer commitment and a larger capital investment by the parking facility operator than do managed facilities. Fee Ownership. Under fee ownership arrangements, the parking facility operator owns the property and fixtures. Ownership of parking facilities, either independently or through joint ventures, typically requires a larger capital investment than managed or leased facilities but provides maximum control over the operation of the parking facility, and all increases in revenue flow directly to the owner. Ownership provides the potential for realizing capital gains from the appreciation in the value of the underlying real estate, but it also subjects the property owner to risks including reduction in value of the property and additional potential liabilities, as well as additional costs such as real estate taxes and structural, mechanical or electrical maintenance or repairs. Parking Industry Markets. The parking industry is comprised of two major markets: urban parking and airport parking. The urban parking market consists of many sub-markets with differing clients including commercial, office, residential, event, entertainment, retail, shopping centers, hospitals and hotels. In contrast, the airport parking market consists of a relatively small number of clients with large revenue-generating parking operations and similar needs that are unique to airport parking facilities. Industry Growth Dynamics. A number of opportunities for growth exist for parking facility operators: Industry Consolidation. There are many opportunities for industry consolidation, both domestically and abroad. Consolidation is essential to growth in the parking industry because of the limitations on growth in revenues of existing operations. While some growth in revenues from existing operations is possible through redesign, increased operational efficiency or increased facility use and prices, such growth is ultimately limited by the size of a facility and market conditions. The net effect of the consolidation in the urban parking market is that the typical buyer in this market is becoming larger and increasingly sophisticated. This increase in sophistication has placed greater demands on parking 41 44 management firms and has driven the trend toward management contracts where clients require high-level management and reporting systems, site-specific services and quality control. Privatization of Government-Owned and Operated Facilities. Additional growth in the industry has been a function of the trend for parking owners to move from owner-operation to outsourcing the management of operations to private operators. This is particularly true in the case of privatization of government operations and facilities, which is resulting in new opportunities for the parking industry. The Company believes that cities and municipal authorities are increasingly retaining private firms to operate facilities and parking-related services in an effort to reduce operating budgets and increase efficiency. Expanding Relationships with Large Property Managers, Owners and Developers. Generally, the overall parking industry expansion is created by new construction of parking facilities by property managers, owners and developers. While new construction in the United States slowed in the late 1980s and has only gradually begun to increase in recent years, growth for parking facility operators during such period generally resulted from more established parking facility operators leveraging their relationships with property managers and owners to take market share from smaller companies. As new construction of parking facilities increases, the Company believes that facility operators with established relationships with such parking facility developers can leverage such relationships to capture incremental market share. BUSINESS STRATEGY AND COMPETITIVE ADVANTAGES The Company believes its innovative parking facility amenities, services and management, coupled with its state-of-the-art information technology and reporting systems, position the Company to enhance its standing as a leading provider of parking services. Specific elements of the Company's business strategy and competitive advantages include: Focus on Core Cities. Part of the Company's business strategy is to focus on increasing system-wide profitability by maximizing operating leverage. As part of this strategy, the Company operates in certain core cities and realizes certain economies of scale, including the ability to spread administrative overhead costs across a large number of parking facilities in a single market. As a result, the Company has been able to increase significantly profitability per contract. For example, management estimates that in 1997 the Company's average profit per contract in cities in which it operated more than 35 parking locations was nearly double the Company's profit per contract in cities in which it operated fewer than 35 locations. Strong Operating Performance and Stable Cash Flow. From 1993 to 1997, the Company's EBITDA increased from $7.2 million to $15.0 million, representing a CAGR of 20.0%. Over the same period, the Company's capital expenditures averaged less than $3.0 million per year. In addition, the Company reduced exposure to increasing cost of parking services by (i) increasing the proportion of its management contracts, which generally pass cost of parking services onto the Company's clients, and (ii) maintaining low minimum rental commitments under its non-cancelable leases. The Company's average management and lease contract renewal rate over the last three years was approximately 96%. As a result of the Company's operating performance, as well as the low capital expenditure requirements and low risk portfolio of management contracts and leases, the Company has been able to generate consistent cash flow. Strategic Growth Through Acquisitions. The parking industry is highly fragmented, with over 1,700 industry participants. In addition to pursuing individual contracts, the Company is seeking to capitalize on this industry fragmentation by pursuing a focused acquisition strategy which includes: (i) acquiring parking management companies within core cities and target cities where the Company believes it can attain a significant market share, and (ii) acquiring larger, regional parking management companies. As a part of this strategy, APCOA and Standard, combined, have successfully acquired and integrated 6 companies with 138 new facilities and also added 252 net individual contracts over the past five years. Leading Client Base. The Company's diversified, long-standing customer base comprises many of the premier national property management and ownership organizations in the United States and 42 45 Canada. The Company is a market leader in airport parking, operating approximately 100 parking facilities at airports in the United States and Canada. The Company's focus on select core cities enables the Company to maintain broader and stronger relationships with the local client base, which the Company believes improves its client retention rates and its ability to compete for new contracts. Value-Added Services and Award-Winning Information Systems. The Company believes that it can continue to increase profitability and attract new clients by providing: (i) Ambiance in Parking(R); (ii) state-of-the-art information technology, including Client View(C); and (iii) award-winning training programs for on-site employees. In addition, these capabilities facilitate development opportunities that typically lead to long-term lease and management contracts on new facilities. Also, the Company has developed state-of-the-art information technology systems which connect local offices across the country to its corporate office. These systems, which received the 1994 Esprit Award sponsored by Booz-Allen & Hamilton and CIO magazine, enable a centralized staff to eliminate inefficient duplication of administrative and accounting functions at the field level and also help provide key operational information to clients. Management believes that these systems will enable the Company to add many new clients without incurring additional administrative staff and expense. Experienced Management Team. Myron C. Warshauer, the Company's Chief Executive Officer and the third generation of his family to direct Standard, has over 35 years of industry experience. G. Walter Stuelpe, Jr., the Company's President, has been with APCOA for over 25 years, serving as Chief Executive Officer since 1986. The Company's other executive team members are comprised of the most experienced, talented executives from both companies. Overall, the members of the Company's executive team have an average of over 15 years of industry experience. AMBIANCE IN PARKING(R) The Company offers a comprehensive package of value-added, on-site parking services and amenities which the Company characterizes as Ambiance in Parking(R) which includes: Patented Musical Theme Floor Reminder System. The Company's patented musical theme floor reminder system is designed to help customers remember the garage level on which they had parked. A different song is played on each floor of the parking garage which also displays distinctive signs and graphics which correspond with the floor's theme. For example, in one garage with U.S. cities as a theme, songs played include "I Left My Heart in San Francisco" on one floor and "New York, New York" on a different floor. Other garages have themes such as college fight songs, broadway shows, classic movies and professional sports teams. Books-To-Go(R). Books-To-Go(R) is an audiotape library which is provided free-of-charge for monthly parkers. ParkNet(R). The ParkNet(R) traffic information system allows parking customers to obtain continuous, site-specific traffic reports relating to current traffic conditions on area expressways as well as the routes utilized to get from the specific parking facility to the expressways. CarCare(R). The CarCare(R) service program is provided in conjunction with Midas(R). Parking customers can have their cars picked up from the parking facility, serviced and returned before the end of the business day. Standard Parking Exchange(TM). The Standard Parking Exchange(TM) program entitles monthly parkers at participating locations to free parking for one hour per day at all other participating locations. Complimentary Windshield and Headlight Cleaning. During off-peak hours, the Company's parking attendants clean windshields and headlights of cars and place a card on the windshield informing the parking customer that this service has been provided. Emergency Car Services. The Company offers complimentary services such as battery starts, lost car assistance, tire inflation, tire change, escort service and key retrieval. 43 46 STATE-OF-THE-ART INFORMATION TECHNOLOGY The Company's information technology provides valuable benefits to the Company's clients. Client View(C), a proprietary Windows(R)-based client reporting system, allows the Company's clients to access, on a real-time basis, site-level financial and operating information. The Company has created advanced information systems that connect local offices across the country to its corporate office. A centralized staff provides accounting and administrative expertise and controls that eliminate duplication of administrative and accounting functions at the field level. ParkStat(C), one of the Company's proprietary software tools, enhances the performance of parking facilities managed by the Company. By automatically polling information from on-site collection devices, ParkStat(C) uses location-specific information to calculate the impact of pricing alternatives, optimize staffing levels, improve forecasting and assist in long-range planning. Technological innovations such as an automated credit card lane and a radio-activated hands-free parking access system allow fast and hassle-free service for parking customers. AWARDS In 1994, the Company received the prestigious Esprit Award sponsored by CIO magazine and Booz-Allen & Hamilton for its proprietary state-of-the-art information technology systems which connect local offices across the country to the Company's corporate office. These systems enable a centralized staff to eliminate inefficient duplication of administrative and accounting functions at the field level and also help provide key operational, financial and demographic information to clients. No other parking facility manager has ever received this award. Over the past five years various elements of the Company's training program have received industry awards for outstanding content and production, including: - National Association of Industrial and Office Properties' Outstanding Literature and Video Award; - two Telly Awards, a prestigious national award in the field of advertising, film and video productions; - BPAA Bronze Tower Award which recognizes business-to-business communications in Business/Professional Advertising; and - Great-Lakes Sho-Me Award which recognizes outstanding business communication in Greater Cleveland. 44 47 PARKING FACILITIES The Company operates parking facilities in 35 states, Washington D.C. and two provinces of Canada pursuant to management contracts or leases. The Company does not currently own any parking facilities. The following table summarizes certain information regarding the Company's facilities as of December 31, 1997, giving effect to the Combination and the Other Acquisitions:
NUMBER OF LOCATIONS NUMBER OF SPACES ------------------------- ----------------------------- STATES/PROVINCES AIRPORTS AND URBAN CITIES AIRPORT URBAN TOTAL AIRPORT URBAN TOTAL Alabama Airports 3 3 1,430 1,430 Arizona Phoenix 3 3 4,225 4,225 California Los Angeles, San Diego, San 6 177 183 23,779 51,866 75,645 Francisco, San Jose, Santa Barbara and Airports Colorado Denver and Airports 5 12 17 713 5,688 6,401 Connecticut Stamford and Airport 2 6 8 4,351 4,332 8,683 Delaware Wilmington 1 1 500 500 District of Columbia Washington D.C. 11 11 7,577 7,577 Florida Miami, Orlando and Airports 4 13 17 4,340 6,085 10,425 Georgia Atlanta and Airports 2 36 38 2,142 9,677 11,819 Hawaii Honolulu 53 53 21,735 21,735 Idaho Airport 1 1 376 376 Illinois Chicago and Airport 2 150 152 26,800 87,246 114,046 Indiana Indianapolis and Airport 1 19 20 619 4,420 5,039 Kentucky Louisville and Airport 2 1 3 3,071 395 3,466 Louisiana New Orleans and Airport 1 45 46 909 8,125 9,034 Maine Airport 2 2 1,299 1,299 Maryland Baltimore, Bethesda 19 19 4,167 4,167 Massachusetts Boston and Airports 2 95 97 645 61,557 62,202 Michigan Detroit and Airports 6 1 7 1,412 132 1,544 Minnesota Minneapolis and Airports 8 38 46 13,495 12,938 26,433 Missouri Kansas City and Airports 2 77 79 9,848 14,206 24,054 Montana Great Falls and Airports 5 4 9 2,432 1,966 4,398 Nebraska Airport 1 1 1,361 1,361 Nevada Las Vegas 1 1 286 286 New York Buffalo, Hamburg, Hawthorne and 10 3 13 8,678 16,060 24,738 Airports North Dakota Airports 2 2 1,415 1,415 Ohio Cleveland, Columbus and Airports 9 94 103 7,492 38,474 45,966 Ontario East York, North York, Oshawa, 1 34 35 3,171 23,912 27,083 Scarsborough, Toronto and Airport Oregon Airport 1 1 433 433 Pennsylvania Philadelphia, Pittsburgh and 2 3 5 1,331 2,182 3,513 Airports Quebec Airports 3 3 8,591 8,591 South Carolina Airport 1 1 4,987 4,987 South Dakota Airport 1 1 1,024 1,024 Tennessee Memphis and Airports 2 11 13 3,077 5,176 8,253 Texas Houston, Dallas, Fort Worth and 4 57 61 2,862 29,176 32,038 Airports Virginia Richmond and Airport 4 32 36 3,468 6,109 9,577 Washington Seattle and Airports 2 3 5 822 1,195 2,017 Wisconsin Milwaukee and Airports 3 3 6 1,512 1,948 3,460 --- ----- ----- ------- ------- ------- TOTALS 100 1,002 1,102 147,885 431,355 579,240 === ===== ===== ======= ======= =======
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." 45 48 COMPETITION The parking industry is fragmented and highly competitive, with limited barriers to entry. The Company faces direct competition for additional facilities to manage or lease and the facilities currently operated by the Company face competition for employees and customers. The Company competes with a variety of other companies to add new operations. Although there are relatively few large, national parking companies that compete with the Company, developers, hotel companies, and national financial services companies also have the potential to compete with parking companies. Municipalities and other governmental entities also operate parking facilities that compete with the Company. The Company also faces competition from local owner-operators of facilities who are potential clients for the Company's management services. Construction of new parking facilities near the Company's existing facilities could adversely affect the Company's business. See "Risk Factors--Competition." REGULATION The Company's business is not substantially affected by direct governmental regulation, although parking facilities are sometimes directly regulated by both municipal and state authorities. The Company is affected by laws and regulations (such as zoning ordinances) that are common to any business that deals with real estate and by regulations (such as labor and tax laws) that affect companies with a large number of employees. In addition, several state and local laws have been passed in recent years that encourage car pooling and the use of mass transit, including, for example, a Los Angeles, California law prohibiting employers from reimbursing employee parking expenses. Laws and regulations that reduce the number of cars and vehicles being driven could adversely impact the Company's business. Under various federal, state and local environmental laws, ordinances and regulations, a current or previous owner or operator of real property may be liable for the costs of removal or remediation of hazardous or toxic substances on, under or in such property. Such laws typically impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. In connection with the operation of parking facilities, the Company may be potentially liable for any such costs. Although the Company is currently not aware of any material environmental claims pending or threatened against it or any of the parking facilities which it operates, there can be no assurance that a material environmental claim will not be asserted against the Company or against the parking facilities which it operates. The cost of defending against claims of liability, or of remediating a contaminated property, could have a material adverse effect on the Company's financial condition or result of operations. Various other governmental regulations affect the Company's operation of parking facilities, both directly and indirectly, including the ADA. Under the ADA, all public accommodations, including parking facilities, are required to meet certain federal requirements related to access and use by disabled persons. For example, the ADA requires parking facilities to include handicapped spaces, headroom for wheelchair vans, attendants' booths that accommodate wheelchairs, and elevators that are operable by disabled persons. When negotiating management contracts and leases with clients, the Company generally has the property owner contractually assume responsibility for any ADA liability in connection with the property; however, there can be no assurance that the property owner has assumed such liability for any given property and there can be no assurance that the Company would not be held liable despite assumption of responsibility for such liability by the property owner. Management believes that the parking facilities the Company operates are in substantial compliance with ADA requirements. EMPLOYEES As of December 31, 1997, the Company employed approximately 8,000 individuals, including approximately 4,200 full-time and 3,800 part-time employees. The Company believes that its employee relations are good. Approximately 2,600 employees are represented by unions. Most union employees are represented by the Teamsters Union. The largest union facilities are in the Chicago metropolitan area and in airport parking facilities located in Detroit, Michigan, San Jose, California, Minneapolis, Minnesota, Cleveland, Ohio and Hartford, Connecticut. 46 49 INTELLECTUAL PROPERTY The APCOA name and logo and the Standard name and logo are registered with the United States Patent and Trademark Office. In addition, the Company has registered the names and, as applicable, the logos of all material subsidiaries and divisions of the Company in the United States Patent and Trademark Office or the equivalent State registry, including the right to the exclusive use of the name Central Park in the Chicago metropolitan area. The Company has also obtained a United States patent for its Multi-Level Vehicle Parking Facility (the Musical Theme Floor Reminder System) and trademark protection for its proprietary parker programs, such as Books-To-Go(C) and Ambiance in Parking(C). Proprietary software developed by the Company, such as Client View(C), Hand Held Program(C), License Plate Inventory Program(C) and Parkstat(C) are registered in the United States Copyright Office. LITIGATION The provision of services to the public entails an inherent risk of liability. The Company is engaged in routine litigation incidental to its business. There is no legal proceeding to which the Company is a party which, if decided adversely, would be material to the Company's financial condition, liquidity, or results of operations. The Company attempts to disclaim liability for personal injury and property damage claims by printing disclaimers on its ticket stubs and by placing warning signs in the facilities it operates. The Company also carries liability insurance that management believes meets or exceeds industry standards; however, there can be no assurance that any future legal proceedings (including any related judgments, settlements or costs) will not have a material adverse effect on the financial condition, liquidity, or results of operations of the Company. INSURANCE The Company purchases comprehensive liability insurance covering the parking facilities that it leases and manages. The Company also purchases workers' compensation insurance with respect to all its employees, whether such persons are employed at leased or managed facilities. The Company's insurance program insulates its clients against any additional annual premium charges in the event of adverse claims experience. Due to the magnitude of the Company's parking operations, the Company's management believes that the rates at which it purchases such insurance represent a discount to the rates that would be charged to parking facility owners on a stand-alone basis. Recognizing the benefits and protection afforded by the Company's insurance program, a significant majority of the Company's clients historically have purchased liability insurance through the Company. However, the clients of the Company have the option of purchasing their own policies, provided that the Company is adequately protected. A significant reduction in the number of clients that purchase insurance through the Company could have a material adverse effect on operating earnings. In addition, although the cost of insurance has not fluctuated significantly in recent years for the Company, a material increase either in the Company's insurance costs or in the magnitude of its claims could have a material adverse effect on the Company's operating earnings. 47 50 MANAGEMENT EXECUTIVE OFFICERS AND DIRECTORS The following table sets forth certain information with respect to each person who is an executive officer or director of the Company following consummation of the Combination, as indicated below:
NAME AGE TITLE - ---- --- ----- 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
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 48 51 Finance. Mr. Warshauer also holds a Bachelors Degree with highest honors in Social Science from the University of California at Berkeley. Steven A. Warshauer. Mr. Warshauer joined Standard in 1982, initially serving as Vice President, then becoming Senior Vice President and, since January 1, 1998, serving as Executive Vice President. Mr. Warshauer is a Certified Public Accountant and a member of both the American Institute of Certified Public Accountants and the Illinois Society of Certified Public Accountants. Mr. Warshauer received his Bachelor of Science Degree from the University of Northern Colorado in 1976 with dual majors in Accounting and Finance. Prior to joining Standard, he practiced with a national accounting firm. Michael K. Wolf. Mr. Wolf joined Standard as Senior Vice President and General Counsel in 1990, after sixteen years in the private practice of law. Mr. Wolf was subsequently appointed Executive Vice President of Standard. Prior to joining Standard, Mr. Wolf was a partner of the international law firm of Jones, Day, Reavis & Pogue, resident in the Chicago office, where his primary concentration was in the field of real estate. Mr. Wolf received his B.A. Degree in 1971 from the University of Pennsylvania, and in 1974 received his J.D. Degree from Washington University, where he served as Notes and Comments editor of the Washington University Law Quarterly. Upon graduation from law school, Mr. Wolf was elected to the Order of the Coif. James A. Wilhelm. Mr. Wilhelm joined Standard in 1985, serving as Executive Vice President since January 1, 1998. Mr. Wilhelm is currently responsible for managing Standard's Midwest and Western Regions, which include parking facilities in Chicago and sixteen other cities throughout the United States and Canada. Mr. Wilhelm received his B.A. Degree from Northeastern Illinois University in 1976. Mr. Wilhelm is a member of the National Parking Association and the International Parking Institute. Herbert W. Anderson, Jr. Mr. Anderson joined APCOA in 1994, and has served as Corporate Vice President--Urban Properties since 1995. Mr. Anderson graduated from LaSalle University and began his career in the parking industry in 1984. Mr. Anderson is a member of the Board of the National Parking Association. Robert N. Sacks. Mr. Sacks joined APCOA in 1988, serving as General Counsel and Secretary since 1988, serving as Vice President, Secretary, and General Counsel since 1989 and serving as Senior Vice President, Secretary and General Counsel since 1997. Mr. Sacks has overall responsibility for the Legal Department, which includes negotiation, documentation and approval of parking and corporate contracts, financing documentation and coordination of outside counsel. In his position, Mr. Sacks is also responsible for maintaining field compliance with corporate legal and financial policies. Mr. Sacks received his B.A. Degree, cum laude, from Northwestern University in 1976 and, in 1979, received his J.D. Degree from Suffolk University. Mr. Sacks has spoken on legal issues concerning the parking industry at the National Parking Association National Convention and the Institutional and Municipal Parking Congress. James V. LaRocco, Jr. Mr. LaRocco has been associated with APCOA since 1962, starting in an operations position at the Los Angeles International Airport, and has served as Executive Vice President since 1995. His prior positions have included Division Manager, Regional Manager and Vice President. Patrick J. Meara. Mr. Meara became a director of the Company upon consummation of the Combination. Mr. Meara is a Senior Vice President of JMB Realty Corporation, which held an interest in Standard prior to the Combination, and acquired an interest in the Company as a result of the Combination. Gunnar E. Klintberg. Mr. Klintberg has served as Vice Chairman of Holberg since its inception in 1986, and as a Director of APCOA since 1989. Mr. Klintberg was a Managing Partner of DnC Capital Corporation, a merchant banking firm in New York City, from 1983 to 1986. From 1975 to 1983, Mr. Klintberg held various management positions with the Axel Johnson Group, headquartered in Stockholm, Sweden. Mr. Klintberg headed up the Axel Johnson Group's headquarters in Moscow from 1976 to 1979 and served as assistant to the President of Axel Johnson Group's $1 billion operation in the U.S., headquartered in New York City, from 1979 to 1983. Mr. Klintberg received his undergraduate degree from Dartmouth College in 1972 and a degree in Business Administration and Economics from the University of Uppsala, Sweden in 1974. 49 52 A. Petter Ostberg. Mr. Ostberg joined Holberg in 1994 and was appointed Chief Financial Officer of Holberg in 1997. Mr. Ostberg is currently a Vice President of APCOA. Prior to joining Holberg, Mr. Ostberg held various finance positions from 1990 to 1994 with New York Cruise Lines, Inc., including Group Vice President, Treasurer and Secretary. Prior to joining New York Cruise Lines, Inc., Mr. Ostberg was General Manager of Planter Technology Ltd. in Mountain View, California, and from 1985 to 1987, Mr. Ostberg was a Financial Analyst with Prudential Securities, Inc. in New York. Mr. Ostberg received a B.A. in International Relations and Economics from Tufts University in 1985, and an M.B.A. from Stanford University Graduate School of Business in 1989. EXECUTIVE COMPENSATION The following table sets forth information for 1995, 1996 and 1997 with regard to compensation for services rendered in all capacities to (a) APCOA by the Chief Executive Officer and the other four most highly compensated executive officers of APCOA and (b) to Standard by two executive officers of Standard for each of whom disclosure would have been provided but for the fact that he was not serving as an executive officer of APCOA at the end of the last completed fiscal year (collectively, the "Named Executive Officers"). Except as otherwise noted, information set forth in the table reflects compensation earned by such individuals for services with APCOA or its respective subsidiaries. SUMMARY COMPENSATION TABLE
OTHER ANNUAL ALL OTHER COMPEN- COMPEN- FISCAL SALARY BONUS SATION SATION NAME AND PRINCIPAL POSITION YEAR ($) $ $ ($) --------------------------- ------ ------- ------- ------- --------- G. Walter Stuelpe, Jr..................... 1997 420,942(1) 183,500(4) -- 21,000(2) Chief Executive Officer and 1996 405,129(1) 216,600 -- 17,000(2) President 1995 393,834(1) 222,100 -- 17,000(2) James V. LaRocco, Jr...................... 1997 189,396(1) 72,895(4) -- 22,000(2) Executive Vice President, 1996 172,006(1) 64,539 -- 19,300(2) Corporate Development 1995 164,063(1) 61,710 -- 19,300(2) Trevor R. Van Horn(5)..................... 1997 140,399(1) 56,646(4) -- -- Corporate Vice President, 1996 98,654(1) 29,798 17,033(3) -- Airport Properties 1995 -- -- -- -- Herbert W. Anderson, Jr................... 1997 130,250(1) 53,146(4) 21,241(3) 7,900(2) Corporate Vice President, 1996 121,944(1) 49,050 17,695(3) -- Urban Properties 1995 101,334(1) 26,972 -- -- Michael J. Celebrezze..................... 1997 128,477(1) 43,750(4) -- 8,500(2) Senior Vice President, Chief 1996 116,386(1) 45,911 -- 7,900(2) Financial Officer and 1995 108,227(1) 38,304 -- 2,400(2) Treasurer Myron C. Warshauer(6)..................... 1997 98,265 -- 41,229(7) 42,102(8) Chief Executive Officer and 1996 53,290 -- 28,795(7) 41,630(8) President of Standard 1995 37,950 -- 18,740(7) 46,169(8) Michael K. Wolf(6)........................ 1997 376,400 -- -- -- Executive Vice President and 1996 313,800 -- -- -- General Counsel of Standard 1995 254,800 -- -- --
- --------------- (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. 50 53 (4) The amount shown is a target only, bonuses for 1997 have not yet been paid, and the actual bonus may be different from the amount shown in the table above. (5) As of April 1, 1998, Mr. Van Horn is no longer an employee of the Company. (6) All compensation information set forth in the table for this individual reflects compensation earned for services with Standard or its respective subsidiaries. (7) The amount shown includes car allowances, club dues, health insurance premiums and legal fees related to estate planning paid by Standard. (8) The amount shown reflects premiums paid by Standard on behalf of Myron C. Warshauer for life insurance policies to which Mr. Warshauer is entitled to the cash surrender value. DIRECTOR COMPENSATION Directors of the Company do not receive compensation for serving on the Company's Board of Directors. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Company did not have a Compensation Committee in the year ended December 31, 1997. The Company intends to form a Compensation Committee in 1998. The members of such committee have not yet been determined. During 1997, no executive officer of the Company served as a member of the Compensation Committee of another entity. EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS Mr. Stuelpe's current employment agreement with the Company provides for an initial four year term with default annual renewals, and is scheduled to lapse on December 31, 2000. The agreement also provides for an annual base salary of $423,306 in 1998, plus an annual bonus equal to eight percent of an amount substantially based on the amount by which the Company's EBITDA, subject to certain adjustments, exceeds a certain floor amount, as well as certain other benefits. Mr. Stuelpe agrees not to disclose confidential information if such disclosure would have a material adverse effect on the Company. During the term of the employment agreement, and for two years after its termination, or, under certain circumstances, until receipt of the final salary payment due under the terms of the agreement, Mr. Stuelpe agrees not to render services to, or have any ownership interest in, any business which is competitive with the Company. If Mr. Stuelpe's employment is terminated by reason of his death or Disability (as defined in the agreement), the Company is obligated to pay Mr. Stuelpe's designated beneficiary, in the case of termination by reason of death, and Mr. Stuelpe, in the case of termination by reason of Disability, (i) an amount equal to Mr. Stuelpe's annual base salary at the time of his death; (ii) the annual bonus for the year in which the termination of employment occurred, prorated for the numbers of days Mr. Stuelpe was employed during that year; and (iii) certain other benefits. If Mr. Stuelpe's employment is terminated other than for death or Disability, and without Cause (as defined in the agreement) or within six months following a Change of Control (as defined in the agreement), the Company is required to pay Mr. Stuelpe (a) his salary (i) through the date that the agreement was scheduled to terminate as if Mr. Stuelpe had continued to be employed by the Company, in the case of a termination without Cause and (ii) for a minimum period of twenty-four months after the termination of employment, in the case of a Change of Control; (b) the annual bonus for the year in which the termination of employment occurred, prorated for the number of days Mr. Stuelpe was employed during that year; and (c) certain other benefits. Mr. LaRocco's current employment agreement with the Company provides for a three-year term, scheduled to lapse on June 30, 1998, default annual renewals, and an annual base salary of not less than $165,000, subject to annual review and increases at the discretion of the Company's Chief Executive Officer, plus an annual bonus of up to forty percent of annual base salary, as well as certain other benefits. Mr. LaRocco agrees not to disclose confidential information for any reason whatsoever. During the term of the employment agreement, and for one year after its termination if Mr. LaRocco is terminated other than 51 54 without Cause (as defined in the agreement), Mr. LaRocco agrees not to render services to, or have any ownership interest in, any business which is competitive with the Company. Mr. LaRocco's employment agreement does not contain change of control provisions. If Mr. LaRocco's employment is terminated by reason of his death or Disability (as defined in the agreement), the Company is obligated to pay Mr. LaRocco's designated beneficiary, in the case of termination by reason of death, and Mr. LaRocco, in the case of termination by reason of Disability, (i) an amount equal to Mr. LaRocco's annual base salary at the time of his death plus $9,600, which represents the estimated annual value of the right to use a company automobile and (ii) certain other benefits. If Mr. LaRocco's employment is terminated other than for death or Disability and without Cause, the Company is required to pay Mr. LaRocco (i) the greater of his annual base salary at the time of termination or the aggregate amount payable to Mr. LaRocco under the company's severance benefit policy; (ii) a termination bonus in an amount equal to the annual bonus for the year in which the termination of employment occurred, multiplied by the number of days remaining after the date of termination in that year plus 365, and then divided by 365; and (iii) certain other benefits. Mr. Van Horn's employment agreement with the Company terminated as of April 1, 1998. In connection with such termination, the Company paid Mr. Van Horn (i) thirty weeks' severance pay; (ii) a thirty-five percent Severance Retention Bonus and (iii) $25,000 in relocation and related expenses. In addition, the Company transferred to Mr. Van Horn the title to Mr. Van Horn's company automobile and company computer, and will continue providing insurance benefits to Mr. Van Horn for a certain time after such termination. Mr. Anderson's current employment agreement with the Company provides for a two and one-half year term, scheduled to lapse on June 30, 1998, default annual renewals, and an annual base salary of not less than $125,000, subject to annual review and increases at the discretion of the Company's Chief Executive Officer, plus an annual bonus of up to forty percent of the annual base salary, as well as certain other benefits. Mr. Anderson agrees not to disclose confidential information for any reason whatsoever. During the term of the employment agreement, and for one year after its termination if Mr. Anderson is terminated other than without Cause (as defined in the agreement), Mr. Anderson agrees not to render services to, or have any ownership interest in, any business which is competitive with the Company. Mr. Anderson's employment agreement does not contain change of control provisions. If Mr. Anderson's employment is terminated by reason of his death or Disability (as defined in the agreement), the Company is obligated to pay Mr. Anderson's designated beneficiary, in the case of termination by reason of death, and Mr. Anderson, in the case of termination by reason of Disability, (i) an amount equal to Mr. Anderson's annual base salary at the time of his death plus $9,600, which represents the estimated annual value of the right to use a company automobile and (ii) certain other benefits. If Mr. Anderson's employment is terminated other than for death or Disability and without Cause, the Company is required to pay Mr. Anderson (i) the greater of his annual base salary at the time of termination and the aggregate amount payable to Mr. Anderson under the company's severance benefit policy; (ii) a termination bonus in an amount equal to the annual bonus for the year in which the termination of employment occurred, multiplied by the number of days remaining after the date of termination in that year plus 365, and then divided by 365; and (iii) certain other benefits. Mr. Celebrezze's current employment agreement with the Company provides for a three-year term, scheduled to lapse on March 30, 2001, default renewals for additional two year periods, an annual base salary of not less than $180,000, subject to annual review, plus an annual bonus of at least 35% of Mr. Celebrezze's annual base salary and a $250,000 housing differential loan with a term of three years, of which one-third of the principal balance and the accrued interest due thereon shall be forgiven by the Company, and treated as additional compensation to Mr. Celebrezze in the year of such forgiveness, for each year Mr. Celebrezze remains in the continual employ of the Company (and the Company shall make Mr. Celebrezze whole with respect to the tax consequences of any such forgiveness), as well as certain other benefits. 52 55 Mr. Celebrezze agrees not to communicate, divulge or disseminate confidential information at any time during or after his employment with the Company, except with the prior written consent of the Company or as required by law or legal process. During the term of the employment agreement and for two years after its termination, Mr. Celebrezze agrees not to render services to, or have any ownership interest in, any business which is competitive with the Company in geographic areas in which the Company, or its affiliates, is then conducting, or is in the process of developing prospects to conduct, business. Mr. Celebrezze's employment agreement does not contain change of control provisions. If Mr. Celebrezze's employment is terminated by reason of his death, the Company is obligated to pay Mr. Celebrezze's estate an amount equal to the sum of (i) Mr. Celebrezze's annual base salary through the end of the calendar month in which death occurs and (ii) any earned and unpaid annual bonus, vacation pay and other vested benefits. If Mr. Celebrezze's employment is terminated by reason of his Disability (as defined in the agreement), the Company is obligated to pay Mr. Celebrezze or his legal representative (a) Mr. Celebrezze's annual base salary for the duration of the employment period in effect on the date of termination, reduced by amounts received under any disability benefit program and (b) any earned and unpaid annual bonus and other vested benefits. If Mr. Celebrezze's employment is terminated by the Company other than for death, Disability or Cause (as defined in the agreement) or if Mr. Celebrezze terminates his employment for Good Reason (as defined in the agreement), the Company is required to continue (A) to pay Mr. Celebrezze for the remainder of the employment period in effect immediately before the date of termination his annual base salary and annual bonus(es) through the end of the then-current employment period and (B) to provide Mr. Celebrezze and/or his family with certain other benefits, provided that in the event of a termination of employment by Mr. Celebrezze for Good Reason, the annual base salary, annual bonus and benefit continuation period shall be two years from the date of such termination. In addition, under the foregoing circumstances, any remaining principal balance and any accrued and unpaid interest on the housing differential loan shall be forgiven by the Company, and the Company shall make Mr. Celebrezze whole for any tax consequences of such forgiveness. If Mr. Celebrezze's employment is terminated by the Company any time before the third anniversary of the employment agreement for any reason other than for Cause, or if the Company gives notice of its intention not to renew the agreement for an additional two-year term beginning on the third anniversary of the agreement, the Company is obligated to (x) pay Mr. Celebrezze his annual base salary and annual bonus for the remaining balance of the initial three-year term, if any, and for an additional two years and (y) to continue to provide Mr. Celebrezze with certain other benefits for the same period. Mr. Wolf's current employment agreement with the Company provides for a three-year term, scheduled to lapse on March 26, 2001, default annual renewals, and an annual base salary of not less than $376,400, subject to annual review, plus an annual bonus based on a percentage of the annual base salary to be mutually agreed upon by the Company and Mr. Wolf, as well as certain other benefits. Mr. Wolf agrees to hold all confidential information in strict confidence and not publish or otherwise disclose any portion thereof to any person whatsoever except with the prior written consent of the Company. During the term of the employment agreement and for two years after its termination (or eighteen months if such termination follows a Change in Control (as defined in the agreement)), Mr. Wolf agrees not to render services to, or have any ownership interest in, any business which is competitive with the Company in certain geographic areas. If Mr. Wolf's employment is terminated by reason of his death, the Company is obligated to pay Mr. Wolf's estate an amount equal to the sum of (i) Mr. Wolf's annual base salary through the end of the calendar month in which death occurs and (ii) any earned and unpaid annual bonus, vacation pay and other vested benefits. If Mr. Wolf's employment is terminated by reason of his Disability (as defined in the agreement), the Company is obligated to pay Mr. Wolf or his legal representative (a) an amount equal to Mr. Wolf's annual base salary for the duration of the employment period in effect on the date of termination, reduced by amounts received under any disability benefit program and (b) any earned and unpaid annual bonus and other vested benefits. 53 56 If Mr. Wolf's employment is terminated by the Company other than for death or Disability and without Cause (as defined in the agreement), the Company is required to continue (A) to pay Mr. Wolf for the remainder of the employment period in effect immediately before the date of termination his annual base salary and annual bonus(es) through the end of the then-current employment period and (B) to provide Mr. Wolf and/or his family with certain other benefits. If Mr. Wolf's employment is terminated by the Company for any reason other than Cause during the three-year period following a Change in Control (as defined in the agreement), the Company is obligated to (x) pay Mr. Wolf an amount ("Severance Pay") equal to the greater of (1) one and one-half times the sum of (I) Mr. Wolf's current annual base salary plus (II) the amount of any bonus paid to Mr. Wolf in the preceding twelve months and (2) the annual base salary and annual bonuses through the end of the then-current employment period and (y) continue to provide Mr. Wolf with certain other benefits for a certain period of time. If Mr. Wolf terminates his employment voluntarily following a Change in Control, he shall not be entitled to Severance Pay, provided, however, that any such termination by Mr. Wolf for Good Reason (as defined in the agreement) shall not be considered a voluntary termination and Mr. Wolf will be treated as if he had been terminated by the Company other than for Cause. Consummation of the Combination was conditioned, among other things, upon the execution of an employment agreement between the Company and Myron C. Warshauer. Employment Agreement with Myron C. Warshauer. The Employment Agreement between the Company and Myron C. Warshauer (the "Warshauer Employment Agreement") provides that Myron C. Warshauer serve as Chief Executive Officer of the Company, and be appointed as a member of the Board of Directors of the Company (the "Board") and each committee of the Board, for a period beginning on the date of the consummation of the Combination and ending on Myron C. Warshauer's 65th birthday (the "Employment Period"). Myron C. Warshauer will receive during the Employment Period an annual base salary of $600,000 ("Annual Base Salary"). The Warshauer Employment Agreement also provides for certain perquisites. Under the Warshauer Employment Agreement, if Myron C. Warshauer's employment were to be terminated by Myron C. Warshauer for Good Reason (as defined below), or by the Company other than for Cause (as defined below), death or Disability (as defined below), the Company would be obligated to (i) pay Myron C. Warshauer a lump sum cash payment in an amount equal to the aggregate Annual Base Salary that he would have received for the remainder of the Employment Period, reduced to present value using as a discount rate the "applicable federal rate," as defined in Section 1274(d) of the Internal Revenue Code of 1986, as amended, and (ii) continue to provide for the same period welfare benefits to Myron C. Warshauer and/or his family, at least as favorable as those that would have been provided to them under the Warshauer Employment Agreement if Myron C. Warshauer's employment had continued until the end of the Employment Period, provided, however, that during any period when Myron C. Warshauer is eligible to receive such benefits under another employer-provided plan, such benefits provided by the Company may be made secondary to those provided under such other plan. If Myron C. Warshauer's employment were to be terminated by reason of his Disability during the Employment Period, the Company would be obligated to pay Myron C. Warshauer, or his legal representative, as applicable, the Annual Base Salary for the duration of the Employment Period in effect at the time of the termination of employment. In addition to the above compensation and benefits, if Myron C. Warshauer's employment were to be terminated for any reason other than by the Company for Cause, the Company would be obligated, beginning on the date of such termination in the case of a voluntary termination by Myron C. Warshauer, and beginning on Myron C. Warshauer's 65th birthday in all other cases, and ending on the first to occur of Myron C. Warshauer's 75th birthday and Myron C. Warshauer's death (such ending date, the "Cutoff Date"), to (i) pay Myron C. Warshauer $200,000 annually, adjusted for inflation and (ii) provide Myron C. Warshauer with an executive office and secretarial services. In consideration for such benefits, Myron C. Warshauer is obligated to provide reasonable consulting services to the Company from the date of termination of his employment through the Cutoff Date. 54 57 As used in the Warshauer Employment Agreement: (i) "Cause" means (a) illegal conduct, or gross misconduct, that results in material damage to the business or reputation of the Company; or (b) any willful and continued failure by Myron C. Warshauer to perform his duties under the Warshauer Employment Agreement, (ii) "Disability" means that Myron C. Warshauer has been unable, for a period of 180 consecutive days, or for periods aggregating 180 business days in any period of twelve months, to perform a material portion of his duties under the Warshauer Employment Agreement, as a result of physical or mental illness or injury, and a physician selected by the Company has determined that Myron C. Warshauer's incapacity is total and permanent, and (iii) "Good Reason" means (a) the relocation of Myron C. Warshauer's principal place of business outside of the central business district and northern suburbs of Chicago; (b) a material reduction in Myron C. Warshauer's responsibilities; (c) the assignment to Myron C. Warshauer of duties inconsistent with his position as set forth in the Warshauer Employment Agreement; (d) a change in Myron C. Warshauer's title from that required under the Warshauer Employment Agreement; (e) a removal of Myron C. Warshauer from the Board or any committee thereof; (f) a requirement that Myron C. Warshauer report to anyone other than the Chairman of the Board; or (g) any material breach by the Company of any other term of the Warshauer Employment Agreement. The Warshauer Employment Agreement also provides that during the period beginning on the date of the consummation of the Combination and ending on Myron C. Warshauer's 75th birthday (the "Noncompetition Period"), Myron C. Warshauer shall not, without written consent of the Board, engage in or become associated with any business or other endeavor that engages in construction, ownership, leasing, design and/or management of parking lots, parking garages, or other parking facilities or consulting with respect thereto, provided, however, that Myron C. Warshauer may own or sell investments in certain parking facilities ("Permitted Investments") during the Noncompetition Period, and may own or sell any interest in any other real estate ("Other Real Estate") at any time after the Employment Period for the remainder of the Noncompetition Period. The Warshauer Employment Agreement provides that, if such Permitted Investment or Other Real Estate includes a parking facility, Myron C. Warshauer shall initiate negotiations, or, under certain circumstances, use reasonable and good-faith efforts to cause such negotiations, with the Company in an attempt to determine mutually agreeable terms pursuant to which the Company will manage or lease the parking facility and, if such negotiations fail, that, under certain circumstances, the Company shall have a right of first refusal with respect to any management agreement or lease that may be negotiated with any independent third party. Pursuant to the Warshauer Employment Agreement, within 120 days after the Closing Date, the Company shall establish a stock option or phantom stock option plan (the "Option Plan") providing for grants of actual or phantom options with respect to the common stock of the Company ("Company Common Stock"), under which Myron C. Warshauer will be granted options to purchase a number of shares of Company Common Stock equal to 1.0% of the total number of shares of Company Common Stock. All such options will have a term of 10 years from the date of the grant. 55 58 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.
PERCENT AMOUNT AND NATURE OF SHARES NAME AND ADDRESS OF BENEFICIAL OWNERSHIP OUTSTANDING ---------------- ----------------------- ----------- 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)
- ------------------------------ (1) Mr. Holten owns all of the outstanding common stock of the corporate parent of Holberg, which parent entity owns approximately 70.0% of the outstanding common stock of Holberg, which in turn owns 82.5% of the outstanding common stock of AP Holdings. The corporate parent of Holberg has an additional interest in the common stock of Holberg of approximately 25% through certain preferred stock convertible into common stock. The convertible interests described in this note have been computed based upon the outstanding common shares of Holberg, without taking into account any convertible interests of Holberg. (2) Orkla owns approximately 30.0% of the outstanding common stock of Holberg. Orkla has an additional interest in the common stock of Holberg of approximately 17% through certain preferred stock convertible into common stock. The convertible interests described in this note have been computed based upon the outstanding common shares of Holberg, without taking into account any convertible interests of Holberg. (3) Delaware North owns 10.0% of the outstanding common stock of AP Holdings. In accordance with an agreement (the "Put/Call Agreement"), between AP Holdings and Delaware North, AP Holdings has the right under certain circumstances to, and has the obligation under certain circumstances to, repurchase the shares of its common stock held by Delaware North. AP Holdings has exercised the right to repurchase the common stock held by Delaware North pursuant to the terms of the Put/Call Agreement, and the price of such repurchase will be determined in accordance with the terms of the Put/Call Agreement by a nationally recognized investment bank. (4) All of the interests in Dosher Partners, L.P. are beneficially owned by Myron C. Warshauer and trusts for the benefit of certain members of his family. Mr. Warshauer disclaims beneficial ownership of the assets of Dosher Partners, L.P., including the shares of Common Stock held by it, to the extent those interests are held for the benefit of such trusts. (5) SP Associates is a general partnership controlled by affiliates of JMB Realty Corp. (6) Mr. Stuelpe owns approximately 3.1% of the common stock of AP Holdings. (7) Mr. Celebrezze owns less than 1.0% of the common stock of AP Holdings. (8) Mr. Sacks owns less than 1.0% of the common stock of AP Holdings. (9) Mr. LaRocco owns approximately 1.6% of the common stock of AP Holdings. 56 59 CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS COMPANY STOCKHOLDERS AGREEMENT Upon consummation of the Combination, the Company entered into a Stockholders Agreement (the "Stockholders Agreement") with Dosher Partners, L.P. ("Dosher"), and SP Associates (collectively, the "Standard Parties") and Holberg and AP Holdings (collectively with the Standard Parties, the "Stockholders"). The Stockholders Agreement provides, among other things, for (i) prior to the earliest of (a) the seventh anniversary of the consummation of the Combination, (b) the termination of Myron C. Warshauer's employment with the Company under certain circumstances and (c) the consummation of an initial public offering of Company Common Stock (as such offering will be defined in the Stockholders Agreement), certain obligations of Holberg to allow Dosher the opportunity to acquire all, but not less than all, of the Company Common Stock held by Holberg and/or its affiliates before Holberg may directly or indirectly sell an amount of Company Common Stock which would constitute a Control Transaction (as will be defined in the Stockholders Agreement); provided that, under certain circumstances, Holberg may sell such shares to a party other than Dosher if the terms of such other party's offer are more favorable to Holberg, (ii) until the consummation of an initial public offering of Company Common Stock, certain rights of each Standard Party to purchase shares of Company Common Stock to the extent necessary to maintain such Standard Party's percentage ownership of the Company, (iii) the right of the Standard Parties to participate in, and the right of Holberg to require the Standard Parties to participate in, certain sales of Company Common Stock, (iv) following the third anniversary of the consummation of the Combination and prior to an initial public offering of Company Common Stock, certain rights of the Company to purchase, and certain rights of the Standard Parties to require the Company to purchase, shares of Company Common Stock at prices determined in accordance with the Stockholders Agreement and (v) certain additional restrictions on the rights of the Standard Parties to transfer shares of Company Common Stock. The Stockholders Agreement also contains certain provisions granting the Stockholders certain rights in connection with registrations of Company Common Stock in certain offerings and provides for indemnification and certain other rights, restrictions and obligations in connection with such registrations. AP HOLDINGS STOCKHOLDERS AGREEMENT AP Holdings is party to a Stockholders Agreement with Holberg, Delaware North, and each of the members of APCOA management who is a stockholder of AP Holdings, and an ancillary Put/Call Option Agreement between Holberg and Delaware North, which provide for, among other things, (i) a board of directors consisting of three or more Holberg nominees, one Delaware North nominee, and one management nominee, (ii) certain restrictions on the sale, assignment, transfer, encumbrance or other disposition of the common stock of AP Holdings, (iii) certain first offer, repurchase and put/call rights with respect to the AP Holdings common stock held by the management investors, (iv) certain pre-emptive rights in favor of the management investors with respect to the issuance of AP Holdings common stock, and (v) certain put/call rights with respect to the AP Holdings common stock held by Delaware North. TAX SHARING AGREEMENT The Company is a party to the Tax Sharing Agreement, dated April 28, 1989, by and among Holberg, AP Holdings and the Company (the "Tax Sharing Agreement"), which applies to each of Holberg's consolidated return years beginning with 1989. The Tax Sharing Agreement provides that each member of Holberg's affiliated group, including the Company, will pay to Holberg the amount of federal income tax that such member would be required to pay on a separate return basis for the year in question, except that the amount that the Company is required to pay to Holberg will not exceed the tax liabilities of the Company on a separate return basis for all taxable years to which the Tax Sharing Agreement applies and for which the Company joined in the Holberg consolidated return, computed as if the Company had actually filed separate returns for all such years and taking into account any net operating loss carryforward the Company would have had if it had filed a separate return for all such years. Holberg is not required to make a payment to the Company by virtue of the utilization by the Holberg affiliated group of any net operating loss generated by the 57 60 Company. In the event that the consolidated federal income tax liability of the Holberg affiliated group is adjusted for any taxable period, whether by means of an amended return, claim for refund, or tax audit by the Internal Revenue Service, the liability of the Company under the Tax Sharing Agreement will be recomputed to give effect to such adjustments. PREFERRED STOCK Prior to the consummation of the Combination, Holberg held $8.7 million of preferred stock of APCOA. A portion of the proceeds of the Offering was used to redeem $8.0 million of the preferred stock. The remaining $0.7 million was contributed to the capital of the Company. See "Use of Proceeds" and Notes 6 and 7 to the Unaudited Pro Forma Consolidated Balance Sheet of APCOA included herein. The preferred stock issued by the Company to AP Holdings in respect of the Preferred Stock Contribution has the same maturity as the debt securities of AP Holdings issued to finance the Preferred Stock Contribution, has an initial liquidation preference equal to the issue price of such debt securities, increases in liquidation preference at the same rate as such debt securities accrue interest, such that the liquidation preference of the preferred stock will at all times be equal to the then principal amount of such debt securities, and accrues cash dividends commencing at such times as such debt securities commence to accrue cash interest, at the same rate as such debt securities. MANAGEMENT CONTRACTS AND RELATED ARRANGEMENTS WITH AFFILIATES The Company has a management contract to operate one parking facility in Chicago with an Illinois land trust which is beneficially owned by a partnership in which Myron C. Warshauer, Steven A. Warshauer and Stanley Warshauer have an equity interest. All expenses that are typically borne by a facility owner under a management contract, such as salaries, wages and benefits associated with employees at the parking facility and an allocable portion of such costs for supervisory management personnel, the cost of uniforms, supplies, insurance, utilities and other direct operating costs ("property-level expenses") are paid by the facility owner. Pursuant to the management contract, the Company is entitled to an annual management fee of approximately $40,700 in 1998. However, certain subordination provisions in the loan agreement between the facility owner and its lender have resulted in the non-payment of all or a portion of the management fee for the past four years. The Company estimates that the management fee to which it is entitled pursuant to this management contract is no less than would normally be obtained through arms-length negotiations. The Company has a management contract with the Buckingham Plaza Limited Partnership ("BPLP") to operate the parking facility at a condominium complex in Chicago of which BPLP was the developer. Myron C. Warshauer and SP Associates own an equity interest in one of BPLP's limited partners. The Company received an annual management fee of $20,200 pursuant to such management contract. The Company estimates that such management fee is no less than would normally be obtained through arms-length negotiations. The Company has management contracts to operate two surface parking lots in Chicago. Myron C. Warshauer, Steven A. Warshauer, Stanley Warshauer, Michael K. Wolf and SP Associates own membership interests in a limited liability company that is a member of the limited liability companies that own such surface parking lots. The Company receives a total of $39,300 in management fees annually under such management contracts. The Company estimates that such management fees are no less than would normally be obtained through arms-length negotiations. The Company operates the Clark Fullerton Self Park, a parking facility in which Myron C. Warshauer has a 50% equity interest. The facility owner pays all of the property-level expenses. The Company does not receive a management fee. The Company estimates that in today's market, it reasonably could expect to receive an annual management fee ranging from $15,000 to $20,000 for providing such services. The Company provides office and related support services to Auditorium Garage, Inc. ("Auditorium"), an Illinois corporation owned by Stanley Warshauer and his wife, in conjunction with Auditorium's 58 61 management of a parking facility. Auditorium reimburses the Company for the general and administrative costs associated with providing these services, which reimbursement totaled $32,200 in 1997. Myron C., Stanley and Steven A. Warshauer own an equity interest in two parking facilities in Chicago. One of those facilities is leased to the Company on terms that the Company believes are no less favorable to the Company than would normally be obtained through arms-length negotiations. The Company earned net lease income of $342,000 in 1997 at such facility. The other parking facility (the "Tremont Facility") is leased to Standard/Tremont Parking Corporation ("Standard Tremont"), an Illinois corporation that is owned by Stanley Warshauer, Steven A. Warshauer and Myron C. Warshauer. The Company provides office and related support services to Standard Tremont, in conjunction with Standard Tremont's management of the Tremont Facility. Standard Tremont reimburses the Company for the general and administrative costs associated with providing these services, which reimbursement totaled $13,900 in 1997. The Company pays 12.5% of the lease net operating income derived from one parking facility to Warshauer Management Corporation for services rendered in obtaining the right to operate the facility. LIABILITY INSURANCE The Company currently purchases a portion of its casualty insurance from an affiliate of Holberg. The Company estimates that the premiums paid for such insurance are comparable to premiums it would pay for comparable coverage from an unrelated third party. See Note H to the Historical Consolidated Financial Statements of APCOA included herein. The Company purchases liability insurance covering certain parking facilities from JMB Insurance Agency, Inc., an affiliate of JMB Realty Corp. The Company estimates that the premiums paid for such insurance are comparable to premiums it would pay for comparable coverage from an unrelated third party. CONSULTING AGREEMENT WITH SIDNEY WARSHAUER Consummation of the Combination was conditioned, among other things, upon the execution of a consulting agreement between the Company and Sidney Warshauer, the father of Myron C. Warshauer. Sidney Warshauer is 83 years old. The Consulting Agreement between the Company and Sidney Warshauer (the "Consulting Agreement") provides that Sidney Warshauer render such services as may be requested, from time to time, by the Board of Directors of the Company (the "Board") and/or the Chief Executive Officer of the Company, consistent with Mr. Warshauer's past practices and experience, for a period beginning on the date of the consummation of the Combination and ending on Sidney Warshauer's death (the "Consulting Period"). Sidney Warshauer will receive, during the Consulting Period, an annual consulting fee of $552,000. The Consulting Agreement also provides that Sidney Warshauer will receive certain other benefits during the Consulting Period. The Consulting Agreement is not terminable by the Company for any reason other than the death of Sidney Warshauer, or a breach by Sidney Warshauer of his obligations under the Consulting Agreement with respect to non-disclosure of Company confidential information, or his obligation under the Consulting Agreement to refrain from engaging in competition with the Company, as described below. The Consulting Agreement provides that, during the Consulting Period, Sidney Warshauer will not, without written consent of the Board, engage in, or become associated with, any business or other endeavor that engages in construction, ownership, leasing, design and/or management of parking lots, parking garages, or other parking facilities or consulting with respect thereto. CERTAIN OTHER MATTERS RELATING TO HOLBERG Holberg has received customary investment banking and advisory fees from APCOA in connection with certain prior transactions, and received a $1.0 million advisory fee (and reimbursement of expenses) upon consummation of the Combination. The Company also may pay an annual management fee to Holberg and 59 62 otherwise reimburse Holberg for certain expenses incurred by Holberg on behalf of the Company. In addition, the Company currently leases a plane on behalf of Holberg. Holberg pays all costs under the lease other than amounts that may be charged to the Company in connection with use of the plane and indemnifies the Company for all obligations under the lease. All of these fees and other amounts paid to Holberg are subject to the limits and restrictions imposed by the Indenture. See "Description of New Notes--Affiliate Transactions." APCOA and Holberg and its affiliates have periodically engaged in bi-lateral loans and advances. In connection with the Combination, APCOA made a $4.5 million non-cash distribution to Holberg of the receivable in such amount due from Holberg to APCOA, thereby eliminating all amounts due from Holberg to APCOA. The Company may from time to time enter into such bi-lateral loans and advances in the future as permitted under the Indenture. See Note 5 to the Unaudited Pro Forma Consolidated Balance Sheet and "Description of New Notes--Permitted Investments." 60 63 DESCRIPTION OF INDEBTEDNESS The following sets forth information concerning the Company's indebtedness available immediately following the consummation of the Transactions. NEW CREDIT FACILITY The Company has entered into the New Credit Facility, pursuant to which the Company has available a new $40 million revolving credit facility with a six-year term. The New Credit Facility is available for working capital and general corporate purposes, including the issuance of letters of credit. At the Closing, the Company issued approximately $4.9 million of letters of credit under the New Credit Facility. The initial interest rate for borrowings under the New Credit Facility is, at the option of the Company, LIBOR plus 2.50% or the Alternate Base Rate (as defined below) plus 1.25%. The initial rates may be reduced or increased according to a pricing grid. The Company may elect interest periods of one, two, three or six months for LIBOR borrowings. The "Alternate Base Rate" is the higher of (i) the Agent's corporate base rate and (ii) the federal funds rate plus 1%. LIBOR will at all times include maximum statutory reserves. Indebtedness under the New Credit Facility may be prepaid in whole or in part without premium or penalty (subject in some cases to related breakage) and the Company may reduce or terminate the Lenders' commitments upon such notice and in such amounts as may be agreed upon. All of the Company's existing and future wholly-owned domestic subsidiaries guarantee indebtedness under the New Credit Facility. All extensions of credit under the New Credit Facility to the Company and the guarantees of subsidiaries of the Company's indebtedness under the New Credit Facility are secured, subject to certain exceptions, by all existing and after-acquired personal property of the Company and its subsidiaries, including all outstanding capital stock of the Company's subsidiaries, and any intercompany debt obligations, and all existing and after-acquired real property fee and leasehold interests and management contracts, subject to prohibitions in certain of such arrangements relating to collateral assignment. With certain exceptions, the Company and its subsidiaries are prohibited from pledging any of their assets other than under the New Credit Facility. Additionally, AP Holdings guarantees the Company's obligations under the New Credit Facility and such guarantee is secured by a first priority pledge of all the capital stock of the Company owned by AP Holdings. Under the New Credit Facility, the initial letter of credit fee is 2.50% per annum based upon the amount available for drawing under outstanding standby letters of credit plus customary and reasonable issuing fees. The issuing bank will retain 0.25% per annum from the fee for issuing the standby letters of credit. There may be adjustments in the letter of credit fees described above according to a pricing grid. The New Credit Facility contains customary and appropriate representations and warranties, including, without limitation, those relating to due organization and authorization, no conflicts, financial condition, no material adverse changes, title to properties, liens, litigation, payment of taxes, compliance with laws, and full disclosure. The New Credit Facility also contains customary and appropriate conditions including requirements relating to prior written notice of borrowing. The New Credit Facility also contains customary affirmative and negative covenants (including, where appropriate, certain exceptions and baskets), including but not limited to furnishing information and limitations on asset sales, other indebtedness, liens, investments, guarantees, restricted payments, mergers and acquisitions, capital expenditures, and affiliate transactions. The New Credit Facility also contains financial covenants including, without limitation, those relating to: minimum interest coverage; minimum fixed charge coverage; and maximum leverage. Events of default under the New Credit Facility include those relating to: (a) non-payment of interest, principal or fees payable under the New Credit Facility; (b) non-performance of certain covenants; (c) cross default to other material debt of the Company and its subsidiaries; (d) bankruptcy or insolvency; (e) judgments in excess of specified amounts; (f) materially inaccurate or false representations or warranties; and (g) change of control. 61 64 DESCRIPTION OF NEW NOTES GENERAL The New Notes will be issued pursuant to the same indenture (the "Indenture") among the Company, the direct or indirect domestic Restricted Subsidiaries of the Company (together, the "Subsidiary Guarantors"), and State Street Bank and Trust Company, as trustee (the "Trustee"), under which the Notes were issued. The terms of the New Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The New Notes are subject to all such terms, and Holders of New Notes are referred to the Indenture and the Trust Indenture Act for a statement thereof. The following summary of the material provisions of the Indenture does not purport to be complete and is qualified in its entirety by reference to the Indenture, including the definitions therein of certain terms used below. Copies of the proposed form of Indenture and Registration Rights Agreement are available as set forth below under "-- Additional Information." The definitions of certain terms used in the following summary are set forth below under "-- Certain Definitions." The New Notes will be general unsecured obligations of the Company, will rank subordinated in right of payment to all Senior Debt of the Company and senior or pari passu in right of payment to all existing and future subordinated indebtedness of the Company. The New Notes will be fully and unconditionally guaranteed (the "New Note Guarantees") on a joint and several basis by each of the Subsidiary Guarantors. The New Note Guarantees will be general unsecured obligations of the Subsidiary Guarantors, will rank subordinate in right of payment to all Senior Debt of the Subsidiary Guarantors and senior or pari passu in right of payment to all existing and future subordinated indebtedness of the Subsidiary Guarantors. The New Notes and the New Note Guarantees will be effectively subordinated to all indebtedness, including trade payables, of the Company's subsidiaries that are not Subsidiary Guarantors. As of December 31, 1997, on a pro forma basis giving effect to the Combination, and the related financings and other transactions described herein, there was no Senior Debt outstanding. Upon the Closing, the Company entered into a $40.0 million revolving credit facility pursuant to which $4.9 million in letters of credit were issued as of the closing of the Offering. All borrowings and other obligations under the revolving credit facility constitute Senior Debt. The operations of the Company are conducted in part through its Subsidiaries, and the Company may, therefore, be dependent upon the cash flow of its Subsidiaries to meet its debt obligations, including its obligations under the New Notes. All of the existing and future wholly owned domestic Restricted Subsidiaries with material assets are expected to be Subsidiary Guarantors. However, under certain circumstances, the Company is able to designate current or future Subsidiaries as Unrestricted Subsidiaries. Unrestricted Subsidiaries will not be subject to many of the restrictive covenants set forth in the Indenture. PRINCIPAL, MATURITY AND INTEREST The New Notes will be limited in aggregate principal amount to $200.0 million, of which $140.0 million were issued in the Offering and will mature on March 15, 2008. Interest on the New Notes will accrue at the rate of 9 1/4% per annum and will be payable semi-annually in arrears on March 15 and September 15 of each year, commencing on September 15, 1998, to Holders of record on the immediately preceding March 1 and September 1. Additional New Notes may be issued from time to time, subject to the provisions of the Indenture described below under the caption "-- Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock." Interest on the New Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. Principal, premium and Liquidated Damages, if any, and interest on the New Notes will be payable at the office or agency of the Company maintained for such purpose within the City and State of New York or, at the option of the Company, payment of interest and Liquidated Damages, if any, may be made by check mailed to the Holders of the New Notes at their respective addresses set forth in the register of Holders of New Notes; provided that all payments of principal, premium and Liquidated Damages, if any, and interest with respect to New Notes the Holders of which have given wire transfer instructions to the Company will be required to be made by wire transfer of immediately available funds to the accounts specified by the Holders thereof. Until otherwise 62 65 designated by the Company, the Company's office or agency in New York will be the office of the Trustee maintained for such purpose. The Notes will be issued in denominations of $1,000 and integral multiples thereof. SUBORDINATION The payment of principal of, premium and Liquidated Damages, if any, and interest on the New Notes will be subordinated in right of payment, as set forth in the Indenture, to the prior payment in full in cash or cash equivalents of all Senior Debt and all other Obligations with respect thereto, whether outstanding on the date of the Indenture or thereafter created, incurred or assumed and all permissible renewals, extensions, refundings or refinancings thereof. The Indenture provides that, upon any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors in any Insolvency or Liquidation Proceeding with respect to the Company all amounts due or to become due under or with respect to all Senior Debt will first be paid in full in cash or cash equivalents before any payment is made on account of the New Notes and all other Obligations with respect thereto, except that the Holders of New Notes may receive Reorganization Securities. Upon any such Insolvency or Liquidation Proceeding, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities (other than Reorganization Securities), to which the Holders of the New Notes or the Trustee would be entitled will be paid by the Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, or by the Holders of the New Notes or by the Trustee if received by them, directly to the holders of Senior Debt (pro rata to such holders on the basis of the amounts of Senior Debt held by such holders) or their Representative or Representatives, as their interests may appear, for application to the payment of the Senior Debt remaining unpaid until all such Senior Debt has been paid in full in cash, after giving effect to any concurrent payment, distribution or provision therefor to or for the holders of Senior Debt. The Indenture provides that (a) in the event of and during the continuation of any default in the payment of principal of, interest or premium, if any, on any Senior Debt, or any Obligation owing from time to time under or in respect of Senior Debt, or in the event that any event of default (other than a payment default) with respect to any Senior Debt will have occurred and be continuing and will have resulted in such Senior Debt becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, or (b) if any event of default other than as described in clause (a) above with respect to any Designated Senior Debt will have occurred and be continuing permitting the holders of such Designated Senior Debt (or their Representative or Representatives) to declare such Designated Senior Debt due and payable prior to the date on which it would otherwise have become due and payable, then no payment will be made, or redemption or acquisition will be effected, by or on behalf of the Company on account of the New Notes and all other Obligations with respect thereto (other than payments in the form of Reorganization Securities) (x) in case of any payment or nonpayment default specified in (a), unless and until such default will have been cured or waived in writing in accordance with the instruments governing such Senior Debt or such acceleration will have been rescinded or annulled, or (y) in case of any nonpayment event of default specified in (b), during the period (a "Payment Blockage Period") commencing on the date the Company or the Trustee receive written notice (a "Payment Notice") of such event of default (which notice will be binding on the Trustee and the Holders of New Notes as to the occurrence of such a payment default or nonpayment event of default) from the Credit Agent (or other holders of Designated Senior Debt or their Representative or Representatives) and ending on the earliest of (A) 179 days after such date, (B) the date, if any, on which such Designated Senior Debt to which such default relates is paid in full in cash or such default is cured or waived in writing in accordance with the instruments governing such Designated Senior Debt by the holders of such Designated Senior Debt and (C) the date on which the Trustee receives written notice from the Credit Agent (or other holders of Designated Senior Debt or their Representative or Representatives), as the case may be, terminating the Payment Blockage Period. During any consecutive 360-day period, the aggregate of all Payment Blockage Periods shall not exceed 179 days and there shall be a period of at least 181 consecutive days in each consecutive 360-day period when no Payment Blockage Period is in effect. No event of default which existed or was continuing with respect to the Senior Debt for which notice commencing 63 66 a Payment Blockage Period was given on the date such Payment Blockage Period commenced shall be or be made the basis for the commencement of any subsequent Payment Blockage Period unless such event of default is cured or waived for a period of not less than 90 consecutive days. As a result of the subordination provisions described above, in the event of the Company's liquidation, dissolution, bankruptcy, reorganization, insolvency, receivership or similar proceeding or in an assignment for the benefit of the creditors or a marshalling of the assets and liabilities of the Company, Holders of New Notes may recover less ratably than creditors of the Company who are holders of Senior Debt. See "Risk Factors -- Subordination." The Indenture limits, subject to certain financial tests, the amount of additional Indebtedness, including Senior Debt, that the Company and its Restricted Subsidiaries can incur. See "-- Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock." NEW NOTE GUARANTEES The Company's payment obligations under the New Notes will be jointly and severally guaranteed by the Subsidiary Guarantors. The New Note Guarantees will be subordinated to the prior payment in full of all Senior Debt of each Subsidiary Guarantor (including such Subsidiary Guarantor's guarantee of the New Credit Facility, if any) to the same extent that the New Notes are subordinated to Senior Debt of the Company. The obligations of any Subsidiary Guarantor under its New Note Guarantee will be limited so as not to constitute a fraudulent conveyance under applicable law. The Indenture provides that no Subsidiary Guarantor may consolidate with or merge with or into (whether or not such Subsidiary Guarantor is the surviving Person), another corporation, Person or entity whether or not affiliated with such Subsidiary Guarantor unless, subject to the provisions of the following paragraph, (i) the Person formed by or surviving any such consolidation or merger (if other than such Subsidiary Guarantor) assumes all the obligations of such Subsidiary Guarantor pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee, under the New Senior Subordinated Notes and the Indenture; (ii) immediately after giving effect to such transaction, no Default or Event of Default exists; and (iii) the Company would be permitted by virtue of its pro forma Fixed Charge Coverage Ratio, immediately after giving effect to such transaction, to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the covenant described below under the caption "Incurrence of Indebtedness and Issuance of Preferred Stock." The requirements of clause (iii) of this paragraph will not apply in the case of a consolidation with or merger with or into (a) the Company or another Subsidiary Guarantor or (b) any other Person if the acquisition of all of the Equity Interests in such Person would have complied with the provisions of the covenants described below under the captions "-- Restricted Payments" and "-- Incurrence of Indebtedness and Issuance of Preferred Stock." The Indenture provides that (a) in the event of a sale or other disposition of all of the assets of any Subsidiary Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all of the capital stock of any Subsidiary Guarantor, or (b) in the event that the Company designates a Subsidiary Guarantor to be an Unrestricted Subsidiary, or such Subsidiary Guarantor ceases to be a Subsidiary of the Company, then such Subsidiary Guarantor (in the event of a sale or other disposition, by way of such a merger, consolidation or otherwise, of all of the capital stock of such Subsidiary Guarantor or any such designation) or the entity acquiring the property (in the event of a sale or other disposition of all of the assets of such Subsidiary Guarantor) will be released and relieved of any obligations under its New Note Guarantee; provided that the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of the Indenture. See "Repurchase at the Option of Holders." In the case of a sale, assignment, lease, transfer, conveyance or other disposition of all or substantially all of the assets of a Subsidiary Guarantor, upon the assumption provided for in clause (ii) of the covenant described under the caption "Merger, Consolidation, or Sale of Assets," such Subsidiary Guarantor shall be discharged from all further liability and obligations under the Indenture. 64 67 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:
PERCENTAGE ---------- 2003.................................................... 104.625% 2004.................................................... 103.083% 2005.................................................... 101.542% 2006 and thereafter..................................... 100.000%
Notwithstanding the foregoing, at any time prior to March 15, 2001, the Company may redeem up to 35% of the original aggregate principal amount of New Notes at a redemption price of 109.25% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the redemption date, with the net cash proceeds of a Public Equity Offering; provided that at least 65% of the original aggregate principal amount of New Notes remains outstanding immediately after the occurrence of such redemption (excluding New Notes held by the Company and its Subsidiaries); and provided, further, that such redemption shall occur within 45 days of the date of the closing of such Public Equity Offering. SELECTION AND NOTICE If less than all of the New Notes are to be redeemed at any time, selection of New Notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the New Notes are listed, or, if the New Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided that no New Notes of $1,000 or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each Holder of New Notes to be redeemed at its registered address. Notices of redemption may not be conditional. If any New Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new New Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original New Note. New Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on New Notes or portions of them called for redemption. MANDATORY REDEMPTION Except as set forth below under "Repurchase at the Option of Holders," the Company is not required to make mandatory redemption or sinking fund payments with respect to the New Notes. REPURCHASE AT THE OPTION OF HOLDERS CHANGE OF CONTROL Upon the occurrence of a Change of Control, each Holder of New Notes will have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder's New Notes pursuant to the offer described below (the "Change of Control Offer") at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the date of purchase (the "Change of Control Payment"). Within 30 days following any Change of Control, the Company will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase New Notes on the date specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the "Change of Control Payment Date"), pursuant to the procedures required by the Indenture and described in such notice. The Company will comply with the requirements of Rule 14e-1 under the Exchange 65 68 Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the New Notes as a result of a Change of Control. On the Change of Control Payment Date, the Company will, to the extent lawful, (1) accept for payment all New Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all New Notes or portions thereof so tendered and (3) deliver or cause to be delivered to the Trustee the New Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of New Notes or portions thereof being purchased by the Company. The Paying Agent will promptly mail to each Holder of New Notes so tendered the Change of Control Payment for such New Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new New Note equal in principal amount to any unpurchased portion of the New Notes surrendered, if any; provided that each such new New Note will be in a principal amount of $1,000 or an integral multiple thereof. The Indenture provides that, prior to complying with the provisions of this covenant, but in any event within 90 days following a Change of Control, the Company will either repay all outstanding Senior Debt or obtain the requisite consents, if any, under all agreements governing outstanding Senior Debt to permit the repurchase of New Notes required by this covenant. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. The Change of Control provisions described above will be applicable whether or not any other provisions of the Indenture are applicable. Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the Holders of the New Notes to require that the Company repurchase or redeem the New Notes in the event of a takeover, recapitalization or similar transaction. The New Credit Facility provides that certain change of control events with respect to the Company would constitute a default thereunder. Any future credit agreements or other agreements relating to Senior Debt to which the Company becomes a party may contain similar restrictions and provisions. In the event a Change of Control occurs at a time when the Company is prohibited from purchasing New Notes, the Company could seek the consent of its lenders to purchase the New Notes or could attempt to refinance the borrowings that contain such prohibition. If the Company does not obtain such consent or repay such borrowings, the Company will remain prohibited from purchasing New Notes. In such case, the Company's failure to purchase tendered New Notes would constitute an Event of Default under the Indenture which would, in turn, constitute a default under the New Credit Facility. In such circumstances, the subordination provisions in the Indenture would likely restrict payments to the Holders of New Notes. The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all New Notes validly tendered and not withdrawn under such Change of Control Offer. The definition of Change of Control includes a phrase relating to the sale, lease, transfer, conveyance or other disposition of "all or substantially all" of the assets of the Company and its Subsidiaries taken as a whole. Although there is a developing body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a Holder of New Notes to require the Company to repurchase such New Notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of the Company and its Subsidiaries taken as a whole to another Person or group may be uncertain. ASSET SALES The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company (or the Restricted Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value (evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee) of the assets or Equity Interests issued or sold or otherwise disposed of and (ii) at least 80% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of cash; provided that the amount of 66 69 (x) any liabilities (as shown on the Company's or such Restricted Subsidiary's most recent balance sheet), of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the New Notes or any guarantee thereof) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability and (y) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash within 180 days (to the extent of the cash received), shall be deemed to be cash for purposes of this provision. Within 360 days after the receipt of any Net Proceeds from an Asset Sale, the Company may apply such Net Proceeds, at its option, (a) to permanently repay Senior Debt (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings), or (b) to the acquisition of a controlling interest in another business, the making of a capital expenditure or the acquisition of other long-term assets and parking facility agreements, in each case, in a Permitted Business. Pending the final application of any such Net Proceeds, the Company may temporarily reduce the revolving Indebtedness under the New Credit Facility or otherwise invest such Net Proceeds in any manner that is not prohibited by the Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as provided in the first sentence of this paragraph will be deemed to constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company will be required to make an offer to all Holders of New Notes (an "Asset Sale Offer") to purchase the maximum principal amount of New Notes that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the date of purchase, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of New Notes tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for general corporate purposes. If the aggregate principal amount of New Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the New Notes to be purchased on a pro rata basis. Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero. CERTAIN COVENANTS RESTRICTED PAYMENTS The Indenture provides that from and after the date of the Indenture the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make any other payment or distribution on account of the Company's or any of its Restricted Subsidiaries' Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Company) or to the direct or indirect holders of the Company's or any of its Restricted Subsidiaries' Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company); (ii) purchase, redeem or otherwise acquire or retire for value (including without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any direct or indirect parent of the Company; (iii) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is pari passu with or subordinated to the New Notes (other than New Notes), except a payment of interest or principal at Stated Maturity; or (iv) make any Restricted Investment (all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as "Restricted Payments"), unless, at the time of and after giving effect to such Restricted Payment: (a) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; and (b) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed 67 70 Charge Coverage Ratio test set forth in the first paragraph of the covenant described below under the caption "-- Incurrence of Indebtedness and Issuance of Preferred Stock"; and (c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Subsidiaries after the date of the Indenture (excluding Restricted Payments permitted by clause (ii) and (iii) of the next succeeding paragraph), is less than the sum of (i) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the date of the Indenture to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus (ii) 100% of the aggregate net cash proceeds received by the Company from the issue or sale since the date of the Indenture of Equity Interests of the Company (other than Disqualified Stock) or of Disqualified Stock or debt securities of the Company that have been converted into such Equity Interests (other than Equity Interests (or Disqualified Stock or convertible debt securities) sold to a Subsidiary of the Company and other than Disqualified Stock or convertible debt securities that have been converted into Disqualified Stock), plus (iii) to the extent that any Restricted Investment that was made after the date of the Indenture is sold for cash or otherwise liquidated or repaid for cash, the lesser of (A) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (B) the initial amount of such Restricted Investment plus (iv) if any Unrestricted Subsidiary (A) is redesignated as a Restricted Subsidiary, the fair market value of such redesignated Subsidiary (as determined in good faith by the Board of Directors) as of the date of its redesignation or (B) pays any cash dividends or cash distributions to the Company or any of its Restricted Subsidiaries, 50% of any such cash dividends or cash distributions made after the date of the Indenture. The foregoing provisions will not prohibit (i) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the Indenture; (ii) the redemption, repurchase, retirement, defeasance or other acquisition of any pari passu or subordinated Indebtedness or Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale or issuance (other than to a Restricted Subsidiary of the Company) of, other Equity Interests of the Company (other than any Disqualified Stock); (iii) the defeasance, redemption, repurchase or other acquisition of pari passu or subordinated Indebtedness with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness; (iv) the payment of any dividend by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis; (v) Investments in any Person (other than the Company or a Wholly-Owned Restricted Subsidiary) engaged in a Permitted Business in an amount taken together with all other Investments made pursuant to this clause (v) that are at that time outstanding not to exceed $5.0 million; (vi) other Investments in Unrestricted Subsidiaries having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (vi) that are at that time outstanding, not to exceed $2.0 million; (vii) payments to Holdings or Holberg pursuant to the tax sharing agreement among Holberg and other members of the affiliated corporations of which Holberg is the common parent; (viii) the designation of certain of the Company's Subsidiaries as Unrestricted Subsidiaries immediately prior to the date of the Indenture; (ix) the payment of a one-time dividend or distribution by the Company to pay fees, expenses, commissions and discounts in connection with the offering by Holdings of debt securities used to finance the Preferred Stock Contribution; (x) the redemption in connection with the Transactions of the preferred stock of the Company held by Holberg; (xi) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of Holdings or the Company held by any member of Holdings' or the Company's (or any of their Restricted Subsidiaries) management pursuant to any management equity subscription agreement or stock option agreement or in connection with the termination of employment of any employees or management of Holdings or the Company or their Subsidiaries; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $2.0 million in the aggregate plus the aggregate cash proceeds received by Holdings or the Company after the date of the Indenture from any reissuance of Equity Interests by Holdings or the Company to members of management of Holdings or the Company and their Restricted Subsidiaries; and (xii) other Restricted Payments in an aggregate amount not to exceed $10.0 million. 68 71 From and after the date of the Indenture, the Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such designation would not cause a Default; provided that in no event shall the business currently operated by any Subsidiary Guarantor be transferred to or held by an Unrestricted Subsidiary. For purposes of making such determination, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary so designated will be deemed to be Restricted Payments at the time of such designation and will reduce the amount available for Restricted Payments under the first paragraph of this covenant. All such outstanding Investments will be deemed to constitute Investments in an amount equal to the fair market value of such Investments at the time of such designation (as determined in good faith by the Board of Directors). Such designation will only be permitted if such Restricted Payment would be permitted at such time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any non-cash Restricted Payment shall be determined in good faith by the Board of Directors whose resolution with respect thereto shall be delivered to the Trustee such determination to be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if such fair market value exceeds $10.0 million. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by the covenant "Restricted Payments" were computed, together with a copy of any fairness opinion or appraisal required by the Indenture. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK The Indenture provides that the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and that the Company will not issue any Disqualified Stock and will not permit any of its Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The provisions of the first paragraph of this covenant will not apply to the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"): (i) the incurrence by the Company of revolving credit Indebtedness and letters of credit pursuant to New Credit Facility; provided that the aggregate principal amount of all revolving credit Indebtedness (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) outstanding under the New Credit Facility after giving effect to such incurrence does not exceed $40.0 million less the aggregate amount of all Net Proceeds of Asset Sales applied to repay revolving credit Indebtedness under the New Credit Facility pursuant to the covenant described above under "-- Repurchase at the Option of Holders -- Asset Sales"; (ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness; (iii) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the New Notes and the New Note Guarantees thereof, respectively; (iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, 69 72 plant or equipment used in the business of the Company or such Restricted Subsidiary (whether through the direct purchase of assets or the Capital Stock of any Person owning such Assets), in an aggregate principal amount not to exceed $7.5 million; (v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in connection with the acquisition of assets or a new Restricted Subsidiary; provided that such Indebtedness was incurred by the prior owner of such assets or such Restricted Subsidiary prior to such acquisition by the Company or one of its Subsidiaries and was not incurred in connection with, or in contemplation of, such acquisition by the Company or one of its Subsidiaries; provided further that the principal amount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (v), does not exceed $5.0 million; (vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness that was permitted by the Indenture to be incurred under the first paragraph hereof or clauses (i), (ii), (iii), (iv), (v) or (xv) of this paragraph; (vii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Wholly Owned Restricted Subsidiaries; provided, however, that (i) if the Company is the obligor on such Indebtedness and the payee is not a Subsidiary Guarantor, such Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii)(A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary and (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be; (viii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging currency risk or interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding; (ix) the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this covenant; (x) the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause (x); (xi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation to letters of credit in respect to workers' compensation claims or self-insurance, surety bonds or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims, provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence; (xii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, asset or Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability of all such Indebtedness shall at no time exceed 50% of the gross proceeds actually received by the Company; (xiii) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business; 70 73 (xiv) guarantees incurred in the ordinary course of business in an aggregate principal amount not to exceed $5.0 million; and (xv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness, including Attributable Debt incurred after the date of the Indenture, in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (xv), not to exceed $25.0 million. For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xv) above or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company shall, in its sole discretion, classify such item of Indebtedness in any manner that complies with this covenant and such item of Indebtedness will be treated as having been incurred pursuant to only one of such clauses or pursuant to the first paragraph hereof. The incurrence of Indebtedness pursuant to the first paragraph of the covenant described above shall not be classified as any of the Items in clauses (i) through (xv) above. Accrual of interest and the accretion of accreted value will not be deemed to be an incurrence of Indebtedness for purposes of this covenant. LIENS The Indenture provides that the Company will not and will not permit any of its Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind securing Indebtedness or trade payables that do not constitute Senior Debt (other than Permitted Liens) upon any of their property or assets, now owned or hereafter acquired. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary to (i)(a) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits, or (b) pay any indebtedness owed to the Company or any of its Restricted Subsidiaries, (ii) make loans or advances to the Company or any of its Restricted Subsidiaries or (iii) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries, except for such encumbrances or restrictions existing under or by reason of (a) Existing Indebtedness as in effect on the date of the Indenture, (b) the New Credit Facility as in effect as of the date of the Indenture, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacement or refinancings are no more restrictive in the aggregate (as determined by the Credit Agent in good faith) with respect to such dividend and other payment restrictions than those contained in the New Credit Facility as in effect on the date of the Indenture, (c) the Indenture and the New Notes, (d) any applicable law, rule, regulation or order, (e) any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the Indenture to be incurred, (f) by reason of customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices, (g) purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the nature described in clause (iii) above on the property so acquired, (h) Permitted Refinancing Indebtedness; provided that the material restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are no more restrictive than those contained in the agreements governing the Indebtedness being refinanced, (i) contracts for the sale of assets, including without limitation customary restrictions with respect to a Subsidiary pursuant 71 74 to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary, and (j) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business. MERGER, CONSOLIDATION, OR SALE OF ASSETS The Indenture provides that the Company may not consolidate or merge with or into (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to another corporation, Person or entity unless (i) the Company is the surviving corporation or the entity or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia; (ii) the entity or Person formed by or surviving any such consolidation or merger (if other than the Company) or the entity or Person to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made assumes all the obligations of the Company under the New Notes and the Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee; (iii) immediately after such transaction no Default or Event of Default exists; and (iv) except in the case of a merger of the Company with or into a Wholly Owned Restricted Subsidiary of the Company, the Company or the entity or Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made will, at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described above under the caption "-- Incurrence of Indebtedness and Issuance of Preferred Stock." TRANSACTIONS WITH AFFILIATES The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction") unless (i) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee (a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $5.0 million, a resolution of the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (i) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors and (b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10.0 million, an opinion as to the fairness to the Holders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing; provided that the following shall not be deemed Affiliate Transactions: (q) any employment agreement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business and consistent with the past practice of the Company or such Restricted Subsidiary, (r) transactions between or among the Company and/or its Restricted Subsidiaries, (s) Permitted Investments and Restricted Payments that are permitted by the provisions of the Indenture described above under the caption "-- Restricted Payments," (t) customary loans, advances, fees and compensation paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Company or any of its Restricted Subsidiaries, (u) annual management fees paid to Holberg Industries, Inc. not to exceed $5.0 million in any one year, (v) transactions pursuant to any contract or agreement in effect on the date of the Indenture as the same may be amended, modified or replaced from time to time so long as any such amendment, modification or replacement is no less favorable to the Company and its Restricted Subsidiaries than the contract or agreement as in effect on the date of the Indenture or is approved by a majority of the disinterested directors of 72 75 the Company, (w) transactions between the Company or its Restricted Subsidiaries on the one hand, and Holberg on the other hand, involving the provision of financial or advisory services by Holberg; provided that fees payable to Holberg do not exceed the usual and customary fees for similar services, (x) transactions between the Company or its Restricted Subsidiaries on the one hand, and Donaldson, Lufkin & Jenrette Securities Corporation or its Affiliates ("DLJ") on the other hand, involving the provision of financial, advisory, placement or underwriting services by DLJ; provided that fees payable to DLJ do not exceed the usual and customary fees of DLJ for similar services, (y) the insurance arrangements between the Company and its Subsidiaries and an Affiliate of Holberg that are not less favorable to the Company or any of its Subsidiaries than those that are in effect on the date hereof provided such arrangements are conducted in the ordinary course of business consistent with past practices and (z) payments under the tax sharing agreement among Holberg and other members of the affiliated group of corporations of which it is the common parent. ANTI-LAYERING The Indenture provides that (i) the Company will not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is both (a) subordinate or junior in right of payment to any Senior Debt and (b) senior in any respect in right of payment to the Notes and (ii) no Subsidiary Guarantor will incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is both (a) subordinate or junior in right of payment to its Senior Debt and (b) senior in right of payment to its New Note Guarantee. SALE AND LEASEBACK TRANSACTIONS The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction; provided that the Company may enter into a sale and leaseback transaction if (i) the Company could have (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction pursuant to the covenant described above under the caption "-- Incurrence of Additional Indebtedness and Issuance of Preferred Stock" and (b) incurred a Lien to secure such Indebtedness pursuant to the covenant described above under the caption "-- Liens," (ii) the gross cash proceeds of such sale and leaseback transaction are at least equal to the fair market value (as determined in good faith by the Board of Directors and set forth in an Officers' Certificate delivered to the Trustee) of the property that is the subject of such sale and leaseback transaction and (iii) the transfer of assets in such sale and leaseback transaction is permitted by, and the Company applies the proceeds of such transaction in compliance with, the covenant described above under the caption "-- Asset Sales." LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED RESTRICTED SUBSIDIARIES The Indenture provides that the Company (i) will not, and will not permit any Wholly Owned Restricted Subsidiary of the Company to, transfer, convey, sell, lease or otherwise dispose of any Capital Stock of any Wholly Owned Subsidiary of the Company to any Person (other than the Company or a Wholly Owned Restricted Subsidiary of the Company), unless (a) such transfer, conveyance, sale, lease or other disposition is of all the Capital Stock of such Wholly Owned Restricted Subsidiary and (b) the cash Net Proceeds from such transfer, conveyance, sale, lease or other disposition are applied in accordance with the covenant described above under the caption "-- Asset Sales," and (ii) will not permit any Wholly Owned Restricted Subsidiary of the Company to issue any of its Equity Interests (other than, if necessary, shares of its Capital Stock constituting directors' qualifying shares) to any Person other than to the Company or a Wholly Owned Restricted Subsidiary of the Company. LIMITATIONS ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS The Indenture provides that the Company will not permit any Restricted Subsidiary, directly or indirectly, to Guarantee or pledge any assets to secure the payment of any other Indebtedness of the Company unless either such Restricted Subsidiary (x) is a Subsidiary Guarantor or (y) simultaneously executes and delivers a supplemental indenture to the Indenture providing for the Guarantee of the payment of the New Notes by such Restricted Subsidiary, which Guarantee shall be senior to or pari passu with such Restricted 73 76 Subsidiary's Guarantee of or pledge to secure such other Indebtedness. Notwithstanding the foregoing, any such Guarantee by a Restricted Subsidiary of the New Notes shall provide by its terms that it shall be automatically and unconditionally released and discharged upon any sale, exchange or transfer, to any Person not an Affiliate of the Company, of all of the Company's stock in, or all or substantially all the assets of, such Restricted Subsidiary, which sale, exchange or transfer is made in compliance with the applicable provisions of the Indenture. The form of such Guarantee will be attached as an exhibit to the Indenture. BUSINESS ACTIVITIES The Company will not, and will not permit any Restricted Subsidiary to, engage in any business other than Permitted Businesses, except to such extent as would not be material to the Company and its Restricted Subsidiaries taken as a whole. ADDITIONAL GUARANTEES The Indenture provides that (i) if the Company or any of its Restricted Subsidiaries shall, after the date of the Indenture, transfer or cause to be transferred, including by way of any Investment, in one or a series of transactions (whether or not related), any assets, businesses, divisions, real property or equipment having an aggregate fair market value (as determined in good faith by the Board of Directors) in excess of $1.0 million to any Restricted Subsidiary that is not a Subsidiary Guarantor or a Foreign Subsidiary, (ii) if the Company or any of its Restricted Subsidiaries shall acquire another Restricted Subsidiary other than a Foreign Subsidiary having total assets with a fair market value (as determined in good faith by the Board of Directors) in excess of $1.0 million, or (iii) if any Restricted Subsidiary other than a Foreign Subsidiary shall incur Acquired Debt in excess of $1.0 million, then the Company shall, at the time of such transfer, acquisition or incurrence, (i) cause such transferee, acquired Restricted Subsidiary or Restricted Subsidiary incurring Acquired Debt (if not then a Subsidiary Guarantor) to execute a New Note Guarantee of the Obligations of the Company under the New Notes in the form set forth in the Indenture and (ii) deliver to the Trustee an Opinion of Counsel, in form reasonably satisfactory to the Trustee, that such New Note Guarantee is a valid, binding and enforceable obligation of such transferee, acquired Restricted Subsidiary or Restricted Subsidiary incurring Acquired Debt, subject to customary exceptions for bankruptcy, fraudulent conveyance and equitable principles. Notwithstanding the foregoing, the Company or any of its Restricted Subsidiaries may make a Restricted Investment in any Wholly Owned Restricted Subsidiary of the Company without compliance with this covenant provided that such Restricted Investment is permitted by the covenant described under the caption "Restricted Payments." REPORTS The Indenture provides that, whether or not required by the rules and regulations of the Commission, so long as any New Notes are outstanding, the Company will furnish to the Holders of New Notes (i) all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report thereon by the Company's certified independent accountants and (ii) all current reports that would be required to be filed with the Commission on Form 8-K if the Company were required to file such reports. In addition, whether or not required by the rules and regulations of the Commission, the Company will file a copy of all such information and reports with the Commission for public availability (unless the Commission will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. In addition, the Company has agreed that, for so long as any New Notes remain outstanding, it will furnish to the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. 74 77 EVENTS OF DEFAULT AND REMEDIES The Indenture provides that each of the following constitutes an Event of Default: (i) default for 30 days in the payment when due of interest on, or Liquidated Damages with respect to, the New Notes (whether or not prohibited by the subordination provisions of the Indenture); (ii) default in payment when due of the principal of or premium, if any, on the New Notes (whether or not prohibited by the subordination provisions of the Indenture); (iii) failure by the Company to comply with the provisions described under the captions "-- Change of Control," "-- Asset Sales," or "-- Merger, Consolidation, or Sale of Assets;" (iv) failure by the Company for 30 days after notice from the Trustee or at least 30% in principal amount of the New Notes then outstanding to comply with the provisions described under the captions "-- Restricted Payments" or "-- Incurrence of Indebtedness and Issuance of Preferred Stock;" (v) failure by the Company for 60 days after notice from the Trustee or at least 25% in principal amount of the New Notes then outstanding to comply with any of its other agreements in the Indenture or the New Notes; (vi) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Subsidiaries (or the payment of which is guaranteed by the Company or any of its Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created after the date of the Indenture, which default (a) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a "Payment Default") or (b) results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $15.0 million or more; (vii) failure by the Company or any of its Subsidiaries to pay final judgments aggregating in excess of $5.0 million, which judgments are not paid, discharged or stayed for a period of 60 days; and (viii) certain events of bankruptcy or insolvency with respect to the Company or any of its Subsidiaries. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding New Notes may declare all the New Notes to be due and payable immediately; provided, however, that if any Indebtedness or Obligation is outstanding pursuant to the New Credit Facility, upon a declaration of acceleration by the holders of the New Notes or the Trustee, all principal and interest under the Indenture shall be due and payable upon the earlier of (x) the day which five Business Days after the provision to the Company, the Credit Agent and the Trustee of such written notice of acceleration or (y) the date of acceleration of any Indebtedness under the New Credit Facility; and provided, further, that in the event of an acceleration based upon an Event of Default set forth in clause (vi) above, such declaration of acceleration shall be automatically annulled if the holders of Indebtedness which is the subject of such failure to pay at maturity or acceleration have rescinded their declaration of acceleration in respect of such Indebtedness or such failure to pay at maturity shall have been cured or waived within 30 days thereof and no other Event of Default has occurred during such 30-day period which has not been cured, paid or waived. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the Company or any of its Subsidiaries all outstanding New Notes will become due and payable without further action or notice. Holders of the New Notes may not enforce the Indenture or the New Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding New Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the New Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. In the case of any Event of Default occurring by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the New Notes pursuant to the optional redemption provisions of the Indenture, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the New Notes. If an Event of Default occurs prior to March 15, 2003 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding the prohibition on redemption of the New Notes prior 75 78 to March 15, 2003, then the premium specified in the Indenture shall also become immediately due and payable to the extent permitted by law upon the acceleration of the New Notes. The Holders of a majority in aggregate principal amount of the New Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the New Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the New Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS No director, officer, employee, incorporator or stockholder of the Company or the Subsidiary Guarantors, as such, shall have any liability for any obligations of the Company or any Subsidiary Guarantor under the New Notes, the Indenture, the New Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of New Notes by accepting a New Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the New Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the Commission that such a waiver is against public policy. LEGAL DEFEASANCE AND COVENANT DEFEASANCE The Company may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding New Notes and all obligations of the Subsidiary Guarantors under the New Note Guarantees ("Legal Defeasance") except for (i) the rights of Holders of outstanding New Notes to receive payments in respect of the principal of, premium and Liquidated Damages, if any, and interest on such New Notes when such payments are due from the trust referred to below, (ii) the Company's obligations with respect to the New Notes concerning issuing temporary New Notes, registration of New Notes, mutilated, destroyed, lost or stolen New Notes and the maintenance of an office or agency for payment and money for security payments held in trust, (iii) the rights, powers, trusts, duties and immunities of the Trustee, and the Company's obligations in connection therewith and (iv) the Legal Defeasance provisions of the Indenture. In addition, the Company may, at its option and at any time, elect to have the obligations of the Company and the Subsidiary Guarantors released with respect to certain covenants that are described in the Indenture ("Covenant Defeasance") and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default with respect to the New Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under "Events of Default" will no longer constitute an Event of Default with respect to the New Notes. In order to exercise either Legal Defeasance or Covenant Defeasance: (i) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the New Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium and Liquidated Damages, if any, and interest on the outstanding New Notes on the stated maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the New Notes are being defeased to maturity or to a particular redemption date; (ii) in the case of Legal Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of the Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the Holders of the outstanding New Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; (iii) in the case of Covenant Defeasance, the Company shall have delivered to 76 79 the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding New Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (iv) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit; (v) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; (vi) the Company must have delivered to the Trustee an opinion of counsel to the effect that after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (vii) the Company must deliver to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of New Notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and (viii) the Company must deliver to the Trustee an Officers' Certificate and an opinion of counsel, each stating that all conditions precedent provided for relating to the Legal Defeasance or the Covenant Defeasance have been complied with. TRANSFER AND EXCHANGE A Holder may transfer or exchange New Notes in accordance with the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company is not required to transfer or exchange any New Note selected for redemption. Also, the Company is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed. The registered Holder of a New Note will be treated as the owner of it for all purposes. AMENDMENT, SUPPLEMENT AND WAIVER Except as provided in the next two succeeding paragraphs, the Indenture or the New Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, New Notes), and any existing default or compliance with any provision of the Indenture or the New Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding New Notes (including consents obtained in connection with a tender offer or exchange offer for New Notes). Without the consent of each Holder affected, an amendment or waiver may not (with respect to any New Notes held by a non-consenting Holder): (i) reduce the principal amount of New Notes whose Holders must consent to an amendment, supplement or waiver, (ii) reduce the principal of or change the fixed maturity of any New Note or alter the provisions with respect to the redemption of the New Notes (other than provisions relating to the covenants described above under the caption "-- Repurchase at the Option of Holders"), (iii) reduce the rate of or change the time for payment of interest on any New Note, (iv) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest on the New Notes (except a rescission of acceleration of the New Notes by the Holders of at least a majority in aggregate principal amount of the New Notes and a waiver of the payment default that resulted from such acceleration), (v) make any New Note payable in money other than that stated in the New Notes, (vi) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders of New Notes to receive payments of principal of or premium, if any, or interest on the New Notes, (vii) waive a redemption payment with respect to any New Note (other than a payment required by one of the covenants described above under the caption "-- Repurchase at the Option of Holders") or (viii) make any change in the foregoing amendment 77 80 and waiver provisions. In addition, any amendment to the provisions of Article 10 of the Indenture (which relate to subordination) will require the consent of the Holders of at least 75% in aggregate principal amount of the New Notes then outstanding if such amendment would adversely affect the rights of Holders of New Notes. Notwithstanding the foregoing, without the consent of any Holder of New Notes, the Company, the Subsidiary Guarantors and the Trustee may amend or supplement the Indenture or the New Notes to cure any ambiguity, defect or inconsistency, to provide for uncertificated New Notes in addition to or in place of certificated New Notes, to provide for the assumption of the Company's and the Subsidiary Guarantors' obligations to Holders of New Notes in the case of a merger or consolidation, to make any change that would provide any additional rights or benefits to the Holders of New Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, or to comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act. CONCERNING THE TRUSTEE The Indenture contains certain limitations on the rights of the Trustee, should it become a creditor of the Company, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the Commission for permission to continue or resign. The Holders of a majority in principal amount of the then outstanding New Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default shall occur (which shall not be cured), the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of New Notes, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. ADDITIONAL INFORMATION Anyone who receives this Prospectus may obtain a copy of the Indenture and Registration Rights Agreement without charge by writing to APCOA, Inc., 800 Superior Avenue, Cleveland, Ohio 44114; Attention: Corporate Secretary. BOOK-ENTRY, DELIVERY AND FORM The New Notes initially being issued in exchange for the Notes generally will be represented by one or more fully-registered global notes without interest coupons (collectively the "Global New Notes"). Notwithstanding the foregoing, Notes held in certificated form will be exchanged solely for New Notes in certificated form as discussed below. The Global New Notes will be deposited upon issuance with the Depository Trust Company (the "DTC") and registered in the name of DTC or its nominee (the "Global New Note Registered Owner"), in each case for credit to an account of a direct or indirect participant as described below. Except as set forth below, the Global New Notes may be transferred, in whole and not in part, only to another nominee of the DTC or to a successor of the DTC or its nominee. See "-- Exchange of Book-Entry New Notes for Certificated New Notes." The New Notes may be presented for registration of transfer and exchange at the offices of the Registrar. DEPOSITORY PROCEDURES DTC has advised the Company that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in 78 81 accounts of Participants. The Participants include securities brokers and dealers (including the Initial Purchaser), banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the "Indirect Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or Indirect Participants. The ownership interest and transfer of ownership interest of each actual purchaser of each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants. DTC has also advised the Company that pursuant to procedures established by it, (i) upon deposit of the Global New Notes, DTC will credit the accounts of Participants designated by the Initial Purchaser with portions of the principal amount of Global New Notes and (ii) ownership of such interests in the Global New Notes will be shown on, and the transfer ownership thereof will be effected only through, records maintained by DTC (with respect to Participants) or by Participants and the Indirect Participants (with respect to other owners of beneficial interests in the Global New Notes). EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE GLOBAL NEW NOTES WILL NOT HAVE NEW NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY OF NEW NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR HOLDERS THEREOF UNDER THE INDENTURE FOR ANY PURPOSE. Payments in respect of the principal and premium and Liquidated Damages, if any, and interest on a Global New Note registered in the name of DTC or its nominee will be payable by the Trustee to DTC or its nominee in its capacity as the registered holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee will treat the persons in whose names the New Notes, including the Global New Notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, none of the Company, the Trustee nor any agent of the Company or the Trustee has or will have any responsibility or liability for (i) any aspect of DTC's records or any Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interests in the Global New Notes, or for maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in the Global New Notes or (ii) any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants. DTC has advised the Company that its current practice, upon receipt of any payment in respect of securities such as the New Notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date, in amounts proportionate to their respective holdings in principal amount of beneficial interests in the relevant security such as the Global New Notes as shown on the records of DTC. Payments by Participants and the Indirect Participants to the beneficial owners of New Notes will be governed by standing instructions and customary practices and will not be the responsibility of DTC, the Trustee or the Company. Neither the Company nor the Trustee will be liable for any delay by DTC or its Participants in identifying the beneficial owners of the New Notes, and the Company and the Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee as the registered owner of the New Notes for all purposes. DTC has advised the Company that it will take any action permitted to be taken by a holder of New Notes only at the direction of one or more Participants to whose account DTC interests in the Global New Notes are credited and only in respect of such portion of the aggregate principal amount of the New Notes as to which such Participant or Participants have given direction. However, if there is an Event of Default under the New Notes, DTC reserves the right to exchange Global New Notes for legended New Notes in certificated form, and to distribute such New Notes to its Participants. The information in this section concerning DTC and its book-entry system has been obtained from sources that the Company believes to be reliable, but the Company takes no responsibility for the accuracy thereof. 79 82 Although DTC has agreed to the foregoing procedures to facilitate transfers of interests in the Global New Notes among Participants in DTC, it is under no obligation to perform or to continue to perform such procedures, and such procedures may be discontinued at any time. None of the Company, the Initial Purchasers or the Trustee will have any responsibility for the performance by DTC, or its Participants or indirect Participants of its obligations under the rules and procedures governing their operations. EXCHANGE OF BOOK-ENTRY NEW NOTES FOR CERTIFICATED NEW NOTES A Global New Note is exchangeable for definitive New Notes in registered certificated form if (i) DTC (x) notifies the Company that it is unwilling or unable to continue as depositary for the Global New Note and the Company thereupon fails to appoint a successor depositary or (y) has ceased to be a clearing agency registered under the Exchange Act, (ii) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of the New Notes in certificated form or (iii) there shall have occurred and be continuing to occur a Default or an Event of Default with respect to the New Notes. In addition, beneficial interests in a Global New Note may be exchanged for certificated New Notes upon request but only upon at least 20 days' prior written notice given to the Trustee by or on behalf of DTC in accordance with customary procedures. In all cases, certificated New Notes delivered in exchange for any Global New Note or beneficial interest therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures). Subject to the restrictions on the transferability of the New Notes described in "Risk Factors -- Restrictions on Transfer," a New Note in definitive form will be issued (i) in the Exchange Offer solely in exchange for certificated Notes or (ii) following the Exchange Offer, upon the resale, pledge or other transfer of any New Note or interest therein to any person or entity that does not participate in the Depository. The exchange of certificated Notes in the Exchange Offer may be made only by presentation of the Notes, duly endorsed, together with a duly completed Letter of Transmittal and other required documentation as described under "The Exchange Offer -- Procedures for Tendering" and "-- Guaranteed Delivery Procedures." Transfers of certificated New Notes may be made only by presentation of New Notes, duly endorsed, to the Trustees for registration of transfer on the Note Register maintained by the Trustees for such purposes. The information in this section concerning the Depository and the Depository's book-entry system has been obtained from sources that the Company believes to be reliable, but the Company takes no responsibility for the accuracy thereof. CERTIFICATED NEW NOTES Subject to certain conditions, any person having a beneficial interest in the Global New Notes may, upon request to the Trustee, exchange such beneficial interest for New Notes in the form of Certificated New Notes. Upon any such issuance, the Trustee is required to register such Certificated New Notes in the name of, and cause the same to be delivered to, such person or persons (or the nominee of any thereof). In addition, if (i) the Company notifies the Trustee in writing that the DTC is no longer willing or able to act as a depositary and the Company is unable to locate a qualified successor within 90 days or (ii) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of New Notes in the form of Certificated New Notes under the Indenture, then, upon surrender by the Global New Note Holder of its Global New Note, New Notes in such form will be issued to each person that the Global New Note Holder and the DTC identify as being the beneficial owner of the related New Notes. Neither the Company nor the Trustee will be liable for any delay by the Global New Note Holder or the DTC in identifying the beneficial owners of New Notes and the Company and the Trustee may conclusively rely on, and will be protected in relying on, instructions from the Global New Note Holder or the DTC for all purposes. SAME DAY SETTLEMENT AND PAYMENT The Indenture requires that payments in respect of the New Notes represented by the Global New Notes (including principal, premium, if any, interest and Liquidated Damages, if any) be made by wire transfer of 80 83 immediately available next day funds to the accounts specified by the Global New Note Holder. With respect to Certificated New Notes, the Company will make all payments of principal, premium, if any, interest and Liquidated Damages, if any, by wire transfer of immediately available funds to the accounts specified by the Holders thereof or, if no such account is specified, by mailing a check to each such Holder's registered address. The Company expects that secondary trading in the Certificated New Notes will also be settled in immediately available funds. REGISTRATION RIGHTS; LIQUIDATED DAMAGES The Company, the Subsidiary Guarantors and the Initial Purchasers entered into the Registration Rights Agreement on the Closing date. Pursuant to the Registration Rights Agreement, the Company and the Subsidiary Guarantors agreed to file with the Commission the Exchange Offer Registration Statement of which this Prospectus is a part on the appropriate form under the Securities Act with respect to the New Notes. Pursuant to the Exchange Offer, the Company is offering to the Holders of Transfer Restricted Securities who are able to make certain representations the opportunity to exchange their Transfer Restricted Securities for New Notes. If any Holder of Transfer Restricted Securities notifies the Company prior to the 20th day following consummation of the Exchange Offer that (i) it is prohibited by law or Commission policy from participating in the Exchange Offer or (ii) that it may not resell the New Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and the prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales or (iii) that it is a broker-dealer and owns Notes acquired directly from the Company or an affiliate of the Company, the Company and the Subsidiary Guarantors will file with the Commission a Shelf Registration Statement to cover resales of the Notes by the Holders thereof who satisfy certain conditions relating to the provision of information in connection with the Shelf Registration Statement. The Company and the Subsidiary Guarantors will use their best efforts to cause the applicable registration statement to be declared effective as promptly as possible by the Commission. For purposes of the foregoing, "Transfer Restricted Securities" means each Note until (i) the date on which such Note has been exchanged by a person other than a broker-dealer for a New Note in the Exchange Offer, (ii) following the exchange by a broker-dealer in the Exchange Offer of a Note for a New Note, the date on which such New Note is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement, (iii) the date on which such Note has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement or (iv) the date on which such Note is distributed to the public pursuant to Rule 144 under the Act. The Registration Rights Agreement provides, among other things, that (i) unless the Exchange Offer would not be permitted by applicable law or Commission policy, the Company and the Subsidiary Guarantors will have commenced the Exchange Offer and used their best efforts to issue on or prior to 30 business days after the date on which the Exchange Offer Registration Statement was declared effective by the Commission, New Notes in exchange for all Notes tendered prior thereto in the Exchange Offer and (ii) if obligated to file the Shelf Registration Statement, the Company and the Subsidiary Guarantors will use their best efforts to file the Shelf Registration Statement with the Commission on or prior to 45 days after such filing obligation arises and to cause the Shelf Registration to be declared effective by the Commission on or prior to 120 days after such obligation arises. If (a) the Company and the Subsidiary Guarantors fail to file any of the Registration Statements required by the Registration Rights Agreement on or before the date specified for such filing, (b) any of such Registration Statements is not declared effective by the Commission on or prior to the date specified for such effectiveness (the "Effectiveness Target Date"), (c) the Company and the Subsidiary Guarantors fail to consummate the Exchange Offer within 30 business days of the Effectiveness Target Date with respect to the Exchange Offer Registration Statement, or (d) the Shelf Registration Statement or the Exchange Offer Registration Statement is declared effective but thereafter ceases to be effective or usable in connection with resales of Transfer Restricted Securities during the periods specified in the Registration Rights Agreement (each such event referred to in clauses (a) through (d) above a "Registration Default"), then the Company will pay Liquidated Damages to each Holder of Notes, with respect to the first 90-day period immediately following the occurrence of the first Registration Default in an amount equal to $.05 per week per $1,000 principal amount of Notes held by such Holder. The amount of the Liquidated Damages will 81 84 increase by an additional $.05 per week per $1,000 principal amount of Notes with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of Liquidated Damages of $.50 per week per $1,000 principal amount of Notes. All accrued Liquidated Damages will be paid by the Company on each Damages Payment Date to the Global Note Holder by wire transfer of immediately available funds or by federal funds check and to Holders of Certificated Notes by wire transfer to the accounts specified by them or by mailing checks to their registered addresses if no such accounts have been specified. Following the cure of all Registration Defaults, the accrual of Liquidated Damages will cease. Holders of Notes will be required to make certain representations to the Company (as described in the Registration Rights Agreement) in order to participate in the Exchange Offer and will be required to deliver information to be used in connection with the Shelf Registration Statement and to provide comments on the Shelf Registration Statement within the time periods set forth in the Registration Rights Agreement in order to have their Notes included in the Shelf Registration Statement and benefit from the provisions regarding Liquidated Damages set forth above. CERTAIN DEFINITIONS Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided. "Acquired Debt" means, with respect to any specified Person, (i) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, including, without limitation, Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the voting securities of a Person shall be deemed to be control. "Asset Sale" means (i) the sale, lease, conveyance or other disposition of any assets or rights (including, without limitation, by way of a sale and leaseback) other than sales of inventory in the ordinary course of business consistent with past practices (provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole will be governed by the provisions of the Indenture described above under the caption "-- Change of Control" and/or the provisions described above under the caption "-- Merger, Consolidation or Sale of Assets" and not by the provisions of the Asset Sale covenant), and (ii) the issue or sale by the Company or any of its Restricted Subsidiaries of Equity Interests of any of the Company's Restricted Subsidiaries, in the case of either clause (i) or (ii), whether in a single transaction or a series of related transactions (a) that have a fair market value in excess of $3.0 million or (b) for net proceeds in excess of $3.0 million. Notwithstanding the foregoing: (i) a transfer of assets by the Company to a Wholly Owned Restricted Subsidiary or by a Wholly Owned Restricted Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary, (ii) an issuance of Equity Interests by a Wholly Owned Restricted Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary, and (iii) a Restricted Payment that is permitted by the covenant described above under the caption "-- Restricted Payments" will not be deemed to be Asset Sales. "Attributable Debt" in respect of a sale and leaseback transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended). 82 85 "Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP. "Capital Stock" means (i) in the case of a corporation, corporate stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited) and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. "Cash Equivalents" means (i) United States dollars, (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof having maturities of not more than six months from the date of acquisition, (iii) certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any lender party to the New Credit Facility or with any domestic commercial bank having capital and surplus in excess of $500 million and a Thompson Bank Watch Rating of "B" or better, (iv) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (ii) and (iii) above entered into with any financial institution meeting the qualifications specified in clause (iii) above, and (v) commercial paper having the highest rating obtainable from Moody's Investors Service, Inc. or Standard & Poor's Corporation and in each case maturing within six months after the date of acquisition. "Change of Control" means the occurrence of any of the following: (i) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of Holdings and its Subsidiaries or of the Company and its Subsidiaries, in each case, taken as a whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange Act) other than the Principals or their Related Parties (as defined below), (ii) the adoption of a plan relating to the liquidation or dissolution of Holdings or the Company, (iii) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as defined above), other than the Principals and their Related Parties, becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that a person shall be deemed to have "beneficial ownership" of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition), directly or indirectly, of more than 50% of the Voting Stock of Holdings or the Company (measured by voting power rather than number of shares), (iv) the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors or (v) Holdings or the Company consolidates with, or merges with or into, any Person or sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of its assets to any Person, or any Person consolidates with, or merges with or into, Holdings or the Company, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of Holdings or the Company is converted into or exchanged for cash, securities or other property, other than any such transaction where the Voting Stock of Holdings or the Company outstanding immediately prior to such transaction is converted into or exchanged for Voting Stock (other than Disqualified Stock) of the surviving or transferee Person constituting a majority of the outstanding shares of such Voting Stock of such surviving or transferee Person (immediately after giving effect to such issuance). "Consolidated Cash Flow" means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus (i) an amount equal to any extraordinary loss plus any net loss realized in connection with an Asset Sale (to the extent such losses were deducted in computing such Consolidated Net Income), plus (ii) provision for taxes based on income or profits of such Person and its Subsidiaries for such period, to the extent that such provision for taxes was included in computing such Consolidated Net Income, plus (iii) consolidated interest expense of such Person and its Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and 83 86 charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments (if any) pursuant to Hedging Obligations), to the extent that any such expense was deducted in computing such Consolidated Net Income, plus (iv) depreciation, amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income, plus (v) one-time charges related to the Combination, to the extent that such charges were deducted in computing Consolidated Net Income, plus (vi) in connection with any acquisition by the Company or a Restricted Subsidiary, projected quantifiable improvements in operating results (on an annualized basis) due to cost reductions calculated in good faith by the Company or one of its Restricted Subsidiaries, as evidenced by (A) in the case of cost reductions of less than $10.0 million, an Officers' Certificate delivered to the Trustee and (B) in the case of cost reductions of $10.0 million or more, a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee, minus (vii) non-cash items increasing such Consolidated Net Income for such period. Notwithstanding the foregoing, the provision for taxes on the income or profits of, and the depreciation and amortization and other non-cash charges of, a Subsidiary of the referent Person shall be added to Consolidated Net Income to compute Consolidated Cash Flow only to the extent that a corresponding amount would be permitted at the date of determination to be dividended to the Company by such Subsidiary without prior governmental approval (that has not been obtained), and without direct or indirect restriction pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Subsidiary or its stockholders. "Consolidated Net Income" means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that (i) the Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the referent Person or a Wholly Owned Restricted Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders, (iii) the Net Income of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded, (iv) the cumulative effect of a change in accounting principles shall be excluded and (v) the Net Income of any Unrestricted Subsidiary shall be excluded, whether or not distributed to the Company or one of its Restricted Subsidiaries for purposes of the covenant described under the covenant "Incurrence of Indebtedness and Issuance of Preferred Stock." "Continuing Directors" means, as of any date of determination, any member of the Board of Directors of the Company who (i) was a member of such Board of Directors on the date of the Indenture or (ii) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election. "Credit Agent" means The First National Bank of Chicago, in its capacity as Administrative Agent for the lenders party to the New Credit Facility or any successor thereto or any person otherwise appointed. "Default" means any event that is or with the passage of time or the giving of notice or both would be an Event of Default. "Designated Senior Debt" means (i) any Indebtedness outstanding under the New Credit Facility and (ii) any other Senior Debt permitted under the Indenture the principal amount of which is $25.0 million or more and that has been designated by the Company as Designated Senior Debt. "Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is 84 87 mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the Holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature; provided, however, that any Capital Stock that would not qualify as Disqualified Stock but for change of control provisions shall not constitute Disqualified Stock if the provisions are not more favorable to the holders of such Capital Stock than the provisions described under "-- Change of Control" applicable to the Holders of the Notes. "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock). "Existing Indebtedness" means Indebtedness of the Company and its Subsidiaries (other than Indebtedness under the New Credit Facility) in existence on the date of the Indenture, until such amounts are repaid. "Fixed Charges" means, with respect to any Person for any period, the sum, without duplication, of (i) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation, original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments (if any) pursuant to Hedging Obligations) and (ii) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period, and (iii) to the extent paid by such Person, any interest expense on Indebtedness of another Person that is Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon) and (iv) the product of (a) all dividend payments, whether or not in cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than dividend payments on Equity Interests payable solely in Equity Interests of the Company, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP. "Fixed Charge Coverage Ratio" means with respect to any Person for any period, the ratio of the Consolidated Cash Flow of such Person and its Restricted Subsidiaries for such period to the Fixed Charges of such Person and its Restricted Subsidiaries for such period. In the event that the Company or any of its Restricted Subsidiaries incurs, assumes, Guarantees or redeems any Indebtedness (other than revolving credit borrowings) or issues preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, Guarantee or redemption of Indebtedness, or such issuance or redemption of preferred stock, as if the same had occurred at the beginning of the applicable four-quarter reference period. In addition, for purposes of making the computation referred to above, (i) acquisitions that have been made by the Company or any of its Restricted Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be deemed to have occurred on the first day of the four-quarter reference period and Consolidated Cash Flow for such reference period shall be calculated without giving effect to clause (iii) of the proviso set forth in the definition of Consolidated Net Income, and (ii) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, and (iii) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the referent Person or any of its Restricted Subsidiaries following the Calculation Date. "Foreign Subsidiary" means any Subsidiary organized and existing under the laws of a jurisdiction other than those of any state or commonwealth in the United States of America. 85 88 "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the date of the Indenture. "Government Securities" means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States is pledged. "Guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness. "Hedging Obligations" means, with respect to any Person, the obligations of such Person under (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements and (ii) other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency rates. "Holdings" means AP Holdings, Inc., a Delaware corporation and the parent (but not 100% owner) of APCOA, Inc. "Indebtedness" means, with respect to any Person, any indebtedness of such Person, whether or not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or banker's acceptances or representing Capital Lease Obligations or the balance deferred and unpaid of the purchase price of any property or representing any Hedging Obligations, except any such balance that constitutes an accrued expense or trade payable, if and to the extent any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, as well as all indebtedness of others secured by a Lien on any asset of such Person (whether or not such indebtedness is assumed by such Person) and, to the extent not otherwise included, the Guarantee by such Person of any indebtedness of any other Person. The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof, in the case of any Indebtedness that does not require current payments of interest, and (ii) the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness. "Insolvency or Liquidation Proceedings" means (i) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding, relative to the Company or to the creditors of the Company, as such, or to the assets of the Company, or (ii) any liquidation, dissolution, reorganization or winding up of the Company, whether voluntary or involuntary and involving insolvency or bankruptcy, or (iii) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of the Company. "Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of the covenant described above under the caption " -- Restricted Payments." 86 89 "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction). "Net Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however, (i) any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with (a) any Asset Sale (including, without limitation, dispositions pursuant to sale and leaseback transactions) or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain (but not loss), together with any related provision for taxes on such extraordinary or nonrecurring gain (but not loss). "Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), and any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP. "New Credit Facility" means that certain Credit Agreement, dated as of the date of the Indenture, by and among the Company, the lenders and other parties thereto from time to time and The First National Bank of Chicago, as agent, together with all related documents executed or delivered pursuant thereto at any time (including, without limitation, all mortgages, guarantees, security agreements and all other collateral and security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), supplemented or otherwise modified from time to time, including any agreement extending the maturity of, refinancing, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder provided that such increase in borrowings is within the definition of Permitted Indebtedness or is otherwise permitted under the covenant described "Incurrence of Indebtedness and Issuance of Preferred Stock") or adding Subsidiaries as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness and other Obligations under such agreement or agreements or any successor or replacement agreement or agreements, and whether by the same or any other agent, lender or group of lenders. "Non-Recourse Debt" means Indebtedness (i) as to which neither the Company nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor or otherwise), or (c) constitutes the lender; (ii) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness (other than the Notes being offered hereby) of the Company or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and (iii) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries. "Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness, and in all cases whether now outstanding or hereafter created, assumed or incurred and including, without limitation, interest accruing subsequent to the filing of a petition in bankruptcy at the rate provided in the relevant document, whether or not an allowed claim, and any obligation to redeem or defease any of the foregoing. 87 90 "Permitted Business" means any of the businesses and any other businesses related to the businesses engaged in by the Company and its respective Restricted Subsidiaries on the date of the Indenture. "Permitted Investments" means (a) any Investment in the Company or in a Wholly Owned Restricted Subsidiary of the Company that is engaged in a Permitted Business; (b) any Investment in Cash Equivalents; (c) any Investment by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment (i) such Person becomes a Wholly Owned Restricted Subsidiary of the Company that is engaged in a Permitted Business or (ii) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Wholly Owned Restricted Subsidiary of the Company that is engaged in a Permitted Business; (d) any Restricted Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption " -- Repurchase at the Option of Holders -- Asset Sales"; (e) any acquisition of assets solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company; (f) loans and advances made after the date of the Indenture to Holberg Industries, Inc. not to exceed $10.0 million at any time outstanding; (g) make and permit to remain outstanding travel and other like advances in the ordinary course of business consistent with past practices to officers and employees of the Company or a Subsidiary of the Company; (h) other Investments made after the date of the Indenture in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (h) that are at the time outstanding, not to exceed $10 million; and (i) loans and advances made after the date of the Indenture to Holdings, not to exceed $9.0 million at any time outstanding. "Permitted Liens" means (i) Liens securing Senior Debt under the New Credit Facility that were permitted by the terms of the Indenture to be incurred; (ii) Liens in favor of the Company; (iii) Liens on property of a Person existing at the time such Person is merged into or consolidated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company; (iv) Liens on property existing at the time of acquisition thereof by the Company or any Restricted Subsidiary of the Company, provided that such Liens were in existence prior to the contemplation of such acquisition; (v) Liens to secure the performance of bids, tenders, contracts, statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business; (vi) Liens existing on the date of the Indenture; (vii) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor; (viii) Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to obligations that do not exceed $5.0 million at any one time outstanding and that (a) are not incurred in connection with the borrowing of money or the obtaining of advances or credit (other than trade credit in the ordinary course of business) and (b) do not in the aggregate materially detract from the value of the property or materially impair the use thereof in the operation of business by the Company or such Restricted Subsidiary; (ix) Liens on assets of Unrestricted Subsidiaries that secure Non-Recourse Debt of Unrestricted Subsidiaries; (x) Liens on the daily revenues in favor of Persons other than the Company and its Restricted Subsidiaries who are parties to parking facility agreements for the amounts due to them pursuant thereto; (xi) Liens arising by applicable law in respect of employees' wages, salaries or commissions not overdue; and (xii) Liens arising out of judgments or awards not in excess of $5.0 million with respect to which the Company or its Subsidiary with respect to which the Company or such Subsidiaries are prosecuting an appeal or a proceeding or review and the enforcement of such lien is stayed pending such appeal or review. "Permitted Refinancing Indebtedness" means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries; provided that: (i) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus accrued interest on, the 88 91 Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable expenses incurred in connection therewith); (ii) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and (iv) such Indebtedness is incurred either by the Company or by the Restricted Subsidiary who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded. "Principals" means Holberg Industries, Inc., John V. Holten or, in the case of the Company, Holdings. "Public Equity Offering" means a public offering of Equity Interests (other than Disqualified Stock) of (i) the Company or (ii) Holdings, to the extent that the net proceeds thereof are contributed to the Company as a capital contribution, that, in each case, results in net proceeds to the Company of at least $25.0 million. "Receivables" means, with respect to any Person or entity, all of the following property and interests in property of such Person or entity, whether now existing or existing in the future or hereafter acquired or arising: (i) accounts, (ii) accounts receivable incurred in the ordinary course of business, including without limitation, all rights to payment created by or arising from sales of goods, leases of goods or the rendition of services no matter how evidenced, whether or not earned by performance, (iii) all rights to any goods or merchandise represented by any of the foregoing after creation of the foregoing, including, without limitation, returned or repossessed goods, (iv) all reserves and credit balances with respect to any such accounts receivable or account debtors, (v) all letters of credit, security, or guarantees for any of the foregoing, (vi) all insurance policies or reports relating to any of the foregoing, (vii) all collection or deposit accounts relating to any of the foregoing, (viii) all proceeds of the foregoing and (ix) all books and records relating to any of the foregoing. "Regulation S" means Regulation S promulgated under the Securities Act. "Regulation S Global Notes" means the Regulation S Temporary Global Notes or the Regulation S Permanent Global Notes as applicable. "Regulation S Permanent Global Notes" means the permanent global notes that are deposited with and registered in the name of the Depositary or its nominee, representing a series of Notes sold in reliance on Regulation S. "Regulation S Temporary Global Notes" means the temporary global notes that are deposited with and registered in the name of the Depositary or its nominee, representing a series of Notes sold in reliance on Regulation S. "Related Party" with respect to any Principal means (A) any controlling stockholder, 80% (or more) owned Subsidiary, or spouse or immediate family member (in the case of an individual) of such Principal or (B) or trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 80% or more controlling interest of which consist of such Principal and/or such other Persons referred to in the immediately preceding clause (A). "Reorganization Securities" means securities distributed to the Holders of the Notes in an Insolvency or Liquidation Proceeding pursuant to a plan of reorganization consented to by each class of the Senior Debt, but only if all of the terms and conditions of such securities (including, without limitation, term, tenor, interest, amortization, subordination, standstills, covenants and defaults), are at least as favorable (and provide the same relative benefits) to the holders of Senior Debt and to the holders of any security distributed in such Insolvency or Liquidation Proceeding on account of any such Senior Debt as the terms and conditions of the Notes and the Indenture are, and provide to the holders of Senior Debt. "Representative" means the Trustee, agent or representative for any Senior Debt. 89 92 "Restricted Investment" means an Investment other than a Permitted Investment. "Restricted Subsidiary" of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary. "Rule 144A" means Rule 144A promulgated under the Securities Act. "Rule 144A Global Note" means a permanent global note that is deposited with and registered in the name of the Depositary or its nominee, representing a series of Notes sold in reliance on Rule 144A. "Senior Debt" means (i) all Indebtedness outstanding under the New Credit Facility, including any Guarantees thereof and all Hedging Obligations with respect thereto, (ii) any other Indebtedness permitted to be incurred by the Company or its Restricted Subsidiaries under the terms of the Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the Notes and (iii) all Obligations with respect to the foregoing. Notwithstanding anything to the contrary in the foregoing, Senior Debt will not include (w) any liability for federal, state, local or other taxes owed or owing by the Company, (x) any Indebtedness of the Company to any of its Subsidiaries or other Affiliates, (y) any trade payables or (z) any Indebtedness that is incurred in violation of the Indenture. "Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof. "Subsidiary" means, with respect to any Person, (i) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof) and (ii) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof). "Subsidiary Guarantors" means all direct and indirect Restricted Subsidiaries of the Company. "Unrestricted Subsidiary" means (i) any Subsidiary that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution; but only to the extent that such Subsidiary: (a) has no Indebtedness other than Non-Recourse Debt; (b) is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company; (c) is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (x) to subscribe for additional Equity Interests or (y) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results; and (d) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries. Any such designation by the Board of Directors shall be evidenced to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing conditions and was permitted by the covenant described above under the caption "Certain Covenants -- Restricted Payments." If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption "Incurrence of Indebtedness and Issuance of Preferred Stock," the Company shall be in default of such covenant). The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the 90 93 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. 91 94 DESCRIPTION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following discussion is a summary of certain U.S. federal income tax considerations relevant to the purchase, ownership and disposition of the New Notes by the holders thereof. This summary does not purport to be a complete analysis of all the potential federal income tax effects relating to the purchase, ownership and disposition of the New Notes. There can be no assurance that the U.S. Internal Revenue Service will take a similar view of such consequences. Further, the discussion does not address all aspects of taxation that may be relevant to particular purchasers in light of their individual circumstances (including the effect of any foreign, state or local laws) or to certain types of purchasers (including dealers in securities, insurance companies, financial institutions, persons that hold New Notes that are a hedge or that are hedged against currency risks or that are part of a straddle or conversion transaction, persons whose functional currency is not the U.S. dollar and tax-exempt entities) subject to special treatment under U.S. federal income tax laws. The discussion below assumes that the New Notes are held as capital assets. The discussion of the U.S. federal income tax consequences set forth below is based upon currently existing provisions of the Internal Revenue Code of 1986, as amended (the "Code"), judicial decisions, and administrative interpretations. Because individual circumstances may differ, each prospective purchaser of the New Notes is strongly urged to consult its own tax advisor with respect to its particular tax situation and the particular tax effects of any state, local, non-U.S. or other tax laws and possible changes in the tax laws. As used herein, the term "U.S. Holder" means a beneficial owner of a New Note who or which is for U.S. federal income tax purposes either (i) a citizen or resident of the U.S., (ii) a corporation, partnership or other entity created or organized in or under the laws of the U.S. or of any political subdivision thereof, (iii) an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust if a court within the U.S. is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust. The term also includes certain former citizens of the U.S. whose income and gain on the New Notes will be subject to U.S. taxation. As used herein, the term "U.S. Alien Holder" means a beneficial owner of a New Note that is not a U.S. Holder. PAYMENTS OF INTEREST Interest paid on a New Note will generally be taxable to a U.S. Holder as ordinary interest income at the time it accrues or is received, in accordance with the U.S. Holder's method of accounting for federal income tax purposes. MARKET DISCOUNT AND PREMIUM If a U.S. Holder that acquires a New Note has a tax basis in the New Note that is less than its "stated redemption price at maturity," the amount of the difference will be treated as "market discount" for U.S. federal income tax purposes, unless such difference is less than a specified de minimis amount. Under the market discount rules of the Code, a U.S. Holder will be required to treat any principal payment on, or any gain on the sale, exchange, retirement or other disposition of, a New Note as ordinary income to the extent of any accrued market discount that has not previously been included in income. Market discount generally accrues on a straight-line basis over the remaining term of a New Note. A U.S. Holder may not be allowed to deduct immediately all or a portion of the interest expense on any indebtedness incurred or continued to purchase or to carry such New Note. A U.S. Holder may elect to include market discount in income currently as it accrues (either on a straight-line basis or, if the United States Holder so elects, on a constant yield basis), in which case the interest deferral rule set forth in the preceding sentence will not apply. Such an election will apply to all bonds acquired by the U.S. Holder on or after the first day of the first taxable year to which such election applies and may be revoked only with the consent of the Internal Revenue Service. If a U.S. Holder purchases a New Note for an amount that is greater than the sum on all amounts payable on the New Note after the purchase date, other than stated interest, such holder will be considered to have purchased such New Note with "amortizable bond premium" equal in amount to such excess, and may elect (in accordance with applicable Code provisions) to amortize such premium, using a constant yield 92 95 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 93 96 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 94 97 it has failed to properly report payments of interest and dividends or (iv) under certain circumstances, fails to certify, under penalties of perjury, that it has furnished a correct TIN and has not been notified by the Internal Revenue Service that it is subject to backup withholding for failure to report interest and dividend payments. In the case of a U.S. Alien Holder, under currently effective Treasury Regulations, backup withholding will not apply to payments made by the Company or any paying agent thereof on a New Note if such holder has provided the required certification under penalties of perjury that it is not a U.S. Holder (as defined above) or has otherwise established an exemption, provided in each case that the Company or such paying agent, as the case may be, does not have actual knowledge that the payee is a U.S. Holder. Under currently effective Treasury Regulations, if payments on a New Note are made to or through a foreign office of a custodian, nominee or other agent acting on behalf of a beneficial owner of a New Note, such custodian, nominee or other agent acting will not be required to apply backup withholding to such payments made to such beneficial owner. However, under the New Regulations, backup withholding may apply to payments made after December 31, 1998 if such custodian, nominee or other agent has actual knowledge that the payee is a U.S. Holder. Under currently effective Treasury Regulations, payments on the sale, exchange or other disposition of a New Note made to or through a foreign office of a broker generally will not be subject to backup withholding. However, under the New Regulations, backup withholding may apply to payments made after December 31, 1998 if such broker has actual knowledge that the payee is a U.S. Holder. In the case of proceeds from a sale of a New Note by a U.S. Alien Holder paid to or through the foreign office of a U.S. broker or a foreign office of a foreign broker that is (i) a controlled foreign corporation for U.S. tax purposes or (ii) a person 50% or more of whose gross income for the three-year period ending with the close of the taxable year preceding the year of payment (or for the part of that period that the broker has been in existence) is effectively connected with the conduct of a trade or business within the U.S., information reporting is required unless the broker has documentary evidence in its files that the payee is not a U.S. person and certain other conditions are met, or the payee otherwise establishes an exemption. Payments to or through the U.S. office of a broker will be subject to backup withholding and information reporting unless the holder certifies, under penalties of perjury, that it is not a U.S. Holder and that certain other conditions are met or otherwise establishes an exemption. Holders of New Notes should consult their tax advisors regarding the application of backup withholding in their particular situations, the availability of an exemption therefrom, and the procedure for obtaining such an exemption, if available. Any amounts withheld from payment under the backup withholding rules will be allowed as a credit against a Holder's U.S. federal income tax liability and may entitle such holder to a refund, provided that the required information is furnished to the Internal Revenue Service. THE FOREGOING DISCUSSION IS FOR GENERAL INFORMATION AND IS NOT TAX ADVICE. ACCORDINGLY, EACH PROSPECTIVE HOLDER OF NEW NOTES SHOULD CONSULT ITS OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO THE PROSPECTIVE HOLDER OF THE NEW NOTES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, OR NON-U.S. INCOME TAX LAWS AND ANY RECENT OR PROSPECTIVE CHANGES IN APPLICABLE TAX LAWS AND THE EFFECT OF THE NEW REGULATIONS WITH RESPECT TO PAYMENTS MADE AFTER DECEMBER 31, 1998. PLAN OF DISTRIBUTION Each broker-dealer that receives New Notes for its own account ("Participating Broker-Dealer") pursuant to the Exchange Offer must acknowledge that it will deliver a Prospectus in connection with the initial sales of such New Notes. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer in connection with the sales of New Notes received in exchange for Notes where such Notes were acquired as a result of market-making activities or other trading activities. The Company has agreed that it will make this Prospectus, as amended or supplemented, available to any Participating Broker-Dealer for use in connection with any such resale and Participating Broker-Dealers shall be authorized to deliver this prospectus for a period not exceeding 120 days after the Expiration Date. In 95 98 addition, until , 1998 (90 days after the date of this Prospectus), all dealers effecting transactions in the New Notes may be required to deliver a prospectus. The Company will not receive any proceeds from any sales of the New Notes by participating Broker-Dealers. New Notes received by Participating Broker-Dealers for their own account pursuant to the Exchange Offer may be sold from time to time, in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such Participating Broker-Dealer that resells the New Notes that were received by it for its own account pursuant to the Exchange Offer. Any broker or dealer that participates in a distribution of such New Notes may be deemed to be an "underwriter" within the meaning of the Securities Act and may profit on any such resale of New Notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. The Company will promptly send additional copies of this Prospectus and any amendment or supplement to this prospectus to any Participating Broker-Dealer that requests such documents in the Letter of Transmittal. See "The Exchange Offer." DLJ has, from time to time, including in connection with the Combination, provided investment banking and other financial advisory services to APCOA and affiliates of APCOA for which it has received customary compensation. The First National Bank of Chicago, an affiliate of First Chicago, is the agent under the New Credit Facility and First Chicago is the arranger under the New Credit Facility. See "Description of Indebtedness." LEGAL MATTERS Certain legal matters in connection with the New Notes offered hereby will be passed upon for the Company by Wachtell, Lipton, Rosen & Katz, New York, New York. EXPERTS The consolidated financial statements of APCOA at December 31, 1996 and 1997 and for each of the three years in the period ended December 31, 1997, appearing in this Prospectus and in the Registration Statement, and the financial statement schedule for each of the three years in the period ended December 31, 1997 included in the Registration Statement have been audited by Ernst & Young LLP, independent auditors, as set forth in their reports thereon appearing elsewhere herein and in the Registration Statement, and are included herein in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing. The financial statements of Standard at December 31, 1996 and 1997 and for each of the three years in the period ended December 31, 1997, appearing in this Prospectus and in the Registration Statement have been audited by Altschuler, Melvoin and Glasser LLP, independent auditors, as set forth in their report thereon appearing elsewhere herein, and are included herein in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. 96 99 INDEX OF CERTAIN DEFINED TERMS
PAGE NO. ADA............................... 18 Affiliate Transaction............. 72 Agent............................. 28 Annual Base Salary................ 54 APCOA............................. 1 AP Holdings....................... 20 Board............................. 54 CAGR.............................. 9 Certificate of Incorporation...... 17 Change of Control Offer........... 65 Closing........................... 12 Code.............................. 92 Combination....................... 1 Combination Agreement............. 28 Commission........................ 3 Company........................... 1 Company Common Stock.............. 28 Delaware North.................... 49 Depositary........................ 3 DLJ............................... 73 DTC............................... 78 EPI............................... 26 ERISA............................. 94 Exchange Act...................... 4 Exchange Offer.................... 1 Exchange Offer Registration Statement....................... 12 Financing......................... 28 First Chicago..................... 3 Guarantors........................ 54 Holberg........................... 18 Indenture......................... 1 Initial Purchasers................ 3 Lenders........................... 16 Liquidated Damages................ 78 Named Executive Officers.......... 50 New Credit Facility............... 28 New Global Notes.................. 72
PAGE NO. New Notes......................... 1 New Note Guarantees............... 1 New Regulations................... 94 Offering.......................... 9 Option Plan....................... 55 Other Acquisitions................ 6 PORTAL............................ 1 Preferred Stock Contribution...... 28 property-level expenses........... 58 Purchase Agreement................ 95 Registration Default.............. 81 Registration Rights Agreement..... 1 Regulation S Certificate.......... 76 Regulation S Global Notes......... 72 Regulation S Notes................ 72 Regulation S Permanent Global Notes........................... 72 Regulation S Temporary Global Notes........................... 72 Restricted Payments............... 69 Restricted Period................. 72 Securities Act.................... 1 Shelf Registration Statement...... 12 Standard.......................... 1 Standard Owners................... 28 Standard Parties.................. 57 Stockholders...................... 57 Stockholders Agreement............ 57 Subsidiary Guarantors............. 12 Tax Sharing Agreement............. 57 TIN............................... 94 Transactions...................... 28 Trustee........................... 1 Trust Indenture Act............... 62 U.S. Alien Holder................. 92 U.S. Holder....................... 92 U.S. Person....................... 76 Warshauer Employment Agreement.... 54
97 100 APCOA, INC. INDEX TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
PAGE ---- Description of Unaudited Pro Forma Consolidated Financial Statements................................................ P-2 Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 1997......................................... P-3 Notes to Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 1997...................................... P-4 Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 1997.......................... P-6 Notes to Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 1997........... P-7
P-1 101 APCOA, INC. UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS The following Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 1997 and Unaudited Pro Forma Consolidated Statement of Operations for the year then ended are based on the historical consolidated financial statements of APCOA. The Unaudited Pro Forma Consolidated Balance Sheet is adjusted to give effect to (1) the acquisition of Standard, (2) the Other Acquisitions, including the probable acquisition of EPI, (3) the Preferred Stock Contribution, (4) the sale of the Notes and (5) the application of the estimated net proceeds therefrom as described under "Use of Proceeds," as if these events had occurred on December 31, 1997. The Unaudited Pro Forma Consolidated Statement of Operations is adjusted to give effect to (1) the acquisition of Standard, (2) the Other Acquisitions, including the probable acquisition of EPI, (3) the Preferred Stock Contribution, (4) the sale of the Notes and (5) the application of the net proceeds therefrom, as if these events had occurred as of January 1, 1997. The Unaudited Pro Forma Consolidated Statement of Operations combines the historical operations of APCOA with the historical operations of the acquired businesses prior to the date APCOA made such acquisitions, using the purchase method of accounting. The actual allocation of purchase price for each acquisition will be based on management's final determination of the fair value of assets acquired or to be acquired and liabilities assumed or to be assumed. The pro forma operating results are not necessarily indicative of the operating results that would have been achieved had the acquisitions actually occurred at January 1, 1997, nor do they purport to indicate the results of future operations. The Unaudited Pro Forma Consolidated Financial Statements are based on the assumptions set forth in the notes to such statements and should be read in conjunction with the related consolidated financial statements and notes thereto of APCOA and Standard included elsewhere in this Prospectus. P-2 102 APCOA, INC. UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1997 (IN THOUSANDS)
PRO FORMA HISTORICAL ADJUSTMENTS COMBINED ---------------------------------- FOR STANDARD PRO FORMA OTHER AND OTHER COMBINED ADJUSTMENTS ADJUSTED APCOA STANDARD ACQUISITIONS ACQUISITIONS PRO FORMA FOR OFFERING(7) FOR OFFERING -------- -------- ------------ ------------ --------- --------------- ------------ ASSETS Current assets: Cash......................... $ 3,322 $ 2,478 $ 824 $ (1,200)(1) $ 5,424 $ 55,749 $ 61,173 Notes and accounts receivable, net............ 13,806 4,919 338 (2,800)(1) 16,263 -- 16,263 Prepaid expenses............. 1,126 150 73 -- 1,349 -- 1,349 -------- ------- ------ -------- -------- -------- -------- Total current assets... 18,254 7,547 1,235 (4,000) 23,036 55,749 78,785 Property and equipment, net... 8,248 1,170 222 -- 9,640 -- 9,640 Cost of parking contracts, net.......................... 4,092 328 -- 6,473(2) 12,725 -- 12,725 935(3) 897(4) Cost in excess of net assets acquired, net................ 18,457 -- -- 74,475(2) 102,649 -- 102,649 6,364(3) 3,353(4) Other intangible assets, net.......................... 4,013 -- -- (283)(3) 3,730 7,200 10,155 (775) Due from affiliate............ 4,522 -- -- (4,522)(5) -- -- -- Other assets.................. 1,509 1,131 -- -- 2,640 -- 2,640 -------- ------- ------ -------- -------- -------- -------- $ 59,095 $10,176 $1,457 $ 83,692 $154,420 $ 62,174 $216,594 ======== ======= ====== ======== ======== ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable............. $ 16,401 $ 650 $ 848 $ -- $ 17,899 $ -- $ 17,899 Accrued expenses............. 14,810 2,910 625 4,875(2) 25,720 (4,875) 20,845 2,500(2) Line of credit............... -- 330 -- -- 330 (330) -- Current portion of long-term debt....................... 4,102 208 -- -- 4,310 (1,800) 2,510 -------- ------- ------ -------- -------- -------- -------- Total current liabilities........... 35,313 4,098 1,473 7,375 48,259 (7,005) 41,254 Long-term liabilities: Existing credit facilities... 27,729 -- -- 1,000(4) 28,729.. (28,729) -- New credit facility.......... -- -- -- -- -- -- -- 9 1/4% Senior Subordinated Notes due 2008............. -- -- -- -- -- 140,000 140,000 Other debt................... 6,452 127 -- -- 6,579 -- 6,579 Due to Standard.............. -- -- -- 65,000(2) 65,000 (65,000) -- Due to EPI................... -- -- -- 7,000(3) 7,000 (7,000) -- Seller notes................. -- -- -- 3,250(4) 3,250 -- 3,250 Other liabilities............ 3,132 935 -- 5,000(2) 9,067 -- 9,067 -------- ------- ------ -------- -------- -------- -------- Total long-term liabilities........... 37,313 1,062 -- 81,250 119,625 39,271 158,896 Redeemable preferred stock.... 8,728 -- -- (728)(6) 8,000 40,683 40,683 (8,000) Common stock subject to put/call rights.............. -- -- -- 4,589(2) 4,589 -- 4,589 Stockholders' equity (deficit): Common stock................. 1 -- -- -- 1 -- 1 Additional paid in capital... 17,205 -- -- (4,522)(5) 13,411 -- 13,411 728(6) Retained earnings (deficit).................. (39,465) -- -- -- (39,465) (2,000) (42,240) (775) Owners' equity (deficit)..... -- 5,016 (16) (4,000)(2) -- -- -- (1,016)(2) 16(3) -------- ------- ------ -------- -------- -------- -------- Total stockholders' equity (deficit)...... (22,259) 5,016 (16) (8,794) (26,053) (2,775) (28,828) -------- ------- ------ -------- -------- -------- -------- $ 59,095 $10,176 $1,457 $ 83,692 $154,420 $ 62,174 $216,594 ======== ======= ====== ======== ======== ======== ========
See accompanying notes to unaudited pro forma consolidated balance sheet. P-3 103 APCOA, INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1997 (IN THOUSANDS) (1) Represents the reduction in cash and notes and accounts receivable for the closing distribution to the Standard Owners pursuant to the Combination Agreement. (2) Represents the following adjustments to reflect the Combination (the final purchase price allocation will be based upon a final determination of fair values of the net assets acquired): Cash consideration payable from proceeds of the Offering.... $65,000 APCOA common stock to be issued, at calculated put/call value per the Stockholders' Agreement..................... 4,589 ------- Total consideration............................... $69,589 ======= The total consideration is allocated as follows: Historical net assets of Standard......................... $ 5,016 Closing distribution to the Standard Owners............... (4,000) ------- Net assets acquired.................................... 1,016 Cost of parking contracts................................. 6,473 Cost in excess of net assets acquired..................... 74,475 Accrued transaction costs................................. (4,875) Restructuring reserves.................................... (2,500) Long-term severance liabilities........................... (5,000) ------- $69,589 =======
(3) Represents the following adjustments to reflect the probable acquisition of EPI (the final purchase price allocation will be based upon a final determination of fair values of the net assets acquired): Historical net assets (deficit) of EPI...................... $ (16) Less: Current APCOA investment in EPI....................... (283) ------- Net deficit acquired................................... (299) Cost of parking contracts................................... 935 Cost in excess of net assets acquired....................... 6,364 ------- Cash consideration payable from proceeds of the Offering.... $ 7,000 =======
(4) Represents the acquisition by the Company of Dixie Parking on January 22, 1998, but which was managed by the Company in 1997. The purchase price consisted of cash of $1,000, which was borrowed under the existing credit facility, and seller notes of $3,250. The purchase price allocation consisted of $897 to parking contracts acquired and $3,353 to cost in excess of net assets acquired. (5) Represents the closing distribution to Holberg Industries, Inc., pursuant to the Combination Agreement, of the receivable, "Due from affiliate." (6) Represents $728 of preferred stock eliminated pursuant to the Combination Agreement. P-4 104 APCOA, INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET--(CONTINUED) (7) Reflects the issuance of $140,000 of Senior Subordinated Notes due 2008 in the Offering and $40,683 of redeemable preferred stock issued to AP Holdings, Inc. The application of the proceeds therefrom are as follows: Reduction of existing indebtedness: Amounts due the Standard Owners........................... $ 65,000 Existing credit facilities................................ 28,729 Amounts due EPI owners.................................... 7,000 Current portion of long-term debt......................... 1,800 Line of credit for Standard............................... 330 Redemption of preferred stock held by Holberg Industries, Inc....................................................... 8,000 Deferred financing fees..................................... 7,200 Prepayment penalty on existing credit facilities, charged to stockholders' equity (deficit)............................ 2,000 Payment of accrued transaction costs at closing............. 4,875 Excess proceeds from the Offering........................... 55,749 -------- $180,683 ========
In connection with the reduction of existing indebtedness, $775 of deferred financing costs will be written off. P-5 105 APCOA, INC. UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1997 (IN THOUSANDS)
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 -------- -------- --------------- ------------ --------- ----------- ------------ Parking service revenue...... $115,676 $63,652 $6,750 $ -- $186,078 $ -- $186,078 Cost and expenses: Cost of parking services... 92,818 50,142 3,205 -- 146,165 -- 146,165 General and administrative.......... 13,528 7,857 3,566 (2,987)(2) 20,045 -- 20,045 (1,919)(3) Depreciation and amortization............ 3,767 464 -- 1,298(4) 7,678 (180)(8) 7,498 2,149(5) -------- ------- ------ ------- -------- ------- -------- Total costs and expenses......... 110,113 58,463 6,771 (1,459) 173,888 (180) 173,708 -------- ------- ------ ------- -------- ------- -------- Operating income............. 5,563 5,189 (21) 1,459 12,190 180 12,370 Other expense (income): Interest expense........... 3,713 45 -- 7,124(6) 10,882 4,063(9) 14,945 Interest income............ (470) (130) -- 351(7) (249) -- (249) -------- ------- ------ ------- -------- ------- -------- Income (loss) before income taxes and minority interest................... 2,320 5,274 (21) (6,016) 1,557 (3,883) (2,326) Minority interest............ 321 -- -- -- 321 -- 321 Income tax expense........... 140 -- -- -- 140 -- 140 -------- ------- ------ ------- -------- ------- -------- Net income (loss)............ $ 1,859 $ 5,274 $ (21) $(6,016) $ 1,096 $(3,883) $ (2,787) ======== ======= ====== ======= ======== ======= ======== Other data: EBITDA(10)................... $ 19,868 ======== Deficiency of earnings to fixed charges(11).......... $ 2,326 ========
See accompanying notes to unaudited pro forma consolidated statement of operations. P-6 106 APCOA, INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1997 (IN THOUSANDS) (1) The historical consolidated statement of operations data for the Other Acquisitions for the year ended December 31, 1997 represents the results of operations of such companies from January 1, 1997 to the earlier of their respective dates of acquisition or December 31, 1997. The Other Acquisitions and their respective acquisition dates include: (i) Colonial Richmond (March 1, 1997); (ii) Metropolitan Parking (June 1, 1997); (iii) the remaining 50% interest in APCOA Parking Management & Development, Ltd. (November 1, 1997); (iv) Dixie Parking (January 22, 1998); and (v) the remaining 76% interest in EPI, a probable acquisition. Each of the Other Acquisitions has been or is proposed to be accounted for as a purchase. Accordingly, the results of the operations of each such acquired company are or will be included in APCOA's results of operations from the date of acquisition. (2) Represents the net reduction in costs in accordance with the Company's business plan to integrate Standard: Payroll reductions for the elimination of duplicative administrative and operations personnel................... $1,461 Reduction in salaries of certain Standard executives pursuant to post-acquisition employment agreements........ 1,139 Reductions in management information systems costs.......... 387 ------ $2,987 ======
In addition, there are $3,289 of anticipated cost savings ($1,883 represents personnel reduction savings at APCOA and $1,406 represents purchasing efficiencies) that have not been reflected in the pro forma statement of operations because they are not directly attributable to the acquisition of Standard. APCOA intends to record a $8,500 charge in fiscal 1998 related to its planned restructuring of existing operations. This charge is composed of $5,700 in employee displacement costs, $1,900 in writedowns of long-term assets to current fair value, and $900 in other restructuring costs. (3) Represents the net reduction in costs in accordance with APCOA's business plans to integrate the Other Acquisitions: Payroll reductions for the elimination of duplicative administrative and operations personnel: EPI.................................................. $ 331 Other................................................ 428 Reduction in salaries of certain EPI executives pursuant to proposed post-acquisition employment agreements........... 577 Reduction in management fees paid to third parties which will be eliminated upon acquisition....................... 583 ------ $1,919 ======
(4) Represents the incremental depreciation and amortization due to the application of purchase accounting. Property, leaseholds and equipment are being amortized over 3 to 7 years. Depreciation and amortization has been increased to reflect each acquisition as if it had occurred on January 1, 1997 as follows: Amortization of cost of parking contracts acquired from Standard.................................................. $1,034 Amortization of cost of parking contracts acquired from the Other Acquisitions........................................ 347 Net reduction in depreciation of property and equipment acquired from Standard.................................... (83) ------ $1,298 ======
P-7 107 APCOA, INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS--(CONTINUED) (5) Represents the incremental amortization, due to the application of purchase accounting, for amortization of the excess cost over the fair value of net assets acquired over 40 years. Amortization has been increased to reflect each acquisition as if it had occurred on January 1, 1997 as follows: Amortization of excess cost over fair value of net assets acquired for Standard.............................................. $1,862 Amortization of excess cost over fair value of net assets acquired for the Other Acquisitions........................................ 287 ------ $2,149 ======
(6) Represents the incremental interest expense for the additional financing required for the acquisitions. Interest expense has been increased to reflect each acquisition as if it had occurred on January 1, 1997. The interest rate used for the additional financing for the Standard acquisition and the proposed EPI acquisition was 9 1/4%, the actual rate of the Senior Subordinated Notes, the proceeds from which will be partially used to finance such acquisitions. The interest expense is as follows:
INCREMENTAL PRINCIPAL INTEREST AMOUNT RATE EXPENSE --------- ----------- ----------- Standard................................. $65,000 9 1/4% $6,013 EPI...................................... 7,000 9 1/4% 648 Seller notes for Dixie acquisition....... 3,250 8 1/4% 268 Other borrowings (pro-rated)............. 3,128 8.0% - 9.0% 195 ------ $7,124 ======
(7) Represents the elimination of interest income from Holberg Industries, Inc. on the outstanding amount due from Holberg Industries, Inc. (8) Represents the elimination of historical amortization expense related to the deferred financing costs on the existing credit facilities. (9) Represents the change in interest expense related to the Offering:
PRINCIPAL YEAR ENDED AMOUNT DECEMBER 31, OF DEBT 1997 --------- ------------ Recording of pro forma interest expense: 9 1/4% Senior Subordinated Notes due 2008................. $140,000 $12,950 Nonrecourse third party debt at 11.0% to 15.0%............ 5,523 660 Seller notes for Dixie acquisition at 8.25%............... 3,250 268 Letters of credit......................................... 4,905 123 Capital leases............................................ 168 Other debt................................................ 56 ------- Cash interest expense..................................... 14,225 Amortization of deferred financing costs.................. 720 ------- Total interest expense............................ 14,945 Less: Combined pro forma interest expense................... 10,882 ------- Pro forma interest adjustment after the Offering............ $ 4,063 =======
(10) EBITDA represents operating income plus depreciation and amortization. EBITDA is presented because management believes it is a widely accepted financial indicator used by certain investors and analysts to analyze and compare companies on the basis of operating performance. EBITDA is not P-8 108 APCOA, INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS--(CONTINUED) intended to represent cash flows for the period, nor has it been presented as an alternative to operating income as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles. The Company understands that, while EBITDA is frequently used by securities analysts in the evaluation of companies, EBITDA, as used herein, is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation. (11) For purposes of computing the deficiency of earnings to fixed charges, earnings consist of income (loss) before income taxes and minority interest plus fixed charges. Fixed charges consist of interest expense, amortization of deferred financing costs and one-third of the rent expense from operating leases, which management believes is a reasonable approximation of the interest factor of the rent. P-9 109 INDEX TO HISTORICAL FINANCIAL STATEMENTS APCOA, INC. Report of Ernst & Young LLP, Independent Auditors........... F-2 Consolidated Balance Sheets as of December 31, 1996 and 1997...................................................... F-3 Consolidated Statements of Operations for each of the three years in the period ended December 31, 1997............... F-4 Consolidated Statements of Stockholders' Equity (Deficit) for each of the three years in the period ended December 31, 1997.................................................. F-5 Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 1997............... F-6 Notes to Consolidated Financial Statements.................. F-7 STANDARD PARKING Report of Altschuler, Melvoin and Glasser LLP, Independent Auditors.................................................. F-13 Balance Sheets as of December 31, 1996 and 1997............. F-14 Statements of Income for each of the three years in the period ended December 31, 1997............................ F-15 Statements of Changes in Equity for each of the three years in the period ended December 31, 1997..................... F-16 Statements of Cash Flows for each of the three years in the period ended December 31, 1997............................ F-17 Notes to Financial Statements............................... F-18
F-1 110 REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS Board of Directors APCOA, Inc. Cleveland, Ohio We have audited the accompanying consolidated balance sheets of APCOA, Inc., as of December 31, 1996 and 1997, and the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 1997. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of APCOA, Inc. at December 31, 1996 and 1997, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1997, in conformity with generally accepted accounting principles. ERNST & YOUNG LLP Cleveland, Ohio February 3, 1998 F-2 111 APCOA, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT FOR SHARE DATA)
DECEMBER 31 ------------------ 1996 1997 ASSETS Current assets: Cash...................................................... $ 2,532 $ 3,322 Notes and accounts receivable, less allowances of $315 in 1996 and $443 in 1997.................................. 10,241 13,806 Prepaid expenses and supplies............................. 1,343 1,126 ------- ------- Total current assets........................................ 14,116 18,254 Property, leaseholds and equipment: Buildings and equipment................................... 9,296 10,024 Land and leasehold improvements........................... 15,804 13,981 Leaseholds................................................ 31,446 31,293 Construction in progress.................................. 36 417 ------- ------- 56,582 55,715 Less accumulated depreciation and amortization............ 44,906 43,375 ------- ------- 11,676 12,340 Other assets: Advances and deposits Cost in excess of net assets acquired, less accumulated... 1,011 1,509 amortization of $2,979 and $3,412 in 1996 and 1997, respectively.......................................... 17,118 18,457 Other intangible assets, less accumulated amortization of $3,081 and $3,433 in 1996 and 1997, respectively....... 3,381 4,013 Due from affiliate........................................ 5,521 4,522 ------- ------- 27,031 28,501 ------- ------- Total assets...................................... $52,823 $59,095 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable.......................................... $15,742 $16,401 Accrued rent.............................................. 6,023 5,649 Compensation and payroll withholdings..................... 2,057 1,924 Property, payroll and other taxes......................... 3,004 3,111 Accrued insurance and expenses............................ 6,079 4,126 Current portion of long-term borrowings................... 666 4,102 ------- ------- Total current liabilities................................... 33,571 35,313 Long-term borrowings, excluding current portion: Obligation under credit agreements........................ 25,261 27,729 Other..................................................... 6,868 6,452 ------- ------- 32,129 34,181 Other long-term liabilities................................. 2,513 3,132 Redeemable preferred stock.................................. 7,841 8,728 Stockholders' equity (deficit): Common stock, par value $1.00 per share, 1,000 shares authorized; 26.3 shares issued and outstanding......... 1 1 Additional paid-in capital................................ 17,205 17,205 Accumulated deficit....................................... (40,437) (39,465) ------- ------- Total stockholders' equity (deficit)........................ (23,231) (22,259) ------- ------- Total liabilities and stockholders' equity (deficit)........................................ $52,823 $59,095 ======= =======
See Notes to Consolidated Financial Statements. F-3 112 APCOA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997 (IN THOUSANDS)
1995 1996 1997 Parking revenue............................................ $141,540 $135,752 $115,676 Costs and expenses: Cost of parking services................................. 120,215 113,501 92,818 General and administrative............................... 12,121 13,017 13,528 Depreciation and amortization............................ 8,772 4,888 3,767 -------- -------- -------- Total costs and expenses................................... 141,108 131,406 110,113 -------- -------- -------- Operating income........................................... 432 4,346 5,563 Other expenses (income): Interest expense......................................... 3,101 3,409 3,713 Interest income.......................................... (396) (532) (470) -------- -------- -------- 2,705 2,877 3,243 -------- -------- -------- Income (loss) before minority interest and income taxes.... (2,273) 1,469 2,320 Minority interest.......................................... 604 424 321 Income tax expense......................................... 240 106 140 -------- -------- -------- Net income (loss).......................................... $ (3,117) $ 939 $ 1,859 ======== ======== ========
See Notes to Consolidated Financial Statements. F-4 113 APCOA, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997 (IN THOUSANDS, EXCEPT FOR SHARE DATA)
COMMON STOCK ------------------ ADDITIONAL NUMBER PAR PAID-IN ACCUMULATED OF SHARES VALUE CAPITAL DEFICIT TOTAL 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) ===== == ======= ======== ========
See Notes to Consolidated Financial Statements. F-5 114 APCOA, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
YEARS ENDED DECEMBER 31 ------------------------------ 1995 1996 1997 OPERATING ACTIVITIES Net income (loss)........................................... $(3,117) $ 939 $ 1,859 Adjustment to reconcile net income (loss) to net cash provided by operations: Depreciation and amortization............................. 8,772 4,888 3,767 Changes in operating assets and liabilities: (Increase) decrease in notes and accounts receivable... (686) 1,041 (3,495) (Increase) decrease in prepaid assets.................. (2) 163 273 (Increase) decrease in other assets.................... (452) (1,071) 216 Increase (decrease) in accounts payable................ 2,067 (845) 294 Decrease in accrued liabilities........................ (1,340) (1,209) (2,982) (Increase) decrease in due from affiliate.............. (902) (1,864) 999 ------- -------- ------- Net cash provided by operating activities................... 4,340 2,042 931 INVESTING ACTIVITIES Purchase of property, leaseholds and equipment.............. (2,782) (2,552) (2,357) Purchase of property, leaseholds and equipment by joint ventures.................................................. (1,930) (1,181) (480) Increase in other assets.................................... (100) (906) Businesses acquired, net of cash............................ (227) 151 Proceeds from disposition of property, leaseholds and equipment................................................. 122 384 ------- -------- ------- Net cash used in investing activities....................... (4,917) (3,349) (3,592) FINANCING ACTIVITIES Proceeds from refinancing................................... 11,217 Payments due to refinancing................................. (11,071) Proceeds from long-term borrowings.......................... 1,027 4,269 Payments on long-term borrowings............................ (1,183) (412) (829) Proceeds from joint venture borrowings...................... 2,430 2,665 400 Payments on joint venture borrowing......................... (140) (1,414) (389) Payments of debt issuance costs............................. (724) ------- -------- ------- Net cash provided by financing activities................... 1,107 1,288 3,451 ------- -------- ------- Increase (decrease) in cash................................. 530 (19) 790 Cash at beginning of year................................... 2,021 2,551 2,532 ------- -------- ------- CASH AT END OF YEAR......................................... $ 2,551 $ 2,532 $ 3,322 ======= ======== =======
See Notes to Consolidated Financial Statements. F-6 115 APCOA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997 (IN THOUSANDS) NOTE A. ORGANIZATION APCOA, Inc. (the Company), its subsidiaries and affiliates manage, operate and develop parking properties throughout the United States and Canada. The Company is a wholly owned subsidiary of AP Holdings, Inc. NOTE B. SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION--The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and joint ventures in which the Company has more than 50% ownership interest. Minority interest recorded in the consolidated statement of operations is the Company's noncontrolling interest in consolidated joint ventures. Minority interest included in the consolidated balance sheet was $49 and $276 at December 31, 1996 and 1997, respectively. Investments in joint ventures of 50% or less ownership interest are reported on the equity method. Investments in joint ventures accounted for using the equity method in the consolidated balance sheet was $217 and $273 at December 31, 1996 and 1997, respectively. All significant intercompany profits, transactions and balances have been eliminated in consolidation. GROSS CUSTOMER COLLECTIONS--Gross customer collections represent gross receipts collected at all leased and managed properties, including unconsolidated affiliates. Gross customer collections were $408,952, $430,696 and $476,183 in 1995, 1996 and 1997. PARKING REVENUE--The Company recognizes gross receipts from leased locations and management fees earned from management contract properties as parking revenue as the related services are provided. Also included in parking revenue is $850 in 1995, $147 in 1996 and $1,207 in 1997 from gains on sales of property and leaseholds. COST OF PARKING SERVICES--The Company recognizes costs for leases and nonreimbursed costs from managed facilities as cost of parking services. Cost of parking services consists primarily of rent and payroll related costs. PROPERTIES, LEASEHOLDS AND EQUIPMENT--Leaseholds and property and equipment are stated at cost. Leaseholds are amortized on a straight-line basis over the average contract life of 7 years. Equipment is depreciated on the straight-line basis over the estimated useful lives of approximately 5 years on average. Leasehold improvements are amortized on the straight-line basis over the terms of the respective leases or the service lives of the improvements, whichever is shorter (average of approximately 7 years). Depreciation and amortization includes losses on abandonments of property and leaseholds. ADVERTISING COSTS--Advertising costs are expensed as incurred and are included in general and administrative expenses. Advertising expenses were $246, $414 and $440 for 1995, 1996 and 1997, respectively. COST IN EXCESS OF NET ASSETS ACQUIRED (GOODWILL)--Cost in excess of net assets acquired arising from acquisitions is amortized using the straight-line method over 40 years. The carrying value of goodwill is evaluated if circumstances indicate a possible impairment in value. If undiscounted cash flows over the remaining amortization period indicate that goodwill may not be recoverable, the carrying value of goodwill will be reduced by the estimated shortfall of cash flows on a discounted basis. INTANGIBLE ASSETS--Organization and start-up costs of $633 and $1,296 at December 31, 1996 and 1997, respectively, are amortized over 7 years using the straight-line method. Debt issuance costs of $900 and $775 at December 31, 1996 and 1997, respectively, are amortized over the terms of the credit agreements using the straight-line method. F-7 116 APCOA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED FINANCIAL INSTRUMENTS--The carrying values of cash, accounts receivable and accounts payable are reasonable estimates of their fair value due to the short-term nature of these financial instruments. Other long-term assets and debt have a carrying value that approximates fair value. USE OF ESTIMATES--The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. NEW ACCOUNTING PRONOUNCEMENT--In June 1997, the Financial Accounting Standards Board issued Statement No. 131, Disclosures about Segments of an Enterprise and Related Information. Statement No. 131, which becomes effective in 1998, establishes standards for reporting segment information in annual and interim financial statements including disclosures about services, geographic areas and major customers. The Company has not yet determined the impact of adopting Statement No. 131 on its financial statement disclosures. NOTE C. BORROWING ARRANGEMENTS Long-term borrowings consist of:
AMOUNT OUTSTANDING DECEMBER 31 INTEREST DUE ------------------ RATE(S) DATE 1996 1997 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 ======= =======
The Company has a term facility with the Prudential Insurance Company of America in the amount of $23 million. The facility, with semi-annual principal payments beginning in 1998 contains two term notes. In March 1996, the Company refinanced its revolving credit facility with KeyBank, as agent, which provides for borrowings and letters of credit of up to $20 million and bears interest at LIBOR plus 2% or prime plus .25% as selected by the Company. These facilities are secured by substantially all of the assets of the Company. The terms of the credit agreements call for, among other things, meeting defined net worth, income and debt coverage ratios as well as restrictions on the payment of dividends on common stock and capital expenditures. Consolidated joint ventures have entered into four agreements for stand-alone development projects providing nonrecourse funding. These joint venture debentures are collateralized by the specific contracts that were funded and approximate the net book value of the related assets. The Company has entered into capital leases and various financing agreements, which were used for the purchase of equipment and on November 1, 1997, the Company signed interest free promissory notes in the amount of $1,123 to purchase the remaining interest of an unconsolidated subsidiary. The notes were paid in January, 1998. The Company paid interest of $3,174, $3,230 and $3,878 in 1995, 1996, and 1997, respectively. F-8 117 APCOA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED The aggregate maturities of borrowings outstanding at December 31, 1997 are as follows: 1998............................................... $ 4,102 1999............................................... 4,849 2000............................................... 11,162 2001............................................... 4,466 2002............................................... 4,587 2003 and thereafter................................ 9,117 ------- $38,283 =======
NOTE D. INCOME TAXES The Company is included in the consolidated federal income tax return filed with its affiliates and has a tax sharing agreement with the affiliates. The Company's income tax provision is determined on a separate return basis. Income tax expense consists of state and local taxes. At December 31, 1997, the Company has net operating loss carryforwards of $23.2 million for income tax purposes that expire in years 2004 through 2012. Net operating loss carryforwards have been utilized to eliminate federal income tax expense in 1996. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities as of December 31, 1996 and 1997 are as follows:
1996 1997 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 ======= =======
For financial reporting purposes, a valuation allowance for deferred tax assets will continue to be recorded until realization is certain. NOTE E. BENEFIT PLANS The Company sponsors deferred compensation plan for certain key executives as well as an employees' savings and retirement plan in which certain employees are eligible to participate. Subject to their continued employment by the Company, employees eligible for participation in the deferred compensation plan will receive a defined monthly benefit upon attaining age 65. Participants in the savings and retirement plan may elect to contribute a portion of their compensation to the plan. The Company, in turn, contributes an amount in cash or other property as required by the plan. Expenses related to these plans amounted to $441, $473 and $461 in 1995, 1996 and 1997, respectively. The Company also contributes to two multi-employer defined contribution and nine multi-employer defined benefit plans which cover certain union employees. Expenses related to these plans were $562, $561 and $418 in 1995, 1996 and 1997, respectively. F-9 118 APCOA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED NOTE F. LEASES The Company operates parking facilities under operating leases expiring on various dates, generally prior to the year 2012. Certain of the leases contain options to renew at the Company's discretion. At December 31, 1997, the Company was committed to install in future years, at an estimated cost of $1,063, certain capital improvements at leased facilities. Future annual rent expense is not determinable due to the application of percentage factors based on revenues. At December 31, 1997, the Company's minimum rental commitments, under all non-cancelable leases with remaining terms of more than one year, are as follows: 1998............................................... $28,036 1999............................................... 16,117 2000............................................... 12,301 2001............................................... 7,925 2002............................................... 6,443 2003 and thereafter................................ 25,216 ------- $96,038 =======
Rent expense for office space and equipment was $1,623, $1,873 and $2,155 in 1995, 1996 and 1997, respectively. NOTE G. REDEEMABLE PREFERRED STOCK The Company has 400 shares of preferred stock authorized, of which 78 and 87 shares are outstanding at December 31, 1996 and 1997, respectively. The preferred shareholder, an affiliate, is entitled to 11% annual dividends payable semiannually in cash or additional preferred shares. The preferred stock is recorded at its $100,000 per share liquidation value plus unpaid dividends. Subject to the approval of the Board of Directors, the Company has the right to redeem for cash all or any part of the preferred shares then outstanding at a redemption price equal to the per share liquidation value. All of the then outstanding preferred shares will be mandatorily redeemed for cash on February 25, 2004 at a redemption price equal to the per share liquidation value. NOTE H. RELATED PARTIES TRANSACTIONS Due from affiliate represents amounts due from Holberg Industries, Inc. (Holberg) as the result of various transactions between the Company and Holberg including net cash transferred, investment income and insurance premiums. Interest is recorded on amounts due based on current investment rates of return. The Company participates in a master insurance program with affiliates which serves to reduce the insurance costs of the combined group. The program provides the Company with a stop loss for each insurance policy year. Insurance premium for the coverage is included in the cost of parking services and reflects the Company's estimated cost indicative of the ongoing entity on a stand alone basis through the purchase of insurance and related costs for self-insured retention amounts consistent with the limits used in the 1997 policy year and expected to be followed in the future. NOTE I. ACQUISITIONS During the year ended December 31, 1997, the Company completed three acquisitions. In January 1998, the Company acquired Dixie Parking Services, Inc. located in New Orleans, Louisiana. The aggregate purchase price of the four acquisitions was $2.0 million in cash and $4.4 million in notes payable. Additional consideration of up to $875 for one acquisition is contingent upon the operating results of the acquired F-10 119 APCOA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED company. The excess purchase price over the fair value of the net assets acquired, primarily cost of contracts, was recorded as goodwill for all acquisitions. All acquisitions have been accounted for under the purchase method of accounting, and the consolidated results of operations include the results of each business from the date of acquisition. Unaudited pro forma data for the year ended December 31, 1996 and 1997 as though the Company had purchased all of the above businesses at the beginning of 1996 and 1997 are set forth below. The pro forma operating results are not necessarily indicative of what would have occurred had the transactions taken place on January 1, 1996.
1996 1997 Parking revenue........................................ $142,091 $116,935 Net income............................................. 1,454 2,025
NOTE J. COMMITMENTS AND CONTINGENCIES As a result of its day-to-day operations, the Company is involved in several disputes, generally regarding the terms of lease agreements. In the opinion of management, the outcome of these disputes and litigation will not have a material adverse effect on the consolidated financial position or operating results of the Company. NOTE K. SUBSEQUENT EVENTS AND SUBSIDIARY GUARANTORS In January 1998, the Company entered into a definitive Combination Agreement to acquire all of the outstanding capital stock, partnership and other equity interests of Standard Parking Corporation and certain affiliates (Standard). On March 30, 1998, the Company acquired Standard for consideration consisting of $65 million in cash, common stock of the Company equal to 16.0% of the common stock of the Company outstanding as of January 15, 1998, and the assumption of certain liabilities. Standard currently manages approximately 380 properties in 29 cities. In connection with the Standard acquisition, on March 30, 1998, the Company (i) issued $140 million principal amount of 9 1/4% Senior Subordinated Notes due 2008 in a Rule 144A private placement, (ii) received a contribution of $40.7 million from AP Holdings, Inc., in exchange for redeemable preferred stock and (iii) entered into a $40 million senior credit facility. The net proceeds from the offering and the preferred stock contribution were used by the Company to fund the cash portion of the consideration for the acquisition of Standard, to repay certain existing debt of the Company and Standard, for general corporate purposes and to redeem preferred stock held by an affiliate. F-11 120 APCOA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED The majority of the Company's operating subsidiaries, as well as Standard, will fully, unconditionally, jointly and severally guarantee the Senior Subordinated Notes. Separate financial statements of the guarantor subsidiaries are not separately presented because, in the opinion of management, such financial statements are not material to investors. The following is summarized combining financial information for APCOA, Inc., the guarantor subsidiaries of the Company and the non-guarantor subsidiaries of the Company:
APCOA, GUARANTOR NON-GUARANTOR INC. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ ------------- ------------ ----- 1995 Income Statement Data: Parking revenue............................. $73,720 $1,901 $65,919 $ -- $141,540 Gross profit................................ 17,588 360 3,377 -- 21,325 Depreciation and amortization............... 7,996 51 725 -- 8,772 Operating income (loss)..................... (1,828) 182 2,078 -- 432 Interest expense (income), net.............. 2,289 (34) 450 -- 2,705 Net income (loss)........................... (4,357) 216 1,024 -- (3,117) Statement of Cash Flows Data: Net cash provided by (used in) operating activities................................ 4,515 10 (185) -- 4,340 Investing activities: Purchase of property, leaseholds and equipment............................... (2,769) (13) (1,930) -- (4,712) Other..................................... (205) -- -- -- (205) -------- ------ ------- -------- -------- Net cash used in investing activities....... (2,974) (13) (1,930) -- (4,917) Financing activities: Proceeds from long-term borrowings........ -- -- 2,430 -- 2,430 Payments on long-term borrowings.......... (1,183) -- (140) -- (1,323) -------- ------ ------- -------- -------- Net cash provided by (used in) financing activities................................ (1,183) -- 2,290 -- 1,107 1996 Balance Sheet Data: Notes and accounts receivable............... 7,489 (146) 2,898 -- 10,241 Current assets.............................. 10,327 93 3,696 -- 14,116 Property, leaseholds and equipment, net..... 5,925 146 5,605 -- 11,676 Cost in excess of net assets acquired, net....................................... 16,479 639 -- -- 17,118 Total assets................................ 42,283 977 11,017 (1,454) 52,823 Accounts payable............................ 13,603 241 1,898 -- 15,742 Current liabilities......................... 26,303 377 6,891 -- 33,571 Long-term borrowings, excluding current portion................................... 27,006 -- 5,123 -- 32,129 Redeemable preferred stock.................. 7,841 -- -- -- 7,841 Total stockholders' equity (deficit)........ (20,956) 600 (1,421) (1,454) (23,231) Total liabilities and stockholders' equity.................................... 42,283 977 11,017 (1,454) 52,823 Income Statement Data: Parking revenue............................. 73,140 2,914 59,698 -- 135,752 Gross profit................................ 18,412 669 3,170 -- 22,251 Depreciation and amortization............... 3,745 166 977 -- 4,888 Operating income............................ 2,722 198 1,426 -- 4,346 Interest expense (income), net.............. 2,340 (18) 555 -- 2,877 Net income (loss)........................... 276 216 447 -- 939 Statement of Cash Flows Data: Net cash provided by (used in) operating activities................................ 2,012 286 (256) -- 2,042 Investing activities: Purchase of property, leaseholds and equipment............................... (2,481) (71) (1,181) -- (3,733) Other..................................... 384 -- -- -- 384 -------- ------ ------- -------- -------- Net cash used in investing activities....... (2,097) (71) (1,181) -- (3,349)
F-12 121 APCOA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
APCOA, GUARANTOR NON-GUARANTOR INC. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ ------------- ------------ -----
F-13 APCOA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
APCOA, GUARANTOR NON-GUARANTOR INC. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL ------ ------------ ------------- ------------ ----- Financing activities: Proceeds from refinancing................. $11,217 $ -- $ -- $ -- $11,217 Payments due to refinancing............... (11,071) -- -- -- (11,071) Proceeds from long-term borrowings........ 1,027 -- 2,665 -- 3,692 Payments on long-term borrowings.......... (412) -- (1,414) -- (1,826) Payments of debt issuance costs........... (724) -- -- -- (724) -------- ------ ------- -------- -------- Net cash provided by financing activities... 37 -- 1,251 -- 1,288 1997 Balance Sheet Data: Notes and accounts receivable............... 10,587 1,113 2,106 -- 13,806 Current assets.............................. 12,801 2,610 2,843 -- 18,254 Property, leaseholds and equipment, net..... 6,246 501 5,593 -- 12,340 Cost in excess of net assets acquired, net....................................... 16,190 2,267 -- -- 18,457 Total assets................................ 43,895 6,541 10,206 (1,547) 59,095 Accounts payable............................ 13,574 1,756 1,071 -- 16,401 Current liabilities......................... 26,593 4,006 4,714 -- 35,313 Long-term borrowings, excluding current portion................................... 28,747 407 5,027 -- 34,181 Redeemable preferred stock.................. 8,728 -- -- -- 8,728 Total stockholders' equity (deficit)........ (22,334) 1,981 (359) (1,547) (22,259) Total liabilities and stockholders' equity.................................... 43,895 6,541 10,206 (1,547) 59,095 Income Statement Data: Parking revenue............................. 78,051 3,510 34,115 -- 115,676 Gross profit................................ 18,400 1,033 3,425 -- 22,858 Depreciation and amortization............... 2,836 65 866 -- 3,767 Operating income............................ 4,451 512 600 -- 5,563 Interest expense (income), net.............. 2,654 -- 589 -- 3,243 Net income (loss)........................... 1,657 512 (310) -- 1,859 Statement of Cash Flows Data: Net cash provided by (used in) operating activities................................ (173) 739 365 -- 931 Investing activities: Purchase of property, leaseholds and equipment............................... (2,357) -- (480) -- (2,837) Other..................................... (1,467) 712 -- -- (755) -------- ------ ------- -------- -------- Net cash provided by (used in) investing activities................................ (3,824) 712 (480) -- (3,592) Financing activities: Proceeds from long-term borrowings........ 4,269 -- 400 -- 4,669 Payments on long-term borrowings.......... (685) (144) (389) -- (1,218) -------- ------ ------- -------- -------- Net cash provided by (used in) financing activities................................ 3,584 (144) 11 -- 3,451
F-14 122 REPORT OF ALTSCHULER, MELVOIN AND GLASSER LLP, INDEPENDENT AUDITORS To the Owners of Standard Parking We have audited the accompanying balance sheets of STANDARD PARKING as of December 31, 1996 and 1997 and the related statements of income, changes in equity and cash flows for each of the three years in the period ended December 31, 1997. These financial statements are the responsibility of the management of Standard Parking. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Standard Parking as of December 31, 1996 and 1997, and the combined results of its operations, changes in equity and cash flows for each of the three years in the period ended December 31, 1997 in conformity with generally accepted accounting principles. Altschuler, Melvoin and Glasser LLP Chicago, Illinois February 3, 1998 F-14 123 STANDARD PARKING BALANCE SHEETS DECEMBER 31, 1996 AND 1997 (IN THOUSANDS)
1996 1997 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 ====== =======
The accompanying notes are an integral part of this statement. F-15 124 STANDARD PARKING STATEMENTS OF INCOME YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997 (IN THOUSANDS)
1995 1996 1997 Revenue: Leased facilities......................................... $38,418 $41,770 $54,801 Management and consulting fees and other parking services revenue................................................ 6,783 8,505 8,851 ------- ------- ------- Total revenue............................................... 45,201 50,275 63,652 Cost and expenses: Cost of parking services.................................. 35,168 37,838 50,142 General and administrative expenses....................... 6,390 7,547 7,857 Depreciation and amortization............................. 316 376 464 Loss on office relocation................................. 408 ------- ------- ------- Total costs and expenses.................................... 42,282 45,761 58,463 ------- ------- ------- Operating income............................................ 2,919 4,514 5,189 Other expense (income): Interest income........................................... (96) (110) (130) Interest expense.......................................... 37 54 45 ------- ------- ------- (59) (56) (85) ------- ------- ------- Net income.................................................. $ 2,978 $ 4,570 $ 5,274 ======= ======= =======
The accompanying notes are an integral part of this statement. F-16 125 STANDARD PARKING STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997 (IN THOUSANDS) 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 =======
The accompanying notes are an integral part of this statement. F-17 126 STANDARD PARKING STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997 (IN THOUSANDS)
1995 1996 1997 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 ======= ======= =======
The accompanying notes are an integral part of this statement. F-18 127 STANDARD PARKING NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997 (IN THOUSANDS) NOTE 1--NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of Presentation--The financial statements of Standard Parking have been prepared in connection with the Combination Agreement dated January 15, 1998 between the owners of Standard Parking and APCOA, Inc. The financial statements include the accounts and activities of the following entities, exclusive of certain assets not included in the acquisition, as specified and defined in the Combination Agreement: Standard Parking, L.P. and consolidated entities: Central Parking Entities: Standard Parking I, L.L.C. Standard Parking II, L.L.C. Standard Parking/Marina, L.L.C. (ceased operations during 1997) Standard Parking of Canada, L.P. Standard Parking Corporation Standard Auto Park, Inc. Standard Parking Corporation, MW Standard Parking Corporation, IL Standard/Wabash Parking Corporation Certain business interests, defined as excluded assets in the Combination Agreement, have not been included in these financial statements as follows: Standard Parking, L.P.: Interests in Buckingham Investors Partnership (a partnership) and Standard Parking/Courthouse, L.L.C. (a limited liability company), including associated debt of $142. Standard Parking Corporation: All assets and liabilities, except for investments in Standard Parking L.P., Standard Parking I, L.L.C., Standard Parking II, L.L.C., Standard Parking/Marina L.L.C. and Standard Parking of Canada, L.P. Because all of the above entities are under the common control and management of Standard Parking, the financial statements have been combined based on the historical costs of the underlying entities. All significant intercompany balances and transactions have been eliminated in the combined presentation. In addition, certain other entities under common control are not subject to the Combination Agreement and have not been included in these financial statements. The Combination Agreement states that APCOA, Inc. will acquire the defined business for $65 million plus 16% of APCOA, Inc.'s common stock. Standard Parking leases and manages parking facilities located throughout North America from regional offices in Chicago, Houston, Boston, Los Angeles and Canada. Standard Parking, L.P. (the "Partnership") was formed pursuant to an Agreement of Limited Partnership dated January 1, 1994 between Standard Parking Corporation, as general (and a limited) partner, and SP Associates, as a limited partner. On formation, the partners contributed to the Partnership cash and certain assets, net of assumed liabilities, including the rights to management contracts and parking facility leases previously owned by the general partner. At December 31, 1997, Standard Parking leased and managed 379 parking facilities. Revenue consists primarily of gross receipts from facilities leased by Standard Parking with terms varying from one to several years and basic and incentive management fees received from managing parking facilities owned by related and third parties. F-19 128 STANDARD PARKING NOTES TO FINANCIAL STATEMENTS--(CONTINUED) In preparing financial statements in conformity with generally accepted accounting principles, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. A summary of other significant accounting policies is as follows: Depreciation--For both financial and tax reporting purposes, depreciation is computed using both the straight-line and accelerated methods over the estimated useful lives of the assets. Amortization of Management Contracts--Management contracts acquired valued at acquisition cost of $561 in accordance with the purchase agreement are being amortized on the straight-line basis over the average 15 years of expected economic lives of the contracts. The management contracts are reviewed for impairment based on an assessment of future operations. Statement of Cash Flows--For purposes of the statement of cash flows, all highly liquid debt instruments purchased with a maturity of three months or less are reflected as cash equivalents. Deferred Compensation--Standard Parking is contractually committed to pay additional compensation to certain key employees for a defined period of time after retirement. The liability for deferred compensation represents the present value of the payments required to meet the contractual requirements earned by the employees. Funds Held on Behalf of Managed Facilities--Standard Parking holds funds as a deposit for certain managed facilities which usually represents one month's payroll to be incurred by Standard Parking on behalf of the facility. Financial Instruments--Standard Parking believes the book value of its cash equivalents, current receivables, accounts payable and accrued expenses and other current liabilities approximates fair value due to their short-term nature. The book value of its long-term receivables and obligations approximates their fair value as the current interest rates approximate rates at which similar types of borrowing arrangements could be currently obtained. NOTE 2--PROPERTY AND EQUIPMENT: Office and parking facility equipment and leasehold improvements consisted of the following:
ESTIMATED USEFUL LIFE 1996 1997 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 ====== ======
Depreciation expense was $273 in 1995, $314 in 1996 and $336 in 1997. Depreciation expense includes loss on sale/abandonment of fixed assets of $40 in 1995, $15 in 1996 and $53 in 1997. F-20 129 STANDARD PARKING NOTES TO FINANCIAL STATEMENTS--(CONTINUED) NOTE 3--NOTES RECEIVABLE: Notes receivable at December 31, 1996 and 1997 were as follows:
1996 1997 (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 ==== ====
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:
1996 1997 Customer receivables........................................ $ 165 $ 588 Insurance receivables....................................... 715 885 Other accounts receivable................................... 263 568 ------ ------ $1,143 $2,041 ====== ======
NOTE 5--ACCOUNTS PAYABLE AND ACCRUED EXPENSES: Accounts payable and accrued expenses at December 31, 1996 and 1997 were as follows:
1996 1997 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 ====== ======
Accrued payroll for managed facilities represents funds held by Standard Parking as of December 31, 1997 which were expended in January 1998 on behalf of its managed facilities. NOTE 6--DEBT ARRANGEMENTS: During 1995, Standard Parking borrowed $476 from LaSalle National Bank to finance the acquisition of management contracts. The note is payable in monthly installments of $13, plus interest at the prime rate over three years, with the final payment being due in 1998. Additionally, Standard Parking borrowed $130 from Amalgamated Bank of Chicago during 1996. The proceeds were loaned to one of Standard Parking's managed facilities to finance the purchase of equipment (see Note 3). The unsecured note is payable in monthly installments of $2 plus interest at the prime rate over five years, with the final payment being due in 2001. F-21 130 STANDARD PARKING NOTES TO FINANCIAL STATEMENTS--(CONTINUED) During 1997, Standard Parking borrowed $330 from LaSalle National Bank under a $500 line of credit. The line is due on July 8, 1998 with payments of interest at the prime rate, which was 8.5% during 1997, being due monthly. The prime rates of interest in effect pertaining to the above bank debt at December 31, 1996 and 1997 were 8.25% and 8.5%, respectively. Future payments on the installment loans are $26 in 1999 and 2000 and $18 in 2001. NOTE 7--RELATED-PARTY TRANSACTIONS: Amounts due from related parties were as follows:
1996 1997 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 ====== ======
Amounts due to related parties were as follows:
1996 1997 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 ==== ====
Future payments pertaining to the unsecured loan payable are $27 in 1999 and $30 in 2000. Management and consulting fee income relating to management of facilities controlled by related parties amounted to $1,801, $1,332 and $1,329 during 1995, 1996 and 1997, respectively. These amounts are included with "management and consulting fees and other parking services revenue" on the statement of income. Rent expense incurred relating to parking facilities leased from related parties under short term leases renewable annually amounted to $5,464, $7,628 and $13,403 during 1995, 1996 and 1997, respectively. These expenses are included with cost of parking services on the statement of income. Minimum lease payments relating to these leases will approximate $15,808 during 1998. F-22 131 STANDARD PARKING NOTES TO FINANCIAL STATEMENTS--(CONTINUED) NOTE 8--LEASE COMMITMENTS: Standard Parking leases several parking and office facilities throughout North America from both related and third parties under leases expiring over various dates through 2010. Future minimum lease payments are approximately as follows: 1998............................................... $23,326 1999............................................... 5,555 2000............................................... 997 2001............................................... 413 2002............................................... 333 Thereafter......................................... 1,887 ------- $32,511 =======
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:
1996 1997 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 ==== ====
NOTE 9--EMPLOYEE BENEFIT PLAN: Standard Parking maintains a qualified Section 401(k) Plan which benefits all eligible employees. Under the plan, Standard Parking partially matches employee contributions. For 1995, 1996 and 1997, management authorized an employer match of employee contributions at the rate of 50% of the first 4% of eligible wages. Standard Parking contributions to the plan were $41, $42 and $53 for 1995, 1996 and 1997, respectively. NOTE 10--INCOME TAXES: Under the provisions of the Internal Revenue Code, the affiliated companies combined herein, which are all partnerships or Subchapter S corporations, pay no federal income taxes and their net income and losses (including the distributive shares resulting from its ownership as a member in the subsidiary limited liability companies, which file partnership income tax returns) are reportable in the tax returns of the respective partners and shareholders. However, the partnerships and the affiliated companies are subject to state income taxes. F-23 132 ========================================================= NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE INITIAL PURCHASERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. ------------------------ TABLE OF CONTENTS
PAGE ---- Available Information.................... 4 Prospectus Summary....................... 5 Risk Factors............................. 15 The Exchange Offer....................... 21 Certain Federal Income Tax Consequences of the Exchange Offer.................. 27 The Transactions......................... 28 Use of Proceeds.......................... 29 Capitalization........................... 30 Selected Historical Financial Data of APCOA.................................. 31 Management's Discussion and Analysis of Financial Condition and Results of Operations of APCOA.................... 32 Selected Historical Financial Data of Standard............................... 37 Management's Discussion and Analysis of Financial Condition and Results of Operations of Standard................. 38 Business................................. 40 Management............................... 48 Security Ownership of Certain Beneficial Holders and Management................. 56 Certain Relationships and Related Party Transactions........................... 57 Description of Indebtedness.............. 61 Description of New Notes................. 62 Description of Certain Federal Income Tax Consequences........................... 92 Plan of Distribution..................... 95 Legal Matters............................ 96 Experts.................................. 96 Index of Certain Defined Terms........... 97 Index to Unaudited Pro Forma Consolidated Financial Statements................... P-1 Index to Historical Financial Statements............................. F-1
========================================================= ========================================================= $140,000,000 APCOA, INC. --------------------------------------------- OFFER TO EXCHANGE --------------------------------------------- 9 1/4% NEW SENIOR SUBORDINATED NOTES DUE 2008 , 1998 ========================================================= 133 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 102(b)(7) of the General Corporation Law of the State of Delaware (the "DGCL"), provides that a corporation (in its original certificate of incorporation or an amendment thereto) may eliminate or limit the personal liability of a director (or certain persons who, pursuant to the provisions of the certificate of incorporation, exercise or perform duties conferred or imposed upon directors by the DGCL) to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provisions shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the corporation or its stockbrokers, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL (providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions) or (iv) for any transaction from which the director derived an improper personal benefit. Article VIII, Section 1 of the Company's Certificate of Incorporation limits the liability of directors thereof to the extent permitted by Section 102(b)(7) of the DGCL. Under Section 145 of the DGCL, in general, a corporation may indemnify its directors, officers, employees or agents against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by them in connection with any action, suit or proceeding brought by third parties to which they may be made parties by reason of their being or having been directors, officers, employees or agents and shall so indemnify such persons if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interest of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. Article VIII, Section 2(a) of the Certificate of Incorporation of the Company provides that the Company shall indemnify its officers, directors, employees and agents to the full extent permitted by Delaware law. Article VIII, Section 2(a) of the Company's Certificate of Incorporation also provides that the Company shall indemnify any such person seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the Board. Any rights to indemnification conferred in Section 2 are contract rights, and include the right to be paid by the Company the expenses incurred in defending any such proceeding in advance of its final disposition, except that, if the DGCL requires, the payment of such expenses incurred by a director or officer in such capacity in advance of final disposition shall be made only upon delivery to the Company of an undertaking by or on behalf of such director or officer, to repay all amounts so advanced if it is ultimately determined that such director or officer is not entitled to be indemnified under Section 2 or otherwise. By action of the board of directors, the Company may extend such indemnification to employees and agents of the Company. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) Exhibits. 1.1 Purchase Agreement, by and among the Company, the Subsidiary Guarantors, Donaldson, Lufkin & Jenrette Securities Corporation and First Chicago Capital Markets, Inc., dated as of March 25, 1998. 2.1 Combination Agreement, dated as of January 15, 1998, by and between APCOA, Inc. and the Standard Owners. 3.1 Amended and Restated Certificate of Incorporation of the Company. 3.2 By-Laws of the Company. 3.3 Articles of Incorporation of Tower Parking, Inc. 3.4 Code of Regulations of Tower Parking, Inc. 3.5 Articles of Incorporation of Graelic, Inc.
II-1 134 3.6 Code of Regulations of Graelic, Inc. 3.7 Certificate of Incorporation of APCOA Capital Corporation. 3.8 By-Laws of APCOA Capital Corporation. 3.9 Articles of Incorporation of A-1 Auto Park, Inc. 3.10 Amended and Restated By-Laws of A-1 Auto Park, Inc. 3.11 Articles of Organization of Metropolitan Parking System, Inc. 3.12 By-Laws of Metropolitan Parking System, Inc. 3.13 Articles of Organization of Events Parking Company, Inc. 3.14 By-Laws of Events Parking Company, Inc. 3.15 Agreement of Limited Partnership of Standard Parking, L.P. 3.16 Articles of Incorporation of Standard Parking Corporation. 3.17 Amended and Restated By-laws of Standard Parking Corporation. 3.18 Articles of Incorporation of Standard Parking Corporation MW. 3.19 By-laws of Standard Parking Corporation MW. 3.20 Articles of Incorporation of Standard Parking Corporation IL. 3.21 By-laws of Standard Parking Corporation IL. 3.22 Articles of Incorporation of Standard Auto Park, Inc. 3.23 Amended and Restated By-laws of Standard Auto Park, Inc. 3.24 Articles of Incorporation of Standard/Wabash Parking Corporation. 3.25 By-laws of Standard/Wabash Parking Corporation. 3.26 Agreement of Limited Partnership of Standard Parking of Canada, L.P. 3.27 Operating Agreement of Standard Parking I, L.L.C. 3.28 Operating Agreement of Standard Parking II, L.L.C. 4.1 Indenture, dated as of March 30, 1998, by and among the Company, the Subsidiary Guarantors and State Street Bank and Trust Company, with respect to the New Notes. 4.2 Form of New Note (included as Exhibit A to Exhibit 4.1). 4.3 Form of New Note Guarantee (included as Exhibit D to Exhibit 4.1). 5.1 Opinion of Wachtell, Lipton, Rosen & Katz.* 10.1 Registration Rights Agreement, dated as of March 30, 1998, by and among the Company, the Subsidiary Guarantors, Donaldson, Lufkin & Jenrette Securities Corporation and First Chicago Capital Markets, Inc. 10.2 Credit Agreement, dated as of March 30, 1998, by and among the Company, The First National Bank of Chicago, as Agent and Lender, and the Other Institutions party thereto. 10.3 Stockholders Agreement, dated as of March 30, 1998, by and among Dosher Partners, L.P. and SP Associates and Holberg, Holdings and the Company. 10.4 Stockholders Agreement, dated as of April 14, 1989, by and among Holdings, Holberg, Delaware North and each member of the management of the Company who is a stockholder of Holdings. 10.5 Tax Sharing Agreement, dated as of April 28, 1989, as amended as of March 30, 1998, by and among Holberg, Holdings and the Company. 10.6 Employment Agreement between the Company and Myron C. Warshauer. 10.7 Employment Agreement between the Company and G. Walter Stuelpe, Jr. 10.8 Employment Agreement between the Company and James V. LaRocco, Jr. 10.9 Employment Agreement between the Company and Trevor R. Van Horn. 10.10 Employment Agreement between the Company and Herbert W. Anderson, Jr.
II-2 135 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.
- --------------- * To be filed by amendment. (b) Financial Statement Schedule. ITEM 22. UNDERTAKINGS. The undersigned Registrant hereby undertakes: (a)(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933. (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-3 136 (b) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. (c) To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. (d) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-4 137 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on April 17, 1998. APCOA, INC. By /s/ MYRON C. WARSHAUER ------------------------------------ Myron C. Warshauer Chief Executive Officer and Director KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this Registration Statement relates, or other instruments he deems necessary or appropriate, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated and on April 17, 1998.
NAME TITLE ---- ----- /s/ MYRON C. WARSHAUER Chief Executive Officer and Director - ----------------------------------------------------- (Principal Executive Officer) Myron C. Warshauer /s/ G. WALTER STUELPE, JR. President and Director - ----------------------------------------------------- G. Walter Stuelpe, Jr. /s/ MICHAEL J. CELEBREZZE Chief Financial Officer and Executive Vice - ----------------------------------------------------- President (Principal Financial and Accounting Michael J. Celebrezze Officer) /s/ JOHN V. HOLTEN Chairman and Director - ----------------------------------------------------- John V. Holten /s/ GUNNAR E. KLINTBERG Vice President and Director - ----------------------------------------------------- Gunnar E. Klintberg /s/ PATRICK J. MEARA Director - ----------------------------------------------------- Patrick J. Meara
II-5 138 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on April 17, 1998. TOWER PARKING, INC. By /s/ G. WALTER STUELPE, JR. ------------------------------------ G. Walter Stuelpe, Jr. President and Director KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this Registration Statement relates, or other instruments he deems necessary or appropriate, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated and on April 17, 1998.
NAME TITLE ---- ----- /s/ G. WALTER STUELPE, JR. President and Director - ----------------------------------------------------- (Principal Executive Officer) G. Walter Stuelpe, Jr. /s/ MICHAEL J. CELEBREZZE Vice President and Treasurer - ----------------------------------------------------- (Principal Financial and Accounting Officer) Michael J. Celebrezze /s/ JOHN V. HOLTEN Director - ----------------------------------------------------- John V. Holten /s/ GUNNAR E. KLINTBERG Director - ----------------------------------------------------- Gunnar E. Klintberg
II-6 139 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on April 17, 1998. APCOA CAPITAL CORPORATION By /s/ G. WALTER STUELPE, JR. ------------------------------------ G. Walter Stuelpe, Jr. President and Director KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this Registration Statement relates, or other instruments he deems necessary or appropriate, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated and on April 17, 1998.
NAME TITLE ---- ----- /s/ G. WALTER STUELPE, JR. President and Director (Principal Executive - ----------------------------------------------------- Officer) G. Walter Stuelpe, Jr. /s/ MICHAEL J. CELEBREZZE Vice President and Treasurer (Principal - ----------------------------------------------------- Financial and Accounting Officer) Michael J. Celebrezze /s/ JOHN V. HOLTEN Director - ----------------------------------------------------- John V. Holten /s/ GUNNAR E. KLINTBERG Director - ----------------------------------------------------- Gunnar E. Klintberg
II-7 140 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on April 17, 1998. GRAELIC, INC. By /s/ JAMES V. LAROCCO, JR. ------------------------------------ James V. LaRocco, Jr. President KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this Registration Statement relates, or other instruments he deems necessary or appropriate, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following person in the capacities indicated and on April 17, 1998.
NAME TITLE ---- ----- /s/ JAMES V. LAROCCO, JR. President - ----------------------------------------------------- (Principal Executive Officer) James V. LaRocco, Jr. /s/ G. WALTER STUELPE, JR. Vice President and Director - ----------------------------------------------------- G. Walter Stuelpe, Jr. /s/ MICHAEL J. CELEBREZZE Vice President, Treasurer and Director - ----------------------------------------------------- (Principal Financial and Accounting Officer) Michael J. Celebrezze /s/ ROBERT N. SACKS Secretary and Director - ----------------------------------------------------- Robert N. Sacks
II-8 141 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on April 17, 1998. A-I AUTO PARK, INC. By /s/ G. WALTER STUELPE, JR. ------------------------------------ G. Walter Stuelpe, Jr. President and Director KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this Registration Statement relates, or other instruments he deems necessary or appropriate, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following person in the capacities indicated and on April 17, 1998.
NAME TITLE ---- ----- /s/ G. WALTER STUELPE, JR. President and Director - ----------------------------------------------------- (Principal Executive Officer) G. Walter Stuelpe, Jr. /s/ MICHAEL J. CELEBREZZE Vice President, Treasurer and Director - ----------------------------------------------------- (Principal Financial and Accounting Officer) Michael J. Celebrezze /s/ ROBERT N. SACKS Secretary and Director - ----------------------------------------------------- Robert N. Sacks
II-9 142 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on April 17, 1998. EVENTS PARKING COMPANY, INC. By /s/ EDWARD P. SETTINO, JR. ------------------------------------------ Edward P. Settino, Jr. President KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this Registration Statement relates, or other instruments he deems necessary or appropriate, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated and on April 17, 1998.
NAME TITLE ---- ----- /s/ EDWARD P. SETTINO, JR. President - ----------------------------------------------------- (Principal Executive Officer) Edward P. Settino, Jr. /s/ G. WALTER STUELPE, JR. Vice President and Director - ----------------------------------------------------- G. Walter Stuelpe, Jr. /s/ MICHAEL J. CELEBREZZE Treasurer and Director - ----------------------------------------------------- (Principal Financial and Accounting Officer) Michael J. Celebrezze /s/ ROBERT N. SACKS Director - ----------------------------------------------------- Robert N. Sacks
II-10 143 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on April 17, 1998. METROPOLITAN PARKING SYSTEM, INC. By /s/ EDWARD P. SETTINO, JR. ------------------------------------------ Edward P. Settino, Jr. President KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this Registration Statement relates, or other instruments he deems necessary or appropriate, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated and on April 17, 1998.
NAME TITLE ---- ----- /s/ EDWARD P. SETTINO, JR. President - ----------------------------------------------------- (Principal Executive Officer) Edward P. Settino, Jr. /s/ G. WALTER STUELPE, JR. Vice President and Director - ----------------------------------------------------- G. Walter Stuelpe, Jr. /s/ MICHAEL J. CELEBREZZE Treasurer and Director - ----------------------------------------------------- (Principal Financial and Accounting Officer) Michael J. Celebrezze /s/ ROBERT N. SACKS Director - ----------------------------------------------------- Robert N. Sacks
II-11 144 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on April 17, 1998. STANDARD PARKING, L.P. By /s/ MYRON C. WARSHAUER ------------------------------------ Myron C. Warshauer President and Director of Standard Parking Corporation, General Partner of Standard Parking, L.P. KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this Registration Statement relates, or other instruments he deems necessary or appropriate, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated and April 17, 1998.
NAME TITLE ---- ----- /s/ MYRON C. WARSHAUER President and Director of Standard Parking - ----------------------------------------------------- Corporation, General Partner of Standard Myron C. Warshauer Parking, L.P. (Principal Executive Officer) /s/ MICHAEL J. CELEBREZZE Assistant Treasurer - ----------------------------------------------------- (Principal Financial and Accounting Officer) Michael J. Celebrezze
II-12 145 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on April 17, 1998. STANDARD PARKING CORPORATION By /s/ MYRON C. WARSHAUER ------------------------------------ Myron C. Warshauer President and Director KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this Registration Statement relates, or other instruments he deems necessary or appropriate, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following person in the capacities indicated and on April 17, 1998.
NAME TITLE ---- ----- /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
II-13 146 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on April 17, 1998. STANDARD PARKING CORPORATION MW By /s/ MYRON C. WARSHAUER ------------------------------------ Myron C. Warshauer President and Director KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this Registration Statement relates, or other instruments he deems necessary or appropriate, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated and on April 17, 1998.
NAME TITLE ---- ----- /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
II-14 147 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on April 17, 1998. STANDARD AUTO PARK, INC. By /s/ MYRON C. WARSHAUER ---------------------------------------- Myron C. Warshauer President and Director KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this Registration Statement relates, or other instruments he deems necessary or appropriate, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated and on April 17, 1998.
NAME TITLE ---- ----- /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
II-15 148 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on April 17, 1998. STANDARD/WABASH PARKING CORPORATION By /s/ MYRON C. WARSHAUER ---------------------------------------- Myron C. Warshauer President and Director KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this Registration Statement relates, or other instruments he deems necessary or appropriate, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated and on April 17, 1998.
NAME TITLE ---- ----- /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
II-16 149 SIGNATURE Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on April 17, 1998. STANDARD PARKING OF CANADA, L.P. By /s/ MYRON C. WARSHAUER ------------------------------------ Myron C. Warshauer President and Director of Standard Parking Corporation, General Partner of Standard Parking of Canada, L.P. KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this Registration Statement relates, or other instruments he deems necessary or appropriate, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated and on April 17, 1998.
NAME TITLE ---- ----- /s/ MYRON C. WARSHAUER President and Director of Standard Parking - --------------------------------------------- Corporation, Myron C. Warshauer General Partner of Standard Parking of Canada, L.P. (Principal Executive, Financial and Accounting Officer)
II-17 150 SIGNATURE Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on April 17, 1998. STANDARD PARKING I, L.L.C. By /s/ MYRON C. WARSHAUER ------------------------------------ Myron C. Warshauer President and Director of Standard Parking Corporation, Managing Member of Standard Parking I, L.L.C. KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this Registration Statement relates, or other instruments he deems necessary or appropriate, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated and on April 17, 1998.
NAME TITLE ---- ----- /s/ MYRON C. WARSHAUER President and Director of Standard Parking - --------------------------------------------------- Corporation, Managing Member of Standard Parking Myron C. Warshauer I, L.L.C. (Principal Executive, Financial and Accounting Officer)
II-18 151 SIGNATURE Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on April 17, 1998. STANDARD PARKING II, L.L.C. By /s/ MYRON C. WARSHAUER ------------------------------------ Myron C. Warshauer President and Director of Standard Parking Corporation, Managing Member of Standard Parking II, L.L.C. KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Robert N. Sacks and Michael K. Wolf his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this Registration Statement relates, or other instruments he deems necessary or appropriate, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated and on April 17, 1998.
NAME TITLE ---- ----- /s/ MYRON C. WARSHAUER President and Director of Standard Parking - --------------------------------------------------- Corporation, Managing Member of Standard Parking Myron C. Warshauer II, L.L.C. (Principal Executive, Financial and Accounting Officer)
II-19 152 REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We have audited the consolidated financial statements of APCOA, Inc. (the Company) as of December 31, 1996 and 1997, and for each of the three years in the period ended December 31, 1997, and have issued our report thereon dated February 3, 1998 (included elsewhere in this Registration Statement). Our audit also included the financial statement schedule for each of the three years in the period ended December 31, 1997, listed in Item 21(b) of this Registration Statement. This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. Cleveland, Ohio ERNST & YOUNG LLP February 3, 1998 II-20 153 SCHEDULE II APCOA, INC. VALUATION AND QUALIFYING ACCOUNTS (IN THOUSANDS)
ADDITIONS ----------------------- BALANCE AT CHARGED TO CHARGED TO BALANCE BEGINNING COSTS AND OTHER AT END DESCRIPTION OF YEAR EXPENSES ACCOUNTS DEDUCTIONS(1) OF YEAR ----------- ---------- ---------- ---------- ------------- ------- 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 ==== ==== ==== ==== ====
- --------------- (1) Represents uncollectible accounts written off, net of recoveries. II-21 154 INDEX TO EXHIBITS
SEQUENTIALLY EXHIBIT NUMBERED NUMBER DESCRIPTION PAGE - ------- ----------- ------------ 1.1 Purchase Agreement, by and among the Company, the Subsidiary Guarantors, Donaldson, Lufkin & Jenrette Securities Corporation and First Chicago Capital Markets, Inc., dated as of March 25, 1998. 2.1 Combination Agreement, dated as of January 15, 1998, by and between APCOA, Inc. and the Standard Owners. 3.1 Amended and Restated Certificate of Incorporation of the Company. 3.2 By-Laws of the Company. 3.3 Articles of Incorporation of Tower Parking, Inc. 3.4 Code of Regulations of Tower Parking, Inc. 3.5 Articles of Incorporation of Graelic, Inc. 3.6 Code of Regulations of Graelic, Inc. 3.7 Certificate of Incorporation of APCOA Capital Corporation. 3.8 By-Laws of APCOA Capital Corporation. 3.9 Articles of Incorporation of A-1 Auto Park, Inc. 3.10 Amended and Restated By-Laws of A-1 Auto Park, Inc. 3.11 Articles of Organization of Metropolitan Parking System, Inc. 3.12 By-Laws of Metropolitan Parking System, Inc. 3.13 Articles of Organization of Events Parking Company, Inc. 3.14 By-Laws of Events Parking Company, Inc. 3.15 Agreement of Limited Partnership of Standard Parking, L.P. 3.16 Articles of Incorporation of Standard Parking Corporation. 3.17 Amended and Restated By-Laws of Standard Parking Corporation. 3.18 Articles of Incorporation of Standard Parking Corporation MW. 3.19 By-laws of Standard Parking Corporation MW. 3.20 Articles of Incorporation of Standard Parking Corporation IL. 3.21 By-laws of Standard Parking Corporation IL. 3.22 Articles of Incorporation of Standard Auto Park, Inc. 3.23 Amended and Restated By-Laws of Standard Auto Park, Inc. 3.24 Articles of Incorporation of Standard/Wabash Parking Corporation. 3.25 By-laws of Standard/Wabash Parking Corporation. 3.26 Agreement of Limited Partnership of Standard Parking of Canada, L.P. 3.27 Operating Agreement of Standard Parking I, L.L.C. 3.28 Operating Agreement of Standard Parking II, L.L.C. 4.1 Indenture, dated as of March 30, 1998, by and among the Company, the Subsidiary Guarantors and State Street Bank and Trust Company, with respect to the New Notes. 4.2 Form of New Note (included as Exhibit A to Exhibit 4.1). 4.3 Form of New Note Guarantee (included as Exhibit D to Exhibit 4.1). 5.1 Opinion of Wachtell, Lipton, Rosen & Katz.*
155
SEQUENTIALLY EXHIBIT NUMBERED NUMBER DESCRIPTION PAGE - ------- ----------- ------------ 10.1 Registration Rights Agreement, dated as of March 30, 1998, by and among the Company, the Subsidiary Guarantors, Donaldson, Lufkin & Jenrette Securities Corporation and First Chicago Capital Markets, Inc. 10.2 Credit Agreement, dated as of March 30, 1998, by and among the Company, The First National Bank of Chicago, as Agent and Lender, and the Other Institutions party thereto. 10.3 Stockholders Agreement, dated as of March 30, 1998, by and among Dosher Partners, L.P. and SP Associates and Holberg, Holdings and the Company. 10.4 Stockholders Agreement, dated as of April 14, 1989, by and among Holdings, Holberg, Delaware North and each member of the management of the Company who is a stockholder of Holdings. 10.5 Tax Sharing Agreement, dated as of April 28, 1989, as amended as of March 30, 1998, by and among Holberg, Holdings and the Company. 10.6 Employment Agreement between the Company and Myron C. Warshauer. 10.7 Employment Agreement between the Company and G. Walter Stuelpe, Jr. 10.8 Employment Agreement between the Company and James V. LaRocco, Jr. 10.9 Employment Agreement between the Company and Trevor R. Van Horn. 10.10 Employment Agreement between the Company and Herbert W. Anderson, Jr. 10.11 Employment Agreement between the Company and Michael J. Celebrezze. 10.12 Employment Agreement between the Company and Michael K. Wolf. 10.13 Deferred Compensation Agreement between the Company and Michael K. Wolf. 10.14 Company Retirement Plan For Key Executive Officers. 10.15 Consulting Agreement between the Company and Sidney Warshauer. 12.1 Statements re computation of ratios. 21.1 Subsidiaries of the Company. 23.1 Consent of Ernst & Young LLP. 23.2 Consent of Altschuler, Melvoin and Glasser LLP. 23.3 Consent of Wachtell, Lipton, Rosen & Katz (contained in Exhibit 5.1). 24.1 Power of Attorney (see signature pages). 25.1 Statement of Eligibility and Qualification of Trustee on Form T-1 of State Street Bank and Trust Company under the Trust Indenture Act of 1939. 27.1 Financial Data Schedule. 99.1 Form of Letter of Transmittal for the 9 1/4% New Senior Subordinated Notes due 2008. 99.2 Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. 99.3 Form of Notice of Guaranteed Delivery.
- --------------- * To be filed by amendment. (b) Financial Statement Schedule. EX-1.1 2 PURCHASE AGREEMENT 1 EXECUTION COPY ================================================================================ APCOA, INC. ----------------- $140,000,000 9 1/4% Senior Subordinated Notes due 2008 ----------------- ---------- PURCHASE AGREEMENT DATED AS OF MARCH 25, 1998 ---------- Donaldson, Lufkin & Jenrette Securities Corporation First Chicago Capital Markets, Inc. ================================================================================ 2 APCOA, Inc. $140,000,000 Principal Amount of 9 1/4% Senior Subordinated Notes Due 2008 PURCHASE AGREEMENT March 25, 1998 DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION FIRST CHICAGO CAPITAL MARKETS, INC. c/o Donaldson, Lufkin & Jenrette Securities Corporation 277 Park Avenue New York, New York 10172 Ladies and Gentlemen: APCOA, Inc., a Delaware corporation (the "Company"), proposes to issue and sell an aggregate of $140,000,000 in principal amount of 9 1/4% Senior Subordinated Notes due 2008 (the "Senior Subordinated Notes") of the Company, to Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") and First Chicago Capital Markets, Inc. ("First Chicago", and together with DLJ, the "Initial Purchasers") to be issued pursuant to an indenture (the "Indenture") between the Company, each of the subsidiaries of the Company noted on Schedule I hereto (the "Subsidiary Guarantors") and State Street Bank and Trust Company, as trustee (the "Trustee"). The Senior Subordinated Notes and the New Senior Subordinated Notes (as defined below) issuable in exchange therefor are collectively referred to herein as the "Notes." The Notes will be guaranteed on a senior subordinated basis by the Subsidiary Guarantors pursuant to their guarantee (the "Note Guarantees"). The Notes and the Note Guarantees are hereinafter collectively referred to as the "Securities." Capitalized terms used but not defined herein shall have the meanings given to such terms in the Indenture. The Senior Subordinated Notes are being issued and sold in connection with a combination (the "Combination") pursuant to the terms and conditions contained in a combination agreement (the "Combination Agreement"), pursuant to which the Company will acquire all of the outstanding capital stock, partnership and other equity interests of Standard Parking Corporation, an Illinois corporation; Standard Auto Park, Inc., an Illinois corporation; Standard Parking Corporation, MW, an Illinois corporation; Standard Parking L.P., a Delaware limited partnership; Standard Parking Corporation, IL, an Illinois corporation; and Standard/Wabash Parking Corporation, an Illinois corporation (all such interests collectively, "Standard"). The net proceeds to the Company from the sale to the Initial Purchasers of the Senior Subordinated Notes (the "Proceeds") will be used by the Company: (i) to fund the cash purchase portion of the consideration payable in connection with the Combination; (ii) to repay certain indebtedness; (iii) for general corporate purposes, including working capital needs and 3 future acquisitions; (iv) to redeem preferred stock held by Holberg; and (v) no pay fees and expenses in connection with the Transactions. 1. ISSUANCE OF SECURITIES. The Senior Subordinated Notes will be offered and sold to the Initial Purchasers pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended (the "Act"). The Company has prepared a preliminary offering memorandum, dated March 13, 1998 (the "Preliminary Offering Memorandum") and a final offering memorandum, dated March 25, 1998 (the "Offering Memorandum" and, together with the Preliminary Offering Memorandum, the "Offering Documents"), relating to the Senior Subordinated Notes. Upon original issuance thereof, and until such time as the same is no longer required under the applicable requirements of the Act, the Senior Subordinated Notes (and all securities issued in exchange therefor, in substitution thereof or upon conversion thereof) shall bear the following legend: "THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR") THAT, PRIOR -2- 4 TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND IN THE CASE OF CLAUSE (b), (c), (d), or (e), BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE." 2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the representations, warranties and covenants contained in this Agreement, and subject to the terms and conditions contained herein, the Company agrees to issue and sell to the Initial Purchasers, and each Initial Purchaser agrees, severally and not jointly, to purchase from the Company, the principal amounts of Senior Subordinated Notes set forth opposite the name of Such Initial Purchasers on Schedule II hereto at a purchase price equal to 100% of the principal amount thereof (the "Purchase Price"). 3. TERMS OF OFFERING. The Initial Purchasers will make offers (the "Exempt Resales") of the Senior Subordinated Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to persons (each, a "144A Purchaser") whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBs") or persons otherwise exempt under Regulation S of the Securities Act (together with QIBs, "Eligible Purchasers"). The Initial Purchasers will offer the Senior Subordinated Notes to Eligible Purchasers initially at a price equal to 100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Senior Subordinated Notes will have the registration rights set forth in the registration rights agreement (the "Registration Rights Agreement"), to be dated the Closing Date (as defined below), in substantially the form of Exhibit A hereto, for so long as such Senior Subordinated Notes constitute "Transfer Restricted Securities" (as defined in the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Company will agree to file with the Securities and Exchange Commission (the -3- 5 "Commission") under the circumstances set forth therein, (i) a registration statement under the Act (the "Exchange Offer Registration Statement") relating to the Company's 9 1/4% new Senior Subordinated Notes due 2008 (the "New Senior Subordinated Notes") to be offered in exchange for the Senior Subordinated Notes, (such offer to exchange being referred to as the "Registered Exchange Offer") and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "Shelf Registration Statement" and, together with the Exchange Offer Registration Statement, the "Registration Statements") relating to the resale by certain holders of the Senior Subordinated Notes, and to use their best efforts to cause such Registration Statements to be declared effective and consummate the Registered Exchange Offer. This Agreement, the Indenture, the Notes, the Note Guarantees and the Registration Rights Agreement are hereinafter referred to collectively as the "Operative Documents." 4. DELIVERY AND PAYMENT. (a) Delivery of, and payment of the Purchase Price for, the Senior Subordinated Notes shall be made at the offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New York or at such other location as may be mutually acceptable. Such delivery and payment shall be made at 9:00 a.m. New York City time, on March 30, 1998 or at such other time as shall be agreed upon by the Company and the Initial Purchasers. The time and date of such delivery and the payment are herein called the "Closing Date." (b) One or more Senior Subordinated Notes in definitive form, registered in the name of Cede & Co., as nominee of the Depository Trust Company ("DTC"), or such other names as the Initial Purchasers may request upon at least one business day's notice to the Company, having an aggregate principal amount corresponding to the aggregate principal amount of Senior Subordinated Notes sold pursuant to Exempt Resales to Eligible Purchasers (collectively, the "Master Notes"), shall be delivered by the Company to the Initial Purchasers (or as the Initial Purchasers direct) in each case with any taxes thereon duly paid by the Company, against payment by the Initial Purchasers of the Purchase Price thereof by wire transfer in same day funds to the order of the Company or as the Company may direct. The Master Notes shall be made available to the Initial Purchasers for inspection not later than 9:30 a.m., New York City time, on the business day immediately preceding the Closing Date. 5. AGREEMENTS OF THE COMPANY AND THE SUBSIDIARY GUARANTORS. The Company and the Subsidiary Guarantors, jointly and severally, covenant and agree with the Initial Purchasers as follows: (a) To advise the Initial Purchasers promptly and, if requested by the Initial Purchasers, to confirm such advice in writing, (i) of the issuance by any state securities commission of any stop order suspending the qualification or exemption from qualification of any of the Senior Subordinated Notes for offering or sale in any jurisdiction designated by the Initial Purchasers pursuant to Section 5(e) hereof, or the initiation of any proceeding for such purpose by any state securities commission or other regulatory authority and (ii) of the happening of any event that makes any statement of a material fact made in the Offering Documents (or any amendment or supplement thereto) untrue or that requires the making of -4- 6 any additions to or changes in the Offering Documents (or any amendment or supplement thereto) in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. The Company shall use its best efforts to prevent the issuance of any stop order or order suspending the qualification or exemption from qualification of the Senior Subordinated Notes under any state securities or Blue Sky laws, and, if at any time any state securities commission or other regulatory authority shall issue any stop order or order suspending the qualification or exemption from qualification of any of the Senior Subordinated Notes under any state securities or Blue Sky laws, the Company shall use its best efforts to obtain the withdrawal or lifting of such order at the earliest possible time. (b) To furnish the Initial Purchasers and those persons identified by the Initial Purchasers to the Company, without charge, as many copies of the Offering Documents, and any amendments or supplements thereto, as the Initial Purchasers may reasonably request. The Company consents to the use of the Offering Documents, and any amendments or supplements thereto required pursuant hereto, by the Initial Purchasers in connection with Exempt Resales. (c) During such period as in the written opinion of counsel for the Initial Purchasers an Offering Memorandum is required by law to be delivered in connection with the Exempt Resales by the Initial Purchasers and in connection with market-making activities of the Initial Purchasers for so long as the Senior Subordinated Notes are outstanding (i) not to amend or supplement the Offering Documents, whether before or after the Closing Date, unless the Initial Purchasers shall previously have been advised thereof, and shall not have objected thereto within a reasonable time after being furnished a copy thereof, and (ii) to promptly prepare, upon the Initial Purchasers's reasonable request, any amendment or supplement to the Offering Documents that the Initial Purchasers reasonably believe necessary or advisable in connection with Exempt Resales or such market-making activities. (d) If, after the date hereof and prior to the earlier of the completion of all Exempt Resales by the Initial Purchasers and the 90th day after the Closing Date, any event shall occur as a result of which, in the judgment of the Company or counsel to the Initial Purchasers, it becomes necessary to amend or supplement the Offering Memorandum in order to make the statements therein, in the light of the circumstances when such Offering Memorandum is delivered to an Eligible Purchaser, not misleading or if it is necessary to amend or supplement the Offering Memorandum to comply with any law, statute, rule or regulation, to forthwith prepare an appropriate amendment or supplement to such Offering Memorandum so that the statements therein, as so amended or supplemented, will not, in the light of the circumstances when it is so delivered, be misleading, or so that such Offering Memorandum will comply with applicable law. -5- 7 (e) To cooperate with the Initial Purchasers and counsel to the Initial Purchasers in connection with the registration or qualification of the Senior Subordinated Notes under the state securities or Blue Sky laws of such jurisdictions as the Initial Purchasers may request, to continue such registration or qualification in effect so long as required for the Exempt Resales and to file such consents to service of process or other documents as may be necessary in order to effect such registration or qualification; provided, however, that the Company shall not be required in connection therewith to register or qualify as a foreign corporation in any jurisdiction in which the Company is not now so qualified, or take any action that would subject the Company to general consent to service of process or taxation, other than as to matters and transactions relating to Exempt Resales, in any jurisdiction in which the Company is not now so subject. (f) For so long as the Notes are outstanding, to furnish without charge to the Initial Purchasers promptly upon their becoming available (i) all reports or other publicly available information that the Company shall mail or otherwise make available to the Company's stockholders and (ii) all reports, financial statements and proxy or information statements filed by the Company or its subsidiaries with the Commission or any national securities exchange and such other publicly available information concerning the business and financial condition of the Company or its subsidiaries, including without limitation, press releases, as the Initial Purchasers may reasonably request. (g) To use the net proceeds from the sale of the Senior Subordinated Notes in the manner described in the Offering Memorandum (and any amendments or supplements thereto) under the caption "Use of Proceeds." (h) Not to voluntarily claim, and to actively resist any attempts to claim, the benefit of any usury laws against the holders of any Notes. (i) Whether or not the transactions contemplated by this Agreement are consummated or this Agreement becomes effective or is terminated to pay and be responsible for all costs, expenses, fees and taxes in connection with or incident to: (1) the preparation, printing, processing, duplicating, filing and distribution of the Offering Documents (including, without limitation, financial statements and exhibits) and all amendments and supplements thereto; (2) the preparation, printing and delivery of the Operative Documents, the preliminary and final Blue Sky memoranda and all other agreements, memoranda, correspondence and other documents printed, distributed and delivered in connection herewith and with the Exempt Resales (including in each case any disbursements of counsel to the Initial Purchasers relating to such printing and delivery); -6- 8 (3) the issuance, transfer and delivery by the Company and the Subsidiary Guarantors of the Senior Subordinated Notes and the Note Guarantees to the Initial Purchasers; (4) the registration or qualification of the Notes and the Note Guarantees for offer and sale under the securities or Blue Sky laws of the jurisdictions referred to in Section 5(e) (including, in each case, the fees and disbursements of counsel to the Initial Purchasers relating to such registration or qualification and memoranda relating thereto); (5) furnishing such copies of the Preliminary Offering Memorandum and the Offering Memorandum, and all amendments and supplements thereto, as may be requested for use in connection with the Exempt Resales; (6) the preparation of certificates for the Notes (including, without limitation, printing and engraving thereof); (7) the rating of the Notes by investment rating agencies; (8) the fees, disbursements and expenses of the Company's and the Subsidiary Guarantors' counsel and accountants; (9) all expenses and listing fees in connection with the application for quotation of the Senior Subordinated Notes in the National Association of Securities Dealers, Inc. ("NASD") Private Offerings, Resales and Trading through Automated Linkages ("PORTAL"); (10) the fees and expenses of the Trustee and the Trustee's counsel in connection with the Indenture and the Notes; (11) all fees and expenses (including fees and expenses of counsel to the Company) of the Company in connection with approval of the Note by DTC for "book-entry" transfer; and (12) the performance by the Company of its other obligations under this Agreement and the other Operative Documents. (j) If this Agreement shall be terminated pursuant to any of the provisions hereof (other than a default by the Initial Purchasers) or if for any reason the Company shall be unable or unwilling to perform their obligations hereunder, the Company shall, except as otherwise agreed by the parties hereto, reimburse the Initial Purchasers for the fees and expenses to be paid or reimbursed pursuant to Section 5(i) above, and reimburse the Initial Purchasers for all out-of-pocket expenses (including the fees and expenses of counsel to the Initial Purchasers) rea- -7- 9 sonably incurred by the Initial Purchasers in connection with the transactions contemplated by this Agreement. (k) Prior to the consummation of the Exchange Offer, to furnish to the Initial Purchasers, as soon as they have been prepared by the Company, a copy of any consolidated financial statements of the Company for any period subsequent to the period covered by the financial statements appearing in the Offering Memorandum. (l) Not to distribute prior to the Closing Date any offering material in connection with the offering and sale of the Senior Subordinated Notes other than the Offering Memorandum. (m) Not to sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Act) that would be integrated with the sale of the Senior Subordinated Notes in a manner that would require the registration under the Act of the sale to the Initial Purchasers or the Eligible Purchaser of the Senior Subordinated Notes. (n) For so long as any of the Notes remain outstanding and during any period in which the Company is not subject to Section 13 or 15(d) of the Exchange Act, to make available to any holder of Notes in connection with any sale thereof and any prospective purchaser of such Notes from such holder, the information ("Rule 144A Information") required by Rule 144A(d)(4) under the Act. (o) To comply with all of their agreements set forth in the Registration Rights Agreement, and all agreements set forth in the representation letters of the Company to DTC relating to the approval of the Notes by DTC for "book-entry" transfer. (p) To cause the Exchange Offer to be made in the appropriate form to permit registered New Senior Subordinated Notes to be offered in exchange for the Senior Subordinated Notes and to comply with all applicable federal and state securities laws in connection with the Registered Exchange Offer. (q) To use their respective best efforts to cause the Notes to be eligible for trading through PORTAL and to obtain approval of the Notes by DTC for "book-entry" transfer. 6. REPRESENTATIONS AND WARRANTIES. The Company and the Subsidiary Guarantors represent and warrant to each of the Initial Purchasers that: (a) The Offering Documents have been prepared in connection with the Exempt Resales. The Preliminary Offering Memorandum and the Offering Memorandum do not and any supplement or amendment thereto will not, contain any untrue statement of a material fact or omit to state any material fact required -8- 10 to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties contained in this paragraph (a) shall not apply to statements in or omissions from the Offering Documents (or any amendment or supplement thereto) made in reliance upon information relating to the Initial Purchasers furnished to the Company in writing by the Initial Purchasers expressly for use therein. The Company acknowledges for all purposes under this Agreement that the statements set forth in the last paragraph on the cover page, the legend on the bottom of the inside cover page and in the first and second sentences of the third paragraph, the first sentence of the fourth paragraph, the fourth sentence of the sixth paragraph, the first sentence of the seventh paragraph and the eighth and ninth paragraphs under the caption "Plan of Distribution" in the Offering Memorandum constitute the only written information finished to the Company by the Initial Purchasers expressly for use in the Offering Documents (or any amendment or supplement thereto). No stop order preventing the use of the Offering Documents, or any amendment or supplement thereto, or any order asserting that any of the transactions contemplated by this Agreement are subject to the registration requirements of the Act, has been issued. (b) Each of the Company and its wholly owned subsidiaries ("subsidiaries") (i) has been, and after giving effect to the Combination pursuant to the terms of the Combination Agreement will be, duly organized and validly existing and in good standing under the laws of the jurisdiction of its organization, (ii) has, and after giving effect to the Combination pursuant to the terms of the Combination Agreement will have, all requisite corporate or comparable power and authority to carry on its business as described in the Offering Memorandum and to own, lease and operate its properties, and (iii) is, and after giving effect to the Combination pursuant to the terms of the Combination Agreement will be, duly qualified and in good standing as a foreign corporation authorized to do business in each other jurisdiction in which the nature of its business or its ownership or leasing of property requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect. As used herein, "Material Adverse Effect" shall mean, with respect to any Person, any effect or group of related or unrelated effects that (i) would be reasonably expected to result in a material adverse effect on the assets, properties, business, results of operations, condition (financial or otherwise) or prospects of the Company and its subsidiaries, taken as a whole or (ii) would reasonably be expected to interfere with, adversely affect or question the validity of the execution, delivery and performance of any of the Operative Documents, the issuance of the Notes and the Note Guarantees or the consummation of this Agreement. (c) All of the issued and outstanding shares of capital stock, partnership interests or other interests of the Company and each of its Subsidiaries have been duly and validly authorized and issued, and all of the capital stock, partnership interests or other interests of each such Subsidiary are owned, directly or indi- -9- 11 rectly, by the Company. All such shares of capital stock, partnership interests or other interests are fully paid and non-assessable and have not been issued in violation of any preemptive or similar rights and are owned free and clear of any security interest, mortgage, pledge, claim, lien, limitation on voting rights or encumbrance (each, a "Lien"), except for Liens granted pursuant to the New Credit Facility and except for limitations voting rights with respect to shares of Atrium Parking, Inc. held by the Company. Except as disclosed in the Offering Memorandum, there are not currently, and will not be as a result of the Offering or the consummation of the Combination pursuant to the terms of the Combination Agreement, any outstanding subscriptions, rights, warrants, options, calls, convertible securities, commitments of sale or Liens related to or entitling any person to purchase or otherwise to acquire any shares of the capital stock of, or other securities evidencing equity ownership interests in, the Company or any of its Subsidiaries. (d) The Company has all requisite corporate power and authority to execute, deliver and perform its obligations under the Operative Documents to which it is a party, and to consummate the transactions contemplated hereby and thereby, including, without limitation, the corporate power and authority to issue, sell and deliver the Senior Subordinated Notes to the Initial Purchasers. (e) The Subsidiary Guarantors have all necessary corporate or comparable power and authority to enter into and perform their obligations under the Operative Documents to which they are parties, and to issue, sell and deliver the Note Guarantees to the Initial Purchasers. (f) Neither the Company nor any of its Subsidiaries is, and after giving effect to the Offering and the Combination pursuant to the terms of the Combination Agreement will be, (i) in violation of its charter, bylaws or other organizational documents, (ii) in default in the performance of any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any other agreement, indenture or instrument, in each case, which is material to the conduct of the business of the Company, to which the Company is a party or by which it or any of the Company's Subsidiaries or their respective property is bound, or (iii) in violation of any local, state or federal law, statute, ordinance, rule, regulation, requirement, judgment or court decree (including, without limitation, environmental laws, statutes, ordinances, rules, regulations, judgments or court decrees) applicable to the Company, its Subsidiaries or any of its assets or properties (whether owned or leased), other than violations or defaults that would not reasonably be expected to have a Material Adverse Effect. To the best knowledge of the Company, there exists no condition that, with notice, the passage of time or otherwise, would constitute a default under any such document or instrument, except for such defaults that could not reasonably be expected to have a Material Adverse Effect. -10- 12 (g) None of (i) the execution, delivery or performance by the Company or the Subsidiary Guarantors of this Agreement and the other Operative Documents, (ii) the performance by the Company of the Combination Agreement and consummation of the Combination pursuant to the terms of the Combination Agreement, (iii) the issuance and sale of the Notes by the Company or the issuance of the Note Guarantees by the Subsidiary Guarantors and (iv) the consummation by the Company of the transactions described in the Offering Memorandum under the caption "Use of Proceeds," will conflict with or constitute a breach of any of the terms or provisions of, or, after giving effect to the Combination pursuant to the terms of the Combination Agreement, will violate, conflict with or constitute a breach of any of the terms or provisions of, or a default under, or result in the imposition of a lien or encumbrance on any properties of the Company or the Subsidiary Guarantors, as the case may be, or an acceleration of indebtedness pursuant to, (1) the respective charter, bylaws or other organizational documents of the Company or the Subsidiary Guarantors, as the case may be, (2) except as disclosed in the Offering Memorandum, any bond, debenture, note, indenture, mortgage, deed of trust or other agreement or instrument to which the Company or the Subsidiary Guarantors, as the case may be, is a party or by which any of their respective property is bound, or (3) any law or administrative regulation applicable to the Company or the Subsidiary Guarantors, as the case may be, or any of their assets or properties, or any judgment, order or decree of any court or governmental agency or authority entered in any proceeding to which the Company or the Subsidiary Guarantors, as the case may be, was or is now a party or to which any of their respective properties may be subject. No consent, approval, authorization or order of, or filing or registration with, any regulatory body, administrative agency, or other governmental agency (except as securities or Blue Sky laws of the various states may require) is required for the execution, delivery and performance of the Operative Documents and the valid issuance and sale of the Securities. No consents or waivers from any person are required to consummate the transactions contemplated by the Operative Documents or the Offering Documents, other than such consents and waivers as have been or will be obtained prior to the Closing Date or, in the case of the Registration Rights Agreement and the transactions contemplated thereby, will be obtained and made under the Act, the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and state securities or Blue Sky laws and regulations. (h) This Agreement has been duly authorized and, when validly executed by the Company and the Subsidiary Guarantors and (assuming the due execution and delivery thereof by the Initial Purchasers) is a legally valid and binding obligation of the Company and the Subsidiary Guarantors, enforceable against each in accordance with its terms, except as the enforceability thereof may be (i) subject to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect which affect the enforcement of creditors' rights generally, (ii) limited by general principles of equity (whether considered in a proceeding at -11- 13 law or in equity), and (iii) limited by securities laws prohibiting or limiting the availability of, and public policy against, indemnification or contribution. (i) The Company and the Subsidiary Guarantors have duly authorized the Indenture, and when the Company and the Subsidiary Guarantors have duly executed and delivered the Indenture (assuming the due authorization, execution and delivery thereof by the Trustee), the Indenture will be the legally valid and binding obligation of each, enforceable against each in accordance with its terms, except as the enforceability thereof may be (i) subject to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect which affect the enforcement of creditors' rights generally, and (ii) limited by general principles of equity (whether considered in a proceeding at law or in equity). (j) The Company has duly authorized the Senior Subordinated Notes and, when issued and authenticated in accordance with the terms of the Indenture and delivered to and paid for by the Initial Purchasers in accordance with the terms hereof, will be the legally valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforceability thereof may be (i) subject to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect which affect the enforcement of creditors' rights generally, and (ii) limited by general principles of equity (whether considered in a proceeding at law or in equity). (k) The Subsidiary Guarantors have duly authorized the Note Guarantees to be endorsed on the Senior Subordinated Notes and, when the Senior Subordinated Notes are issued and authenticated in accordance with the terms of the Indenture and delivered to and paid for by the Initial Purchasers in accordance with the terms hereof, the Note Guarantees will be the legally valid and binding obligations of the Subsidiary Guarantors, enforceable against the Subsidiary Guarantors in accordance with their terms, except as the enforceability thereof may be (i) subject to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect which affect the enforcement of creditors' rights generally, and (ii) limited by general principles of equity (whether considered in a proceeding at law or in equity). (l) The Company has duly authorized the New Senior Subordinated Notes and, when issued and authenticated in accordance with the terms of the Registered Exchange Offer and the Indenture, the New Senior Subordinated Notes will be the legally valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforceability thereof may be (i) subject to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect which affect the enforcement of creditors' rights generally and (ii) limited by general principles of equity (whether considered in a proceeding at law or in equity). -12- 14 (m) The Subsidiary Guarantors have duly authorized the Note Guarantees to be endorsed on the New Senior Subordinated Notes and, when the New Senior Subordinated Notes are issued and authenticated in accordance with the terms of the Registered Exchange Offer and the Indenture, the Note Guarantees will be the legally valid and binding obligations of the Subsidiary Guarantors, enforceable against the Subsidiary Guarantors in accordance with their terms, except as the enforceability thereof may be (i) subject to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect which affect the enforcement of creditors' rights generally and (ii) limited by general principles of equity (whether considered in a proceeding at law or in equity). (n) The Registration Rights Agreement has been duly authorized and when validly executed by the Company and the Subsidiary Guarantors will be (assuming the due execution and delivery thereof by the Initial Purchasers) the legally valid and binding obligation of each, enforceable against each in accordance with its terms, except as the enforceability thereof may be (i) subject to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect which affect the enforcement of creditors' rights generally and (ii) limited by general principles of equity (whether considered in a proceeding at law or in equity). (o) The Combination Agreement has been duly and validly authorized by the Company and is a legally valid and binding agreement of the Company, enforceable against it in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization or other similar laws and court decisions affecting or relating to the rights of creditors generally or by general principles of equity, and except as rights to indemnification may be limited by applicable law. (p) The New Credit Facility has been duly authorized and when validly executed by the Company and the subsidiaries of the Company that are obligors thereunder will be the legally valid and binding obligation of each, enforceable against each in accordance with its terms, except as the enforceability thereof may be (i) subject to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect which affect the enforcement of creditors' rights generally and (ii) limited by general principles of equity (whether considered in a proceeding at law or in equity). (q) There is, and after giving effect to the Combination pursuant to the terms of the Combination Agreement will be, (i) no action, suit, proceeding or investigation before or by any court, arbitrator or governmental agency, body or official, domestic or foreign, now pending, threatened, or, to the knowledge of the Company, contemplated to which the Company or the Subsidiary Guarantors is or may be a party or to which the business or property of the Company or the Subsidiary Guarantors is or, after giving effect to the Combination pursuant to the terms of the Combination Agreement, may be subject, (ii) no statute, rule, regula- -13- 15 tion or order that has been enacted, adopted or issued by any governmental agency or, to the best knowledge of the Company, proposed by any governmental body or (iii) no injunction, restraining order or order of any nature issued by a federal or state court of competent jurisdiction to which the Company or the Subsidiary Guarantors is or may be subject that, in the case of clauses (i), (ii) and (iii) above, (1) is required to be disclosed in the Offering Memorandum and that is not so disclosed, (2) could reasonably be expected to have a Material Adverse Effect or (3) would interfere with or adversely affect the issuance of the Senior Subordinated Notes or the Note Guarantees. (r) There are no holders of any security of the Company or the Subsidiary Guarantors who by reason of the execution by the Company and the Subsidiary Guarantors of this Agreement or any other Operative Document or the consummation of the transactions contemplated hereby and thereby, have the right to request or demand that the Company or the Subsidiary Guarantors register under the Act, or analogous foreign laws and regulations, securities held by them. (s) The Company has delivered to the Initial Purchasers true and correct executed copies of the Combination Agreement and all documents and agreements related thereto and there have been no amendments, alterations, modifications or waivers thereto or in the exhibits or schedules thereto, except as have been delivered to the Initial Purchasers. (t) The Company is not, and after giving effect to the Combination pursuant to the terms of the Combination Agreement will not be, involved in any material labor dispute nor, to the knowledge of the Company, is any material dispute threatened which, if such dispute were to occur, could have a Material Adverse Effect. (u) The Company has not violated any safety or similar law applicable to its business, nor any federal or state law relating to discrimination in the hiring, promotion or pay of employees nor any applicable federal or state wages and hours laws, nor any provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or the rules and regulations promulgated thereunder, except for such instances of noncompliance that, either singly or in the aggregate, could not have a Material Adverse Effect. (v) Each of the Company and the Subsidiary Guarantors is, and after giving effect to the Combination pursuant to the terms of the Combination Agreement will be, in compliance with all applicable existing federal, state, local and foreign laws and regulations (collectively, "Environmental Laws") relating to the protection of human health or the environment or imposing liability or standards of conduct concerning any Hazardous Material (as defined below), except for such instances of noncompliance that, either singly or in the aggregate, could not have a Material Adverse Effect. The term "Hazardous Material" means (i) -14- 16 any "hazardous substance" as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, (ii) any "hazardous waste" as defined by the Resource Conservation and Recovery Act, as amended, (iii) any petroleum or petroleum product, (iv) any polychlorinated biphenyl and (v) any pollutant or contaminant or hazardous, dangerous or toxic chemical, material, waste or substance regulated under or within the meaning of any other Environmental Law. Except as set forth in the Offering Memorandum, there is no alleged liability, or, to the best knowledge and information of the Company, potential liability (including, without limitation, alleged or potential liability for investigatory costs, cleanup costs, governmental response costs, natural resource damages, property damages, personal injuries, or penalties) of the Company or any of its Subsidiaries arising out of, based on, or resulting from (1) the presence or release into the environment of any Hazardous Material at any location currently or previously owned by the Company or any of its Subsidiaries or at any location currently or previously used or leased by the Company or any of its Subsidiaries, or (2) any violation or alleged violation of any Environmental Law, except in each case with respect to clause (1) and (2), alleged or potential liabilities that, singly or in the aggregate, could not have a Material Adverse Effect. (w) The Company and each of its Subsidiaries have and, after giving effect to the Combination pursuant to the terms of the Combination Agreement, will have, such permits, licenses, franchises and authorizations of governmental or regulatory authorities ("permits"), including, without limitation, under any applicable Environmental Laws, as are necessary or will be necessary, to own, lease and operate their respective properties and to conduct their respective businesses in the manner described in the Offering Memorandum, except for those permits the absence of which could not reasonably be expected to have a Material Adverse Effect; the Company and each of its Subsidiaries have and, after giving effect to the Combination pursuant to the terms of the Combination Agreement, will have, fulfilled and performed all of its obligations with respect to such permits, except for such obligations the failure of which to be fulfilled or performed could not reasonably be expected to have a Material Adverse Effect and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the holder of any such permit, except for such event, that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect; and, except as described in the Offering Memorandum, such permits contain no restrictions that are or will be materially burdensome to the Company or any of its Subsidiaries. (x) The Company and its Subsidiaries own or possess free and clear of all Liens or has the right to use free and clear of any rights of third parties that adversely affect such use by the Company and its Subsidiaries and, after giving effect to the Combination pursuant to the terms of the Combination Agreement, will own or possess free and clear of all Liens or have the right to use free and clear of -15- 17 any rights of third parties that adversely affect such use by the Company and its Subsidiaries, all patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names (collectively, "Intellectual Property") presently employed by either of them or which are proposed to be employed by either of them in connection with the businesses now operated by either of them or which are proposed to be operated by them, except where the failure to own or possess such Intellectual Property could not, either singly or in the aggregate, have a Material Adverse Effect. The use of such Intellectual Property in connection with the business and operations of the Company and its Subsidiaries does not to the Company's knowledge, infringe on the rights or claimed rights of any person. No other person is, to the Company's knowledge, infringing upon any of the Intellectual Property of the Company or has notified the Company or any of its Subsidiaries that it is claiming ownership of, or the right to use any Intellectual Property owned by the Company or its Subsidiaries. The Company and its Subsidiaries have taken all reasonable steps to protect the Intellectual Property from infringement by any other person, except where the failure to take such steps would not, individually or in the aggregate, have a Material Adverse Effect on the Company. Other than in connection with the use of so-called "off-the-shelf" software and except as otherwise disclosed in the Offering Memorandum, neither the Company nor its Subsidiaries are obligated or under any liability whatsoever to make any payment in excess of $150,000 per fiscal year, in the aggregate, by way of royalties, fees or otherwise to any persons with respect to the use of the Intellectual Property. Neither the Company nor any of its Subsidiaries has received (i) any notice of infringement of or conflict with assessed rights of others with respect to any Intellectual Property or (ii) any notice of an action or proceeding seeking to limit, cancel or question the validity of any Intellectual Property, which singly or in the aggregate, if the subject of any unfavorable decision, ruling or finding, might have a Material Adverse Effect on the Company. (y) All federal and state tax returns required to be filed by the Company or any of its Subsidiaries in any jurisdiction have been filed, and all material taxes (including, without limitation, withholding taxes, penalties and interest, assessments, fees and other charges due or claimed to be due from any taxing authority) have been paid other than those being contested in good faith and for which adequate reserves have been provided. To the knowledge of the Company, there are, and after giving effect to the Combination pursuant to the terms of the Combination Agreement will be, no material proposed additional tax assessments against the Company, any of its Subsidiaries or the assets or property of the Company or any of its Subsidiaries. (z) The Company and its Subsidiaries have and, after giving effect to the Combination pursuant to the terms of the Combination Agreement, will have all certificates, consents, exemptions, orders, permits, franchises, licenses, -16- 18 authorizations, or other approvals (each, an "Authorization") of and from, and has made all declarations and filings with and notices to, all federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other tribunals, necessary or required to own, lease, license, operate and use their respective properties and assets and to conduct their business in the manner described in the Offering Memorandum except for such Authorizations the absence of which could not reasonably be expected to have a Material Adverse Effect on the Company and except with respect to any parking facility contracts with governmental entities; all such Authorizations are and, after giving effect to the Combination pursuant to the terms of the Combination Agreement, will be valid and in full force and effect; the Company and its Subsidiaries are in compliance with the terms and conditions of all such Authorizations and with the rules and regulations of the regulatory authorities and governing bodies having jurisdiction with respect thereto; and neither the Company nor any of its Subsidiaries has received any notice, or has any knowledge or belief (or any basis therefor), that any governmental body or agency is considering limiting, suspending or revoking any such Authorization. (aa) Except as set forth in the Offering Memorandum and except as could not reasonably be expected to have a Material Adverse Effect on the Company, (i) the Company and its Subsidiaries have and, after giving effect to the Combination pursuant to the terms of the Combination Agreement, will have good and marketable title, free and clear of all Liens except Liens for taxes not yet due and payable and Liens granted pursuant to and permitted by the New Credit Facility, to all property and assets described in the Offering Memorandum as being owned by each of them. Except for leases of parking facilities, all material leases to which the Company or any of its Subsidiaries is a party are and, after giving effect to the Combination pursuant to the terms of the Combination Agreement, will be legally valid and binding and, to the best of the Company's knowledge, no default has occurred or is continuing thereunder which could reasonably be expected to have a Material Adverse Effect on the Company, and the Company and its Subsidiaries enjoy peaceful and undisturbed possession under all such leases to which the Company and its Subsidiaries are a party as lessee with such exceptions as do not materially interfere with the use currently made by the Company or its Subsidiaries, as the case may be. (ab) The Company maintains and, after giving effect to the Combination pursuant to the terms of the Combination Agreement, will endeavor to maintain adequate insurance customary for the parking facilities management industry for its business and the value of its properties (including, without limitation, public liability insurance, third party property damage insurance and replacement value insurance), and, to the best of the Company's knowledge, all such insurance is outstanding and in force as of the date hereof. -17- 19 (ac) The financial statements, together with related notes forming part of the Offering Documents (and any amendment or supplement thereto), present fairly the consolidated financial position, results of operations and changes in financial position of the Company on the basis stated in the Offering Documents at the respective dates or for the respective periods to which they apply, and such financial statements and related schedules and notes have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved, except as disclosed therein and the other financial and statistical information and data set forth in the Offering Documents (and any amendment or supplement thereto) is, in all material respects, accurately presented and prepared on a basis consistent with such financial statements and the books and records of the Company. The pro forma financial data are, in all material respects, accurately presented and prepared in good faith on the basis of the assumptions described therein, and such assumptions are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. (ad) The Company and the Subsidiary Guarantors maintain and, after giving effect to the Combination pursuant to the terms of the Combination Agreement, will maintain a system of internal accounting controls sufficient to provide assurance that: (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; and (iii) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect thereto. (ae) Subsequent to the dates for which information is given in the Offering Documents and up to the Closing Date, unless set forth in the Offering Memorandum or the Company has notified the Initial Purchasers: (i) neither the Company nor the Subsidiary Guarantors has incurred any liabilities or obligations, direct or contingent, which are or, after giving effect to the Combination pursuant to the terms of the Combination Agreement, could reasonably be expected to have a Material Adverse Effect on the Company or the Subsidiary Guarantors, nor has either entered into any material transactions not in the ordinary course of business; (ii) there has not been any decrease in the Company's or the Subsidiary Guarantors' capital stock or any increase in long-term indebtedness to meet working capital requirements or any material increase in short-term indebtedness of the Company or the Subsidiary Guarantors or any payment of or declaration to pay any dividends or any other distribution with respect to the Company's or the Subsidiary Guarantors' capital stock; and (iii) there has not been any event or series of events that could reasonably be expected to have a Material Adverse Effect. (af) Prior to and immediately after the issuance of the Senior Subordinated Notes and, after giving effect to the Combination pursuant to the terms of -18- 20 the Combination Agreement, (i) the present fair saleable value of the assets of the Company and its subsidiaries exceeded and will exceed the amount that will be required to be paid on, or in respect of, the debts and other liabilities (including contingent liabilities) of the Company and its subsidiaries as they become absolute and matured, (ii) the assets of the Company and its subsidiaries do not constitute and will not constitute unreasonably small capital to carry out their businesses as conducted or as proposed to be conducted, and (iii) the Company and its subsidiaries do not intend to, or believe that it will, incur debts or other liabilities beyond its ability to pay such debts and liabilities as they mature. In computing the amount of such contingent liabilities at any time, it is intended that such liabilities will be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount than can reasonably be expected to become an actual or matured liability. (ag) Except as would not otherwise be unlawful, the Company has not (i) taken, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Notes or (ii) since the date of the Preliminary Offering Memorandum (A) sold, bid for, purchased, or paid anyone other than the Initial Purchasers any compensation for soliciting purchases of, the Senior Subordinated Notes or (B) paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Company. (ah) Neither the Company nor any of its subsidiaries nor any agent thereof acting on the behalf of them, has taken or will take any action that might cause this Agreement or the issuance or sale of the Notes to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve System, in each case as in effect now or as the same may hereafter be in effect on the Closing Date. (ai) Neither the Company nor any of its subsidiaries is or, after giving effect to the Combination pursuant to the terms of the Combination Agreement, will be an "investment company" or a company "controlled" by an investment company within the meaning of the Investment Company Act of 1940, as amended. (aj) The accountants, Ernst & Young LLP and Altschuler, Melvoin and Glasser, LLP, that have certified the financial statements and supporting schedules included in the Offering Memorandum are independent public accountants, as required by the Act and the Exchange Act. The historical financial statements, together with related schedules and notes, set forth in the Offering Memorandum comply as to form in all material respects with the requirements applicable to registration statements on Form S-1 under the Act. -19- 21 (ak) When the Senior Subordinated Notes are issued and delivered pursuant to this Agreement, such Senior Subordinated Notes will not be of the same class (within the meaning of Rule 144A under the Act) as securities of the Company that are listed on a national securities exchange registered under Section 6 of the Exchange Act or that are quoted in a United States automated inter-dealer quotation system. (al) Assuming (i) that the representations and warranties of the Initial Purchasers in Section 7 hereof are true, (ii) that the Initial Purchasers complied with their covenants as set forth in Section 7 hereof, (iii) that none of the Eligible Purchasers is an affiliate of the Company and (iv) that each of the Eligible Purchasers is a QIB or is purchasing the Senior Subordinated Notes pursuant to the exemption provided for under Regulation S, the purchase and resale of the Senior Subordinated Notes pursuant hereto (including pursuant to be Exempt Resales) is exempt from the registration requirements of the Act. No form of general solicitation or general advertising was used by the Company or any of its representatives (other than the Initial Purchasers, as to whom the Company makes no representation) in connection with the offer and sale of the Senior Subordinated Notes, including, but not limited to, articles, notices or other communications published in any newspaper, magazine, or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. No securities of the same class as the Senior Subordinated Notes have been issued and sold by the Company within the six-month period immediately prior to the date hereof. (am) The execution and delivery of this Agreement, the other Operative Documents and the sale of the Securities to be purchased by the Eligible Purchasers will not involve any prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code with respect to any employee benefit plan of the Company. The representation made by the Company in the preceding sentence is made in reliance upon and subject to the accuracy of, and compliance with, the representations and covenants made or deemed made by the Eligible Purchaser as set forth in the Offering Documents under the Section entitled "Notice to Investors." (an) Each of the Preliminary Offering Memorandum and the Offering Memorandum, as of its date contains, and as of the Closing Date will contain, all the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the Act. (ao) None of the Company, its subsidiaries or any of its or their affiliates or any person acting on its or their behalf has engaged or will engage in any directed selling efforts within the meaning of Regulation S with respect to the Senior Subordinated Notes, and the Company, its subsidiaries and its or their affiliates and all persons acting on its or their behalf have complied or will comply -20- 22 with the offering restrictions requirements of Regulation S in connection with the offering of the Senior Subordinated Notes outside the United States. (ap) There is no "substantial U.S. market interest" as defined in rule 902(n) of Regulation S for the Senior Subordinated Notes or any security of the same class as the Senior Subordinated Notes. (aq) The sale of the Senior Subordinated Notes in offshore transactions pursuant to Regulation S is not part of a plan or scheme to evade the registration provisions of the Act. 7. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE INITIAL PURCHASERS. Each of the Initial Purchasers, severally and not jointly, represents and warrants to the Company as follows: (a) Such Initial Purchaser is a QIB with such knowledge and experience in financial and business matters as is necessary in order to evaluate the merits and risks of an investment in the Senior Subordinated Notes. (b) Such Initial Purchaser (i) is not acquiring the Senior Subordinated Notes with a view to any distribution thereof that would violate the Act or the securities laws of any state of the United States or any other applicable jurisdiction and (ii) will be reoffering and reselling the Senior Subordinated Notes only to QIBs in reliance on the exemption from the registration requirements of the Act provided by Rule 144A and to persons outside the United States in reliance on the exemption from the registration requirements of the Act provided by Regulation S. (c) No form of general solicitation or general advertising (within the meaning of Regulation D under the Act) has been or will be used by the Initial Purchasers or any of its representatives in connection with the offer and sale of any of the Senior Subordinated Notes, including, but not limited to, articles, notices or other communications published in any newspaper, magazine, or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. (d) Such Initial Purchaser agrees that, in connection with the Exempt Resales, it will solicit offers to buy the Senior Subordinated Notes only from, and will offer to sell the Senior Subordinated Notes only to, Eligible Purchasers. Such Initial Purchaser further agrees that it will offer to sell the Senior Subordinated Notes only to, and will solicit offers to buy the Senior Subordinated Notes only from, persons who in purchasing such Senior Subordinated Notes will be deemed to have represented and agreed (i) if such Eligible Purchasers are QIBs, that they are purchasing the Senior Subordinated Notes for their own account or accounts with respect to which they exercise sole investment discretion and that they or such accounts are QIBs, (ii) that such Senior Subordinated Notes will not have -21- 23 been registered under the Act and may be resold, pledged or otherwise transferred, only (1) (a) inside the United States to a person who the seller reasonably believes is a "qualified institutional buyer" within the meaning of Rule 144A under the Act in a transaction meeting the requirements of Rule 144A, (b) in a transaction meeting the requirements of Rule 144A under the Act, (c) outside the United States to a foreign person in a transaction meeting the requirements of Rule 904 under the Act or (d) in accordance with another exemption from the registration requirements of the Act (and based in the case of clauses (b) and (c) above upon an opinion of counsel if the Company so requests), (2) to the Company or (3) pursuant to an effective registration statement under the Act, in each case, in accordance with any applicable securities laws of any state of the United States or any other applicable jurisdiction, and (iii) that the holder will, and each subsequent holder is required to, notify purchaser from it of the security evidenced thereby of the resale restrictions set forth in (ii) above. Accordingly, the Initial Purchasers represents and agrees that neither it, its affiliates nor any persons acting on its or their behalf has engaged or will engage in any directed selling efforts within the meaning of Rule 901(b) of Regulation S with respect to the Senior Subordinated Notes, and it, or its affiliates and all persons acting on its or their behalf have complied and will comply with the offering restrictions requirements of Regulation S. (e) Such Initial Purchaser represents and agrees that the Senior Subordinated Notes offered and sold in reliance on Regulation S have been and will be offered and sold only in offshore transactions and that such securities have been and will be represented upon issuance by a global security that may not be exchanged for definitive securities until the expiration of the Restricted Period and only upon certification of beneficial ownership of the securities by a non-U.S. person or a U.S. person who purchased such securities in a transaction that was exempt from the registration requirements of the Act, which U.S. person will acquire an interest in a Transfer Restricted Security. (f) Such Initial Purchaser agrees that, at or prior to confirmation of a sale of Senior Subordinated Notes (other than a sale pursuant to Rule 144A), it will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases the Senior Subordinated Notes from it during the Restricted Period a confirmation or notice to substantially the following effect: "The Senior Subordinated Notes covered hereby have not been registered under the U.S. Securities Act of l933, as amended (the "Securities Act") and may not be offered and sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the commencement of the offering and the closing date, except in either case in accordance with -22- 24 Regulation S (or Rule 144A if available) under the Securities Act. Terms used above have the same meanings assigned to them in Regulation S." (g) Such Initial Purchaser agrees not to cause any advertisement of the Senior Subordinated Notes to be published in any newspaper or periodical or posted in any public place and not to issue any circular relating to the Senior Subordinated Notes, except such advertisements as include the statements required by Regulation S. (h) The sale of the Senior Subordinated Notes in offshore transactions pursuant to Regulation S is not part of a plan or scheme to evade the registration provisions of the Act. (i) Such Initial Purchaser is not a pension or welfare plan (as defined in Section 3 of ERISA) and is not acquiring the Senior Subordinated Notes on behalf of a pension or welfare plan. (j) Prior to consummating the Eligible Resales, the Initial Purchasers shall have delivered a copy of the Offering Memorandum and any supplements or amendments thereto to each Eligible Purchaser. (k) Such Initial Purchaser also understands that the Company and, for purposes of the opinions to be delivered to the Initial Purchasers pursuant to Sections 9(d) and (e) hereof, counsel to the Company and counsel to the Initial Purchasers will rely upon the accuracy and truth of the foregoing representations and such Initial Purchasers hereby consent to such reliance. 8. INDEMNIFICATION. (a) The Company and each Subsidiary Guarantor agree, jointly and severally, to indemnify and hold harmless (i) each Initial Purchaser, its directors, its officers and each person, if any, who controls such Initial Purchasers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages, liabilities and judgments (including, without limitation, any legal or other expenses reasonably incurred in connection with investigating or defending any matter, including any action, that could give rise to any such losses, claims, damages, liabilities or judgments) caused by any untrue statement or alleged untrue statement of a material fact contained in the Offering Memorandum (or any amendment or supplement thereto), the Preliminary Offering Memorandum or any Rule 144A Information provided by the Company or any Subsidiary Guarantor to any holder or prospective purchaser of Senior Subordinated Notes pursuant to Section 5(n) or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the light of the circumstances under which they were made) not misleading, except insofar as such losses, claims, damages, liabilities or judgments are caused by any such untrue statement or -23- 25 omission or alleged untrue statement or omission based upon information relating to the Initial Purchasers furnished in writing to the Company by such Initial Purchaser; provided, however, that the foregoing indemnity agreement with respect to any Preliminary Offering Memorandum shall not inure to the benefit of any Initial Purchasers who failed to deliver a Final Offering Memorandum (as then amended or supplemented, provided by the Company to the several Initial Purchasers in the requisite quantity and on a timely basis to permit proper delivery on or prior to the Closing Date) to the person asserting any losses, claims, damages and liabilities and judgments caused by any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Offering Memorandum, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such material misstatement or omission or alleged material misstatement or omission was cured in the Final Offering Memorandum. (b) The Initial Purchasers agree to indemnify and hold harmless the Company and the Subsidiary Guarantors, and their respective directors and officers and each person, if any, who controls (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company or the Subsidiary Guarantors, to the same extent as the foregoing indemnity from the Company and the Subsidiary Guarantors to the Initial Purchasers but only with reference to information relating to the Initial Purchasers furnished in writing to the Company by the Initial Purchasers expressly for use in the Preliminary Offering Memorandum or the Offering Memorandum. (c) In case any action shall be commenced involving any person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the "indemnified party"), the indemnified party shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party shall assume the defense of such action, including the employment of counsel reasonably satisfactory to the indemnified party and the payment of all fees and expenses of such counsel, as incurred (except that in the case of any action in respect of which indemnity may be sought pursuant to both Sections 8(a) and 8(b), the Initial Purchasers shall not be required to assume the defense of such action pursuant to this Section 8(c), but may employ separate counsel and participate in the defense thereof, but the fees and expenses of such counsel, except as provided below, shall be at the expense of the Initial Purchasers). Any indemnified party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the indemnified party unless (i) the employment of such counsel shall have been specifically authorized in writing by the indemnifying party, (ii) the indemnifying party shall have failed to assume the defense of such action or employ counsel reasonably satisfactory to the indemnified party or (iii) the named parties to any such action (including any impleaded parties) include both the indemnified party and the indemnifying party, and the in- -24- 26 demnified party shall have been advised by such counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the indemnifying party (in which case the indemnifying party shall not have the right to assume the defense of such action on behalf of the indemnified party). In any such case, the indemnifying party shall not, in connection with any one action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all indemnified parties and all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by Donaldson, Lufkin & Jenrette Securities Corporation, in the case of the parties indemnified pursuant to Section 8(a), and by the Company, in the case of parties indemnified pursuant to Section 8(b). The indemnifying party shall indemnify and hold harmless the indemnified party from and against any and all losses, claims, damages, liabilities and judgments by reason of any settlement of any action (i) effected with its written consent or (ii) effected without its written consent if the settlement is entered into more than thirty business days after the indemnifying party shall have received a request from the indemnified party for reimbursement for the fees and expenses of counsel (in any case where such fees and expenses are at the expense of the indemnifying party) and, prior to the date of such settlement, the indemnifying party shall have failed to comply with such reimbursement request. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement or compromise of, or consent to the entry of judgment with respect to, any pending or threatened action in respect of which the indemnified party is or could have been a party and indemnity or contribution may be or could have been sought hereunder by the indemnified party, unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability on claims that are or could have been the subject matter of such action and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of the indemnified party. (d) To the extent the indemnification provided for in this Section 8 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages, liabilities or judgments referred to herein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities and judgments (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Subsidiary Guarantors, on the one hand, and the Initial Purchasers on the other hand from the offering of the Senior Subordinated Notes or (ii) if the allocation provided by clause 8(d)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 8(d)(i) above but also the relative fault of the Company and the Subsidiary Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in connection with the statements or -25- 27 omissions which resulted in such losses, claims, damages, liabilities or judgments, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Subsidiary Guarantors, on the one hand and the Initial Purchasers, on the other hand, shall be deemed to be in the same proportion as the total net proceeds from the offering of the Senior Subordinated Notes (after underwriting discounts and commissions, but before deducting expenses) received by the Company, and the total discounts and commissions received by the Initial Purchasers bear to the total price to investors of the Senior Subordinated Notes, in each case as set forth in the table on the cover page of the Offering Memorandum. The relative fault of the Company and the Subsidiary Guarantors, on the one hand, and the Initial Purchasers, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Subsidiary Guarantors, on the one hand, or the Initial Purchasers, on the other hand, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Subsidiary Guarantors, and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or judgments referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any matter, including any action, that could have given rise to such losses, claims, damages, liabilities or judgments. Notwithstanding the provisions of this Section 8, the Initial Purchasers shall not be required to contribute any amount in excess of the amount by which the total discounts and commissions received by such Initial Purchaser exceed the amount of any damages which the Initial Purchasers has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (e) The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. 9. CONDITIONS OF THE INITIAL PURCHASERS' OBLIGATIONS. The several obligations of the Initial Purchasers to purchase and pay for the Senior Subordinated Notes as provided herein, shall be subject to the satisfaction of each of the following conditions: -26- 28 (a) All the representations and warranties of the Company and the Subsidiary Guarantors contained in this Agreement shall be true and correct on the Closing Date, with the same force and effect as if made on and as of the date hereof and the Closing Date, respectively. Each of the Company and the Subsidiary Guarantors shall have performed or complied with its obligations and agreements and satisfied the conditions to be performed, complied with or satisfied by it on or prior to the Closing Date. (b) (1) The Offering Memorandum shall have been printed and copies distributed to the Initial Purchasers not later than 9:00 a.m., New York City time, on the day following the date of this Agreement, or at such later date and time as to which the Initial Purchasers may approve; (2) No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency that would, as of the Closing Date, prevent the issuance of the Senior Subordinated Notes or the Note Guarantees; (3) No injunction, restraining order or order of any nature by a federal or state court of competent jurisdiction shall have been issued as of the Closing Date or, to the best knowledge of the Company, threatened against, the Company or the Subsidiary Guarantors which would prevent the issuance of the Senior Subordinated Notes or the Note Guarantors; and (4) No stop order preventing the use of the Offering Documents, or any amendment or supplement thereto, or suspending the qualification or exemption from qualification of the Senior Subordinated Notes for sale in any jurisdiction designated by the Initial Purchasers pursuant to Section 5(f) hereof shall have been issued and no proceedings for that purpose shall have been commenced or shall be pending, threatened or, to the Company's knowledge contemplated. (c) (1) (i) Since the date of the latest balance sheet in the Offering Memorandum, there shall not have been any material adverse change, or any development involving a prospective material adverse change, in the assets, properties, business, results of operations, condition (financial or otherwise) or prospects, whether or not arising in the ordinary course of business, of the Company and its subsidiaries, taken as a whole, (ii) since the date of the latest balance sheet included in the Offering Memorandum, there shall not have been any material change, or any development that is reasonably likely to result in a material change, in the capital stock or in the long-term debt, or material increase in short-term debt, of the Company and its subsidiaries, taken as a whole, from that set forth in the Offering Memorandum and (iii) except as set forth in the Offering Memorandum, neither the Company nor any of its subsidiaries shall have any liability or obligation, direct or contingent, which is material to the Company; -27- 29 (2) The Company and the Subsidiary Guarantors shall not have any material liability or obligation, direct or contingent, other than those reflected in the Offering Memorandum; and (3) The Initial Purchasers shall have received certificates dated the Closing Date, signed on behalf of the Company and each of the Subsidiary Guarantors by (i) the President and (ii) the Chief Financial Officer of the Company and the Subsidiary Guarantors, confirming all matters set forth in Sections 9(a), (b) and (c) hereof. (d) On the Closing Date, the Initial Purchasers shall have received an opinion (satisfactory to the Initial Purchasers and counsel to the Initial Purchasers) dated the Closing Date, of Wachtell, Lipton, Rosen & Katz, special counsel for the Company and the Subsidiary Guarantors, substantially to the effect that: (1) The Company (i) is duly organized and validly existing as a corporation in good standing under the laws of its jurisdiction and (ii) has all requisite corporate power and authority to carry on its business as described in the Offering Memorandum and to own, lease and operate its properties. (2) The Company has all necessary corporate power and authority to enter into and perform its obligations under the Operative Documents, and to issue, sell and deliver the Notes to the Initial Purchasers. (3) The Company is not, and after giving effect to the Offering will not be, (i) in violation of its charter or bylaws (ii) except as disclosed in the Offering Memorandum, in default in the performance of any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any other agreement, indenture or instrument, in each case known to counsel which is material to the conduct of the business of the Company, or by which the Company or its property is bound, or (iii) in violation of any local, state or federal law, statute, ordinance, rule, regulation, requirement, judgment or court decree (including, without limitation, environmental laws, statutes, ordinances, rules, regulations, judgments or court decrees) in each case under the Subject Laws (the laws of the State of New York, the laws of the State of Delaware and the laws of the United States (the "Subject Laws")), applicable to the Company, its subsidiaries or any of its assets or properties (whether owned or leased), other than violations or defaults that would not reasonably be expected to have a Material Adverse Effect. To the best knowledge of such counsel, there exists no condition that, with notice, the passage of time or otherwise, would constitute a default under any such document or instrument, except for such defaults that would not reasonably be expected -28- 30 to have a Material Adverse Effect. (4) None of (i) the execution, delivery or performance by the Company of this Agreement and the other Operative Documents and (ii) the issuance of the Notes by the Company will conflict with or constitute a breach of any of the terms or provisions of any of the terms or provisions of, or a default under, or result in the imposition of a lien or encumbrance on any properties of the Company, or an acceleration of indebtedness pursuant to, (1) the charter or bylaws of the Company, (2) to the best of its knowledge, any bond, debenture, note, indenture, mortgage, deed of trust or other agreement or instrument in each case known to such counsel and which is material in the conduct of the business of the Company, by which the Company or its property is bound, or (3) any law or administrative regulation, in each case under the Subject Laws applicable to the Company or any of its assets or properties, or, to the knowledge of such counsel, any judgment, order or decree of any court or governmental agency or authority entered in any proceeding to which The Company was or is now a party or to which any of its properties may be subject except as would not reasonably be expected to have a Material Adverse Effect. (5) This Agreement has been duly authorized and, when validly executed by the Company (assuming the due execution and delivery thereof by the Initial Purchasers) will be a legally valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that (i) such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, (whether general or specific) or similar laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally, (ii) such enforceability may be limited by the effects of general principles of equity and by the discretion of the court before which any proceeding therefor may be brought (whether such proceeding is at law or in a bankruptcy proceeding), (iii) rights to contribution or indemnification may be limited by the laws, rules or regulations or any governmental authority or agency thereof or by public policy, and (iv) waivers as to usury, stay or extension laws may be unenforceable. (6) The Company has duly authorized the Indenture, and when the Company has duly executed and delivered the Indenture (assuming the due authorization, execution and delivery thereof by the Trustee), the Indenture will be the legally valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that (i) such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, (whether general or specific) or similar laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally, (ii) such enforceability may be limited by -29- 31 the effects of general principles of equity and by the discretion of the court before which any proceeding therefor may be brought (whether such proceeding is at law or in a bankruptcy proceeding), (iii) rights to contribution or indemnification may be limited by the laws, rules or regulations or any governmental authority or agency thereof or by public policy, and (iv) waivers as to usury, stay or extension laws may be unenforceable. (7) The Company has duly authorized the Notes to be endorsed on the Senior Subordinated Notes and, when the Senior Subordinated Notes are issued and authenticated in accordance with the terms of the Indenture and delivered to and paid for by the Initial Purchasers in accordance with the terms hereof, the Notes will be the legally valid and binding obligations of The Company, enforceable against the Company in accordance with their terms, except that (i) such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, (whether general or specific) or similar laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally, (ii) such enforceability may be limited by the effects of general principles of equity and by the discretion of the court before which any proceeding therefor may be brought (whether such proceeding is at law or in a bankruptcy proceeding), (iii) rights to contribution or indemnification may be limited by the laws, rules or regulations or any governmental authority or agency thereof or by public policy, and (iv) waivers as to usury, stay or extension laws may be unenforceable. (8) The Company has duly authorized the Notes to be endorsed on the New Senior Subordinated Notes and, when the New Senior Subordinated Notes are issued and authenticated in accordance with the terms of the Registered Exchange Offer and the Indenture, the Notes will be the legally valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except that (i) such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, (whether general or specific) or similar laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally, (ii) such enforceability may be limited by the effects of general principles of equity and by the discretion of the court before which any proceeding therefor may be brought (whether such proceeding is at law or in a bankruptcy proceeding), (iii) rights to contribution or indemnification may be limited by the laws, rules or regulations or any governmental authority or agency thereof or by public policy, and (iv) waivers as to usury, stay or extension laws may be unenforceable. (9) The Registration Rights Agreement has been duly authorized and when validly executed by the Company will be (assuming the due execution and delivery thereof by the Initial Purchasers) the legally valid -30- 32 and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that (i) such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, (whether general or specific) or similar laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally, (ii) such enforceability may be limited by the effects of general principles of equity and by the discretion of the court before which any proceeding therefor may be brought (whether such proceeding is at law or in a bankruptcy proceeding), (iii) rights to contribution or indemnification may be limited by the laws, rules or regulations or any governmental authority or agency thereof or by public policy, and (iv) waivers as to usury, stay or extension laws may be unenforceable. (10) The New Credit Facility has been duly authorized and when validly executed by the Company will be the legally valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that (i) such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, (whether general or specific) or similar laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally, (ii) such enforceability may be limited by the effects of general principles of equity and by the discretion of the court before which any proceeding therefor may be brought (whether such proceeding is at law or in a bankruptcy proceeding), (iii) rights to contribution or indemnification may be limited by the laws, rules or regulations or any governmental authority or agency thereof or by public policy, and (iv) waivers as to usury, stay or extension laws may be unenforceable. (11) To the best knowledge of such counsel, there is and, after giving effect to the Combination pursuant to the terms of the Combination Agreement, will be (i) no action, suit, proceeding or investigation before or by any court, arbitrator or governmental agency, body or official, domestic or foreign, now pending, threatened, or contemplated to which the Company is or may be a party or to which the business or property of the Company is or, after giving effect to the Combination pursuant to the terms of the Combination Agreement, may be subject, (ii) no statute, rule, regulation or order that has been enacted, adopted or issued by any governmental agency or proposed by any governmental body or (iii) no injunction, restraining order or order of any nature issued by a federal or state court of competent jurisdiction to which the Company is or may be subject that, in the case of clauses (i), (ii) and (iii) above, (1) is required to be disclosed in the Offering Memorandum and that is not so disclosed, (2) might have a Material Adverse Effect or (3) would interfere with or adversely affect the issuance of the Senior Subordinated Notes or the Note Guarantees. -31- 33 (12) To the best knowledge of such counsel, there are no holders of any security of the Company who by reason of the execution by the Company of this Agreement or any other Operative Document or the consummation of the transactions contemplated hereby and thereby, have the right to request or demand that the Company register under the Act, or analogous foreign laws and regulations, securities held by them. (13) The statements under the captions "Description of Notes," "Description of Indebtedness" and "The Transactions--The Combination" in the Offering Memorandum, insofar as such statements constitute a summary of legal matters, documents or proceedings referred to therein, are correct in all material respects. (14) Neither the Company nor any of its Subsidiaries nor any agent thereof acting on the behalf of them, has taken or will take any action that might cause this Agreement or the issuance or sale of the Notes to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve System, in each case as in effect now or as the same may hereafter be in effect on the Closing Date. (15) Neither the Company nor any of its Subsidiaries is or, after giving effect to the Combination pursuant to the terms of the Combination Agreement, will be an "investment company" or a company "controlled" by an investment company within the meaning of the Investment Company Act of 1940, as amended. (16) When the Senior Subordinated Notes are issued and delivered pursuant to this Agreement, such Senior Subordinated Notes will not be of the same class (within the meaning of Rule 144A under the Act) as securities of the Company that are listed on a national securities exchange registered under Section 6 of the Exchange Act or that are quoted in a United States automated inter-dealer quotation system. (17) The Indenture is not required to be qualified under the Trust Indenture Act prior to the first to occur of (i) the Registered Exchange Offer and (ii) the effectiveness of the Shelf Registration Statement. (18) Assuming (i) that the representations and warranties of the Initial Purchasers in Section 7 hereof and those of the Company in this Agreement relating to (a) the absence of general solicitation, (b) offerings of similar securities, (c) the Company's status as an investment company and (d) whether the Senior Subordinated Notes are of the same class as other securities of the Company listed on a national securities exchange registered under Section 6 of the Exchange Act or that are quoted in a -32- 34 United States automated inter-dealer quotation system are accurate and will be complied with, (ii) that the Initial Purchasers complied with their covenants as set forth in Section 7 hereof, (iii) that none of the Eligible Purchasers is an affiliate of the Company and (iv) that each of the Eligible Purchasers is a QIB or is purchasing in a transaction pursuant to Regulation S, the purchase and resale of the Senior Subordinated Notes pursuant hereto (including pursuant to the Exempt Resales) is exempt from the registration requirements of the Act. (19) The Offering Memorandum, as of its date, and each amendment or supplement thereto, as of its date (except for the financial statement and the notes thereto and schedules and other financial, statistical and accounting data included therein, as to which such counsel expresses no opinion), complied as to form in all material respects with the requirements of Rule 144A of the Act. In addition, such counsel shall state that it has participated in conferences with representatives of the Company, representatives of the Company's accountants, the Initial Purchasers' representatives and counsel for the Initial Purchasers, at which conferences the contents of the Offering Documents and related matters were discussed, and, although such counsel has not independently verified and is not passing upon and assumes no responsibility for the accuracy, completeness or fairness of the statements contained in the Offering Documents (other than those that such counsel must opine on pursuant to Section 9(d)(l5) of this Agreement), no facts have come to such counsel's attention which led it to believe that the Offering Memorandum, on the date thereof or on the date of such opinion, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading (it being understood that such counsel need express no view with respect to the financial statements and data and related notes, the financial statement schedules and other financial, statistical and accounting data included in the Offering Documents). (e) On the Closing Date, the Initial Purchasers shall have received an opinion (satisfactory to the Initial Purchasers and counsel to the Initial Purchasers) dated the Closing Date, of Robert N. Sacks, General Counsel for the Company and the Subsidiary Guarantors. In giving such opinion, Robert N. Sacks will rely upon the opinion of Michael K. Wolf as to all matters with respect to Standard Parking, L.P., Standard Parking Corporation, Standard Parking Corporation IL, Standard Parking Corporation, MW, Standard Auto Park, Inc., Standard/Wabash Parking Corporation, Standard Parking of Canada, L.P., Standard Parking I, L.L.C. and Standard Parking II, L.L.C. Such opinion will be substantially to the effect that: (1) Each of the Company and the non-Delaware Subsidiary Guarantors (i) is, and after giving effect to the Combination pursuant to the terms of the Combination Agreement will be, duly organized and val- -33- 35 idly existing and in good standing under the laws of its jurisdiction of its organization, (ii) has, and after giving effect to the Combination pursuant to the terms of the Combination Agreement will have, all requisite corporate or comparable power and authority to carry on its business as described in the Offering Memorandum and to own, lease and operate its properties, and (iii) is, and after giving effect to the Combination pursuant to the terms of the Combination Agreement will be, duly qualified and is in good standing as a foreign business or organization authorized to do business in each jurisdiction in which the nature of its business or its ownership or leasing of property requires such qualification except where the failure to be so qualified would not reasonably be expected to have a Material Adverse Effect. (2) All of the issued and outstanding shares of capital stock or partnership interests of, or other securities evidencing equity ownership interests in, the Company and each of its Subsidiaries have been duly and validly authorized and issued, and, except otherwise disclosed in the Offering Memorandum, all of the shares of capital stock of, or other securities evidencing equity ownership interests in, each such Subsidiary are owned, directly or indirectly, by the Company. All such shares of capital stock are fully paid and non-assessable and have not been issued in violation of any preemptive or similar rights and are owned free and clear of any Lien, except for Liens granted pursuant to the New Credit Facility and except for limitations on voting rights with respect to shares of Atrium Parking, Inc. held by the Company. Except as disclosed in the Offering Memorandum, there are not currently, and will not be as a result of the Offering or the consummation of the Combination pursuant to the terms of the Combination Agreement, any outstanding subscriptions, rights, warrants, options, calls, convertible securities, commitments of sale or Liens related to or entitling any person to purchase or otherwise to acquire any shares of the capital stock of, or other securities evidencing equity ownership interests in, the Company or any of its Subsidiaries. (3) The Company has all requisite corporate power and authority to execute, deliver and perform its obligations under the Operative Documents to which it is a party, and to consummate the transactions contemplated thereby, including, without limitation, the corporate power and authority to issue, sell and deliver the Senior Subordinated Notes to the Initial Purchasers. (4) The non-Delaware Subsidiary Guarantors have all necessary corporate or comparable power and authority to enter into and perform their obligations under the Operative Documents, and to issue, sell and deliver the Note Guarantees to the Initial Purchasers. -34- 36 (5) Neither the Company nor any of its non-Delaware Subsidiary Guarantors is, and after giving effect to the Offering and the Combination pursuant to the terms of the Combination Agreement will be, (i) in violation of its charter or bylaws or partnership agreement or other organizational documents, as the case may be, (ii) except as disclosed in the Offering Memorandum, in default in the performance of any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any other agreement, indenture or instrument, in each case which is material to the conduct of the business of the Company, to which the Company is a party or by which it or any of the Company's non-Delaware Subsidiary Guarantors or their respective property is bound, or (iii) in violation of any local, state or federal law, statute, ordinance, rule, regulation, requirement, judgment or court decree (including, without limitation, environmental laws, statutes, ordinances, rules, regulations, judgments or court decrees) in each case under the laws of the State of Ohio, the laws of the State of Illinois, the laws of the State of Delaware, and the laws of the United States (the "General Counsel Subject Laws"), applicable to the Company, its non-Delaware Subsidiary Guarantors or any of its assets or properties (whether owned or leased), other than violations or defaults that could not reasonably be expected to have a Material Adverse Effect. To the best knowledge of the Company, there exists no condition that, with notice, the passage of time or otherwise, would constitute a default under any such document or instrument, except for such defaults that would not reasonably be expected to have a Material Adverse Effect. (6) None of (i) the execution, delivery or performance by the Company or the non-Delaware Subsidiary Guarantors of this Agreement and the other Operative Documents, (ii) the performance by the Company of the Combination Agreement and consummation of the Combination pursuant to the terms of the Combination Agreement, (iii) the issuance and sale of the Notes by the Company or the issuance of the Note Guarantees by the non-Delaware Subsidiary Guarantors and (iv) the consummation by the Company of the transactions described in the Offering Memorandum under the caption "Use of Proceeds," will conflict with or constitute a breach of any of the terms or provisions of, or, after giving effect to the Combination pursuant to the terms of the Combination Agreement, will violate, conflict with or constitute a breach of any of the terms or provisions of, or a default under, or result in the imposition of a lien or encumbrance on any properties of the Company or the non-Delaware Subsidiary Guarantors, as the case may be, or an acceleration of indebtedness pursuant to, (1) the respective charter or bylaws of the Company or the non-Delaware Subsidiary Guarantors, as the case may be, (2) to the best of its knowledge, any bond, debenture, note, indenture, mortgage, deed of trust or other agreement or instrument to which the Company or the non- -35- 37 Delaware Subsidiary Guarantors, as the case may be, is a party or by which any of their respective property is bound, or (3) any law or administrative regulation in each case under the General Counsel Subject Laws applicable to the Company or the non-Delaware Subsidiary Guarantors, as the case may be, or any of their assets or properties, or any judgment, order or decree of any court or governmental agency or authority entered in any proceeding to which the Company or the non-Delaware Subsidiary Guarantors, as the case may be, was or is now a party or to which any of their respective properties may be subject except as would not have a Material Adverse Effect. No consent, approval, authorization or order of, or filing or registration with, any regulatory body, administrative agency, or other governmental agency (except as securities or Blue Sky laws of the various states may require) is required for the execution, delivery and performance of the Operative Documents and the valid issuance and sale of the Securities. No consents or waivers from any person are required to consummate the transactions contemplated by the Operative Documents or the Offering Documents, other than such consents and waivers as have been or will be obtained prior to the Closing Date or, in the case of the Registration Rights Agreement and the transactions contemplated thereby, will be obtained and made under the Act, the Trust Indenture Act and state securities or Blue Sky laws and regulations. (7) This Agreement has been duly authorized and, when validly executed by the Company and the non-Delaware Subsidiary Guarantors and (assuming the due execution and delivery thereof by the Initial Purchasers) is a legally valid and binding obligation of the Company and the non-Delaware Subsidiary Guarantors, enforceable against each in accordance with its terms, except that (i) such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, (whether general or specific) or similar laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally, (ii) such enforceability may be limited by the effects of general principles of equity and by the discretion of the court before which any proceeding therefor may be brought (whether such proceeding is at law or in a bankruptcy proceeding), (iii) rights to contribution or indemnification may be limited by the laws, rules or regulations or any governmental authority or agency thereof or by public policy, and (iv) waivers as to the usury, stay or extension laws may be unenforceable. (8) The Company and the non-Delaware Subsidiary Guarantors have duly authorized the Indenture, and when the Company and the non-Delaware Subsidiary Guarantors have duly executed and delivered the Indenture (assuming the due authorization, execution and delivery thereof by the Trustee), the Indenture will be the legally valid and binding obligation of each, enforceable against each in accordance with its terms, except that -36- 38 (i) such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, (whether general or specific) or similar laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally, (ii) such enforceability may be limited by the effects of general principles of equity and by the discretion of the court before which any proceeding therefor may be brought (whether such proceeding is at law or in a bankruptcy proceeding), (iii) rights to contribution or indemnification may be limited by the laws, rules or regulations or any governmental authority or agency thereof or by public policy, and (iv) waivers as to usury, stay or extension laws may be unenforceable. (9) The Company has duly authorized the Senior Subordinated Notes and, when issued and authenticated in accordance with the terms of the Indenture and delivered to and paid for by the Initial Purchasers in accordance with the terms hereof, will be the legally valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except that (i) such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, (whether general or specific) or similar laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally, (ii) such enforceability may be limited by the effects of general principles of equity and by the discretion of the court before which any proceeding therefor may be brought (whether such proceeding is at law or in a bankruptcy proceeding), (iii) rights to contribution or indemnification may be limited by the laws, rules or regulations or any governmental authority or agency thereof or by public policy, and (iv) waivers as to the usury, stay or extension laws may be unenforceable. (10) The non-Delaware Subsidiary Guarantors have duly authorized the Note Guarantees to be endorsed on the Senior Subordinated Notes and, when the Senior Subordinated Notes are issued and authenticated in accordance with the terms of the Indenture and delivered to and paid for by the Initial Purchasers in accordance with the terms hereof, the Note Guarantees will be the legally valid and binding obligations of the non-Delaware Subsidiary Guarantors, enforceable against the non-Delaware Subsidiary Guarantors in accordance with their terms, except that (i) such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, (whether general or specific) or similar laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally, (ii) such enforceability may be limited by the effects of general principles of equity and by the discretion of the court before which any proceeding therefor may be brought (whether such proceeding is at law or in a bankruptcy proceeding), (iii) rights to contribution or indemnification may be limited by the laws, rules or regulations or any governmental authority or agency thereof or by -37- 39 public policy, and (iv) waivers as to the usury, stay or extension laws may be unenforceable. (11) The Company has duly authorized the New Senior Subordinated Notes and, when issued and authenticated in accordance with the terms of the Registered Exchange Offer and the Indenture, the New Senior Subordinated Notes will be the legally valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except that (i) such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, (whether general or specific) or similar laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally, (ii) such enforceability may be limited by the effects of general principles of equity and by the discretion of the court before which any proceeding therefor may be brought (whether such proceeding is at law or in a bankruptcy proceeding), (iii) rights to contribution or indemnification may be limited by the laws, rules or regulations or any governmental authority or agency thereof or by public policy, and (iv) waivers as to usury, stay or extension laws may be unenforceable. (12) The non-Delaware Subsidiary Guarantors have duly authorized the Note Guarantees to be endorsed on the New Senior Subordinated Notes and, when the New Senior Subordinated Notes are issued and authenticated in accordance with the terms of the Registered Exchange Offer and the Indenture, the Note Guarantees will be the legally valid and binding obligations of the non-Delaware Subsidiary Guarantors, enforceable against the non-Delaware Subsidiary Guarantors in accordance with their terms, except that (i) such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, (whether general or specific) or similar laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally, (ii) such enforceability may be limited by the effects of general principles of equity and by the discretion of the court before which any proceeding therefor may be brought (whether such proceeding is at law or in a bankruptcy proceeding), (iii) rights to contribution or indemnification may be limited by the laws, rules or regulations or any governmental authority or agency thereof or by public policy, and (iv) waivers as to the usury, stay or extension laws may be unenforceable. (13) The Registration Rights Agreement has been duly authorized and when validly executed by the Company and the non-Delaware Subsidiary Guarantors will be (assuming the due execution and delivery thereof by the Initial Purchasers) the legally valid and binding obligation of each, enforceable against each in accordance with its terms, except that (i) such enforceability may be limited by bankruptcy, insolvency, fraudu- -38- 40 lent conveyance, reorganization, moratorium, (whether general or specific) or similar laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally, (ii) such enforceability may be limited by the effects of general principles of equity and by the discretion of the court before which any proceeding therefor may be brought (whether such proceeding is at law or in a bankruptcy proceeding), (iii) rights to contribution or indemnification may be limited by the laws, rules or regulations or any governmental authority or agency thereof or by public policy, and (iv) waivers as to the usury, stay or extension laws may be unenforceable. (14) The Combination Agreement has been duly and validly authorized by the Company and is a legally valid and binding agreement of the Company, enforceable against it in accordance with its terms, except that (i) such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, (whether general or specific) or similar laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally, (ii) such enforceability may be limited by the effects of general principles of equity and by the discretion of the court before which any proceeding therefor may be brought (whether such proceeding is at law or in a bankruptcy proceeding), (iii) rights to contribution or indemnification may be limited by the laws, rules or regulations or any governmental authority or agency thereof or by public policy, and (iv) waivers as to the usury, stay or extension laws may be unenforceable. (15) The New Credit Facility has been duly authorized and when validly executed by the Company and the subsidiaries of the Company that are obligors thereunder will be the legally valid and binding obligation of each, enforceable against each in accordance with its terms, except that (i) such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, (whether general or specific) or similar laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally, (ii) such enforceability may be limited by the effects of general principles of equity and by the discretion of the court before which any proceeding therefor may be brought (whether such proceeding is at law or in a bankruptcy proceeding), (iii) rights to contribution or indemnification may be limited by the laws, rules or regulations or any governmental authority or agency thereof or by public policy, and (iv) waivers as to usury, stay or extension laws may be unenforceable. (16) To the best knowledge of such counsel, there is and, after giving effect to the Combination pursuant to the terms of the Combination Agreement, will be (i) no action, suit, proceeding or investigation before or by any court, arbitrator or governmental agency, body or official, do- -39- 41 mestic or foreign, now pending, threatened, or, to the knowledge of the Company, contemplated to which the Company or the non-Delaware Subsidiary Guarantors is or may be a party or to which the business or property of the Company or the non-Delaware Subsidiary Guarantors is or, after giving effect to the Combination pursuant to the terms of the Combination Agreement, may be subject, (ii) no statute, rule, regulation or order that has been enacted, adopted or issued by any governmental agency or, to the best knowledge of the Company, proposed by any governmental body or (iii) no injunction, restraining order or order of any nature issued by a federal or state court of competent jurisdiction to which the Company or the non-Delaware Subsidiary Guarantors is or may be subject that, in the case of clauses (i), (ii) and (iii) above, (1) is required to be disclosed in the Offering Memorandum and that is not so disclosed, (2) might have a Material Adverse Effect or (3) would interfere with or adversely affect the issuance of the Senior Subordinated Notes or the Note Guarantees. (17) To the best knowledge of such counsel, there are no holders of any security of the Company or the non-Delaware Subsidiary Guarantors who by reason of the execution by the Company and the non-Delaware Subsidiary Guarantors of this Agreement or any other Operative Document or the consummation of the transactions contemplated hereby and thereby, have the right to request or demand that the Company or the non-Delaware Subsidiary Guarantors register under the Act, or analogous foreign laws and regulations, securities held by them. (18) The statements under the captions "The Business - Litigation" in the Offering Memorandum, insofar as such statements constitute a summary of legal matters, documents or proceedings referred to therein, are correct in all material respects. In addition, such counsel shall state that he has participated in conferences with representatives of the Company, representatives of the Company's accountants, the Initial Purchasers' representatives and counsel for the Initial Purchasers, at which conferences the contents of the Offering Documents and related matters were discussed, and, although such counsel has not independently verified and is not passing upon and assumes no responsibility for the accuracy, completeness or fairness of the statements contained in the Offering Documents, no facts have come to such counsel's attention which led him to believe that the Offering Memorandum, on the date thereof or on the date of such opinion, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading (it being understood that such counsel need express no view with respect to the financial statements and data and related notes, the financial statement schedules and other financial, statistical and accounting data included in the Offering Documents). -40- 42 (f) The Initial Purchasers shall have received on the Closing Date an opinion, dated the Closing Date, of Latham & Watkins, in form and substance satisfactory to the Initial Purchasers. (g) The Initial Purchasers shall have received customary comfort letters from (i) Ernst & Young LLP, independent public accountants for the Company and (ii) Altschuler, Melvoin and Glasser, LLP, independent public accountants for Standard, in each case, dated as of the date of this Agreement and as of the Closing Date, in form and substance satisfactory to the Initial Purchasers and counsel to the Initial Purchasers, with respect to the financial statements and certain financial information contained in the Offering Memorandum. (h) The Company, the Subsidiary Guarantors and the Trustee shall have entered into the Indenture and the Initial Purchasers shall have received counterparts, conformed as executed, thereof. (i) The Company, the Subsidiary Guarantors and the Initial Purchasers shall have entered into the Registration Rights Agreement for the benefit of the Initial Purchasers and the benefit of the other purchasers, in the form attached hereto as Exhibit A, and the Initial Purchasers shall have received counterparts, conformed as executed, thereof. (j) The Company shall have entered into the New Credit Facility (the form and substance of which shall be acceptable to the Initial Purchasers) and the Initial Purchasers shall have received counterparts, conformed as executed thereof and of all other documents and agreements entered into in connection therewith. (k) The Company shall have fully performed or complied with any of the agreements herein contained and required to be performed or complied with by the Company on or prior to the Closing Date. (l) Latham & Watkins shall have been furnished with such documents and opinions, in addition to those set forth above, as they may reasonably require for the purpose of enabling them to review or pass upon the matters referred to in this Section 9 and in order to evidence the accuracy, completeness or satisfaction in all material respects of any of the representations, warranties or conditions herein contained. 10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. (a) This Agreement shall become effective upon the execution and delivery of this Agreement by the parties hereto. This Agreement may be terminated at any time on or prior to the Closing Date by the Initial Purchasers by written notice to the Company if any of the following has occurred: (i) any outbreak or escalation of hostilities or other national or international calamity or crisis or -41- 43 change in economic conditions or in the financial markets of the United States or elsewhere that, in the Initial Purchasers' judgment, is material and adverse and, in the Initial Purchasers' judgment, makes it impracticable to market the Senior Subordinated Notes on the terms and in the manner contemplated in the Offering Memorandum, (ii) the suspension or material limitation of trading in securities or other instruments on the New York Stock Exchange, the American Stock Exchange, the Chicago Board of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or the Nasdaq National Market or limitation on prices for securities or other instruments on any such exchange or the Nasdaq National Market, (iii) the suspension of trading of any securities of the Company or any Guarantor on any exchange or in the over-the-counter market, (iv) the enactment, publication, decree or other promulgation of any federal or state statute, regulation, rule or order of any court or other governmental authority which in your the Initial Purchasers' reasonable opinion materially and adversely affects, or will materially and adversely affect, the business, prospects, financial condition or results of operations of the Company and its subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by either federal or New York State authorities or (vi) the taking of any action by any federal, state or local government or agency in respect of its monetary or fiscal affairs which in the Initial Purchasers' reasonable opinion has a material adverse effect on the financial markets in the United States. (b) If on the Closing Date, any of the Initial Purchasers shall fail or refuse to purchase Senior Subordinated Notes which it has agreed to purchase hereunder on such date, and the aggregate principal amount of such Senior Subordinated Notes that such defaulting Initial Purchaser agreed but failed or refused to purchase does not exceed 10% of the total principal amount of such Senior Subordinated Notes that all of the Initial Purchasers are obligated to purchase on such Closing Date, the non-defaulting Initial Purchasers shall be obligated to purchase the Senior Subordinated Notes that such defaulting Initial Purchasers agreed but failed or refused to purchase on such date. If, on the Closing Date, any of the Initial Purchasers shall fail or refuse to purchase Senior Subordinated Notes in an aggregate principal amount that exceeds 10% of such total principal amount of the Senior Subordinated Notes and arrangements satisfactory to the other Initial Purchasers and the Company for the purchase of such Senior Subordinated Notes are not made within 48 hours after such default, this Agreement shall terminate without liability on the part of the non-defaulting Initial Purchasers or the Company, except as otherwise provided in this Section 10. In any such case that does not result in termination of this Agreement, the Initial Purchasers or the Company may postpone the Closing Date for not longer than seven days, in order that the required changes, if any, in the Offering Memorandum or any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve a defaulting Initial Purchaser from liability in respect of any default by any such Initial Purchaser under this Agreement. 11. AGREEMENT OF THE INITIAL PURCHASERS. The Initial Purchasers agree, severally and not jointly, that upon their receipt of any written notice from the Company of the existence of any fact or the happening of any event that requires the making of any additions to or changes in any offering memorandum, registration statement or prospectus, or amendment or supplement thereto, referred to in Section 5(d) hereof in order that such document will not contain any untrue statement of a material fact or omission -42- 44 to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing as of the date such document was delivered, not misleading, such Initial Purchasers shall forthwith discontinue disposition of the applicable Notes pursuant to such document until (i) such Initial Purchasers receive from the Company copies of an amended or supplemented document that the Company states in writing may be used by such Initial Purchasers or (ii) such Initial Purchasers are advised in writing by the Company that the use of such document may be resumed. 12. MISCELLANEOUS. (a) Notices given pursuant to any provision of this Agreement shall be addressed as follows: (i) if to the Company, to APCOA, Inc., 800 Superior Avenue, Cleveland, Ohio 44114, Attention: General Counsel and (ii) if to the Initial Purchasers, to Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New York, New York 10172, Attention: Syndicate Department, and (iii) if to the Initial Purchasers pursuant to Section 11 hereof, (A) to Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New York, New York 10172, Attention: Syndicate Department & Compliance Department and (B) to First Chicago Capital Markets, Inc., 611 Woodward, 2nd Floor, Detroit, Michigan 48226, Attention: Syndicate Department & Compliance Department or in any case to such other address as the person to be notified may have requested in writing. (b) The respective indemnities, contribution agreements, representations, warranties and other statements set forth in or made pursuant to this Agreement shall remain operative and in full force and effect, and will survive delivery of and payment for the Senior Subordinated Notes, regardless of (i) any investigation, or statement as to the results thereof, made by or on behalf of any such person, (ii) acceptance of the Senior Subordinated Notes and payment for them hereunder and (iii) termination of this Agreement. (c) Except as otherwise provided, this Agreement has been and is made solely for the benefit of and shall be binding upon the Company, the Subsidiary Guarantors, the Initial Purchasers, any controlling persons referred to herein and their respective successors and assigns, all as and to the extent provided in this Agreement, and no other person shall acquire or have any right under or by virtue of this Agreement. The term "successors and assigns" shall not include a purchaser of any of the Senior Subordinated Notes from any of the Initial Purchasers merely because of such purchase. (d) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK. -43- 45 (e) This Agreement may be signed in various counterparts which together shall constitute one and the same instrument. Please confirm that the foregoing correctly sets forth the agreement between the Company, the Subsidiary Guarantors and the Initial Purchasers. (f) In any provision hereunder purporting to give effect to the Combination, such statements are made with respect to facts known as of the date hereof (and not future events other than the consummation of the Combination) and are meant only to account for consummation of the Combination in accordance with the terms of the Combination Agreement. (g) All representations and warranties hereunder made by the Company or the Subsidiary Guarantors, and the opinions of Wachtell, Lipton, Rosen & Katz and Robert N. Sacks are qualified by the information contained in the Preliminary Offering Memorandum and the Offering Memorandum. [signature pages follow] -44- 46 Very truly yours, APCOA, INC. By: /s/ Michael J. Celebrezze ---------------------------------- Name: Michael J. Celebrezze Title: Senior Vice President, Chief Financial Officer Treasurer TOWER PARKING, INC. By: /s/ Michael J. Celebrezze ---------------------------------- Name: Michael J. Celebrezze Title: Vice President, Treasurer GRAELIC, INC. By: /s/ Michael J. Celebrezze ---------------------------------- Name: Michael J. Celebrezze Title: Vice President, Treasurer APCOA CAPITAL CORPORATION By: /s/ Michael J. Celebrezze ---------------------------------- Name: Michael J. Celebrezze Title: Vice President, Treasurer -45- 47 A-1 AUTO PARK, INC. By: /s/ Michael J. Celebrezze ---------------------------------- Name: Michael J. Celebrezze Title: Vice President, Treasurer METROPOLITAN PARKING SYSTEM, INC. By: /s/ Michael J. Celebrezze ---------------------------------- Name: Michael J. Celebrezze Title: Treasurer EVENTS PARKING CO., INC. By: /s/ Michael J. Celebrezze ---------------------------------- Name: Michael J. Celebrezze Title: Treasurer -46- 48 STANDARD PARKING, L.P. By: /s/ Myron C. Warshauer ---------------------------------- Name: Myron C. Warshauer Title: President STANDARD PARKING CORPORATION By: /s/ Myron C. Warshauer ---------------------------------- Name: Myron C. Warshauer Title: President STANDARD PARKING CORPORATION, IL By: /s/ Myron C. Warshauer ---------------------------------- Name: Myron C. Warshauer Title: President STANDARD PARKING CORPORATION, MW By: /s/ Myron C. Warshauer ---------------------------------- Name: Myron C. Warshauer Title: President -47- 49 STANDARD AUTO PARK, INC. By: /s/ Myron C. Warshauer ---------------------------------- Name: Myron C. Warshauer Title: President STANDARD/WABASH PARKING CORPORATION By: /s/ Myron C. Warshauer ---------------------------------- Name: Myron C. Warshauer Title: President STANDARD PARKING OF CANADA By: /s/ Myron C. Warshauer ---------------------------------- Name: Myron C. Warshauer Title: President of Standard Parking Corporation, General Partner of Standard Parking of Canada, L.P. STANDARD PARKING I, L.L.C. By: /s/ Myron C. Warshauer ---------------------------------- Name: Myron C. Warshauer Title: President of Standard Parking Corporation, Managing Member of Standard Parking I, L.L.C. -48- 50 STANDARD PARKING II, L.L.C. By: /s/ Myron C. Warshauer ---------------------------------- Name: Myron C. Warshauer Title: President of Standard Parking Corporation, Managing Member of Standard Parking II, L.L.C. -49- 51 The foregoing Purchase Agreement is hereby confirmed and accepted as of the date first above written by Donaldson, Lufkin & Jenrette Se- curities Corporation on behalf of the Initial Purchasers. DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION By: /s/ Timothy White ------------------------------- Name: Timothy White Title: Vice President -50- 52 SCHEDULE I Subsidiary Guarantors Tower Parking, Inc. Graelic, Inc. APCOA Capital Corporation A-1 Auto Park, Inc. Metropolitan Parking System, Inc. Events Parking Co., Inc. Standard Parking, L.P. Standard Parking Corporation Standard Parking Corporation, IL Standard Parking Corporation, MW Standard Auto Park, Inc. Standard/Wabash Parking Corporation Standard Parking of Canada, L.P. Standard Parking I, L.L.C. Standard Parking II, L.L.C. -51- 53 SCHEDULE II Donaldson, Lufkin & Jenrette Securities Corporation................. First Chicago Capital Markets, Inc.................................. -52- 54 EXHIBIT A Form of Registration Rights Agreement -53- EX-2.1 3 COMBINATION AGREEMENT 1 Exhibit 2.1 ============================================================================== COMBINATION AGREEMENT by and among THE STANDARD OWNERS NAMED ON THE SIGNATURE PAGES HERETO and APCOA, INC. dated as of January 15, 1998 ============================================================================== 2 TABLE OF CONTENTS Page Number ------ ARTICLE I Certain Definitions Section 1.1. "Accounting Firm".......................................... 1 Section 1.2. "Action"................................................... 1 Section 1.3. "Affiliate"................................................ 1 Section 1.4. "Agreement"................................................ 2 Section 1.5. "AMG"...................................................... 2 Section 1.6. "Antitrust Laws"........................................... 2 Section 1.7. "APCOA".................................................... 2 Section 1.8. "APCOA Affiliated Group"................................... 2 Section 1.9. "APCOA Balance Sheet"...................................... 2 Section 1.10. "APCOA Business Condition"................................. 2 Section 1.11. "APCOA Common Stock"....................................... 2 Section 1.12. "APCOA Damages"............................................ 2 Section 1.13. "APCOA Financial Statements"............................... 2 Section 1.14. "APCOA Income Statement"................................... 2 Section 1.15. "APCOA Indemnitees"........................................ 2 Section 1.16. "APCOA Leased Real Property"............................... 2 Section 1.17. "APCOA Leases"............................................. 2 Section 1.18. "APCOA Licenses ".......................................... 2 Section 1.19. "APCOA Preferred Stock".................................... 3 Section 1.20. "APCOA Statement of Cash Flows"............................ 3 Section 1.21. "APCOA's Warranty Period".................................. 3 Section 1.22. "Audited 1997 APCOA Financial Statements".................. 3 Section 1.23. "Audited 1997 Standard Financial Statements"............... 3 Section 1.24. "Audited Standard Financial Statements".................... 3 Section 1.25. "Basket"................................................... 3 Section 1.26. "Century".................................................. 3 Section 1.27. "Claims"................................................... 3 Section 1.28. "Closing".................................................. 3 Section 1.29. "Closing Date"............................................. 3 Section 1.30. "Code"..................................................... 3 Section 1.31. "Combination".............................................. 3 Section 1.32. "Company Employee Benefit Plans"........................... 3 Section 1.33. "Consulting Agreement"..................................... 3 Section 1.34. "CTC"...................................................... 3 Section 1.35. "Current Employees"........................................ 4 -i- 3 Page Number ------ Section 1.36. "Distribution Amount"...................................... 4 Section 1.37. "Due Diligence Agreement".................................. 4 Section 1.38. "Due Diligence Out Termination Date"....................... 4 Section 1.39. "Employee Benefit Plans"................................... 4 Section 1.40. "Employees"................................................ 4 Section 1.41. "Employment Agreement"..................................... 4 Section 1.42. "Encumbrances"............................................. 4 Section 1.43. "Environmental Law"........................................ 4 Section 1.44. "ERISA".................................................... 4 Section 1.45. "ERISA Affiliate".......................................... 4 Section 1.46. "Escrow Agent"............................................. 4 Section 1.47. "Escrow Agreement"......................................... 4 Section 1.48. "Escrowed Amount".......................................... 4 Section 1.49. "Estimated DA Statement"................................... 4 Section 1.50. "Estimated Distribution Amount"............................ 5 Section 1.51. "Excluded Assets".......................................... 5 Section 1.52. "Final DA Statement"....................................... 5 Section 1.53. "Former Employees"......................................... 5 Section 1.54. "FY 1997".................................................. 5 Section 1.55. "Government Authority"..................................... 5 Section 1.56. "Guarantee"................................................ 5 Section 1.57. "Historical Standard Balance Sheet"........................ 5 Section 1.58. "Historical Standard Financial Statements"................. 5 Section 1.59. "Historical Standard Income Statement"..................... 5 Section 1.60. "Historical Standard Statement of Cash Flows".............. 5 Section 1.61. "Holberg".................................................. 5 Section 1.62. "HSR Act".................................................. 5 Section 1.63. "Indemnified Party"........................................ 5 Section 1.64. "Indemnifying Party"....................................... 5 Section 1.65. "Initial DA Statement"..................................... 5 Section 1.66. "IPO"...................................................... 6 Section 1.67. "IRS"...................................................... 6 Section 1.68. "Letter Agreement"......................................... 6 Section 1.69. "Management Contracts"..................................... 6 Section 1.70. "Multiemployer Plan"....................................... 6 Section 1.71. "Notice of Disagreement"................................... 6 Section 1.72. "Parties".................................................. 6 Section 1.73. "Pension Plan"............................................. 6 Section 1.74. "Permitted Debt"........................................... 6 Section 1.75. "Permitted Encumbrance".................................... 6 Section 1.76. "person"................................................... 6 Section 1.77. "Purchase Price"........................................... 7 Section 1.78. "Returns".................................................. 7 Section 1.79. "Schedules Date"........................................... 7 -ii- 4 Page Number ------ Section 1.80. "Special Management Contracts"............................. 7 Section 1.81. "Standard Advisors Fee".................................... 7 Section 1.82. "Standard Affiliated Group"................................ 7 Section 1.83. "Standard APCOA Shares".................................... 7 Section 1.84. "Standard Business"........................................ 7 Section 1.85. "Standard Business Condition".............................. 7 Section 1.86. "Standard Companies"....................................... 7 Section 1.87. "Standard Interests"....................................... 7 Section 1.88. "Standard Leased Real Property"............................ 7 Section 1.89. "Standard Leases".......................................... 7 Section 1.90. "Standard Licenses"........................................ 7 Section 1.91. "Standard Owners".......................................... 7 Section 1.92. "Standard Owners Damages".................................. 7 Section 1.93. "Standard Owners Indemnitees".............................. 8 Section 1.94. "Standard Owners' Warranty Period"......................... 8 Section 1.95. "Standard Transferred Companies"........................... 8 Section 1.96. "Stockholders Agreement"................................... 8 Section 1.97. "Subsidiary"............................................... 8 Section 1.98. "Taxes".................................................... 8 Section 1.99. "Taxing Authority"......................................... 8 Section 1.100. "338 Election"............................................ 8 Section 1.101. "to the knowledge of APCOA"............................... 8 Section 1.102. "to the knowledge of Standard Owners and the Standard Companies".................................. 8 Section 1.103. "Withdrawal Liability".................................... 8 ARTICLE II Transfer of Standard Interests; Closing Section 2.1. Combination and Transfer................................... 8 Section 2.2. Consideration.............................................. 9 Section 2.3. Time and Place of Closing.................................. 9 Section 2.4. Closing Distribution Amount................................ 10 ARTICLE III Representations and Warranties of Standard Owners Section 3.1. Incorporation; Authorization; Etc.......................... 12 Section 3.2. Capitalization............................................. 13 Section 3.3. Financial Statements....................................... 14 Section 3.4. Undisclosed Liabilities.................................... 15 Section 3.5. Properties................................................. 15 -iii- 5 Page Number ------ Section 3.6. Personal Property.......................................... 16 Section 3.7. Absence of Certain Changes................................. 17 Section 3.8. Litigation; Orders......................................... 17 Section 3.9. Intellectual Property...................................... 17 Section 3.10. Licenses, Approvals, Other Authorizations, Consents, Reports, Etc................................... 17 Section 3.11. Labor Matters.............................................. 18 Section 3.12. Compliance with Laws....................................... 19 Section 3.13. Insurance.................................................. 19 Section 3.14. Material Contracts......................................... 19 Section 3.15. Management Contracts....................................... 19 Section 3.16. Brokers, Finders, Etc...................................... 20 Section 3.17. Hazardous Materials........................................ 20 Section 3.18. Knowledge Regarding Representations........................ 21 Section 3.19. Acquisition of Shares for Investment....................... 21 ARTICLE IV Representations and Warranties of APCOA Section 4.1. Incorporation; Authorization; Etc.......................... 21 Section 4.2. Capitalization............................................. 22 Section 4.3. Financial Statements....................................... 23 Section 4.4. Undisclosed Liabilities.................................... 23 Section 4.5. Properties................................................. 23 Section 4.6. Personal Property.......................................... 24 Section 4.7. Absence of Certain Changes................................. 25 Section 4.8. Litigation; Orders......................................... 25 Section 4.9. Intellectual Property...................................... 25 Section 4.10. Licenses, Approvals, Other Authorizations, Consents, Reports, Etc................................... 25 Section 4.11. Labor Matters.............................................. 26 Section 4.12. Compliance with Laws....................................... 26 Section 4.13. Insurance.................................................. 26 Section 4.14. Material Contracts......................................... 26 Section 4.15. Management Contracts....................................... 27 Section 4.16. Brokers, Finders, Etc...................................... 27 Section 4.17. Hazardous Materials........................................ 28 Section 4.18. Knowledge Regarding Representations........................ 28 -iv- 6 Page Number ------ ARTICLE V Covenants of Standard Owners and APCOA Section 5.1 Investigation of Business; Access to Properties and Records, Etc.............................. 28 Section 5.2. Efforts; Obtaining Consents; Antitrust Laws................ 29 Section 5.3. Further Assurances......................................... 29 Section 5.4. Conduct of Business........................................ 29 Section 5.5. Public Announcements....................................... 31 Section 5.6. Financial Statements....................................... 32 Section 5.7. Schedules.................................................. 32 ARTICLE VI Employee Benefits Section 6.1. Employee Benefit Plans..................................... 33 ARTICLE VII Tax Matters Section 7.1. Standard Tax Returns....................................... 34 Section 7.2. APCOA Tax Returns.......................................... 36 Section 7.3. Definitions................................................ 38 Section 7.4. Section 338(h)(10)......................................... 38 Section 7.5. Section 754 Election....................................... 39 Section 7.6. Survival................................................... 39 ARTICLE VIII Conditions of APCOA's Obligation to Close Section 8.1. Representations, Warranties and Covenants of Standard Owners.......................................... 39 Section 8.2. Filings; Consents; Waiting Periods......................... 39 Section 8.3. No Injunction.............................................. 39 Section 8.4. Other Agreements........................................... 39 Section 8.5. Financing.................................................. 40 -v- 7 Page Number ------ ARTICLE IX Conditions to Standard Owners' Obligation to Close Section 9.1. Representations, Warranties and Covenants of APCOA.................................................... 40 Section 9.2. Filings; Consents; Waiting Periods......................... 40 Section 9.3. No Injunction.............................................. 40 Section 9.4. Other Agreements........................................... 40 ARTICLE X Escrow Section 10.1 Escrowed Amount............................................ 41 Section 10.2 Designee................................................... 41 ARTICLE XI Survival; Indemnification Section 11.1. Survival of Standard Owners' Representations............... 41 Section 11.2. Indemnification by Standard Owners......................... 42 Section 11.3. Survival of APCOA's Representations........................ 43 Section 11.4. Indemnification by APCOA................................... 43 Section 11.5. Conditions of Indemnification.............................. 44 Section 11.6. Indemnification Sole Remedy................................ 45 ARTICLE XII Termination Section 12.1. Termination................................................ 45 Section 12.2. Procedure and Effect of Termination........................ 46 ARTICLE XIII Miscellaneous Section 13.1. Counterparts............................................... 47 Section 13.2. Governing Law; Jurisdiction and Forum...................... 47 Section 13.3. Entire Agreement; Third-Party Beneficiary.................. 48 Section 13.4. Expenses................................................... 48 Section 13.5. Notices.................................................... 48 Section 13.6. Successors and Assigns..................................... 50 Section 13.7. Headings; Definitions...................................... 50 -vi- 8 Page Number ------ Section 13.8. Amendments and Waivers..................................... 50 Section 13.9. Interpretation; Absence of Presumption..................... 50 Section 13.10. Severability............................................. 51 -vii- 9 SCHEDULES Schedule 1.53 Excluded Assets Schedule 2.2 Allocation of Consideration Schedule 3.1(b) Standard Owners Violations Schedule 3.2 Standard Capitalization Schedule 3.3(a) Standard Financial Statements Schedule 3.3(d) Standard Transactions with Affiliates of Standard Owners Schedule 3.4 Standard Undisclosed Liabilities Schedule 3.5(a) Standard Properties Schedule 3.5(b) Standard Improvements Schedule 3.6 Standard Personal Property Schedule 3.7 Standard Conduct of Business Since October 31, 1997 Schedule 3.8 Standard Litigation; Orders Schedule 3.9 Standard Intellectual Property Schedule 3.10(a) Standard Government Licenses, etc. Schedule 3.10(b) Standard Consents, etc. Schedule 3.11 Standard Labor Matters Schedule 3.12 Standard Compliance with Laws Schedule 3.13 Standard Insurance Schedule 3.14 Standard Contracts Schedule 3.15 Standard Management Contracts Schedule 3.17 Standard Hazardous Materials Schedule 4.1(b) APCOA Owners Violations Schedule 4.2 APCOA Capitalization Schedule 4.3(a) APCOA Financial Statements -viii- 10 Schedule 4.3(d) APCOA Transactions with Affiliates Schedule 4.4 APCOA Undisclosed Liabilities Schedule 4.5(a) APCOA Properties Schedule 4.5(b) APCOA Improvements Schedule 4.6 APCOA Personal Property Schedule 4.7 APCOA Conduct of Business Since September 30, 1997 Schedule 4.8 APCOA Litigation; Orders Schedule 4.9 APCOA Intellectual Property Schedule 4.10(a) APCOA Government Licenses, etc. Schedule 4.10(b) APCOA Consents, etc. Schedule 4.11 APCOA Labor Matters Schedule 4.12 APCOA Compliance with Laws Schedule 4.13 APCOA Insurance Schedule 4.14 APCOA Contracts Schedule 4.15 APCOA Management Contracts Schedule 4.17 APCOA Hazardous Materials Schedule 5.1(a) Amended and Restated Due Diligence Agreement Schedule 5.4(a) Standard Conduct of Business Schedule 5.4(b) APCOA Conduct of Business Schedule 6.1(a) Employee Benefit Plans Schedule 6.1(f) Multiemployer Plans Schedule 7.1(c) Standard Affiliated Groups Schedule 7.1(d) Standard Tax Liens, Assertions and Unresolved Disputes Schedule 7.2(c) APCOA Tax Liens, Assertions and Unresolved Disputes Schedule 7.4 Allocation Schedule -ix- 11 Schedule 11.2(a) Percentages for Standard Owners Several Liability Schedule 13.9S Persons Whose Actual Knowledge Constitutes Knowledge of Standard Owners and the Standard Companies Schedule 13.9A Persons Whose Actual Knowledge Constitutes Knowledge of APCOA -x- 12 EXHIBITS Exhibit A Form of Stockholders Agreement Exhibit B Form of Escrow Agreement Exhibit C Form of Employment Agreement Exhibit D Form of Consulting Agreement -xi- 13 This COMBINATION AGREEMENT (this "Agreement"), dated as of January 15, 1998, is by and among Myron C. Warshauer, Stanley Warshauer, Steven A. Warshauer, Dosher Partners, L.P., a Delaware limited partnership, SP Parking Associates, an Illinois general partnership, and SP Associates, an Illinois general partnership (collectively, "Standard Owners"), and APCOA, Inc., a Delaware corporation ("APCOA" and, together with Standard Owners, the "Parties"). WHEREAS, Standard Owners are engaged through the Standard Companies in the operation of various parking businesses (excluding the business related to the Excluded Assets, the "Standard Business"), the operations of which are reflected in the Historical Standard Financial Statements; and WHEREAS, Standard Owners wish to sell, convey and transfer to APCOA, and APCOA wishes to purchase, acquire and receive from Standard Owners, the Standard Interests, upon the terms and subject to the conditions set forth herein; NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows: ARTICLE I Certain Definitions As used in this Agreement, the following terms shall have the following respective meanings: Section 1.1. "Accounting Firm" shall mean KPMG Peat Marwick LLP, or if such firm is unable or unwilling to undertake the responsibilities required of the Accounting Firm hereunder, or has any material relationship with any Party, such other nationally recognized independent public accounting firm as shall be agreed upon by the Parties in writing. Section 1.2. "Action" shall mean any actual or threatened action, suit, arbitration, inquiry, proceeding or investigation. Section 1.3. "Affiliate" (and, with a correlative meaning, "Affiliated") shall mean, with respect to any person, any other person that directly, or through one or more intermediaries, controls or is controlled by or is under common control with such person, and, if such a person is an individual, any member of the immediate family (including parents, spouse and children) of such individual and any trust whose principal beneficiary is such individual or one or more members of such immediate family and any person who is controlled by any such member or trust. As used in this definition, "control" (including, with correlative meanings, "controlled by" and "under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise). 14 Section 1.4. "Agreement" shall have the meaning set forth in the first paragraph hereof. Section 1.5. "AMG" shall have the meaning set forth in Section 2.4. Section 1.6. "Antitrust Laws" shall mean and include the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended, and all other federal, state, foreign and multinational (including European Community) statutes, rules, regulations, orders, decrees, administrative and judicial doctrines, and other laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade. Section 1.7. "APCOA" shall have the meaning set forth in the first paragraph hereof. Section 1.8. "APCOA Affiliated Group" shall have the meaning set forth in Section 7.2(a). Section 1.9. "APCOA Balance Sheet" shall have the meaning set forth in Section 4.3(b). Section 1.10. "APCOA Business Condition" shall mean the assets, properties, operations, business, prospects or financial condition of APCOA's business taken as a whole. Section 1.11. "APCOA Common Stock" shall have the meaning set forth in Section 4.2. Section 1.12. "APCOA Damages" shall have the meaning set forth in Section 11.2(a). Section 1.13. "APCOA Financial Statements" shall have the meaning set forth in Section 4.3(a). Section 1.14. "APCOA Income Statement" shall have the meaning set forth in Section 4.3(b). Section 1.15. "APCOA Indemnitees" shall have the meaning set forth in Section 11.2(a). Section 1.16. "APCOA Leased Real Property" shall have the meaning set forth in Section 4.5(a). Section 1.17. "APCOA Leases" shall have the meaning set forth in Section 4.5(a). Section 1.18. "APCOA Licenses" shall have the meaning set forth in Section 4.10(a). -2- 15 Section 1.19. "APCOA Preferred Stock" shall have the meaning set forth in Section 4.2. Section 1.20. "APCOA Statement of Cash Flows" shall have the meaning set forth in Section 4.3(b). Section 1.21. "APCOA's Warranty Period" shall have the meaning set forth in Section 11.3. Section 1.22. Audited 1997 APCOA Financial Statements" shall have the meaning set forth in Section 5.6(b). Section 1.23. "Audited 1997 Standard Financial Statements" shall have the meaning set forth in Section 5.6(a). Section 1.24. "Audited Standard Financial Statements" shall have the meaning set forth in Section 5.6(a). Section 1.25. "Basket" shall have the meaning set forth in Section 11.2(b). Section 1.26. "Century" shall mean Century Parking Inc. and its affiliated entities. Section 1.27. "Claims" shall have the meaning set forth in Section 11.5. Section 1.28. "Closing" (and, with a correlative meaning, "Close") shall mean the consummation of the Combination. Section 1.29. "Closing Date" shall mean the date which is three days from the date on which the conditions set forth in Articles VIII and IX shall be satisfied or duly waived, or, if the Parties agree on a different date, the date upon which they have mutually agreed. Section 1.30. "Code" shall mean the Internal Revenue Code of 1986, as amended, and any successor thereto. Section 1.31. "Combination" shall mean the consummation of the transactions described in Section 2.1. Section 1.32. "Company Employee Benefit Plans" shall have the meaning set forth in Section 6.1(a). Section 1.33. "Consulting Agreement" shall mean the Consulting Agreement by and between APCOA and Sidney Warshauer in the form attached as Exhibit D to be dated as of the Closing Date. Section 1.34. "CTC" shall have the meaning set forth in Section 13.2(c). -3- 16 Section 1.35. "Current Employees" shall have the meaning set forth in Section 6.1(a). Section 1.36. "Distribution Amount" shall have the meaning set forth in Section 2.4(c). Section 1.37. "Due Diligence Agreement" shall have the meaning set forth in Section 5.1. Section 1.38. "Due Diligence Out Termination Date" shall have the meaning set forth in Section 12.1. Section 1.39. "Employee Benefit Plans" shall have the meaning set forth in Section 6.1(a). Section 1.40. "Employees" shall have the meaning set forth in Section 6.1(a). Section 1.41. "Employment Agreement" shall mean the Employment Agreement by and between APCOA and Myron C. Warshauer in the form attached as Exhibit C to be dated as of the Closing Date. Section 1.42. "Encumbrances" shall mean mortgages, liens, encumbrances, security interests, covenants, conditions, restrictions, rights-of-way, easements, encroachments, options, rights of first offer, rights of first refusal, claims and any other matters affecting title. Section 1.43. "Environmental Law" shall have the meaning set forth in Section 3.17. Section 1.44. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended, and any successor thereto. Section 1.45. "ERISA Affiliate" shall mean, with respect to any entity, trade or business, any other entity, trade or business that is a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes the first entity, trade or business, or that is a member of the same "controlled group" as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA. Section 1.46. "Escrow Agent" shall have the meaning set forth in Section 10.1. Section 1.47. "Escrow Agreement" shall have the meaning set forth in Section 10.1. Section 1.48. "Escrowed Amount" shall have the meaning set forth in Section 10.1. Section 1.49. "Estimated DA Statement" shall have the meaning set forth in Section 2.4(a). -4- 17 Section 1.50. "Estimated Distribution Amount" shall have the meaning set forth in Section 2.4(a). Section 1.51. "Excluded Assets" shall mean those assets listed on Schedule 1.51. Section 1.52. "Final DA Statement" shall have the meaning set forth in Section 2.4(c). Section 1.53. "Former Employees" shall have the meaning set forth in Section 6.1(a). Section 1.54. "FY 1997" shall have the meaning set forth in Section 2.4(a). Section 1.55. "Government Authority" shall mean any government or state (or any subdivision thereof), whether domestic, foreign or multinational (including European Community), or any agency, authority, bureau, commission, department or similar body or instrumentality thereof, or any governmental court or tribunal. Section 1.56. "Guarantee" shall have the meaning set forth in Section 10.1. Section 1.57. "Historical Standard Balance Sheet" shall have the meaning set forth in Section 3.3(b). Section 1.58. "Historical Standard Financial Statements" shall have the meaning set forth in Section 3.3(a). Section 1.59. "Historical Standard Income Statement" shall have the meaning set forth in Section 3.3(b). Section 1.60. "Historical Standard Statement of Cash Flows" shall have the meaning set forth in Section 3.3(b). Section 1.61. "Holberg" shall mean Holberg Industries, Inc., a Delaware corporation. Section 1.62. "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Section 1.63. "Indemnified Party" shall have the meaning set forth in Section 11.5(a) Section 1.64. "Indemnifying Party" shall have the meaning set forth in Section 11.5(a) Section 1.65. "Initial DA Statement" shall have the meaning set forth in Section 2.4(c). -5- 18 Section 1.66. "IPO" shall have the meaning set forth in Section 11.1. Section 1.67. "IRS" shall mean the United States Internal Revenue Service. Section 1.68. "Letter Agreement" shall have the meaning set forth in Section 5.1(b). Section 1.69. "Management Contracts" shall mean all contracts, agreements or other arrangements (including leases) pursuant to which a person has agreed to manage, operate or lease a parking facility. Section 1.70. "Multiemployer Plan" shall have the meaning set forth in Section 6.1(e). Section 1.71. "Notice of Disagreement" shall mean APCOA's written notice of its disagreement with the Initial DA Statement. Section 1.72. "Parties" shall have the meaning set forth in the first paragraph hereof. Section 1.73. "Pension Plan" shall have the meaning set forth in Section 6.1(c). Section 1.74. "Permitted Debt" shall mean, as of the Closing Date, debt (including obligations in respect of capital leases and earnout obligations, and including related fees, costs and expenses) incurred or assumed in connection with any acquisition of Century by the Standard Companies if such acquisition and debt is approved by APCOA in accordance with the provisions of Section 5.4, and other debt not in excess of $630,000, provided that all of such debt is prepayable at any time without penalty or premium), and provided that such debt will not include any debt incurred to finance any Excluded Assets or which would not properly be reflected in a Standard Balance Sheet prepared as of the Closing Date. Section 1.75. "Permitted Encumbrance" shall mean (i) with respect to the Standard Business, those Encumbrances listed in Schedule 3.5(a) or 3.6, and, with respect to APCOA, those Encumbrances listed in Schedule 4.5(a) or 4.6, (ii) liens for current ad valorem taxes not yet due and payable and (iii) such Encumbrances not known to the applicable Party as do not in any respect detract from the value of the property subject thereto (other than in an amount not material with respect to such property and, together with all other such Encumbrances, not material to and which would not reasonably be expected to have a material adverse effect on the business condition of the applicable Party) or interfere with or impair the present and continued use thereof in the usual and normal conduct of their business (other than in a manner not material with respect to such property and, together with all other such Encumbrances, not material to and which could not reasonably be expected to have a material adverse effect on the business condition of the applicable Party). Section 1.76. "person" shall mean any individual, corporation, partnership, joint venture, trust, unincorporated organization, other form of business or legal entity or Government Authority. -6- 19 Section 1.77. "Purchase Price" shall mean (i) the Standard APCOA Shares plus (ii) $65,000,000. Section 1.78. "Returns" shall have the meaning set forth in Section 7.3(a). Section 1.79. "Schedules Date" shall have the meaning set forth in Section 5.7. Section 1.80. "Special Management Contracts" shall have the meaning set forth in Section 3.15. Section 1.81. "Standard Advisors Fee" shall have the meaning set forth in Section 3.16. Section 1.82. "Standard Affiliated Group" shall have the meaning set forth in Section 7.1(a). Section 1.83. "Standard APCOA Shares" shall mean 5.009523 shares of APCOA Common Stock. Section 1.84. "Standard Business" shall have the meaning set forth in the second paragraph hereof. Section 1.85. "Standard Business Condition" shall mean the assets, properties, operations, business, prospects or financial condition of the Standard Business taken as a whole. Section 1.86. "Standard Companies" shall mean all of the Standard Transferred Companies and their respective Subsidiaries, including Standard Parking I, L.L.C., a Delaware limited liability company; Standard Parking II, L.L.C., a Delaware limited liability company; and Standard Parking of Canada, L.P., an Illinois limited partnership. Section 1.87. "Standard Interests" shall mean all of the outstanding capital stock, partnership and other equity interests of the Standard Transferred Companies. Section 1.88. "Standard Leased Real Property" shall have the meaning set forth in Section 3.5(a). Section 1.89. "Standard Leases" shall have the meaning set forth in Section 3.5(a). Section 1.90. "Standard Licenses" shall have the meaning set forth in Section 3.10(a). Section 1.91. "Standard Owners" shall have the meaning set forth in the first paragraph hereof. Section 1.92. "Standard Owners Damages" shall have the meaning set forth in Section 11.4(a). -7- 20 Section 1.93. "Standard Owners Indemnitees" shall have the meaning set forth in Section 11.4(a). Section 1.94. "Standard Owners' Warranty Period" shall have the meaning set forth in Section 11.1. Section 1.95. "Standard Transferred Companies" shall mean Standard Parking Corporation, an Illinois corporation; Standard Auto Park, Inc., an Illinois corporation; Standard Parking Corporation, MW, an Illinois corporation; Standard Parking, L.P., a Delaware limited partnership; Standard Parking Corporation, IL, an Illinois corporation; Standard/Wabash Parking Corporation, an Illinois corporation. Section 1.96. "Stockholders Agreement" shall mean the Stockholders Agreement by and among Standard Owners, APCOA, Holberg, APA Acquisition, Inc. and AP Holdings, Inc. in the form attached as Exhibit A to be dated as of the Closing Date. Section 1.97. "Subsidiary" of any person shall mean any corporation, partnership, limited liability company or other business entity of which at least a majority of the outstanding capital stock (or similar interests) having voting power under ordinary circumstances to elect directors (or similar governing body members) shall at the time be held, directly or indirectly, by such person and/or by one or more Subsidiaries of such person. Section 1.98. "Taxes" shall have the meaning set forth in Section 7.3(b). Section 1.99. "Taxing Authority" shall have the meaning set forth in Section 7.3(c). Section 1.100. "338 Election" shall have the meaning set forth in Section 7.4. Section 1.101. "to the knowledge of APCOA" shall have the meaning set forth in Section 13.9(a). Section 1.102. "to the knowledge of Standard Owners and the Standard Companies" shall have the meaning set forth in Section 13.9(a). Section 1.103. "Withdrawal Liability" shall have the meaning set forth in Section 6.1(f). ARTICLE II Transfer of Standard Interests; Closing Section 2.1. Combination and Transfer. On the Closing Date, and subject to the terms and conditions set forth in this Agreement, each Standard Owner shall sell, convey, assign, transfer and deliver to APCOA, and APCOA shall purchase and acquire from such Standard Owner, all of such Standard Owner's right, title and interest in and to the Standard Interests owned by such Standard Owner, which are listed in Schedule 2.2 and which, together with the -8- 21 other Standard Interests listed in Schedule 2.2, represent all Standard Interests, in return for the Purchase Price payable as set forth in Section 2.2. Section 2.2. Consideration. (a) Subject to the terms and conditions hereof, at the Closing, APCOA shall convey to Standard Owners (including to the Escrow Agent as contemplated and required hereby) the Purchase Price, (i) by delivery of the Standard APCOA Shares, duly issued and registered in the names and amounts set forth in Schedule 2.2, and (ii) by wire transfer of immediately available funds of the cash portion of the Purchase Price (in the amounts, by Standard Owner, set forth in Schedule 2.2) to the account or accounts specified to APCOA by Standard Owners by written notice delivered to APCOA at least two business days prior to the Closing (including in each case by delivery of the Escrowed Amount to the Escrow Agent to be held in accordance with the terms of the Escrow Agreement). (b) In addition to the other things required to be done hereunder, at the Closing, Standard Owners shall deliver or cause to be delivered to APCOA the following: (i) a certificate, dated the Closing Date and validly executed on behalf of Standard Owners, to the effect that the condition set forth in Section 8.1 has been satisfied; (ii) a copy of the resolutions of the board of directors of each Standard Owner (or similar enabling document in the case of entities other than corporate entities) authorizing the execution, delivery and performance of this Agreement by such Standard Owner, together with a certificate of the secretary or assistant secretary of such Standard Owner, dated as of the Closing Date, that such resolutions were duly adopted and are in full force and effect; (iii) evidence or copies of any consents, approvals, orders, qualifications or waivers required pursuant to Section 8.2; and (iv) certificates or other documents evidencing the Standard Interests, together with any stock or other powers, endorsements or other documents required for their sale, conveyance, assignment, transfer and delivery, and such other instruments of sale, conveyance, assignment, transfer and delivery reasonably requested by APCOA, as may be necessary or appropriate to confirm or carry out the provisions of this Agreement. (c) In addition to the payment of the Purchase Price and the other things required to be done hereunder, at the Closing, APCOA shall deliver, or cause to be delivered, to Standard Owners the following: (i) a certificate, dated the Closing Date and validly executed on behalf of APCOA, to the effect that the condition set forth in Section 9.1 shall have been satisfied; (ii) a copy of the resolutions of the board of directors of APCOA (or its executive committee), or similar enabling document, authorizing the execution, delivery and performance of this Agreement by APCOA, together with a certificate of the secretary or assistant secretary of APCOA, dated as of the Closing Date, that such resolutions were duly adopted and are in full force and effect; (iii) evidence or copies of any consents, approvals, orders, qualifications or waivers required pursuant to Section 9.2; (iv) if not previously delivered to Standard Owners, all other certificates, documents, instruments and writings required pursuant hereto to be delivered by or on behalf of APCOA at or before the Closing; and (v) such other instruments as may be reasonably requested by Standard Owners, as may be necessary or appropriate to confirm or carry out the provisions of this Agreement. Section 2.3. Time and Place of Closing. The Closing shall take place on the Closing Date at 10:00 a.m., New York City time, at the offices of Wachtell, Lipton, Rosen & Katz, New York, New York, unless otherwise agreed by the Parties. -9- 22 Section 2.4. Closing Distribution Amount. (a) Prior to the Closing Date, Standard Owners and APCOA shall work together in the preparation of a statement (the "Estimated DA Statement") setting forth a reasonable estimate of the following amount (the "Estimated Distribution Amount") as of the Closing Date and the calculation thereof: such calculation shall be comprised of (i) $5,283,000 less distributions made on or prior to the Closing Date (whether in cash, property or otherwise, but excluding the distribution of any Excluded Assets expressly permitted in accordance with the terms hereof) with respect to earnings of the Standard Business for the fiscal year ending December 31, 1997 ("FY 1997"), plus (ii) $1,200,000 (which Standard Owners represent and warrant to be a portion of the amount of the original capital contribution by Standard Owners to the Standard Companies), plus (iii) an amount equal to (x) $5,400,000 divided by 365, multiplied by (y) the number of days from January 1, 1998 through the Closing Date, less distributions (whether in cash, property or otherwise) made on or prior to the Closing Date with respect to earnings of the Standard Business during such period, minus (iv) the incentive compensation of the Standard Companies accrued and not received by the Standard Companies for FY 1997, minus (v) the retroactive payments in respect of policies of insurance maintained by the Standard Companies accrued for FY 1997 based on experience history for the Standard Companies but not yet received by the Standard Companies or received, but as to which binding written confirmations of finality from the applicable insurance carrier or broker has not been obtained, provided that the numbers used in such calculation shall be derived from financial records prepared in accordance with generally accepted accounting principles consistently applied (and consistent with the Audited 1997 Standard Financial Statements (to the extent available at the relevant time)) and such calculation shall be consistent with this Agreement and with past practices, but excluding, for purposes of such calculation, the Standard Advisors Fees. (b) At the Closing, APCOA shall convey the Estimated Distribution Amount, to the extent not already distributed in accordance with the provisions of Section 5.4(c)(i), to Standard Owners in the amounts specified in the Estimated DA Statement. (c) On or prior to July 1, 1998, Standard Owners shall deliver to APCOA a revision of the Estimated DA Statement reflecting actual results for FY 1997 (the "Initial DA Statement"), which statement shall be accompanied by a report thereon of Altschuler, Melvoin and Glasser LLP ("AMG") to the effect that, in the opinion of such firm, (x) such statement fairly presents a calculation of an amount equal to the Estimated Distribution Amount, computed without deducting the amounts deducted pursuant to clauses (iv) and (v) in the calculation of the Estimated Distribution Amount to the extent that such amounts have been actually collected, and, with respect to the amounts described in clause (v) only, binding written confirmation of finality with respect thereto obtained from the applicable insurance carrier or broker, as of July 1, 1998 (or, if previously collected but not final, to the extent that binding written confirmation of finality with respect to such amounts have been obtained from the applicable insurance carrier or broker) (such amount, the "Distribution Amount") based upon financial records prepared in accordance with generally accepted accounting principles consistently applied and (y) that such calculation is consistent with this Agreement and with past practices. APCOA shall assist Standard Owners in the preparation of the Initial DA Statement and shall be provided full access to the properties, books and records relating to Standard Owners and the Standard Business for such purpose. During the 60 days immediately following APCOA's receipt of the Initial DA Statement, AP- -10- 23 COA shall be permitted to review Standard Owners' (and AMG's) working papers relating to the Initial DA Statement. The Initial DA Statement shall become final and binding upon the Parties (and shall thereupon become the "Final DA Statement") on the 60th day following receipt thereof by APCOA unless APCOA shall provide a Notice of Disagreement to Standard Owners prior to such date. Any Notice of Disagreement shall specify in reasonable detail the nature of any disagreement so asserted. If a timely Notice of Disagreement is received by Standard Owners, then the Initial DA Statement shall become final and binding upon the Parties (and shall thereupon become the "Final DA Statement") on the earlier of (x) the date on which the Parties resolve in writing any differences they may have with respect to any matter specified in the Notice of Disagreement, and agree upon a Final DA Statement, or (y) the date on which the Accounting Firm finally resolves in writing any matters with respect to the Initial DA Statement that are in dispute by providing the Parties with a Final DA Statement. During the 60 days immediately following the delivery of a Notice of Disagreement, Standard Owners and APCOA shall seek in good faith to resolve in writing (and thereby agree on a Final DA Statement) any differences which they may have with respect to any matter specified in the Notice of Disagreement. During such period, Standard Owners shall have access to the working papers of APCOA prepared in connection with APCOA's preparation of the Notice of Disagreement. At the end of such 60-day period, Standard Owners and APCOA shall submit to the Accounting Firm for review and resolution any and all matters which remain in dispute and which were included in the Notice of Disagreement, and the Accounting Firm shall make a final determination (which shall thereupon become the "Final DA Statement"), binding on the Parties, of the Distribution Amount. The fees of the Accounting Firm incurred pursuant to this Section shall be borne equally by APCOA and Standard Owners. If the Distribution Amount reflected on the Final DA Statement exceeds the Estimated Distribution Amount, APCOA shall, and if the Estimated Distribution Amount exceeds the Distribution Amount reflected on the Final DA Statement, Standard Owners shall, within 10 business days after the DA Statement becomes final and binding on the Parties, make payment of the difference to the other Party by wire transfer in immediately available funds of the amount of such excess, together with interest thereon at a rate equal to the rate of interest from time to time announced publicly by Citibank, N.A. as its base rate, calculated on the basis of the actual number of days elapsed over 365 from the Closing Date to the date of payment. (d) With respect to any FY 1997 retroactive payments on account of any policies of insurance maintained by the Standard Companies received by the Standard Companies prior to July 1, 1998, but as to which binding written confirmations of finality from the applicable insurance carrier or broker were not obtained prior to July 1, 1998, and which have not previously or otherwise been distributed to the Standard Owners, such amounts shall be distributed by the Standard Companies to the Standard Owners after July 1, 1998, either (i) at such time as written confirmations of finality from the applicable insurance carrier or broker are obtained with respect thereto, or (ii) at such time as the insurance carrier's legal right to file a claim to recover any portion thereof has expired. -11- 24 ARTICLE III Representations and Warranties of Standard Owners Each Standard Owner hereby represents and warrants to APCOA as to itself (but not as to any other Standard Owner) and as to each Standard Company as follows: Section 3.1. Incorporation; Authorization; Etc. (a) (i) Such Standard Owner (other than any natural person) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Such Standard Owner (other than any natural person) (A) has all requisite corporate or comparable power to own its properties and assets and to carry on its business as it is now being conducted and (B) is in good standing and is duly qualified to transact business in each domestic jurisdiction in which the nature of property owned or leased by it or the conduct of its business requires it to be so qualified, except where the failure to be in good standing or to be duly qualified to transact business, would not, individually or in the aggregate, have a material adverse effect on the Standard Business Condition or otherwise impair consummation of the Combination. (ii) Each Standard Company is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Each Standard Company (A) has all requisite corporate or comparable power to own its properties and assets and to carry on its business as it is now being conducted and (B) is in good standing and is duly qualified to transact business in each domestic jurisdiction in which the nature of property owned or leased by it or the conduct of its business requires it to be so qualified, except where the failure to be in good standing or to be duly qualified to transact business, would not, individually or in the aggregate, have a material adverse effect on the Standard Business Condition or otherwise impair consummation of the Combination. (b) Such Standard Owner has full corporate or comparable power to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement and the performance of such Standard Owner's (other than a natural person) obligations hereunder have been duly and validly authorized by all necessary proceedings on the part of such Standard Owner and no other proceedings or actions on the part of such Standard Owner, its board of directors (or similar governing body) or stockholders (or other interest owners) are necessary therefor. Except as set forth in Schedule 3.1(b), the execution, delivery and performance by such Standard Owner (other than any natural person) of this Agreement will not (i) violate any provision of such Standard Owner's certificate of incorporation or by-laws or other organizational documents, (ii) except for Management Contracts or as disclosed in Schedule 3.1(b), violate any provision of, or be an event that is (or with the passage of time will result in) a violation of, or result in the acceleration of or entitle any party to accelerate (whether after the giving of notice or lapse of time or both) any obligation under, or result in the imposition of any lien upon or the creation of a security interest in the assets of any Standard Company pursuant to, any mortgage, lien, lease, agreement, instrument, order, arbitration award, judgment, injunction or decree to which any Standard Company is a party or by which any of them is bound, or (iii) except as disclosed in Schedule 3.1(b) or 3.12, violate or conflict with any statute, rule or regulation applicable to such Standard Owner or any Standard Company or any of its properties or assets or any other material restriction of any kind or character to which such Standard Owner or any Standard Company is subject, that, in the case of any of clauses (ii) and (iii), would, indi- -12- 25 vidually or in the aggregate, have a material adverse effect on the Standard Business Condition or impair the consummation of the Combination. This Agreement has been duly executed and delivered by such Standard Owner, and, assuming the due execution and delivery hereof by APCOA, constitutes the legal, valid and binding obligation of such Standard Owner, enforceable against such Standard Owner in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting the rights and remedies of creditors generally and to general principles of equity (regardless of whether in equity or at law). The execution of the Employment Agreement and the Consulting Agreement by APCOA, and all payments that may become due thereunder, will, prior to Closing, be approved in a manner satisfying the requirements of Section 280G(b)(5)(A)(ii) and 280G(b)(5)(B) of the Code with respect to the change of control of Standard Parking and its affiliates that will occur as of the Closing Date. Section 3.2. Capitalization. (a) All of the outstanding shares of capital stock, partnership interests or other interests of each Standard Company have been validly authorized and duly issued and are fully paid and non-assessable. All of the outstanding shares of capital stock, partnership interests or other interests of each Standard Transferred Company, (i) except as set forth on Schedule 3.2, are free of preemptive rights and are owned as set forth in Schedule 2.2 by such Standard Owner free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on voting rights, charges and other legal or equitable encumbrances of any nature whatsoever and (ii) are included in the Standard Interests. All of the outstanding shares of capital stock, partnership interests or other interests of each Standard Company (other than any Standard Transferred Company), except as set forth on Schedule 3.2, are free of preemptive rights and are owned as set forth in Schedule 3.2 by a Standard Transferred Company free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on voting rights, charges and other legal or equitable encumbrances of any nature whatsoever. Except pursuant to this Agreement, and except as set forth on Schedule 3.2, there are no options, warrants, calls, rights or agreements to which such Standard Owner or any Standard Company is a party or by which any of them is bound obligating any Standard Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock, partnership interests or other equity interests of any Standard Company, or securities convertible into or exchangeable for such interests or obligating any Standard Company to grant, extend or enter into any such option, warrant, call, right or agreement. Except as set forth on Schedule 3.2, there are no outstanding contractual obligations of such Standard Owner or any Standard Company (i) restricting the transfer of, (ii) affecting the voting rights of, (iii) requiring the repurchase, redemption or disposition of, (iv) requiring the registration for sale of or (v) granting any preemptive or antidilutive right with respect to any shares of capital stock, partnership interests or other interests on any Standard Company. All outstanding shares of capital stock, partnership interests or other interests of each Subsidiary of any Standard Transferred Company are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights and owned by a Standard Transferred Company or a Standard Company, free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on voting rights, charges and other legal or equitable encumbrances of any nature whatsoever. No Standard Company is the record or beneficial owner of any capital stock of, or -13- 26 joint venture or other investment or equity interest in, any person other than (i) another Standard Company and (ii) the Excluded Assets. (b) The Standard Interests listed on Schedule 2.2 collectively represent all Standard Interests. Except as set forth on Schedule 3.2, no Standard Owner or any Affiliate of Myron C. Warshauer or any member of his family is engaged or owns an interest in any parking or parking-related business other than which is a part of the Standard Business (or the Excluded Assets). Upon consummation of the Combination at the Closing, as contemplated by this Agreement, such Standard Owner shall deliver to APCOA good title to the Standard Interests of such Standard Owner free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on voting rights, charges and other legal or equitable encumbrances of any nature whatsoever, other than those created by or through APCOA (if any). Section 3.3. Financial Statements. (a) Attached as Schedule 3.3(a) are (i) true and complete copies of the audited balance sheets of the Standard Business on a consolidated basis as of December 31, 1995 and December 31, 1996 and the audited income statements and statements of cash flows of the Standard Business on a consolidated basis for the 12-month periods ending December 31, 1994, December 31, 1995 and December 31, 1996, and which in each case (other than those for the 12-month period ended December 31, 1994) have been audited by AMG, and are accompanied by an unqualified opinion of AMG, and (ii) true and complete copies of the unaudited balance sheet of the Standard Business on a consolidated basis as of October 31, 1997 and the unaudited income statement of the Standard Business on a consolidated basis for the ten-month period ending October 31, 1997 (collectively, the "Historical Standard Financial Statements"). In each case herein in which the Standard Business is referred to in the context of a balance sheet, income statement, statement of cash flows or other financial statement, such balance sheet, income statement, statement of cash flows or other financial statement has been prepared without taking into account the Excluded Assets or any results of operations related to the ownership thereof in any way (but including results of operations that are not related to the ownership of the Excluded Assets and that will continue following the consummation of the Combination such as lease payments or management fees made to the Standard Companies in respect of operations located on Excluded Assets), and otherwise reflecting the Standard Business as the same will be conveyed in the Combination. (b) Each balance sheet included in the Historical Standard Financial Statements may be hereinafter referred to as a "Historical Standard Balance Sheet," and each income statement included in the Historical Standard Financial Statements may be hereinafter referred to as a "Historical Standard Income Statement" and each statement of cash flows included in the Historical Standard Financial Statements may be hereinafter referred to as a "Historical Standard Statement of Cash Flows." (c) The Historical Standard Financial Statements (including, in each case, any notes thereto) are accurate and complete in all material respects, were prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto) and, in the case of any Historical Standard Balance Sheet, fairly present the consolidated financial position of the Standard Companies or the Standard Business, as the case may be, at the date thereof or, in the case of any -14- 27 Historical Standard Income Statement, and Historical Standard Statement of Cash Flows, fairly present the consolidated results of operations of the Standard Companies or the Standard Business, as the case may be, for the periods then ended (subject, in the case of unaudited Historical Standard Financial Statements, to any other adjustments described therein and normal year-end audit adjustments), and without taking into account the Excluded Assets or any results of operations related to the ownership thereof in any way (but including results of operations that are not related to the ownership of the Excluded Assets and that will continue following the consummation of the Combination, such as lease payments or management fees made to the Standard Companies in respect of operations located on Excluded Assets), and otherwise reflects the Standard Business as the same will be conveyed in the Combination. No Standard Company has, since January 1, 1996, made any change in the accounting practices or policies applied in the preparation of the Historical Standard Financial Statements. The books and records of the Standard Companies have been, and are being, maintained in accordance with generally accepted accounting principles and other applicable legal and accounting requirements. (d) The Historical Standard Balance Sheets do not include any assets which were not included in the Standard Business (including the Excluded Assets) and owned by a Standard Company at the relevant date, and the Historical Standard Income Statements and Historical Standard Statement of Cash Flows do not reflect the operations of any entity or business which were not included in the Standard Business (including the Excluded Assets and the operations related thereto) and owned by a Standard Company during the relevant period. Schedule 3.3(d) contains a true and complete list of all transactions with Affiliates of Standard Owners involving the Standard Business for the periods covered by the Historical Standard Financial Statements. Except as specified in Schedule 3.3(d), all transactions involving Affiliates of Standard Owners have been accounted for on the Historical Standard Financial Statements. (e) Each Standard Company conducts business the revenues of which (excluding revenues derived from bank accounts, securities and similar investments (such as interests in any Standard Company)) were material to the Standard Business for FY 1997. Section 3.4. Undisclosed Liabilities. Except as reflected, reserved against or otherwise disclosed in the Historical Standard Balance Sheet as of October 31, 1997, and except as set forth on Schedule 3.4, and except, as of the Closing Date, for the Permitted Debt, there are no liabilities, debts (including obligations in respect of capital leases), or obligations of or claims against any Standard Company or otherwise relating to or arising in connection with the Standard Business (of any nature whether or not required to be disclosed pursuant to generally accepted accounting principles) which would individually or in the aggregate reasonably be expected to have a material adverse effect on the Standard Business Condition or that would have been required to be reflected on such balance sheet or in the related notes in accordance with United States generally accepted accounting principles consistently applied by such Standard Company. Section 3.5. Properties. (a) Except for, as of the date hereof, Excluded Assets, no real property is owned by the Standard Business. Schedule 3.5(a) describes all leases for real property leased by any Standard Company as lessee or lessor other than Management Contracts (the "Standard Leased Real Property"), such description including an identification of the lease -15- 28 agreement therefor and any and all amendments, modifications, side letters and other agreements relating thereto, the names of the lessor and lessee thereunder, the title and date thereof, the address of the premises leased thereunder, and the term, including any extension options, if not apparent from the lease agreement. All leases with respect to the Standard Leased Real Property ("Standard Leases") are in effect in accordance with their terms and create a valid and binding interest in the Standard Leased Real Property in favor of a Standard Company and, except as set forth in Schedule 3.5(a), all rents and other amounts (including taxes, insurance and utilities) required to be paid under such Standard Leases, which have become due, have been paid. To the actual knowledge of Standard Owners and the Standard Companies, except as set forth in Schedule 3.5(a), there are no condemnation proceedings, special assessments, impact fees or similar charges pending or, to the actual knowledge of Standard Owners and the Standard Companies, threatened against the Standard Leased Real Property, and Standard Owners have not received or been served with any notice with respect to any of the foregoing. To the actual knowledge of Standard Owners and the Standard Companies, the current use by the Standard Companies of the Standard Leased Real Property complies in all respects with all applicable zoning laws and building and use restrictions (including all agreements of the Standard Companies applicable thereto) and condominium restrictions, except as could not be reasonably expected, individually or in the aggregate, to have a material adverse effect with respect to the Standard Business Condition. Standard Owners and the Standard Companies have no actual knowledge of any proposed change in the zoning or building ordinances affecting the Standard Leased Real Property. (b) Except as disclosed in Schedule 3.5(b), no lease of Standard Leased Real Property requires a Standard Company to make any structural repairs or maintenance beyond routine maintenance. To the actual knowledge of Standard Owners and the Standard Companies, except as disclosed in Schedule 3.5(b), all buildings, structures, improvements and fixtures on, under, over or within Standard Leased Real Property, and all other aspects of each Standard Leased Real Property: (i) are in good operating condition and repair (subject to normal wear and tear) and are structurally sound and free of any material defects; (ii) are suitable, sufficient and appropriate in all respects for their current uses, except for such failures as, together with all other such failures, could not reasonably be expected to have a material adverse effect on the Standard Business Condition; (iii) comply with all applicable codes and rules of national and local associations and boards of insurance underwriters; (iv) are within the boundary lines of their respective Standard Leased Real Property; and (v) consist of sufficient land, parking areas, sidewalks, driveways and other improvements to permit the continued use of such facilities in the manner and for the purposes to which they are presently devoted. There are no outstanding or, to the actual knowledge of Standard Owners and the Standard Companies, threatened requirements by any insurance company which has issued an insurance policy covering any Standard Leased Real Property, or by any board of fire underwriters or other body exercising similar functions, requiring any material repairs or work to be done on any Standard Leased Real Property. Section 3.6. Personal Property. Schedule 3.6 sets forth a list of all personal property (including fixed assets) owned by a Standard Company with an initial purchase price or book value in excess of $25,000 and all Encumbrances thereon. Each Standard Company has good and marketable title to such property free and clear of Encumbrances, except Permitted Encumbrances and except for those Encumbrances set forth in Schedule 3.6. All such personal -16- 29 property is in good operating condition and repair in all material respects, ordinary wear and tear excepted, and is sufficient for the operation of the Standard Business consistent with past practice. Section 3.7. Absence of Certain Changes. Since December 31, 1996, there has been no material adverse change in, and there has not been any occurrence which, when taken together with all other such changes or occurrences, would reasonably be expected to have a material adverse effect on the Standard Business Condition. Since October 31, 1997, except as set forth on Schedule 3.7, no Standard Company has taken any action which would have been prohibited by the provisions of Section 5.4 had this Agreement been in effect at the time of such action. Section 3.8. Litigation; Orders. Except for litigation in the ordinary course of business which is fully covered by insurance without significant deductibles (none of which is individually or in the aggregate material) or as disclosed in Schedule 3.8, (i) there are no lawsuits, actions, administrative or arbitration or other proceedings or Government Authority investigations pending or, to the actual knowledge of Standard Owners and the Standard Companies, threatened against any Standard Company or respecting any Standard Interests by any person or Government Authority and (ii) there are no judgments or outstanding orders, injunctions, decrees, stipulations or awards (whether rendered by a court or administrative agency, or by arbitration) against any Standard Company or any of the properties of any Standard Company or respecting any Standard Interests, in each of clauses (i) or (ii) that would reasonably be expected to, individually or in the aggregate, have a material adverse effect on the Standard Business Condition or that would impair the consummation of the Combination. Section 3.9. Intellectual Property. Schedule 3.9 lists all material patents, trademarks, trade names, service marks, registered copyrights and pending applications owned by any Standard Company or used in the Standard Business as of the date hereof. The intellectual property listed on Schedule 3.9 is sufficient for the conduct of the Standard Business as conducted as of the date hereof and to the actual knowledge of Standard Owners and the Standard Companies, the Standard Companies have the right to use all such intellectual property. Except as disclosed in Schedule 3.9, no claims which would, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Standard Business Condition have been asserted by any person (i) to the effect that the conduct of business by any Standard Company infringes on any patents, trademarks, trade names, service marks or registered copyrights, (ii) against the use by any Standard Company of any trademarks, trade names, technology, know-how or processes necessary to the business of such Standard Company or (iii) challenging the ownership, validity or effectiveness of any of the patents, trademarks, trade names, service marks, registered copyrights or applications therefor listed on Schedule 3.9. Section 3.10. Licenses, Approvals, Other Authorizations, Consents, Reports, Etc. (a) "Standard Licenses" means all material licenses, permits, franchises and other authorizations of any Government Authority possessed by or granted to any Standard Company. To the knowledge of Standard Owners and the Standard Companies, except as disclosed in Schedule 3.10(a), all Standard Licenses are in full force and effect except for those whose failure to be in full force and effect would not reasonably be expected to, individually or in the aggregate, have a -17- 30 material adverse effect on the Standard Business Condition. Except as disclosed in Schedule 3.10(a), no proceeding is pending, or, to the actual knowledge of Standard Owners and the Standard Companies, threatened, seeking the revocation or limitation of any such Standard License that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the Standard Business Condition. (b) Schedule 3.10(b) lists all registrations, filings, applications, notices, consents, approvals, orders, qualifications and waivers required to be made, filed, given or obtained by any Standard Company with, to or from any person (other than under Management Contracts), including any Government Authority, in connection with the consummation of the Combination except for those the failure to make, file, give or obtain which would not, individually or in the aggregate, either have a material adverse effect on the Standard Business Condition or impair the consummation of the Combination. Section 3.11. Labor Matters. Except as described in Schedule 3.11, no Standard Company has any written or oral contracts of employment with any employee in a position of assistant vice president level or above and, except as described in Schedule 3.11, no such contract provides for any severance compensation or benefits or similar "change-of-control" provisions that would give rise to a right or entitlement as a result of the consummation of the transactions contemplated hereby or because of any change in his position, authority, title, duties, reporting responsibilities, status, or other similar matter, resulting from or arising after or in connection with such consummation. Except as described in Schedule 3.11, no Standard Company has been in the past five years or is presently a party to any collective bargaining agreement, subject to a legal duty to bargain with any labor organization on behalf of its employees or the object of any attempt to organize employees for collective bargaining or similar purposes or is presently operating under an expired collective bargaining agreement. Schedule 3.11 contains a complete and accurate list as of the date hereof of all employees in positions of assistant vice president level or above of each Standard Company by department and location and their titles, salaries and all other forms of compensation, dates of hire, and indicating which of such employees have severance arrangements or are covered by change-of-control provisions applicable to such employees. No Standard Company is a party to or subject to any pending or, to the knowledge of Standard Owners and the Standard Companies, threatened labor dispute (including a strike, work stoppage, organizing attempt, picketing, boycott or similar activity). To the knowledge of Standard Owners and the Standard Companies, each Standard Company has complied in all material respects with all applicable federal, state, and local laws, ordinances, rules and regulations and requirements relating to the employment, payment and termination of labor, including the provisions thereof relative to wages, hours, severance, vacation, collective bargaining, employee benefits, and employee benefit plans, contributions, unemployment, withholding taxes and occupational health and safety and equal opportunity and non-discrimination laws (including the Americans with Disabilities Act). Each Standard Company has made all deductions required by law to be made for employees' wages, and salaries and either remitted the same to appropriate Government Authorities or provided for the same in its accounts and is not liable for any arrears of wages or any taxes or penalties for failure to comply with the payment or repayment of any of the foregoing. -18- 31 Section 3.12. Compliance with Laws. Except as may be indicated in Schedule 3.12, the conduct of the Standard Business complies with all statutes, laws, regulations, ordinances, rules, judgments, orders or decrees applicable thereto, and has so complied at all time periods prior hereto, except for violations or failures so to comply, if any, that, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the Standard Business Condition. Section 3.13. Insurance. Schedule 3.13 lists all insurance policies owned or held by any Standard Company which may cover the business or assets of any Standard Company. All such policies are in full force and effect and have not lapsed in coverage, all premiums with respect thereto covering all current periods have been paid to the extent due, and no written notice of cancellation or termination has been received with respect to any such policy. All claims with respect to retroactive insurance premia rebated to any Standard Company for FY 1996 have been closed and such rebates have become final. Section 3.14. Material Contracts. Except as disclosed in Schedule 3.5(a), 3.11 or 3.14, no Standard Company is a party to any (i) employment or consulting agreement having a remaining term of at least one year and requiring payments of base salary in excess of $100,000 per year or aggregate payments of base salary in excess of $300,000, (ii) sales representative or agency contract which is not terminable on 12 months' (or less) notice, (iii) other than Management Contracts, lease of real or personal property with an annual base rental obligation of more than $25,000, or a total remaining rental obligation of more than $100,000, (iv) joint venture or partnership agreement, except as relates solely to the Excluded Assets, (v) contract or agreement as to the sale, transfer or other disposition of any assets (other than the Excluded Assets or de minimis assets), or as to any joint venture or partnership, or as to the purchase of any assets or securities of any person (other than de minimis assets or securities), (vi) agreement limiting in any way any Standard Company's ability to compete with any person in any geographic location or any line of business, or (vii) other than Management Contracts, other contract, agreement or arrangement, entered into other than in the ordinary course of business, requiring future payment or payments in excess of $25,000 per year or otherwise material to the Standard Business. With respect to all contracts listed on Schedule 3.14, except as disclosed on Schedule 3.14, such contracts are valid and binding and no Standard Company is in material breach thereof or material default thereunder and there does not exist under any provision thereof any event that, with the giving of notice or the lapse of time or both, would constitute such a breach or default, except for such failures to be valid and binding and such breaches, defaults and events as to which requisite waivers or consents have been or are obtained or which could not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Standard Business Condition. Schedule 3.14 lists all notes, mortgages, indentures and other obligations and agreements and other instruments for or relating to any lending or borrowing (including assumed debt) with a remaining principal of $25,000 or more effected by any Standard Company or to which any assets of any Standard Company are subject (except with respect to any such lending or borrowing among Standard Companies). Section 3.15. Management Contracts. Schedule 3.15 is a list of all Management Contracts as of the date hereof except for those Management Contracts for which certain -19- 32 information regarding such Management Contracts is Special Evaluation Material as defined in Schedule 5.1(a) ("Special Management Contracts"), together with, as to each, the location name, the address, the start date (or, if not available, the approximate start date), the end date, the renewals, the operating profit for FY 1995 and 1996 and YTD 1997, a description of any change of control or similar provision contained therein and a notation indicating whether such Management Contract is written or oral and as to the Special Management Contracts, the aggregate operating profit for FY 1995 and 1996 and YTD 1997. With respect to each Management Contract, such Management Contract is valid and binding and no Standard Company is in material breach thereof or material default thereunder and there does not exist under any provision thereof any event that, with the giving of notice or the lapse of time or both, would constitute such a breach or default, and there is no threatened breach by a party to a Management Contract and there are no circumstances known to any Standard Owner or Standard Company which would cause a Management Contract to become not valid or binding or would cause a breach or default in a Management Contract except for such failures to be valid and binding and such breaches, defaults and events as could not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Standard Business Condition. No Standard Company or Standard Owner has knowledge of any plan or intention of JMB Realty Corporation or Equity Office Properties Trust or any of their respective Affiliates to alter its relationship with the Standard Business, except in each case, as could not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Standard Business Condition, and except in connection with ordinary-course dispositions of portfolio properties by such persons. Section 3.16. Brokers, Finders, Etc. Standard Owners have employed no broker, finder, consultant or other intermediary in connection with the Combination or the other matters contemplated hereby who would have a valid claim for a fee or commission from APCOA or any Standard Company in connection with the Combination or such transactions, other than Goldman, Sachs & Co., AMG and Katten Muchin & Zavis. Up to, but no more than, $2,000,000 of the actual fees of such firms shall be a permitted liability of the Standard Companies at the Closing (such amount, the "Standard Advisors Fee"). Section 3.17. Hazardous Materials. Except as set forth in Schedule 3.17, (i) there is no liability resulting from a violation of any applicable Environmental Law and (ii) there are no claims pending or, to the knowledge of Standard Owners, threatened, and none of Standard Owners or any Standard Company has received notice, alleging that a Standard Company is or has been in violation of any applicable Environmental Law. Schedule 3.17 contains a true and accurate list of any Standard Leased Real Property or property under a Management Contract on which any petroleum products (including gasoline and oil but excluding cleaning solvents not customarily considered petroleum products) or diesel fuel is presently stored (other than in the fuel tanks of vehicles which are parked on such Standard Leased Real Property) or sold by any Standard Company, or, to the actual knowledge of Standard Owners and the Standard Companies, was stored or sold by any Standard Company. For the purpose of this Agreement, "Environmental Law" shall mean any law, statute, regulation, court order, consent decree or settlement agreement which imposes any liability for or standards of conduct concerning the manufacture, processing, generation, distribution, use, treatment, storage, disposal, cleanup, transport or handling of hazardous materials, including the Comprehensive Environmental Response, Compen- -20- 33 sation and Liability Act of 1980, as amended, the Resource Conservation and Recovery Act of 1976, as amended, any other so-called "Superfund" or "Superlien" law and the Toxic Substances Control Act or any similar federal, state or local statute. Section 3.18. Knowledge Regarding Representations. No Standard Owners or any Standard Company is aware of any inaccuracy or misstatement in, or breach of, any representation or warranty of APCOA contained herein. Section 3.19. Acquisition of Shares for Investment. Standard Owners have such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of their acquisition of the Standard APCOA Shares. Standard Owners confirm that APCOA has, or prior to the Diligence Out Termination Date will have, made available to Standard Owners the opportunity to ask questions of the officers and management employees of APCOA and to acquire additional information about the business and financial condition of APCOA. Standard Owners are acquiring the Standard APCOA Shares for investment and not with a view toward or for sale in connection with any distribution thereof, or with any present intention of distributing or selling such shares, in violation of applicable securities laws. Standard Owners understand and agree that the Standard APCOA Shares may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act of 1933, as amended, except pursuant to an exemption from such registration available under such Act, and without compliance with state, local and foreign securities laws, in each case, to the extent applicable, and in compliance with the Stockholders Agreement. ARTICLE IV Representations and Warranties of APCOA APCOA hereby represents and warrants to each Standard Owner as follows: Section 4.1. Incorporation; Authorization; Etc. (a) APCOA is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. APCOA (A) has all requisite corporate or comparable power to own its properties and assets and to carry on its business as it is now being conducted and (B) is in good standing and is duly qualified to transact business in each domestic jurisdiction in which the nature of property owned or leased by it or the conduct of its business requires it to be so qualified, except where the failure to be in good standing or to be duly qualified to transact business, would not, individually or in the aggregate, have a material adverse effect on the APCOA Business Condition or otherwise impair consummation of the Combination. (b) APCOA has full corporate or comparable power to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement and the performance of APCOA's obligations hereunder have been duly and validly authorized by all necessary proceedings on the part of APCOA and no other proceedings or actions on the part of APCOA, its board of directors or stockholders are necessary therefor. Except as set forth in Schedule 4.1(b), the execution, delivery and performance by APCOA of this Agreement will not (i) violate any provision of APCOA's certificate of incorporation or by-laws, (ii) except for Management Contracts or as disclosed in Schedule 4.1(b), violate any provision -21- 34 of, or be an event that is (or with the passage of time will result in) a violation of, or result in the acceleration of or entitle any party to accelerate (whether after the giving of notice or lapse of time or both) any obligation under, or result in the imposition of any lien upon or the creation of a security interest in the assets of APCOA pursuant to, any mortgage, lien, lease, agreement, instrument, order, arbitration award, judgment, injunction or decree to which APCOA is a party or by which it is bound, or (iii) except as disclosed in Schedule 4.1(b) or 4.12, violate or conflict with any statute, rule or regulation applicable to APCOA or any of its properties or assets or any other material restriction of any kind or character to which APCOA is subject, that, in the case of any of clauses (ii) and (iii), would, individually or in the aggregate, have a material adverse effect on the APCOA Business Condition or impair the consummation of the Combination. This Agreement has been duly executed and delivered by APCOA, and, assuming the due execution and delivery hereof by each Standard Owner, constitutes the legal, valid and binding obligation of APCOA, enforceable against APCOA in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting the rights and remedies of creditors generally and to general principles of equity (regardless of whether in equity or at law. The execution of the Employment Agreement and the Consulting Agreement by APCOA, and all payments that may become due thereunder, have been approved in a manner that would satisfy the requirements of Section 280G(b)(5)(A)(ii) and 280G(b)(5)(B) of the Code with respect to a change of control of APCOA and its affiliates, assuming such change of control were to take place immediately after the Closing Date. Section 4.2.. As of the date hereof, the authorized capital stock of APCOA consists of 3,000 shares of Common Stock, par value $1.00 per share ("APCOA Common Stock"), and 2,000 shares of Preferred Stock (of any class or series), par value $.01 per share ("APCOA Preferred Stock"). At the date hereof, 26.3 shares of APCOA Common Stock were issued and outstanding, all of which were validly issued, fully paid and nonassessable and owned as set forth in Schedule 4.2. As of the date hereof, except for this Agreement and except as set forth on Schedule 4.1, there are no options, warrants, calls, rights or agreements to which APCOA or any of its Subsidiaries is a party or by which any of them is bound obligating APCOA or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock, partnership interests or other equity interests of APCOA or any of its Subsidiaries, or securities convertible into or exchangeable for such interest or obligating Holberg or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, right or agreement. As of the date hereof, there are no outstanding contractual obligations of APCOA or any of its Subsidiaries (i) restricting the transfer of, (ii) affecting the voting rights of, (iii) requiring the repurchase, redemption or disposition of, (iv) requiring the registration for sale of or (v) granting any preemptive or antidilutive right with respect to, any shares of APCOA Common Stock or any capital stock, partnership interests or other equity interests of any of its Subsidiaries. The outstanding shares of capital stock, partnership interests or other equity interests of each Subsidiary of APCOA are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights and owned by APCOA or its Subsidiary, free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on voting rights, charges and other encumbrances of any nature whatsoever. Upon issuance in accordance with the terms of this Agreement, the Standard APCOA Shares shall be validly issued, fully paid and nonassessable shares of APCOA Common Stock. -22- 35 Section 4.3. Financial Statements. (a) Attached as Schedule 4.3(a) are (i) true and complete copies of the audited balance sheets of APCOA on a consolidated basis as of December 31, 1994, December 31, 1995 and December 31, 1996 and the audited income statements and statements of cash flows of APCOA on a consolidated basis for the 12-month periods ending December 31, 1994, December 31, 1995 and December 31, 1996 and (ii) true and complete copies of the unaudited balance sheet of APCOA on a consolidated basis as of September 30, 1997 and the unaudited income statement of APCOA on a consolidated basis for the nine-month period ending September 30, 1997 (collectively, the "APCOA Financial Statements"). (b). Each balance sheet included in the APCOA Financial Statements may be hereinafter referred to as a "APCOA Balance Sheet," and each income statement included in the APCOA Financial Statements may be hereinafter referred to as a "APCOA Income Statement" and each statement of cash flows included in the APCOA Financial Statements may be hereinafter referred to as a "APCOA Statement of Cash Flows." (c) The APCOA Financial Statements (including any notes thereto) are accurate and complete in all material respects, were prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto) and, in the case of any APCOA Balance Sheet, fairly present the consolidated financial position of APCOA at the date thereof or, in the case of any APCOA Income Statement and APCOA Statement of Cash Flows, fairly present the consolidated results of operations of APCOA for the periods then ended (subject, in the case of unaudited APCOA Financial Statements, to any other adjustments described therein and normal year-end audit adjustments). Except for the restatement of depreciation and amortization expense related to the purchase of APCOA by Holberg, APCOA has not, since January 1, 1996, made any change in the accounting practices or policies applied in the preparation of the APCOA Financial Statements. The books and records of APCOA have been, and are being, maintained in accordance with generally accepted accounting principles and other applicable legal and accounting requirements. Section 4.4. Undisclosed Liabilities. Except as reflected, reserved against or otherwise disclosed in the APCOA Balance Sheet as of September 30, 1997, and except as set forth on Schedule 4.4, and except, as of the Closing Date, for obligations incurred in connection with the transactions contemplated hereby and related expenses, there are no liabilities, debts (including obligations in respect of capital leases), or obligations of or claims against APCOA (of any nature whether or not required to be disclosed pursuant to generally accepted accounting principles) which would individually or in the aggregate reasonably be expected to have a material adverse effect on the APCOA Business Condition or that would have been required to be reflected on such balance sheet or in the related notes in accordance with United States generally accepted accounting principles consistently applied by APCOA. Section 4.5. Properties. (a) No real property is owned by APCOA. Schedule 4.5(a) describes all leases for real property leased by APCOA or its Subsidiary as lessee or lessor other than Management Contracts (the "APCOA Leased Real Property"), such description including an identification of the lease agreement therefor and any and all amendments, modifications, side letters and other agreements relating thereto, the names of the lessor and lessee there- -23- 36 under, the title and date thereof, the address of the premises leased thereunder, and the term, including any extension options, if not apparent from the lease agreement. All leases with respect to the APCOA Leased Real Property ("APCOA Leases") are in effect in accordance with their terms and create a valid and binding interest in the APCOA Leased Real Property in favor of APCOA or its Subsidiary and, except as set forth in Schedule 4.5(a), all rents and other amounts (including taxes, insurance and utilities) required to be paid by APCOA or its Subsidiary under such APCOA Leases, which have become due, have been paid. To the actual knowledge of APCOA, except as set forth in Schedule 4.5(a), there are no condemnation proceedings, special assessments, impact fees or similar charges pending or, to the actual knowledge of APCOA, threatened against the APCOA Leased Real Property, and APCOA and its Subsidiaries have not received or been served with any notice with respect to any of the foregoing. To the actual knowledge of APCOA, the current use by APCOA and its Subsidiaries of the APCOA Leased Real Property complies in all respects with all applicable zoning laws and building and use restrictions (including all agreements of APCOA and its Subsidiaries applicable thereto) and condominium restrictions, except as could not be reasonably expected, individually or on the aggregate, to have a material adverse effect with respect to the APCOA Business Condition. APCOA has no actual knowledge of any proposed change in the zoning or building ordinances affecting the APCOA Leased Real Property. (b) Except as disclosed in Schedule 4.5(b), no lease of APCOA Leased Real Property requires APCOA or its Subsidiary to make any structural repairs or maintenance beyond routine maintenance. To the actual knowledge of APCOA, except as disclosed in Schedule 4.5(b), all buildings, structures, improvements and fixtures on, under, over or within APCOA Leased Real Property, and all other aspects of each APCOA Leased Real Property: (i) are in good operating condition and repair (subject to normal wear and tear) and are structurally sound and free of any material defects; (ii) are suitable, sufficient and appropriate in all respects for their current uses, except for such failures as, together with all other such failures, could not reasonably be expected to have a material adverse effect on the APCOA Business Condition; (iii) comply with all applicable codes and rules of national and local associations and boards of insurance underwriters; (iv) are within the boundary lines of their respective APCOA Leased Real Property; and (v) consist of sufficient land, parking areas, sidewalks, driveways and other improvements to permit the continued use of such facilities in the manner and for the purposes to which they are presently devoted. There are no outstanding or, to the actual knowledge of APCOA, threatened requirements by any insurance company which has issued an insurance policy covering any APCOA Leased Real Property, or by any board of fire underwriters or other body exercising similar functions, requiring any material repairs or work to be done on any APCOA Leased Real Property. Section 4.6. Personal Property. Schedule 4.6 sets forth a list of all personal property (including fixed assets) owned by APCOA with an initial purchase price or book value in excess of $25,000 and all Encumbrances thereon. APCOA has good and marketable title to such property free and clear of Encumbrances, except Permitted Encumbrances and except for those Encumbrances set forth in Schedule 4.6. All such personal property is in good operating condition and repair in all material respects, ordinary wear and tear excepted, and is sufficient for the operation of APCOA's business consistent with past practice. -24- 37 Section 4.7. Absence of Certain Changes. Since December 31, 1996, there has been no material adverse change in, and there has not been any occurrence which, when taken together with all other such changes or occurrences, would reasonably be expected to have a material adverse effect on the APCOA Business Condition. Since September 30, 1997, except as set forth on Schedule 4.7, APCOA has not taken any action which would have been prohibited by the provisions of Section 5.4 had this Agreement been in effect at the time of such action. Section 4.8. Litigation; Orders. Except for litigation in the ordinary course of business covered by customary insurance reserves which would not, individually or in the aggregate, have a material adverse effect on the APCOA Business Condition and except as disclosed in Schedule 4.8, (i) there are no lawsuits, actions, administrative or arbitration or other proceedings or Government Authority investigations pending or, to the actual knowledge of APCOA, threatened against APCOA by any person or Government Authority and (ii) there are no judgments or outstanding orders, injunctions, decrees, stipulations or awards (whether rendered by a court or administrative agency, or by arbitration) against APCOA or any of the properties of APCOA, in each of clauses (i) or (ii) that would reasonably be expected to, individually or in the aggregate, have a material adverse effect on the APCOA Business Condition or that would impair the consummation of the Combination. Section 4.9. Intellectual Property. Schedule 4.9 lists all material patents, trademarks, trade names, service marks, registered copyrights and pending applications owned by APCOA or used by APCOA as of the date hereof. The intellectual property listed on Schedule 4.9 is sufficient for the conduct of APCOA's business as conducted as of the date hereof and to the actual knowledge of APCOA, APCOA have the right to use all such intellectual property. Except as disclosed in Schedule 4.9, no claims which would, individually or in the aggregate, reasonably be expected to have a material adverse effect on the APCOA Business Condition have been asserted by any person (i) to the effect that the conduct of business by APCOA infringes on any patents, trademarks, trade names, service marks or registered copyrights, (ii) against the use by APCOA of any trademarks, trade names, technology, know-how or processes necessary to the business of APCOA or (iii) challenging the ownership, validity or effectiveness of any of the patents, trademarks, trade names, service marks, registered copyrights or applications therefor listed on Schedule 4.9. Section 4.10. Licenses, Approvals, Other Authorizations, Consents, Reports, Etc. (a) "APCOA Licenses" means all material licenses, permits, franchises and other authorizations of any Government Authority possessed by or granted to APCOA. To the knowledge of APCOA, except as disclosed in Schedule 4.10(a), all APCOA Licenses are in full force and effect except for those whose failure to be in full force and effect would not reasonably be expected to, individually or in the aggregate, have a material adverse effect on the APCOA Business Condition. Except as disclosed in Schedule 4.10(a), no proceeding is pending, or, to the actual knowledge of APCOA, threatened, seeking the revocation or limitation of any such APCOA License that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the APCOA Business Condition. (b) Schedule 4.10(b) lists all registrations, filings, applications, notices, consents, approvals, orders, qualifications and waivers required to be made, filed, given or obtained -25- 38 by APCOA with, to or from any person (other than under Management Contracts), including any Government Authority, in connection with the consummation of the Combination except for those the failure to make, file, give or obtain which would not, individually or in the aggregate, either have a material adverse effect on the APCOA Business Condition or impair the consummation of the Combination. Section 4.11. Labor Matters. Except as described in Schedule 4.11, APCOA has no written or oral contracts of employment with any employee in a position of regional manager level or above and, except as described in Schedule 4.11, APCOA has not been in the past five years or is presently a party to any collective bargaining agreement, subject to a legal duty to bargain with any labor organization on behalf of its employees or the object of any attempt to organize employees for collective bargaining or similar purposes or is presently operating under an expired collective bargaining agreement. Schedule 4.11 contains a complete and accurate list as of the date hereof of all employees in positions of regional manager level or above of APCOA by department and location and their titles, salaries and all other forms of compensation, dates of hire, and indicating which of such employees have severance arrangements or are covered by change-of-control provisions applicable to such employees. APCOA is not a party to or subject to any pending or, to the knowledge of APCOA, threatened labor dispute (including a strike, work stoppage, organizing attempt, picketing, boycott or similar activity). To the knowledge of APCOA, APCOA has complied in all material respects with all applicable federal, state, and local laws, ordinances, rules and regulations and requirements relating to the employment, payment and termination of labor, including the provisions thereof relative to wages, hours, severance, vacation, collective bargaining, employee benefits, and employee benefit plans, contributions, unemployment, withholding taxes and occupational health and safety and equal opportunity and non-discrimination laws (including the Americans with Disabilities Act). APCOA has made all deductions required by law to be made for employees' wages, and salaries and either remitted the same to appropriate Government Authorities or provided for the same in its accounts and is not liable for any arrears of wages or any taxes or penalties for failure to comply with the payment or repayment of any of the foregoing. Section 4.12. Compliance with Laws. Except as may be indicated in Schedule 4.12, the conduct of APCOA's business complies with all statutes, laws, regulations, ordinances, rules, judgments, orders or decrees applicable thereto, and has so complied at all time periods prior hereto, except for violations or failures so to comply, if any, that, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the APCOA Business Condition. Section 4.13. Insurance. Schedule 4.13 lists all insurance policies owned or held by APCOA which may cover the business or assets of APCOA. All such policies are in full force and effect and have not lapsed in coverage, all premiums with respect thereto covering all current periods have been paid to the extent due, and no written notice of cancellation or termination has been received with respect to any such policy. Section 4.14. Material Contracts. Except as disclosed in Schedule 4.5(a), 4.11 or 4.14, APCOA is not a party to any (i) employment or consulting agreement having a remaining term of at least one year and requiring payments of base salary in excess of $100,000 per year -26- 39 or aggregate payments of base salary in excess of $300,000, (ii) sales representative or agency contract which is not terminable on 12 months' (or less) notice, (iii) other than Management Contracts, lease of real or personal property with an annual base rental obligation of more than $25,000, or a total remaining rental obligation of more than $100,000, (iv) joint venture or partnership agreement, (v) contract or agreement as to the sale, transfer or other disposition of any assets (other than de minimis assets), or as to any joint venture or partnership, or as to the purchase of any assets or securities of any person (other than de minimis assets or securities), (vi) agreement limiting in any way APCOA's ability to compete with any person in any geographic location or any line of business, or (vii) other than Management Contracts, other contract, agreement or arrangement, entered into other than in the ordinary course of business, requiring future payment or payments in excess of $25,000 per year or otherwise material to the APCOA's business. With respect to all contracts listed on Schedule 4.14, except as disclosed on Schedule 4.14, such contracts are valid and binding and APCOA is not in material breach thereof or material default thereunder and there does not exist under any provision thereof any event that, with the giving of notice or the lapse of time or both, would constitute such a breach or default, except for such failures to be valid and binding and such breaches, defaults and events as to which requisite waivers or consents have been or are obtained or which could not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the APCOA Business Condition. Schedule 4.14 lists all notes, mortgages, indentures and other obligations and agreements and other instruments for or relating to any lending or borrowing (including assumed debt) with a remaining principal of $25,000 or more effected by APCOA or to which any assets of APCOA are subject (except with respect to any such lending or borrowing on an inter-company basis). Section 4.15. Management Contracts. Schedule 4.15 is a list of all Management Contracts as of the date hereof except for those Management Contracts for which certain information regarding such Management Contracts is Special Evaluation Material as defined in Schedule 5.1(a) ("Special Management Contracts"), together with, as to each, the location name, the address, the start date (or, if not available, the approximate start date), the end date, the renewals, the operating profit for FY 1995 and 1996 and YTD 1997, a description of any change of control or similar provision contained therein and a notation indicating whether such Management Contract is written or oral and as to the APCOA Special Management Contracts, the aggregate operating profit for FY 1995 and 1996 and YTD 1997. With respect to each Management Contract, such Management Contract is valid and binding and APCOA is not in material breach thereof or material default thereunder and there does not exist under any provision thereof any event that, with the giving of notice or the lapse of time or both, would constitute such a breach or default, and there is no threatened breach by a party to a Management Contract and there are no circumstances known to APCOA which would cause a Management Contract to become not valid or binding or would cause a breach or default in a Management Contract except for such failures to be valid and binding and such breaches, defaults and events as could not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the APCOA Business Condition. Section 4.16. Brokers, Finders, Etc. APCOA has not employed any broker, finder, consultant or other intermediary in connection with the Combination or the other matters -27- 40 contemplated hereby who would have a valid claim for a fee or commission from any Standard Owner in connection with the Combination or such transactions. Section 4.17. Hazardous Materials. Except as set forth in Schedule 4.17, (i) there is no liability resulting from a violation of any applicable Environmental Law and (ii) there are no claims pending or, to the knowledge of APCOA, threatened, and APCOA has not received any notice, alleging that APCOA is or has been in violation of any applicable Environmental Law. Schedule 4.17 contains a true and accurate list of any APCOA Leased Real Property or property under a Management Contract on which any petroleum products (including gasoline and oil but excluding cleaning solvents not customarily considered petroleum products) or diesel fuel is presently stored (other than in the fuel tanks of vehicles which are parked on such APCOA Leased Real Property) or sold by APCOA, or, to the actual knowledge of APCOA, was stored or sold by APCOA. Section 4.18. Knowledge Regarding Representations. APCOA is not aware of any inaccuracy or misstatement in, or breach of, any representation or warranty of Standard Owners or the Standard Companies contained herein. ARTICLE V Covenants of Standard Owners and APCOA Section 5.1. Investigation of Business; Access to Properties and Records, Etc. (a) Subject to the Amended and Restated Due Diligence Agreement dated as of November 24, 1997 (the "Due Diligence Agreement"), after the date hereof, each Party shall cause to be afforded to the other Party and its representatives reasonable access to its respective offices, properties, books and records during normal business hours, in order that the other Party may have full opportunity to make such investigations as it desires of the affairs of the Company, provided that such investigation shall only be upon reasonable notice and shall not unreasonably disrupt personnel and operations. All requests for access to the offices, properties, books, and records of a Party shall be made to such representatives of such Party as such Party shall designate, who shall be solely responsible for coordinating all such requests and all access permitted hereunder. It is further agreed that neither Party nor its representatives shall contact any of the employees, customers, suppliers, joint venture partners or other associates or Affiliates of the other Party in connection with the transactions contemplated hereby, whether in person or by telephone, mail or other means of communication, without the specific prior written authorization of such representatives of the other Party. All notices and applications to, filings with, and other contacts with any Government Authority relating to the transactions contemplated hereby shall be made by either Party only after prior consultation with and approval by the other Party, which approval shall not be unreasonably withheld. If either Party discovers any breach of any representation or warranty contained in this Agreement or any circumstance or condition that upon Closing would constitute such a breach, such Party covenants that it shall promptly so inform the other Party of such event in writing. (b) Any information provided to either Party or its representatives pursuant to this Agreement or in connection with the transactions contemplated hereby shall be held by such Party and its representatives in accordance with and subject to the terms set forth under "Confi- -28- 41 dentiality" in that certain letter agreement, dated October 30, 1997, by and among Standard Owners and certain of their Affiliates, APCOA and Holberg (the "Letter Agreement"), and in accordance with the Due Diligence Agreement. Section 5.2. Efforts; Obtaining Consents; Antitrust Laws. (a) Subject to the terms and conditions herein provided, each Party shall use its reasonable efforts to take or cause to be taken all actions and to do or cause to be done all things necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated hereby, and to cooperate with the other in connection with the foregoing, including using all reasonable efforts (i) to seek all necessary waivers, consents and approvals from other Parties to material loan agreements, leases and other contracts and such estoppel certificates from landlords and other third parties as APCOA may reasonably request (except that Standard Owners and the Standard Companies shall not be obligated to seek waivers, consents, approvals or estoppel certificates which respect to any Management Contracts (it being further understood and agreed, however, that this exception shall not be construed in derogation of any representation, warranty or condition contained herein)), (ii) to seek all consents, approvals and authorizations that are required to be obtained under any federal, state, local or foreign law or regulation, (iii) to lift or rescind any injunction or restraining order or other order adversely affecting the ability of the Parties hereto to consummate the transactions contemplated hereby, (iv) to effect all necessary registrations and filings including filings under the HSR Act and submissions of information requested by any Government Authority and (v) to fulfill all conditions set forth in Articles VIII and IX. Each Party further shall, with respect to any threatened or pending preliminary or permanent injunction or other order, decree or ruling or statute, rule, regulation or executive order that would adversely affect the ability of the Parties hereto to consummate the transactions contemplated hereby, use all reasonable efforts to prevent the entry, enactment or promulgation thereof, as the case may be. Without limiting the generality of the foregoing, APCOA shall use its reasonable efforts to obtain financing having terms no more onerous than as described in Section 8.5. (b) Each Party hereto shall promptly inform the other of any material communication from the Federal Trade Commission, the United States Department of Justice or any other Government Authority regarding any of the transactions contemplated hereby. If either Party or any Affiliate thereof receives a request for additional information or documentary material from any such Government Authority with respect to the transactions contemplated hereby, then such Party will endeavor in good faith to make or cause to be made, as soon as reasonably practicable and after consultation with the other Party, an appropriate response in compliance with such request. Section 5.3. Further Assurances. Each Party agrees that, from time to time, whether before, at or after the Closing Date, it shall, and shall cause its Affiliates to, execute and deliver such further instruments of conveyance and transfer and take such other action as may be necessary to carry out the purposes and intents hereof. Section 5.4. Conduct of Business. (a) From the date hereof to the Closing, except as disclosed on Schedule 5.4(a) or otherwise provided for in this Agreement, and, except as -29- 42 consented to or approved by APCOA in its reasonable discretion, Standard Owners agree that, in respect of the Standard Companies and their respective Subsidiaries: (i) such parties shall operate their respective businesses in the ordinary course in all material respects and shall use reasonable efforts to preserve their respective businesses intact, to keep available the services of employees and to preserve the goodwill of customers and others having business relations with such parties; (ii) such parties shall not (A) create, incur or assume any long-term or short-term debt (including obligations in respect of capital leases), except Permitted Debt or inter- and intra-company loans and advances among Standard Companies, (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any person other than such parties, or (C) make any loans, advances or capital contributions to or investments in any person other than such parties (except for customary loans or advances to employees); (iii) unless required by the Employee Benefit Plans or law, such parties shall not (A) increase in any manner the base compensation of, or enter into any new bonus or incentive agreement or arrangement with, any of its directors, officers or other key employees, other than in accordance with past practice, (B) pay or enter into any agreement to pay any pension, retirement allowance or similar employee benefit to any such director, officer or key employee, whether past or present, (C) enter into any new employment, severance, consulting, or other compensation agreement with any existing director, officer or key employee or (D) commit to any additional pension, profit-sharing, deferred compensation, group insurance, severance pay, retirement or other employee benefit plan, fund or similar arrangement or amend or commit itself to amend any of such plans, funds or similar arrangements; (iv) such parties shall not (A) sell, transfer or otherwise dispose of any assets (other than the Excluded Assets or de minimis assets), (B) create any new security interest, lien or encumbrance on properties or assets, (C) enter into any joint venture or partnership, or (D) purchase any assets or securities of any person (other than de minimis assets or securities), it being expressly understood and agreed that the proposed acquisition of Century shall be prohibited hereby unless APCOA shall first have approved such acquisition, in its sole discretion; and (v) no such party shall agree to take any action prohibited by this Section. (b) From the date hereof to the Closing, except as disclosed on Schedule 5.4(b) or otherwise provided for in this Agreement, and, except as consented to or approved by Standard Owners in their reasonable discretion, APCOA agrees that, in respect of it and its Subsidiaries: (i) APCOA shall operate its businesses in the ordinary course in all material respects and shall use reasonable efforts to preserve its business intact, to keep available the services of employees and to preserve the goodwill of customers and others having business relations with it; -30- 43 (ii) APCOA shall not (A) make distributions or pay dividends on APCOA capital stock except as contemplated or permitted by this Agreement and except for dividends in kind on outstanding APCOA Preferred Stock or (B) issue any shares of APCOA Common Stock in a transaction which would require (X) Standard Owners' consent or (Y) give rise to the exercise of preemptive rights by Standard Owners pursuant to the Stockholders Agreement were such Stockholders Agreement in effect at such time unless, in the case of (Y), such preemptive rights are extended to Standard Owners in connection with the consummation of the Combination; (iii) APCOA shall not engage in any transaction with Affiliates which would be prohibited pursuant to the Stockholders Agreement were such Stockholders Agreement in effect at such time; and (iv) APCOA shall not agree to take any action prohibited by this Section. (c) Notwithstanding the foregoing, nothing in this Agreement shall be construed or interpreted to prevent the consummation of the following transactions, at or prior to the Closing, which transactions shall be expressly permitted and authorized: (i) Standard Owners shall be able to cause the distribution by the Standard Companies to Standard Owners of an amount in cash equal to the Estimated Distribution Amount, computed and derived from financial records prepared in accordance with generally accepted accounting principles consistently applied, and in accordance with past practice, as to the calculation of such distributions, and based on operations in accordance with past practice. (ii) APCOA shall be able to take action such that (1) all intercompany obligations between APCOA and Holberg or its Affiliates (all of which are summarized on Schedule 5.4(c)) shall be canceled or modified as set forth on such Schedule, (2) upon Closing, the APCOA Preferred Stock shall be eliminated, and (3) APCOA shall make a net cash payment of $8,000,000 to Holberg in respect of the foregoing (it being understood and agreed that, if any of such $8,000,000 is required not to be paid by APCOA in order to satisfy the condition set forth in Section 8.5, with respect to the amount which cannot be paid, Holberg (or its designated Affiliate) shall be entitled to retain or create a non-convertible security of APCOA senior to APCOA Common Stock, which security shall be repayable to Holberg (or its designated Affiliate) at any time as may be permitted by applicable financing arrangements and at an interest rate or dividend rate not to exceed the lesser of (x) 13.0% per annum and (y) a rate per annum that is 250 basis points in excess of the rate on any subordinated financing that may be incurred to finance the transactions contemplated hereby). (iii) The Standard Owners shall, prior to the Closing, cause all interests in Standard Parking/Marina, L.L.C. held by any Standard Company to be conveyed to an entity which is not a Standard Company. Section 5.5. Public Announcements. From the date hereof until the Due Diligence Out Termination Date, except as required by law, no public announcements with respect to -31- 44 the existence of this Agreement, the terms hereof or the transactions contemplated hereby shall be made without the prior written consent of the Parties or as required by law. The Parties shall consult with each other before issuing any press release or other public announcement with respect to the transactions contemplated hereby and shall not issue any such press release or public announcement prior to such consultation. Section 5.6. Financial Statements. (a) Not later than February 6, 1998, Standard Owners shall deliver to APCOA an audited balance sheet of the Standard Business on a consolidated basis as of December 31, 1997 and an audited income statement and statement of cash flows of the Standard Business on a consolidated basis for the 12-month period ending December 31, 1997, in each case accompanied by an unqualified opinion of AMG (collectively, the "Audited 1997 Standard Financial Statements" and, together with the Historical Standard Financial Statements, the "Audited Standard Financial Statements"), which in each case do not take into account the Excluded Assets or any results of operations related to the ownership thereof in any way (but including results of operations that are not related to the ownership of the Excluded Assets and that will continue following the consummation of the Combination, such as lease payments or management fees made to the Standard Companies in respect of operations located on Excluded Assets), and otherwise reflecting the Standard Business as the same will be conveyed in the Combination. From and after delivery of the Audited 1997 Standard Financial Statements, all representations and warranties in Section 3.3 as to the Historical Standard Financial Statements and each Historical Standard Balance Sheet, Historical Standard Income Statement and Historical Standard Statement of Cash Flows shall thereafter relate also and in addition to the Audited 1997 Standard Financial Statements and each balance sheet, income statement and statement of cash flows included therein. (b) Not later than February 6, 1998, APCOA shall deliver to Standard Owners an audited balance sheet of APCOA on a consolidated basis as of December 31, 1997 and an audited income statement and statement of cash flows of APCOA on a consolidated basis for the 12-month period ending December 31, 1997, in each case accompanied by an unqualified opinion of Ernst & Young LLP (collectively, the "Audited 1997 APCOA Financial Statements"). From and after delivery of the Audited 1997 APCOA Financial Statements, all representations and warranties in Section 4.3 as to the APCOA Financial Statements shall thereafter relate also and in addition to the Audited 1997 APCOA Financial Statements and each balance sheet, income statement and statement of cash flows included therein. (c) Time shall be of the essence with respect to the deliveries of financial statements contemplated by this Section 5.6. Section 5.7. Schedules. Each of APCOA and Standard Owners acknowledge that for business and legal reasons, APCOA and Standard Owners have not been able to compile the Schedules contemplated hereby prior to the date of this Agreement. Each of APCOA and Standard Owners covenants that it shall deliver to the other these Schedules (and make available for review and copying all documents referred to therein) within seven (7) days after the execution and delivery of this Agreement (the earlier of (x) such seventh (7th) day and (y) the actual date of the delivery of the last of all APCOA or Standard Owners Schedules being the "Schedules Date"). -32- 45 ARTICLE VI Employee Benefits Section 6.1. Employee Benefit Plans. (a) Schedule 6.1(a) lists all material compensation and benefit plans, contracts and arrangements (other than routine administrative procedures or Government Authority-required programs, but including all pension, profit sharing, savings and thrift, incentive or deferred compensation, severance pay and medical, disability and life insurance plans) for the benefit of any current employees (whether active or on leave of absence) of any Standard Company ("Current Employees") or former employees of any Standard Company ("Former Employees" and, together with Current Employees, "Employees") or their respective dependents (collectively, "Employee Benefit Plans"). Schedule 6.1(a) also specifies which Employee Benefit Plans are maintained solely by a Standard Company ("Company Employee Benefit Plans"). (b) All Employee Benefit Plans that are "employee benefit plans," as defined in Section 3(3) of ERISA, are in compliance in all material respects with and have been administered in material compliance with all applicable requirements of law, including the Code and ERISA, and all contributions required to be made to each such plan under the terms of such Employee Benefit Plan, ERISA or the Code prior to the Closing Date have been or will be, as the case may be, timely made. (c) With respect to any Employee Benefit Plan which is intended to qualify under Section 401(a) of the Code ("Pension Plan"), a favorable determination letter as to qualification under Section 401(a) of the Code has been issued and the related trust has been determined to be exempt from taxation under Section 501(a) of the Code and, to the knowledge of Standard Owners and any Standard Company, any amendment made to any Pension Plan subsequent to the date of such determination letter has not adversely affected the qualified status of any such plan. Each Standard Company shall have performed all material obligations required to be performed by them under, and are not in default under or in violation of, the terms of any of the Employee Benefit Plans in any material respect. To the knowledge of Standard Owners and any Standard Company, none of Standard Owners, any Standard Company or any other "disqualified person" (as defined in Section 4975 of the Code) has engaged in any non-exempt "prohibited transaction" (as such term is defined in Section 4975 of the Code) that could subject any Pension Plan (or its related trust), any Standard Company or any officer, director or employee of any Standard Company to a material tax or penalty imposed under Section 4975 of the Code. (d) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) materially increase any benefits otherwise payable under any Employee Benefit Plan or (ii) result in the acceleration of the time of payment or vesting of any such benefits to any material extent. (e) No Employee Benefit Plan, other than a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA (a "Multiemployer Plan"), is subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code. There does not now exist, nor do any circumstances now exist that could result in, any liability on the part of any Standard Company or any ERISA Affiliate of a Standard Company (i) under Title IV of ERISA, (ii) under Section -33- 46 302 of ERISA, (iii) under Sections 412 and 4971 of the Code, or (iv) for failure to comply with the continuation coverage requirements of section 601 et seq. of ERISA and section 4980B of the Code, in each case other than liabilities relating to the Multiemployer Plans listed on Schedule 6.1(f). Without limiting the generality of the foregoing, no Standard Company and no ERISA Affiliate of a Standard Company has engaged in any transaction described in Section 4204 of ERISA or, to the knowledge of Standard Owners and the Standard Companies, any transaction described in Section 4069 or 4212 of ERISA. (f) The Employee Benefit Plans listed on Schedule 6.1(f) are the only Employee Benefit Plans that are Multiemployer Plans to which any Standard Company or any ERISA Affiliate of a Standard Company contributes, has an obligation to contribute, or has at any time since January 1, 1991, contributed or been obligated to contribute. With respect to each such Multiemployer Plan: (i) neither any Standard Company nor any ERISA Affiliate of a Standard Company has incurred any liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as those terms are defined in Part I of Subtitle E of Title IV of ERISA (any such liability, a "Withdrawal Liability") that has not been satisfied in full; (ii) if any Standard Company or any ERISA Affiliate of a Standard Company were to experience a withdrawal or partial withdrawal from such plan, no Withdrawal Liability would be incurred; and (iii) no Standard Company and no ERISA Affiliate of a Standard Company has any knowledge that any such plan is in reorganization, has been terminated, or may reasonably be expected to be in reorganization or to be terminated within the reasonably foreseeable future. (g) No Standard Company has any liability for life, health, medical, disability or other welfare benefits to former employees or beneficiaries or dependents thereof, except for health continuation coverage as required by Section 4980B of the Code or Part 6 of Title I of ERISA or conversion coverage available under a group insurance contract. ARTICLE VII Tax Matters Section 7.1. Standard Tax Returns. (a) All federal, state, local, foreign and other Returns, relating to any Standard Company or any combined, consolidated, affiliated or unitary tax group of which any Standard Company is or has been a member (a "Standard Affiliated Group") and required to be filed have been or will be timely filed. Such Returns are (or will, when filed, be) true, correct and complete in all material respects. Except for Taxes the non-payment of which would not, in the aggregate, be material, the following Taxes have (or by the Closing Date will have) been duly and timely paid: (i) all Taxes shown to be due on such Returns, (ii) all deficiencies and assessments of Taxes of which written notice has been received by any Standard Company or any Standard Affiliated Group that are payable by any Standard Company or chargeable as a lien upon any assets of any Standard Company other than deficiencies or assessments for Taxes that are being contested in good faith by appropriate proceedings and have been reserved against in accordance with generally accepted accounting principles and (iii) all other Taxes due and payable by any Standard Company on or before the Closing Date for which neither filing of Returns nor written notice of deficiency or assessment is required, of which Standard Owners are aware, that are or may become payable by any Standard Company or chargeable as a lien upon any assets of any Standard Company. Accruals and reserves have been -34- 47 made on the Historical Standard Balance Sheet as of October 31, 1997 that will be adequate for the payment of all Taxes due and payable by any Standard Company for all periods (or portions thereof) ending on or before October 31, 1997. All Taxes required to be withheld by or on behalf of any Standard Company have been so withheld, and such withheld Taxes have either been duly and timely paid to the proper Government Authorities or set aside in accounts for such purpose. (b) No agreement or other document extending, or having the effect of extending, the period of assessment or collection of any Taxes for which any Standard Company may be held liable, and no power of attorney with respect to any such Taxes, has been executed or filed with the IRS or any other Taxing Authority. (c) Except as set forth on Schedule 7.1(c), no Standard Company is or has been a member of any Standard Affiliated Group for purposes of filing Returns or paying Taxes at any time. (d) Standard Owners have made available to APCOA complete and accurate copies of the Returns filed by each Standard Company or any member of its Standard Affiliated Group with respect to all federal, state, local, foreign and other income, profits, franchise, gross receipts and capital Taxes that are or have been required to be filed for all periods for which the statute of limitations for assessment or collection of such Taxes has not expired, and have delivered to APCOA copies of all such Returns relating to income Taxes. No lien for Taxes exists with respect to any of the assets of any Standard Company. There are no Taxes for which any Standard Company could be held liable asserted in writing by any Taxing Authority to be due. No unresolved issue has been raised in writing by any Government Authority in the course of any audit with respect to Taxes for which any Standard Company could be held liable. Except as set forth on Schedule 7.1(d), the audits of such Returns with respect to federal income Taxes have been completed, or the statute of limitations with respect to federal income Taxes has expired, for all Tax periods through and including the year ended December 31, 1993. Except as set forth in Schedule 7.1(d), no Returns filed by any Standard Company or any member of its Standard Affiliated Group with respect to federal income Taxes are currently under audit by the IRS. Except as set forth on Schedule 7.1(d), no other Returns filed by any Standard Company or any member of its Standard Affiliated Group or Taxes for which any Standard Company could be held liable are currently under audit by any other Taxing Authority, and no Taxing Authority has given notice in writing that it will commence any such audit. Except as set forth on Schedule 7.1(d), no Taxing Authority is now asserting against any Standard Company any deficiency or claim for additional Taxes or any adjustment of Taxes, and there is no reasonable basis for any such assertion of which Standard Owners or any Standard Company is aware. (e) No election has been made to have the provisions of Section 341(f) of the Code apply to any Standard Company. (f) No Standard Company is a party to or bound by any tax sharing or similar agreement or arrangement. (g) No assets of any Standard Company are subject to any lease under Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect prior to the date of en- -35- 48 actment of the Tax Equity and Fiscal Responsibility Act of 1982. No assets of any Standard Company are subject to a lease under Section 7701(h) of the Code or under any predecessor provision. (h) There are no elections in effect made by or with respect to any Standard Company pursuant to Section 338 or Section 336(e) of the Code or the regulations thereunder. (i) No Standard Company has agreed, or is required, to make any adjustment under Section 481 of the Code (or any comparable provision of state, local or foreign law) by reason of a change in accounting methods or otherwise. (j) Each of Standard Parking, L.P., a Delaware limited partnership, Standard Parking I, L.L.C., a Delaware limited liability company, Standard Parking II, L.L.C., a Delaware limited liability company, and Standard Parking of Canada, L.P., an Illinois limited partnership (and any predecessor of any of the foregoing) is and at all times has been properly classified for federal, state and local income tax purposes as a partnership and not as an association taxable as a corporation. (k) Each of (i) Standard Parking Corporation, an Illinois corporation, (ii) Standard Auto Park, Inc., an Illinois corporation, (iii) Standard Parking Corporation, MW, an Illinois corporation, (iv) Standard Parking Corporation, IL, an Illinois corporation, and (v) Standard/Wabash Parking Corporation, an Illinois corporation made a valid election under Subchapter S of the Code to which all persons who were shareholders on the date of such election gave their (and if necessary each shareholder's spouse gave his or her) consent and such elections became effective for each such corporation's tax year beginning, respectively, January 1, 1985, January 1, 1972, April 12, 1993 (on which date such corporation was incorporated), April 12, 1993 (on which date such corporation was incorporated), and January 1, 1987, and each such corporation is, and has been since such date, an S corporation (as defined in Section 1361 of the Code). Section 7.2. APCOA Tax Returns. (a) All federal, state, local, foreign and other Returns, relating to APCOA or any combined, consolidated, affiliated or unitary tax group of which APCOA is or has been a member (an "APCOA Affiliated Group") and required to be filed have been or will be timely filed. Such Returns are (or will, when filed, be) true, correct and complete in all material respects. Except for Taxes the non-payment of which would not, in the aggregate, be material, the following Taxes have (or by the Closing Date will have) been duly and timely paid: (i) all Taxes shown to be due on such Returns, (ii) all deficiencies and assessments of Taxes of which written notice has been received by APCOA or any APCOA Affiliated Group that are payable by APCOA or chargeable as a lien upon any assets of APCOA other than deficiencies or assessments for Taxes that are being contested in good faith by appropriate proceedings and have been reserved against in accordance with generally accepted accounting principles and (iii) all other Taxes due and payable by APCOA on or before the Closing Date for which neither filing of Returns nor written notice of deficiency or assessment is required, of which APCOA is aware, that are or may become payable by APCOA or chargeable as a lien upon any assets of APCOA. All Taxes required to be withheld by or on behalf of APCOA have -36- 49 been so withheld, and such withheld Taxes have either been duly and timely paid to the proper Government Authorities or set aside in accounts for such purpose. (b) No agreement or other document extending, or having the effect of extending, the period of assessment or collection of any Taxes for which APCOA may be held liable, and no power of attorney with respect to any such Taxes, has been executed or filed with the IRS or any other Taxing Authority. (c) APCOA has made available to Standard Owners complete and accurate copies of the Returns filed by APCOA or any member of the APCOA Affiliated Group with respect to all federal, state, local, foreign and other income, profits, franchise, gross receipts and capital Taxes that are or have been required to be filed for all periods for which the statute of limitations for assessment or collection of such Taxes has not expired, and has delivered to Standard Owners copies of all such Returns relating to income Taxes. No lien for Taxes exists with respect to any of the assets of APCOA. There are no Taxes for which APCOA could be held liable asserted in writing by any Taxing Authority to be due. No unresolved issue has been raised in writing by any Government Authority in the course of any audit with respect to Taxes for which APCOA could be held liable. Except as set forth on Schedule 7.2(c), the audits of such Returns with respect to federal income Taxes have been completed, or the statute of limitations with respect to federal income Taxes has expired, for all Tax periods through and including the year ended December 31, 1991. Except as set forth in Schedule 7.2(c), no Returns filed by APCOA or any member of the APCOA Affiliated Group with respect to federal income Taxes are currently under audit by the IRS. Except as set forth on Schedule 7.2(c), no other Returns filed by APCOA or any member of the APCOA Affiliated Group or Taxes for which APCOA could be held liable are currently under audit by any other Taxing Authority, and no Taxing Authority has given notice in writing that it will commence any such audit. Except as set forth on Schedule 7.2(c), no Taxing Authority is now asserting against APCOA any deficiency or claim for additional Taxes or any adjustment of Taxes, and there is no reasonable basis for any such assertion of which APCOA is aware. (d) No election has been made to have the provisions of Section 341(f) of the Code apply to APCOA. (e) Except as set forth on Schedule 7.2, APCOA is not a party to or bound by any tax sharing or similar agreement or arrangement (and the agreements and arrangements set forth in such Schedule shall be amended prior to the Closing as reasonably may be agreed by the Parties). (f) No assets of APCOA are subject to any lease under Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect prior to the date of enactment of the Tax Equity and Fiscal Responsibility Act of 1982. No assets of APCOA are subject to a lease under Section 7701(h) of the Code or under any predecessor provision. (g) There are no elections in effect made by or with respect to APCOA pursuant to Section 338 or Section 336(e) of the Code or the regulations thereunder. -37- 50 (h) APCOA has not agreed, nor is it required, to make any adjustment under Section 481 of the Code (or any comparable provision of state, local or foreign law) by reason of a change in accounting methods or otherwise. (i) APCOA had net operating loss carryforwards for federal income tax purposes of not less than $21.4 million as of December 31, 1996, which were available for carryforward to APCOA's 1997 taxable year and to APCOA's future taxable years within the applicable carryforward period provided by Section 172(b)(1) of the Code. The acquisition by Standard Owners of the Standard APCOA Shares, taken together with other transactions occurring during the "testing period" (as defined in Section 382(i) of the Code) of such acquisition of the Standard APCOA Shares, will not constitute an "ownership change" of APCOA as defined in Section 382(g) of the Code. Section 7.3. Definitions. For purposes of this Article, the following terms shall have the meanings ascribed to them below: (a) "Returns" (a) XE means returns, declarations, statements, reports, forms or other documents or information required to be filed with or supplied to any Taxing Authority. (b) "Taxes" XE means (i) all taxes (whether federal, state, county, local or foreign) based upon or measured by income and any other tax whatsoever, including gross receipts, profits, windfall profits, sales, use, occupation, value added, ad valorem, transfer, franchise, withholding, payroll, employment, excise, stamp, premium, capital stock, production, business and occupation, disability, severance, or real or personal property taxes, fees, assessments or charges of any kind whatsoever imposed by any Taxing Authority together with any interest or penalties imposed with respect thereto and (ii) any obligations under any agreements or arrangements with respect to any Taxes described in clause (i) above. (c) "Taxing Authority" XE means any Government Authority having jurisdiction over the assessment, determination, collection, or other imposition of Tax. Section 7.4. Section 338(h)(10). At APCOA's request, Standard Owners will join with APCOA in making an election (the "338 Election") under Section 338(h)(10) of the Code and/or any similar state law provision in any state or states as APCOA shall designate, with respect to the acquisition of any Standard Company taxed as an S corporation designated by APCOA. Any such request shall be delivered to Standard Owners in writing not later than 20 days prior to the last date on which the 338 Election can legally be made. If the 338 Election is made with respect to one or more Standard Companies, the parties will allocate the "MADSP" as computed under Treasury Regulations Section 1.338(h)(10)-1(f) (or similar state law provision) among such Standard Companies' assets for Tax purposes in accordance with the allocation set forth in Schedule 7.4. APCOA and Standard Owners agree to act in accordance with the allocations set forth in Schedule 7.4 in any relevant Returns or similar filings. Notwithstanding anything contained herein to the contrary, Standard Owners shall be responsible for, and shall indemnify and hold harmless APCOA and each APCOA Indemnitee from, any and all Taxes (and related APCOA Damages) resulting from the deemed sale of the Standard Companies' assets in the event the 338 Election is made (including any Tax imposed upon "net recognized built-in -38- 51 gain" XE "net recognized built-in gain under Section 1374 of the Code). Standard Owners shall pay such Taxes, together with any related penalty or interest, without set-off, deduction or other adjustment, directly to the relevant Taxing Authority, on or prior to the time such Taxes are due and payable, as estimated payments or otherwise. Section 7.5. Section 754 Election. Following the Closing, at APCOA's request, Standard Owners shall cause to be made an election under Section 754 of the Code (and/or any similar state law provision in any state or states designated by APCOA) for the partnership taxable year that includes the Closing with respect to any Standard Company that is a partnership for federal (or, in the case of any election under state law, state) income tax purposes and will not seek to revoke any such election. Section 7.6. Survival. The provisions of this Article VII shall survive the Closing until the expiration of all applicable statutes of limitations. ARTICLE VIII Conditions of APCOA's Obligation to Close APCOA's obligation to consummate the Combination shall be subject to the satisfaction or waiver by APCOA, on or prior to the Closing Date, of all of the following conditions: Section 8.1. Representations, Warranties and Covenants of Standard Owners. The representations and warranties of Standard Owners contained in this Agreement, in the aggregate, shall be true and correct in all material respects on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of such date except for representations and warranties that speak as of a specific date or time other than the Closing Date (which need only be true and correct in all material respects as of such date or time) and the covenants and agreements of Standard Owners to be performed on or before the Closing Date in accordance with this Agreement shall have been duly performed in all material respects. Section 8.2. Filings; Consents; Waiting Periods. All registrations, filings, applications, notices, consents, approvals, orders, qualifications and waivers listed in Schedule 3.10(b) or 4.10(b) and indicated therein as being a condition to the Closing for APCOA shall have been filed, made or obtained and all waiting periods applicable under the HSR Act shall have expired or been terminated. Section 8.3. No Injunction. At the Closing Date, there shall be no injunction, restraining order or decree of any nature of any court or Government Authority of competent jurisdiction that is in effect that restrains or prohibits the consummation of the Combination. Section 8.4. Other Agreements. Each of the Stockholders Agreement, the Employment Agreement, the Consulting Agreement and the Escrow Agreement shall have been duly executed and delivered by the parties thereto (other than APCOA, but including the spouse of each party thereto). Each employee of any Standard Company who would otherwise be entitled to any severance compensation or benefits or similar "change-of-control" benefits as a result of the consummation of the transactions contemplated hereby or because of any change in his -39- 52 position, authority, title, duties, reporting responsibilities, status, or other similar matter, resulting from or arising after or in connection with such consummation shall, to the extent of such entitlement, have waived such entitlement. Binding written confirmation from the applicable insurance carrier or broker that all retroactive insurance premia rebated to any Standard Company for FY 1996 have been closed shall have been provided to APCOA, or the amount of any retroactive insurance premia received but as to which binding written confirmation of finality from the applicable insurance carrier or broker has not been obtained shall have been contributed to the Standard Companies by the Standard Owners. Section 8.5. Financing. APCOA shall have received financing adequate for consummation of the Combination and related transactions, on terms reasonably satisfactory to APCOA (it being understood and agreed that this condition shall be deemed to have been satisfied if APCOA shall have received financing in an aggregate principal amount of $80 million or more with an interest rate of 13% per annum or less and with a term of seven years or more and carrying "equity kickers" (if any) in the form of warrants in an aggregate amount not exceeding 3% of the fully diluted equity of APCOA and otherwise on customary and reasonable terms). ARTICLE IX Conditions to Standard Owners' Obligation to Close Standard Owners' obligation to consummate the Combination is subject to the satisfaction or waiver by Standard Owners, on or prior to the Closing Date, of all of the following conditions: Section 9.1. Representations, Warranties and Covenants of APCOA. The representations and warranties of APCOA contained in this Agreement, in the aggregate, shall be true and correct in all material respects on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of such date except for representations and warranties that speak as of a specific date or time other than the Closing Date (which need only be true and correct in all material respects as of such date or time) and the covenants and agreements of APCOA to be performed on or before the Closing Date in accordance with this Agreement shall have been duly performed in all material respects. Section 9.2. Filings; Consents; Waiting Periods. All registrations, filings, applications, notices, consents, approvals, orders, qualifications and waivers listed in Schedules 3.10(b) or 4.10(b) and indicated therein as being a condition to the Closing for Standard Owners shall have been filed, made or obtained and all applicable waiting periods under the HSR Act shall have expired or been terminated. Section 9.3. No Injunction. At the Closing Date, there shall be no injunction, restraining order or decree of any nature of any court or Government Authority of competent jurisdiction that is in effect that restrains or prohibits the consummation of the Combination. Section 9.4. Other Agreements. Each of the Stockholders Agreement, the Employment Agreement, the Escrow Agreement and the Consulting Agreement shall have been -40- 53 duly executed and delivered by the parties thereto (other than any Standard Owners who are party thereto). ARTICLE X Escrow Section 10.1. Escrowed Amount. Upon the Closing, APCOA shall deliver, or shall cause to be delivered, directly to the escrow agent under the Escrow Agreement (the "Escrow Agent"), such amount of the cash portion of the Purchase Price (collectively with all interest and earnings thereon, the "Escrowed Amount"), to be held in an escrow account pursuant to the terms set forth herein and in an escrow agreement, substantially in the form attached as Exhibit B (the "Escrow Agreement"), which, together with the amount of an unconditional, personal guarantee from Myron C. Warshauer (in form to be agreed) for an amount of up to $5 million (the "Guarantee"), totals $10,000,000. The Escrowed Amount and the Guarantee shall be available to satisfy any obligations of Standard Owners pursuant hereto, including under Section 2.4 or Article XI (it being understood and agreed, however, that Standard Owners shall promptly replenish any amount drawn against the Escrowed Amount, and any such amount shall not reduce the aggregate liability under the Guarantee, in respect of any obligation other than the indemnification obligations of Article XI (other than in respect of a breach of the representations and warranties contained in Sections 3.1(a)(i) and 3.2), so that the full Escrowed Amount and Guarantee shall be available to satisfy such indemnification obligations). Payments to APCOA from the Escrowed Amount or under the Guarantee shall be treated as reductions in the Purchase Price. The Escrowed Amount and payments on the Guarantee, or portions thereof, shall be paid to APCOA, or, in the case of the Escrowed Amount, to Standard Owners, from time to time as provided for and in accordance with Articles X and XI and in the Guarantee and the Escrow Agreement. Section 10.2. Designee. Standard Owners will, at the Closing, as contemplated by the Escrow Agreement, designate a committee of representatives to act on behalf of Standard Owners and their successors under the Escrow Agreement with the powers and authorities provided therein and is authorized to act on behalf of all Standard Owners and for all purposes under the Escrow Agreement, including settling any claims that may arise following the Closing under the indemnification provisions of Article XI. ARTICLE XI Survival; Indemnification Section 11.1. Survival of Standard Owners' Representations. The representations, warranties, covenants and agreements made by Standard Owners in this Agreement or pursuant hereto shall survive the Closing for a period of two years thereafter (except for those contained in Sections 3.1 and 3.2, which shall survive forever, and in Sections 3.17, 6.1 and 7.1, which shall survive until the expiration of all applicable statutes of limitations), provided that, in the event of an initial public offering ("IPO") of shares of APCOA Common Stock within two years of the Closing, such survival shall terminate on the later of (x) the consummation of such IPO and (y) the 15-month anniversary of the Closing, and provided further that such limitation shall not affect any claim for indemnification written notice of which was provided to Standard -41- 54 Owners prior to the expiration of the applicable time limitation (the period of survival, the "Standard Owners' Warranty Period") and in addition shall survive and shall be unaffected by (and shall not be deemed waived by) any investigation, audit, appraisal or inspection at any time made by or on behalf of APCOA. Any claims for indemnification made by APCOA in accordance with this Section prior to the expiration of the Standard Owners' Warranty Period shall survive and shall not be extinguished by the expiration of such period. Section 11.2. Indemnification by Standard Owners. (a) Subject to the limitations of Section 11.1 and this Section 11.2, Standard Owners, on a several basis, as set forth on Schedule 11.2(a), agree to indemnify, defend and hold harmless APCOA, its officers, directors, employees, agents, advisors, representatives and Affiliates, including the Standard Companies, and each of their respective successors and assigns (collectively, "APCOA Indemnitees") from and against any and all demands, claims, complaints, Actions or causes of action, suits, proceedings, investigations, arbitrations, assessments, losses, damages, liabilities, costs and expenses, including interest, penalties and reasonable attorneys' and accounting fees and disbursements (including those relating to the enforcement of this indemnity) ("APCOA Damages"), asserted against, imposed upon or incurred by any APCOA Indemnitee, directly or indirectly, by reason of, relating to or resulting from (i) any nonfulfillment of any covenant or agreement on the part of Standard Owners contained herein or (ii) any breach of representation or warranty on the part of Standard Owners contained herein or any Schedule or certificate, document or other instrument delivered in connection herewith, provided that notice of any claim for indemnification shall be submitted by the relevant APCOA Indemnitee prior to the expiration of the Standard Owners' Warranty Period and reasonably promptly after the occurrence or discovery of the matter giving rise to the claim for indemnification (provided that, if such notice is actually served within Standard Owners' Warranty Period, the failure to so reasonably promptly notify Standard Owners shall not release Standard Owners from any liability which they may have for indemnification except and only to the extent that the failure to so reasonably promptly notify prejudices Standard Owners). (b) Standard Owners shall not be obligated to make any indemnification with respect to APCOA Damages pursuant to Section 11.2(a) unless and until the aggregated amount of APCOA Damages sustained by APCOA Indemnitees as a whole exceeds $2,000,000 (the "Basket"), provided that, once such Basket has been satisfied, any indemnification with respect to APCOA Damages shall be made by Standard Owners to the extent of any excess over the Basket, and provided further that, for purposes of determining whether any breach has occurred respecting a claim for indemnification or measuring APCOA Damages hereunder, any requirement or qualification in any representation, warranty, covenant or agreement of Standard Owners contained in this Agreement that an event or fact be material or have a material adverse effect or similar language, or qualification by such terms or by knowledge or similar language, shall be ignored (other than with respect to the last sentence of Section 3.15, as to which the knowledge qualification in this clause shall not apply) and all representations, warranties, covenants and agreements shall be deemed to have been made without any qualification by materiality, material adverse effect, knowledge or similar language. In addition, the aggregate liability of the Standard Owners in respect of their indemnification obligations set forth in the foregoing paragraph (a) arising from the breach of any representation or warranty (other than those contained in Sec- -42- 55 tions 3.1(a)(i) and 3.2, as to which this limit shall not be applicable) shall not exceed the aggregate amount available under the Escrow Agreement and the Guarantee. With respect to a breach by a Standard Owner of a representation and warranty made by such Standard Owner in Sections 3.1(a)(i) or 3.2, APCOA may recover APCOA Damages from such Standard Owner (i) first, from such Standard Owner's interest in the Escrowed Amount or Guarantee, as applicable, and (ii) upon exhaustion of such Standard Owner's interest in the Escrowed Amount or Guarantee, as applicable, directly from such Standard Owner. (c) Each Standard Owner shall severally indemnify and hold harmless APCOA and each APCOA Indemnitee against all Taxes (and related APCOA Damages) relating to the Standard Companies for any period (or portion thereof) ending on or prior to the Closing Date, except to the extent that such Taxes are reflected as liabilities on the face of the Historical Standard Balance Sheet as of October 31, 1997 (or, if a later dated Historical Standard Balance Sheet is delivered to APCOA prior to the date that is two days prior to the Due Diligence Out Termination Date, except to the extent that such Taxes are reflected as liabilities on the face of such Historical Standard Balance Sheet) or incurred in the ordinary course of business consistent with past practice and this Agreement since such date, and, notwithstanding any other provisions in this Agreement, such indemnification pursuant to this Section shall not be subject to the Basket nor to any maximum amount. (d) Myron C. Warshauer, and each Standard Owner severally, shall indemnify and hold harmless APCOA and each APCOA Indemnitee against all APCOA Damages relating to or arising out of the Excluded Assets, and, notwithstanding any other provisions in this Agreement, such indemnification pursuant to this Section shall not be subject to the Basket nor to any maximum amount. Section 11.3. Survival of APCOA's Representations. The representations, warranties, covenants and agreements made by APCOA in this Agreement or pursuant hereto shall survive the Closing for a period of two years thereafter (except for those contained in Sections 4.1 and 4.2 hereof, which shall survive forever, and in Sections 4.17 and 7.2 hereof, which shall survive until the expiration of all applicable statutes of limitations), provided that, in the event of an IPO of shares of APCOA Common Stock within two years of the Closing, such survival shall terminate on the later of (x) the consummation of such IPO and (y) the 15-month anniversary of the Closing, and provided further that such limitation shall not affect any claim for indemnification written notice of which was provided to APCOA prior to the expiration of the applicable time limitation (the period of survival, "APCOA's Warranty Period") and in addition shall survive and shall be unaffected by (and shall not be deemed waived by) any investigation, audit, appraisal or inspection at any time made by or on behalf of Standard Owners. Any claims for indemnification made by Standard Owners in accordance with this Section prior to the expiration of APCOA's Warranty Period shall survive and shall not be extinguished by the expiration of such period. Section 11.4. Indemnification by APCOA. (a) Subject to the limitations of Section 11.3 and this Section 11.4, APCOA agrees to indemnify, defend and hold harmless Standard Owners, its officers, directors, employees, agents, advisors, representatives and Affiliates (collectively, "Standard Owners Indemnitees") from and against any and all demands, claims, -43- 56 complaints, Actions or causes of action, suits, proceedings, investigations, arbitrations, assessments, losses, damages, liabilities, costs and expenses, including interest, penalties and reasonable attorneys' and accounting fees and disbursements (including those relating to the enforcement of this indemnity) ("Standard Owners Damages"), asserted against, imposed upon or incurred by any Standard Owner Indemnitee, directly or indirectly, by reason of, relating to or resulting from (i) any nonfulfillment of any covenant or agreement on the part of APCOA contained herein or (ii) any breach of representation or warranty on the part of APCOA contained herein or any Schedule hereto or certificate, document or other instrument delivered in connection herewith, provided that notice of any claim for indemnification shall be submitted by the relevant Standard Owner Indemnitee prior to the expiration of APCOA's Warranty Period and reasonably promptly after the occurrence or discovery of the matter giving rise to the claim for indemnification (provided that, if such notice is actually served within APCOA's Warranty Period, the failure to so reasonably promptly notify APCOA shall not release APCOA from any liability which they may have for indemnification except and only to the extent that the failure to so reasonably promptly notify prejudices APCOA). (b) APCOA shall not be obligated to make any indemnification with respect to Standard Owners Damages pursuant to Section 11.4(a) unless and until the aggregated amount of Standard Owners Damages sustained by Standard Owners Indemnitees as a whole (or not covered by insurance) exceeds the Basket, provided that, once such Basket has been satisfied, any indemnification with respect to Standard Owners Damages shall be made by APCOA to the extent of any excess over the Basket, and provided further that, for purposes of determining whether any breach has occurred respecting a claim for indemnification or measuring Standard Owners Damages hereunder, any requirement or qualification in any representation, warranty, covenant or agreement of APCOA contained in this Agreement that an event or fact be material or have a material adverse effect or similar language, or qualification by such terms or by knowledge or similar language, shall be ignored and all representations, warranties, covenants and agreements shall be deemed to have been made without any qualification by materiality, material adverse effect, knowledge or similar language. In addition, the aggregate liability of APCOA in respect of its indemnification obligations set forth in the foregoing paragraph (a) arising from the breach of any representation or warranty (other than those contained in Sections 4.1 and 4.2, as to which this limit shall not be applicable) shall not exceed an amount equal to $10,000,000. Section 11.5. Conditions of Indemnification. The obligations and liabilities of the Parties with respect to the indemnities provided in this Article XI resulting from any claim or other assertion of liability by third parties (collectively, "Claims"), shall be subject to the following terms and conditions: (a) The APCOA Indemnitee or Standard Owner Indemnitee seeking indemnification (the "Indemnified Party") shall give the relevant indemnitor or indemnitors (the "Indemnifying Party") written notice of any such Claim within the time period provided in Section 11.4. (b) The Indemnifying Party shall have the right to undertake, by counsel or other representatives of its own choosing, the defense of such Claim. -44- 57 (c) In the event that the Indemnifying Party shall elect not to undertake such defense, or within a reasonable time after notice of any such Claim from the Indemnified Party shall fail to defend, the Indemnified Party (upon further written notice to the Indemnifying Party) shall have the right to undertake the defense, compromise or settlement of such Claim, by counsel or other representatives of its own choosing, on behalf of and for the account and risk of the Indemnifying Party. (d) Anything in this Section 11.5 to the contrary notwithstanding: (i) an Indemnified Party shall have the right, at its own cost and expense, to have its own counsel to protect its own interests and participate in the defense, compromise or settlement of any Claim; (ii) an Indemnifying Party shall not, without the Indemnified Party's written consent, settle or compromise any Claim or consent to entry of any judgment which includes any non-monetary performance as a term thereof and which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the Indemnified Party of a release from all liability in respect of such Claim; and (iii) the Indemnified Party, by counsel or other representative of its own choosing and at its sole cost and expense, shall have the right to consult with the Indemnifying Party and its counsel or other representatives concerning such Claim and the Indemnifying Party and the Indemnified Party and their respective counsel shall cooperate with respect to such Claim. Section 11.6. Indemnification Sole Remedy. Each Party hereby acknowledges and agrees that its sole and exclusive remedy with respect to any and all monetary claims arising from any breach of any representation, warranty, covenant or agreement set forth herein shall be pursuant to the indemnification provisions set forth in this Article. ARTICLE XII Termination Section 12.1. Termination. This Agreement may be terminated at any time prior to the Closing: (a) by mutual consent of the Parties; or (b) by either Party, during the period ending on the earlier of the 30th day following the Schedules Date or such earlier time, at least 2 business days following the Schedules Date, following notice to such effect by APCOA (the earlier of such dates, the "Due Diligence Out Termination Date"), if, as a result of the due diligence investigation being conducted by such Party any matter comes to the attention of such Party that makes it inadvisable to proceed with the transactions contemplated hereby, provided that the Party seeking to terminate this Agreement under this clause (b) is not then in material breach of this Agreement; or -45- 58 (c) by APCOA on April 10, 1998, if the Closing shall not have occurred by such date, provided that APCOA may not terminate this Agreement under this clause (c) if it is then in material breach of this Agreement and provided further that the right to terminate this Agreement under this clause (c) shall not be available to APCOA if it has failed to fulfill any obligation under this Agreement, and which failure has been the cause of, or resulted in, the failure of the Closing to occur on or before such date; or (d) by either Party, on or after April 30, 1998, if the Closing shall not have occurred by such date, provided that the Party seeking to terminate this Agreement under this clause (d) is not then in material breach of this Agreement and provided further that the right to terminate this Agreement under this clause (d) shall not be available to any Party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before such date; or (e) by either Party, if any court of competent jurisdiction or other Government Authority shall have issued an order, decree or ruling enjoining or otherwise prohibiting the transactions contemplated by this Agreement (unless such order, decree or ruling has been withdrawn, reversed or otherwise made inapplicable), provided that the Party seeking to terminate this Agreement under this clause (e) is not then in material breach of this Agreement and provided further that the right to terminate this Agreement under this clause (e) shall not be available to any Party who shall not have used best efforts to avoid the issuance of such order, decree or ruling; or (f) by APCOA, if there has been a violation or breach by Standard Owners of any agreement, representation or warranty of Standard Owners contained in this Agreement which (i) if curable, has not been cured by Standard Owners within 15 days after receipt of notice from APCOA or (ii) has rendered the satisfaction of any condition to the obligations of APCOA impossible and such violation or breach has not been waived by APCOA, provided that APCOA is not then in material breach of this Agreement; or (g) by Standard Owners, if there has been a violation or breach by APCOA of any agreement, representation or warranty of APCOA contained in this Agreement which (i) if curable, has not been cured by APCOA within 15 days after receipt of notice from Standard Owners or (ii) has rendered the satisfaction of any condition to the obligation of Standard Owners impossible and such violation or breach has not been waived by Standard Owners, provided that Standard Owners are not then in material breach of this Agreement. Section 12.2. Procedure and Effect of Termination. In the event of termination of this Agreement pursuant to Section 12.1, written notice thereof shall forthwith be given by the terminating Party to the other Party hereto, and this Agreement shall thereupon terminate and become void and have no effect, and the transactions contemplated hereby shall be abandoned without further action by the Parties hereto, except that the provisions of Sections 5.1(b) and Article XIII shall survive the termination of this Agreement, provided that such termination shall not relieve any Party hereto of any liability for any breach of this Agreement, and provided further that, in the event that either Party terminates this Agreement pursuant to Section 12.1(d) and at the time of such termination all conditions to the consummation of the Combination set forth -46- 59 in Articles VIII and IX are satisfied or satisfiable other than the condition set forth in Section 8.5 (and such condition is unsatisfied or unsatisfiable other than as a result of any breach by Standard Owners or any Standard Company), upon such termination, APCOA shall pay to Standard Owners by wire transfer to the account or accounts specified by Standard Owners in writing the sum of $2,500,000 in immediately available funds as liquidated damages hereunder and APCOA shall be released from all obligations arising in connection with this Agreement. If this Agreement shall be terminated, all filings, applications and other submissions made in accordance with this Agreement shall, to the extent practicable, be withdrawn from the persons to which they were made. ARTICLE XIII Miscellaneous Section 13.1. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party. Copies of executed counterparts transmitted by telecopy shall be considered original executed counterparts for purposes of this Section. Section 13.2. Governing Law; Jurisdiction and Forum. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to the choice of law principles thereof. (b) The Parties hereto agree that the appropriate and exclusive forum for any disputes between any of the Parties hereto arising out of this Agreement or the transactions contemplated hereby shall be any state or federal court in the State of Delaware. The Parties hereto further agree that neither Party shall bring suit with respect to any disputes arising out of this Agreement or the transactions contemplated hereby, except as expressly set forth below for the execution or enforcement of judgment, in any court or jurisdiction other than the above specified court. The foregoing shall not limit the rights of any Party to obtain execution of judgment in any other jurisdiction. The Parties further agree, to the extent permitted by law, that a final and unappealable judgment against any of them in any action or proceeding contemplated above shall be conclusive and may be enforced in any other jurisdiction within or outside the United States by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the fact and amount of such judgment. (c) By the execution and delivery of this Agreement, each Party (i) irrevocably designates and appoints The Corporation Trust Company ("CTC") care of CT Corporation System at its offices in Wilmington, Delaware, as its authorized agent upon which process may be served in any Action or proceeding arising out of or relating to this Agreement, (ii) submits to the personal jurisdiction of any state or federal court in the State of Delaware in any such Action or proceeding and (iii) agrees that service of process upon CTC shall be deemed in every respect effective service of process upon such person in any such Action or proceeding. Each Party further agrees to take any and all actions, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment -47- 60 of CTC in full force and effect so long as this Agreement shall be in effect. The foregoing shall not limit the rights of any Party to serve process in any other manner permitted by law. (d) To the extent that any Party has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, such person hereby irrevocably waives such immunity in respect of its obligations with respect to this Agreement. Section 13.3. Entire Agreement; Third-Party Beneficiary. This Agreement (including agreements incorporated herein) and the Schedules and Exhibits hereto contain the entire agreement between the Parties with respect to the subject matter hereof and there are no agreements, understandings, representations or warranties between the Parties other than those set forth or referred to herein. Except for those provisions hereof respecting APCOA or Standard Indemnitees, which are intended to benefit and to be enforceable by the APCOA or Standard Indemnitees, this Agreement is not intended to confer upon any person not a Party hereto (or their successors and assigns permitted hereby) any rights or remedies hereunder. Section 13.4. Expenses. Except as set forth in this Agreement, whether or not the Combination is consummated, all advisory, legal and other costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such costs and expenses, except for the Standard Advisors Fee, which to the extent the Combination is consummated shall be borne as provided in Section 3.16 (it being understood and agreed that all advisory, legal and other costs and expenses incurred by APCOA or its Affiliates in connection with this Agreement and the transactions contemplated hereby shall be borne by APCOA). Section 13.5. Notices. All notices and other communications hereunder shall be sufficiently given for all purposes hereunder if in writing and delivered personally or sent by documented overnight delivery service or, to the extent receipt is confirmed and a copy also sent thereafter by personal delivery or documented overnight delivery service, telecopy, telefax or other electronic transmission service to the appropriate address or number as set forth below. Notices to APCOA shall be addressed to: Holberg Industries, Inc. 545 Steamboat Road Greenwich, Connecticut 06830 Attention: Chief Financial Officer Telecopy Number: (203) 661-5756 -48- 61 with copies to: APCOA, Inc. 1000 McDonald Investment Center 800 Superior Avenue Cleveland, Ohio 44114-2601 Attention: General Counsel Telecopy Number: (216) 523-8080 and Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 Attention: Adam O. Emmerich, Esq. Telecopy Number: (212) 403-2000 or at such other address and to the attention of such other person as APCOA may designate by written notice to Standard Owners. Notices to Standard Owners shall be addressed to: Standard Parking, L.P. 200 East Randolph Drive, Suite 4800 Chicago, Illinois 60601 Attention: Myron C. Warshauer Telecopy Number: (312) 240-0191 with copies to: Standard Parking, L.P. 200 East Randolph Drive, Suite 4800 Chicago, Illinois 60601 Attention: Michael K. Wolf, Esq. Telecopy Number: (312) 240-0191 Standard Parking, L.P. 200 East Randolph Drive, Suite 4800 Chicago, Illinois 60601 Attention: Stanley Warshauer Telecopy Number: (312) 240-0191 Standard Parking, L.P. 200 East Randolph Drive, Suite 4800 Chicago, Illinois 60601 Attention: Steven Warshauer Telecopy Number: (312) 240-0191 -49- 62 SP Associates c/o JMB Realty Corp. 900 North Michigan Avenue, 19th Floor Chicago, Illinois 60611 Attention: Patrick J. Meara Telecopy Number: (312) 915-2310 Mayer Brown & Platt 190 South LaSalle Street Chicago, Illinois 60603 Attention: Edward S. Best, Esq. Telecopy Number: (312) 701-7711 and Katten Muchin & Zavis 525 West Monroe Street, Suite 1600 Chicago, Illinois 60661 Attention: Howard S. Lanznar, Esq. Telecopy Number: (312) 902-1061 or at such other address and to the attention of such other person as Standard Owners may designate by written notice to APCOA. Section 13.6. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns, provided that no Party hereto may assign its rights or delegate its obligations under this Agreement without the express prior written consent of each other Party hereto. Section 13.7. Headings; Definitions. The Section, Article and other headings contained in this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Agreement. All references to Sections or Articles contained herein mean Sections or Articles of this Agreement unless otherwise stated. Section 13.8. Amendments and Waivers. This Agreement may not be modified or amended except by an instrument or instruments in writing signed by the Party against whom enforcement of any such modification or amendment is sought. Either Party hereto may, only by an instrument in writing, waive compliance by the other Party hereto with any term or provision hereof on the part of such other Party hereto to be performed or complied with. The waiver by any Party hereto of a breach of any term or provision hereof shall not be construed as a waiver of any subsequent breach. Section 13.9. Interpretation; Absence of Presumption. (a) For the purposes hereof, (i) "to the knowledge of Standard Owners and the Standard Companies" shall mean the actual knowledge of the persons listed on Schedule 13.9S after reasonable inquiry and "to the actual knowledge of Standard Owners and the Standard Companies" shall mean the same but -50- 63 without any obligation of inquiry and "to the knowledge of APCOA" shall have a correlative meaning as to the persons listed on Schedule 13.9A, (ii) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires, (iii) the terms "hereof," "herein," and "herewith" and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules and Exhibits hereto) and not to any particular provision of this Agreement, and Article, Section, paragraph and Schedule and Exhibit references are to the Articles, Sections, paragraphs, Schedules and Exhibits to this Agreement unless otherwise specified, (iv) the word "including" and words of similar import when used in this Agreement shall mean "including, without limitation," unless the context otherwise requires or unless otherwise specified, (v) the word "or" shall not be exclusive, and (vi) provisions shall apply, when appropriate, to successive events and transactions. (b) This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting or causing any instrument to be drafted. (c) It is understood and agreed that neither the specification of any dollar amount in the representations and warranties contained in this Agreement nor the inclusion of any specific item in Schedules to this Agreement is intended to imply that such amounts or higher or lower amounts, or the items so included or other items, are or are not material, and neither Party shall use the fact of the setting of such amounts or the fact of the inclusion of any such item in the Schedules to this Agreement in any dispute or controversy between the Parties as to whether any obligation, item or matter is or is not material for purposes hereof. Section 13.10. Severability. Any provision hereof which is invalid or unenforceable shall be ineffective to the extent of such invalidity or unenforceability, without affecting in any way the remaining provisions hereof. -51- 64 IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each of the Parties as of the day first above written. /s/ Myron C. Warshauer ------------------------------ Myron C. Warshauer /s/ Stanley Warshauer by Myron C. Warshauer Attorney in fact ------------------------------ Steven A. Warshauer /s/ Steven A. Warshauer by Myron C. Warshauer Attorney in fact ------------------------------ Steven A. Warshauer DOSHER PARTNERS, L.P. By Standard Parking Corp. By: /s/ Myron C. Warshauer ------------------------------ Name: Myron C. Warshauer Title: President SP PARKING ASSOCIATES By: SP Parking Managers, L.P. By: Standard Managers, Inc. By: /s/ Patrick Meara ------------------------------ Name: Patrick Meara Title: Vice President -52- 65 SP ASSOCIATES By: SP Managers, L.P. By: Standard Managers, Inc. By: /s/ Patrick Meara ------------------------------ Name: Patrick Meara Title: Vice President APCOA, INC. By: /s/ John V. Holten ------------------------------ Name: John V. Holten Title: Chairman of the Board -53- EX-3.1 4 AMENDED AND RESTATED CERTIFICATE 1 AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF APCOA, INC. (Originally incorporated on September 24, 1981, under the name of 120 OAKLAND PLACE, INC.) APCOA, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), DOES HEREBY CERTIFY: FIRST: That the Board of Directors of the Corporation, has duly adopted resolutions setting forth a proposed amendment and restatement of the Certificate of Incorporation of the Corporation and declaring said amendment and restatement to be advisable. The resolution setting forth the proposed amendment and restatement is as follows: RESOLVED, that the Corporation's Certificate of Incorporation be amended in accordance with Section 242 of the General Corporation Law of the State of Delaware to effect certain changes in said Certificate of Incorporation, and that the Amended and Restated Certificate of Incorporation attached hereto be adopted, in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware, as the Amended and Restated Certificate of Incorporation of the Corporation. SECOND: That in lieu of a meeting and vote of stockholders, both of the stockholders of the Corporation have given their written consent to said amendment and restatement was duly adopted in accordance with the applicable provisions of Sections 242, 245 and 228 of the General Corporation Law of the State of Delaware. THIRD: That the capital of the Corporation shall not be reduced under or by reason of said amendment and restatement. 2 IN WITNESS WHEREOF, said APCOA, Inc. has caused this certificate to be signed by its President, and attested by its Assistant Secretary, this 24th day of February, 1994. By: /s/ G. Walter Stuelpe, Jr. -------------------------------------- Name: G. Walter Stuelpe, Jr. Title: President ATTEST: By: /s/ William J. Montis -------------------------------- Name: William J. Montis Assistant Secretary -2- 3 AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF APCOA, INC. ARTICLE I The name of the corporation (which is hereinafter referred to as the "Corporation") is: APCOA, Inc. ARTICLE II The address of the Corporation's registered office in the State of Delaware is The Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County of New Castle. The name of the Corporation's registered agent at such address is The Corporation Trust Company. ARTICLE III The purpose of the Corporation shall be to engage in any lawful act or activity for which corporations may be organized and incorporated under the General Corporation Law of the State of Delaware. 4 ARTICLE IV Section 1. The Corporation shall be authorized to issue 5,000 shares of capital stock, of which 3000 shares shall be shares of Common Stock, $1.00 par value ("Common Stock"), and 2000 shares shall be shares of Preferred Stock, $.01 par value ("Preferred Stock"). Section 2. Shares of Preferred Stock may be issued from time to time in one or more series. The Board of Directors of the Corporation (hereinafter referred to as the "Board") is hereby authorized to fix the voting rights, if any, designations, powers, preferences and the relative, participation, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, of any unissued series of Preferred Stock; and to fix the number of shares constituting such series, and to increase or decrease the number of shares of any such series (but not below the number of shares thereof then outstanding). Section 3. Except as otherwise provided by law or by the resolution or resolutions adopted by the Board designating the rights, power and preferences of any series of Preferred Stock, the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes. Each share of Common Stock shall have one vote, and the Common Stock shall vote together as a single class. ARTICLE V Unless and except to the extent that the By-Laws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot. -2- 5 ARTICLE VI In furtherance and not in limitation of the powers conferred by law, the Board is expressly authorized and empowered to make, alter and repeal the By-Laws of the Corporation by a majority vote at any regular or special meeting of the Board or by written consent, subject to the power of the stockholders of the Corporation to alter or repeal any By-Laws made by the Board. ARTICLE VII The Corporation reserves the right at any time from time to time to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, and any other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article. ARTICLE VIII Section 1. Elimination of Certain Liability of Directors. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions -3- 6 not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. Section 2. Indemnification and Insurance. (a) Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding'), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and -4- 7 such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in paragraph (b) hereof, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board. The right to indemnification conferred in this Section shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the General Corporation Law of the State of Delaware requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Section or otherwise. The Corporation may, by action of the Board, provide indemnification to employees and agents of the Corporation with the same scope and effect as the foregoing indemnification of directors and officers. (b) Right of Claimant to Bring Suit. If a claim under paragraph (a) of this Section is not paid in full by the Corporation within thirty days after a written claim -5- 8 has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. (c) Non-Exclusivity of Rights. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Section shall not be exclusive of any other right which any -6- 9 person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, By-Law, agreement, vote of stockholders or disinterested directors or otherwise. (d) Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of the State of Delaware. -7- EX-3.2 5 BY-LAWS OF THE COMPANY 1 Exhibit 3.2 BY-LAWS of 120 OAKLAND PLACE, INC. ARTICLE I Meetings of Stockholders Section 1. Annual Meeting. The annual meeting of stockholders of the corporation for the election of directors and for the transaction of other business shall be held at such time and such place within or without the State of Delaware as shall be determined by the Board of Directors or the President and stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2. Special Meetings. A special meeting of stockholders may be called by the Board of Directors or the President, and shall be called by the President, the Secretary or an Assistant Secretary at the request in writing of a majority of the Board of Directors, or at the request in writing of the holders of record of a majority of the outstanding shares of the stock of the corporation entitled to vote at the meeting. Each special meeting of stockholders shall be held at such time and place within or without the State of Delaware as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Business transacted at any special meeting of stockholders shall be limited to the purpose or purposes stated in the notice of the meeting. Section 3. Notice and Purpose of Meetings. Written notice of every meeting of stockholders stating the place, date and hour of the meeting and, in the case of a special meeting, in general terms, the purpose or purposes for which the meeting is called, shall be given not 2 less than ten nor more than sixty days before the meeting to each stockholder of record entitled to vote at the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, with first-class postage thereon prepaid, directed to each stockholder at his address as it appears on the records of the corporation. Section 4. List of Stockholders. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares of the stock of the corporation registered in the name of each stockholder. Such list shall be open to examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 5. Quorum. Except as otherwise required by law or the certificate of incorporation, a quorum at all meetings of stockholders shall consist of the holders of record of not less than a majority of the outstanding shares of the stock of the corporation entitled to vote at the meeting, present in person or by proxy, except when the stockholders are required to vote by class, in which event the holders of record of not less than a majority of the outstanding shares of the appropriate class shall be present in person or by proxy. -2- 3 Section 6. Adjournments. The stockholders entitled to vote who are present in person or by proxy at any meeting of stockholders, whether or not a quorum shall be present at the meeting, shall have power by a majority of the votes cast to adjourn the meeting from time to time without notice other than announcement at the meeting of the time and place to which the meeting is adjourned. At any adjourned meeting held without notice at which a quorum shall be present any business may be transacted that might have been transacted on the original date of the meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the adjourned meeting. Section 7. Voting; Proxies. Unless otherwise provided in the certificate of incorporation, each stockholder of record shall be entitled at every meeting of stockholders to one vote for each share of the stock of the corporation standing in his name on the record of stockholders on the record date fixed for the meeting or, if no record date for the meeting was fixed, on the date of the meeting. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may act in person or may authorize another person to act for him by proxy, but no proxy shall be voted or acted upon after three years from its date unless it provides for a longer period. Directors elected at any meeting of stockholders shall, except as otherwise required by law, be elected by a plurality of the votes cast. All other corporate action to be taken by vote of stockholders shall, except as otherwise required by law or the certificate of incorporation, be authorized by a majority of the votes cast. Unless otherwise provided in the certificate of incorporation, the vote for directors shall be by ballot, but the vote upon any other question be- -3- 4 fore a meeting of stockholders shall not be by ballot unless required by law or unless the person presiding at such meeting shall so direct or unless any stockholder present in person or by proxy and entitled to vote thereon shall so demand. Section 8. Consent of Stockholders in Lieu of Meeting. Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders, or any action (including, without limitation, adoption, amendment or repeal of by-laws) which may be taken at any annual or special meeting of stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding shares of the stock of the corporation having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Section 9. Waiver of Notice. Whenever notice is required by law or these by-laws to be given to any stockholder, a written waiver thereof, signed by such stockholder in person or by proxy, whether before or after the time stated therein, shall be deemed equivalent to notice. The attendance of any stockholder at a meeting in person or by proxy shall constitute a waiver of notice of such meeting, except where the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the pur- -4- 5 pose of, any annual or special meeting of the stockholders need be specified in any written waiver of notice. Section 10. Inspectors of Election. The Board of Directors may, in advance of any meeting of the stockholders, appoint one or more inspectors to act at the meeting or any adjournment thereof. If inspectors are not so appointed in advance of the meeting, the person presiding at such meeting may, and on the request of any stockholder entitled to vote thereat shall, appoint one or more inspectors. In case any inspector appointed fails to appear or act, the vacancy may be filled by appointment made by the Board of Directors in advance of the meeting or at the meeting by the person presiding thereat. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. No person who is a candidate for the office of director of the corporation shall act as an inspector at any meeting of the stockholders at which directors are elected. Section 11. Duties of Inspectors of Election. Whenever one or more inspectors of election may be appointed as provided in these by-laws, he or they shall determine the number of shares outstanding and entitled to vote, the shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots, or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. -5- 6 ARTICLE II Directors Section 1. General Powers. The property, business and affairs of the corporation shall be managed by or under the direction of its Board of Directors. Section 2. Number and Qualifications. The Board of Directors shall consist of one or more members. The exact number of directors shall be fixed from time to time by action of the stockholders or by vote of a majority of the entire Board of Directors. Section 3. Election and Term of Office. Except as otherwise required by law or these by-laws, each director shall be elected at the annual meeting of stockholders of the corporation and shall hold office until the next annual meeting of stockholders and until his successor has been elected and qualified, or until his earlier death, resignation or removal. Section 4. Resignation. Any director may resign at any time by giving written notice to the corporation. Such resignation shall take effect at the time specified therein; unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 5. Removal of Directors. Except as otherwise provided by law, any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares of the stock of the corporation then entitled to vote at an election of directors. -6- 7 Section 6. Vacancies. Newly created directorships and vacancies in the Board of Directors, including vacancies resulting from the resignation of directors effective immediately or at a future date or from the removal of directors, with or without cause, may be filled by vote of the stockholders, by vote of a majority of the directors then in office (including directors whose resignations are effective at a future date), although less than a quorum, or by the sole remaining director. Each director so chosen shall hold office until the next annual meeting of stockholders and until his successor has been elected and qualified, or until his earlier death, resignation or removal. A vote to fill a vacancy or vacancies created by the resignation or resignations of a director or directors effective at a future date shall take effect when the resignation or resignations become effective. Section 7. First Meeting of Newly Elected Directors. The first meeting of the newly elected Board of Directors may be held immediately after the annual meeting of stockholders and at the same place as the annual meeting of stockholders, provided a quorum be present, and no notice of the meeting shall be necessary. In the event the first meeting of the newly elected Board of Directors is not held at said time and place, it shall be held as provided in Section 8 or 9 of this Article II. Section 8. Regular Meetings of Directors. Regular meetings of the Board of Directors may be held without notice at such time and such place within or without the State of Delaware as may be fixed from time to time by resolution of the Board of Directors. If any day fixed for a regular meeting shall be a legal holiday at a place where the meeting is to be held, then the meeting which would otherwise be held on that day shall be held at the same hour on the next succeeding business day. -7- 8 Section 9. Special Meetings of Directors. A special meeting of the Board of Directors may be called by the President, or, in the absence or disability of the President, any Vice President, or by any two directors or if there is only one director, by that one director. Each special meeting of the Board of Directors may be held at such time and such place within or without the State of Delaware as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 10. Notice of Special Meetings. Notice of each special meeting of the Board of Directors, stating the time and place thereof, shall be given by the President, any Vice President, the Secretary, any Assistant Secretary or any member of the Board of Directors, to each member of the Board of Directors (a) not less than three days before the meeting by depositing the notice in the United States mail, with first-class postage thereon prepaid, directed to each member of the Board of Directors at the address designated by him for such purpose (or, if none is designated, at his last known address), or (b) not less than twenty-four hours before the meeting by either (i) delivering the same to each member of the Board of Directors personally, (ii) sending the same by telephone, telegraph, cable or wireless to address designated by him for such purposes (or, if none is designated, to his last known address) or (iii) delivering the notice to the address designated by him for such purpose (or, if none is designated, to his last known address). The notice of any meeting of the Board of Directors need not specify the purpose or purposes for which the meeting is called, except as otherwise required by law or these by-laws. Section 11. Quorum and Action by the Board. At all meetings of the Board of Directors, except as otherwise required by law or these by-laws, a quorum shall be required for the transaction of business and shall consist of not less than a majority of the entire Board of Di- -8- 9 rectors, and the vote of a majority of the directors present shall decide any question that may come before the meeting. A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time or place without notice other than announcement at the meeting of the time and place to which the meeting is adjourned. Section 12. Procedure. The order of business and all other matters of procedure at every meeting of directors may be determined by the person presiding at the meeting. Section 13. Committees of Directors. The Board of Directors may, by resolution adopted by vote of a majority of the entire Board of Directors designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member or alternate member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member or alternate member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the property, business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority of the Board of Directors in reference to amending the certificate of incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending to the stock- -9- 10 holders a dissolution of the corporation or a revocation of a dissolution, amending the by-laws of the corporation, declaring a dividend or authorizing the issuance of stock. Each such committee shall keep regular minutes of its proceedings and report the same to the Board of Directors when required. A majority vote of all the members of any such committee may fix its rules or procedure, determine its actions and fix the time and place within or without the State of Delaware for its meetings and specify the number of members required to constitute a quorum and what notice thereof, if any, shall be given, unless the Board of Directors shall otherwise provide. The Board of Directors may at any time fill vacancies in, change the membership of or discharge any such committee. Section 14. Compensation of Directors. The Board of Directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of committees of the Board of Directors may be allowed like compensation for attending committee meetings. Section 15. Action Without a Meeting. Any action required or permitted to be taken by the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or the committee consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consents thereto by the members of the Board of Directors or committee shall be filed with the minutes of the proceedings of the Board of Directors or committee. -10- 11 Section 16. Presence at Meeting by Telephone. Members of the Board of Directors or any committee thereof may participate in a meeting of the Board of Directors or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting by such means shall constitute presence in person at the meeting. Section 17. Waiver of Notice. Whenever notice is required by law or these by-laws to be given to any director, a written waiver thereof, signed by such director, whether before or after the time stated therein, shall be deemed equivalent to notice. ARTICLE III Officers Section 1. Officers; Term of Office. The Board of Directors shall annually, at the first meeting of the Board of Directors after the annual meeting of stockholders, elect a Chairman of the Board, a President, one or more Vice Presidents, a Secretary, and a Treasurer. The Board of Directors may from time to time elect or appoint such additional officers as it may determine. Such additional officers shall have such authority and perform such duties as the Board of Directors may from time to time prescribe. The Chairman of the Board, the President, each Vice-President, the Secretary and the Treasurer shall each, unless otherwise determined by the Board of Directors, hold office until the first meeting of the Board of Directors following the next annual meeting of stockholders and until his successor has been elected and qualified, or until his earlier death, resignation or removal. Each additional officer appointed or elected by the Board of Directors shall hold office -11- 12 for such term as shall be determined from time to time by the Board of Directors and until his successor has been elected or appointed and qualified, or until his earlier death, resignation or removal. Section 2. Removal. Any officer may be removed or have his authority suspended by the Board of Directors at any time, with or without cause. Section 3. Resignation. Any officer may resign at any time by giving written notice to the corporation. Such resignation shall take effect at the time specified therein; unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 4. Vacancies. A vacancy in any office arising for any reason may be filled by the Board of Directors. Section 5. Chairman of the Board. The Chairman of the Board shall preside at all meetings of stockholders and of the Board of Directors and shall be entitled to vote upon all questions. Section 6. The President. The President shall be the chief executive officer of the corporation. In the absence of the Chairman of the Board, the President preside at all meetings of stockholders and of the Board of Directors. He shall have the powers and duties of immediate supervision and management of the corporation which usually pertain to his office, and shall perform all such other duties as are properly required of him by the Board of Directors. -12- 13 Section 7. The Vice Presidents. The Vice Presidents may be designated by such title or titles as the Board of Directors may determine, and each Vice President in such order of seniority as may be determined by the Board of Directors shall, in the absence or disability of the President, or at his request, perform the duties and exercise the powers of the President. Each of the Vice Presidents also shall have such powers as usually pertain to his office and shall perform such duties as usually pertain to his office or as are properly required of him by the Board of Directors. Section 8. The Secretary and Assistant Secretaries. The Secretary shall issue notices of all meetings of stockholders and of the Board of Directors where notices of such meetings are required by law or these by-laws. He shall attend meetings of stockholders and of the Board of Directors and keep the minutes thereof in a book or books to be provided for that purpose. He shall affix the corporate seal to and sign such instruments as require the seal and his signature and shall perform such other duties as usually pertain to his office or as are properly required of him by the Board of Directors. Section 9. The Treasurer and Assistant Treasurers. The Treasurer shall have the care and custody of all the moneys and securities of the corporation. He shall cause to be entered in books of the corporation to be kept for that purpose full and accurate accounts of all moneys received by him and paid by him on account of the corporation. He shall make and sign such reports, statements and instruments as may be required of him by the Board of Directors or by the laws of the United States or of any state, country or other jurisdiction in which the corporation transacts business, and shall perform such other duties as usually pertain to his office or as are properly required of him by the Board of Directors. -13- 14 Section 10. Officers Holding Two or More Offices. Any two or more offices may be held by the same person but no officer shall execute, acknowledge or verify any instrument in more than one capacity if such instrument be required by law or otherwise to be executed or verified by two or more officers. Section 11. Duties of Officers May be Delegated. In case of the absence or disability of any officer of the corporation, or in case of a vacancy in any office or for any other reason that the Board of Directors may deem sufficient, the Board of Directors, except as otherwise provided by law, may temporarily delegate the powers or duties of any officer to any other officer or to any director. Section 12. Compensation. The compensation of all officers shall be determined by the Board of Directors. The compensation of all other employees shall be fixed by the President within such limits as may be prescribed by the Board of Directors. Section 13. Security. The corporation may secure the fidelity of any or all of its officers or agents by bond or otherwise, as may be required from time to time by the Board of Directors. ARTICLE IV Indemnification of Officers and Directors Section 1. Right of Indemnification. Every person now or hereafter serving as a director or officer of the corporation and every such director or officer serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall be indemnified by the corporation in accordance with -14- 15 and to the fullest extent permitted by law for the defense of, or in connection with, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative. Section 2. Expenses. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the corporation as authorized in this Article IV. Section 3. Other Rights of Indemnification. The right of indemnification herein provided shall not be deemed exclusive of any other rights to which any such director or officer may now or hereafter be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such person. ARTICLE V Shares and Their Transfer Section 1. Certificates. Every stockholder of the corporation shall be entitled to a certificate or certificates, to be in such form as the Board of Directors shall prescribe, certifying the number of shares of the stock of the corporation owned by him. -15- 16 Section 2. Issuance of Certificates. Certificates representing shares of stock of the corporation shall be numbered in the order in which they are issued and shall be signed by the President or any Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the corporation. Any of or all the signatures on the certificate may be a facsimile. In case any officer or officers of the corporation who shall have signed, or whose facsimile signature or signatures shall have been used on, any such certificate shall have ceased to be such officer or officers before such certificate is issued, such certificate may nevertheless be issued as though the person or persons who signed such certificate, or whose facsimile signature or signatures shall have been affixed thereto, had not ceased to be such officer or officers. Section 3. More Than One Class of Stock. If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except for restrictions on transfer of stock (as provided in section 202 of the General Corporation Law of Delaware), in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. -16- 17 Section 4. Stock Ledger. A record shall be kept by the Secretary, transfer agent or by any other officer, employee or agent designated by the Board of Directors of the name of the individual, firm or corporation holding the shares of the stock of the corporation represented by each certificate, the number of shares represented y such certificate, the date of issue thereof and, in case of cancellation, the date of cancellation thereof. Section 5. Transfer of Shares. Upon surrender to the corporation or the transfer agent of the corporation of a certificate representing shares of the stock of the corporation duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the corporation for transfer, both the transferor and transferee request the corporation to do so. Section 6. Registered Stockholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares of the stock of the corporation to receive dividends, and to vote as such owner, and to hold liable for call and assessments a person registered on its books as the owner of such shares, and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. -17- 18 Section 7. Regulations. The Board of Directors may make such rules and regulations as it may deem expedient, not inconsistent with law, the certificate of incorporation or these by-laws, concerning the issue, transfer and registration of certificates representing shares of the stock of the corporation. It may appoint, or authorize any officer or officers to appoint, one or more transfer clerks or one or more transfer agents or one or more registrars, and may require all such certificates to bear the signature or signatures of any of them. Section 8. Lost, Stolen and Destroyed Certificates. The Board of Directors may in its discretion cause a new certificate representing shares of the stock of the corporation to be issued in place of any certificate theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon satisfactory proof of that fact by the person claiming the certificate to have been lost, stolen or destroyed; but the Board of Directors may in its discretion refuse to issue a new certificate except upon the order of a court having jurisdiction in such matters. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion, and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 9. Fixing of Record Date. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect to any change, conversion or exchange of shares of the stock -18- 19 of the corporation, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty or less than ten days before the date of such meeting, nor more than sixty days prior to any other action. Only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to notice of, and to vote at such meeting of stockholders and any adjournment thereof, or to receive payment of such dividend or such other distribution or such allotment of rights, or to exercise such rights in respect to any such change, conversion or exchange of shares of the stock of the corporation, or to participate in such other action, or to give such consent, as the case may be, notwithstanding any transfer of any shares of the stock of the corporation on the books of the corporation after any such record date so fixed. A determination of stockholders of record entitled to notice of or to vote at any meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. If no record date is fixed by the Board of Directors, (a) the record date for determining stockholders entitled to notice of or to vote at any meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held, (b) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is expressed, and (c) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. -19- 20 ARTICLE VI Finances Section 1. Corporate Funds. The funds of the corporation shall be deposited in its name with such banks, trust companies or other depositories as the Board of Directors may from time to time designate. All checks, notes, drafts and other negotiable instruments of the corporation shall be signed by such officer or officers, employee or employees, agent or agents as the Board of Directors may from time to time designate. No officers, employees or agents of the corporation, alone or with others, shall have power to make any checks, notes, drafts or other negotiable instruments in the name of the corporation or to bind the corporation thereby, except as provided in this Section 1. Section 2. Fiscal Year. The fiscal year of the corporation shall be the calendar year unless otherwise provided by the Board of Directors. Section 3. Dividends; Reserves. Dividends upon the stock of the corporation, payable out of funds legally available therefor, may be declared by the Board of Directors at any regular or special meeting. Dividends may be paid in cash, in property, or in shares of the stock of the corporation. Before declaring any dividend, the Board of Directors may set aside out of any funds of the corporation legally available for dividends such sum or sums as the Board of Directors from time to time in its discretion shall deem proper as a reserve for working capital, for contingencies, for equalizing dividends or for such other purpose or purposes as the Board of Directors shall deem conducive to the interests of the corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created. -20- 21 Section 4. Loans to Employees and Officers. The corporation may lend money to or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation, including any officer or employee who is also a director of the corporation, whenever in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. ARTICLE VII Corporate Seal Section 1. Form of Seal. The corporate seal shall have inscribed thereon the name of the corporation, the year of its incorporation and the words "Corporate Seal" and "Delaware", and shall otherwise be in such form as shall be prescribed from time to time by the Board of Directors. Section 2. Use of Seal. The corporate seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced in any manner. ARTICLE VIII Amendments Section 1. Procedure For Amending By-Laws. By-laws of the corporation may be adopted, amended or repealed (a) at any meeting of stockholders, notice of which shall have referred to the proposed action, by the holders of a majority of the shares of the corporation then entitled to vote at an election of directors, or (b), if the power to adopt, amend or repeal by- -21- 22 laws shall have been conferred upon the directors in the certificate of incorporation, at any meeting of the Board of Directors, notice of which shall have referred to the proposed action, by the vote of a majority of the entire Board of Directors. -22- EX-3.3 6 ARTICLES OF INCORPORATION 1 EXHIBIT 3.3 UNITED STATES OF AMERICA, STATE OF OHIO, } OFFICE OF THE SECRETARY OF STATE. I, SHEEROD BROWN, Secretary of State of the State of Ohio, do hereby certify that the foregoing is an exemplified copy , carefully compared by me with the original record now in my official custody as Secretary of State, and found to be true and correct, of the ARTICLES OF INCORPORATION OF TOWER PARKING, INC. (AN OHIO CORPORATION) CHARTER NO. 463819 Filed in this office on the 28th day of February A.D. 1975 and recorded on Roll E42, Frame 1642 of the Records of Incorporations. WITNESS my hand and official seal at Columbus, Ohio, on this 30th day of December A.D. 1985 /s/Sherrod Brown SHERROD BROWN [ SEAL ] 2 ARTICLES OF INCORPORATION OF TOWER PARKING, INC. The undersigned, being a citizen of the United States and desiring to form a corporation for profit under Section 1701.01 et seq. of the Revised Code of Ohio, does hereby certify: FIRST: The name of the corporation shall be TOWER PARKING, INC. SECOND: The place in Ohio where its principal office is to be located is Columbus, Franklin County. THIRD: The purposes for which it is formed are: To engage in any lawful activity or act for which corporations may be formed under Section 1701.01 to 1701.98, inclusive of the Revised Code. FOURTH: The number of shares which the corporation is authorized to have outstanding is Five Hundred (500) shares of common stock, all of which shall be without par value. FIFTH: The amount of stated capital with which the corporation shall begin business is Five Hundred Dollars ($500.00). SIXTH: No holder of shares of the corporation shall have any preemptive right to subscribe for or to purchase any shares of the corporation of any class whether such shares or such class be now or hereafter authorized. SEVENTH: The corporation may purchase, hold, sell, and transfer the shares of its own capital stock, bonds and other obligations of the corporation from time to time to such extent and in such manner and upon such terms as its Board of Directors shall determine; provided that the Corporation shall not use any of its funds or property for the purchase of its own shares of capital stock when such use would cause any impairment of the capital of the corporation; and further provided that shares of its own capital stock belonging to the corporation shall not be voted upon directly or indirectly. 3 EIGHTH: Any director or officer of the corporation shall not be disqualified by his office from dealing or contracting with the corporation as a vendor, purchaser, employee, agent, lessor, leasee or otherwise. No transaction, contract or other act of the corporation shall be void or voidable or in any way affected or invalidated by reason of the fact that any director or officer, or any firm or corporation in which such director or officer is a member or is a shareholder, director or officer, is in any way interested in such transaction, contract or other act provided the fact that such director, officer, firm or corporation is so interested shall be disclosed or shall be known to the Board of Directors or such members thereof as shall be present at any meeting of the Board of Directors at which action upon any such transaction, contract or other act shall be taken; nor shall any director or officer be accountable or responsible to the corporation for or in respect of any transaction, contract or other act of the corporation or for any gains or profits realized by him by reason of the fact that he or any firm of which he is a member or any corporation of which he is a shareholder, director or officer is interested in such transaction, contract or other act; and any such director may be counted in determining the existence of a quorum at any meeting of the Board of Directors of the corporation which shall authorize or take action in respect of any transaction, contract or other act, and may vote thereat to authorize, ratify or approve any such transaction, contract or other act, with like force and effect as if he or any firm of which he is a member or any corporation of which he is a shareholder, director or officer were not interested in such transaction, contract or other act. NINTH: The corporation shall indemnify each person who is or was a director or officer of the Corporation against any and all liability and reasonable expense that may be incurred by him in connection with or resulting from any action, claim, or suit or proceeding, civil or criminal, in which he may become involved by reason of his being or having been a director or officer of the Corporation, or by reason of any past or future action taken in his capacity as such director or officer, whether or not he continues to be such at the time such liability or expense is incurred, provided such director or officer acted in good faith, in what he reasonably believed to be the best interests of the Corporation and provided further that such director or officer is not adjudged liable for negligence or misconduct in the performance of his duty in such action, suit or proceeding, and in connection with any criminal action or proceeding, provided he had no reasonable 4 cause to believe that his conduct was unlawful. As set forth in the Article, the terms "liability" and "expense" shall include, but shall not be limited to, counsel fees, proper expenses and disbursements, and amounts of judgments, fines or penalties, and amounts paid in settlements by such director or officer of the Corporation. In the event that a question arises as to whether or not such director or officer has met the standards of conduct hereinabove set forth in this Article, such question shall be conclusively determined by either (1) the Board of Directors acting by a quorum consisting of directors who are not involved in such claim, action, suit or proceeding, or (2) by the written opinion of reputable disinterested legal counsel selected by the Corporation. If any word, clause or provision of this Article shall, for any reason, be determined to be invalid, the provisions hereof shall not otherwise be affect thereby, but shall remain in full force and effect. The foregoing rights of indemnification shall not be exclusive of other rights to which any such director or officer may be entitled by contract or as a matter of law, and shall inure to the benefit of the heirs, legatees and personal representative of any such person. IN WITNESS WHEREOF, I have hereunto subscribed my name this 21 day of February, 1975. TOWER PARKING, INC. By /s/ Roderick H. Willcox Roderick H. Willcox Incorporator 5 FORM C-103 PRESCRIBED BY SECRETARY OF STATE TED W. BROWN ORIGINAL APPOINTMENT OF AGENT The undersigned, being at least a majority of the incorporators of Tower Parking, Inc. , (Name of Corporation) hereby appoint F. Herbert Hoffman, Jr. (Name of Agent) a natural person resident in the country in which the corporation has its principal office, a corporation having a business address in the county in which Tower Parking Inc. (Name of Corporation) has its principal office (strike out phrase not applicable), upon whom (which) any process, notice or demand required or permitted by stature to be served upon the corporation may be served. His (its) complete address is 11th Floor, 16 E. Broad Street , (Street or Avenue) Columbus , Franklin________ County, Ohio, 43215. (City or Village) (Zip Code) Tower Parking, Inc. (Name of Corporation) /s/ Roderick H. Willcox Robert H. Willcox (Incorporators' name should be typed or printed beneath signatures) Columbus , Ohio February 21 , 1975 Tower Parking, Inc (Name of Corporation) Gentlemen, I, It (strike out word not applicable) hereby accept(s) appointment as agent of your corporation upon whom process, tax notices or demands may be served. /s/ [illegible] (Signature of Agent of Name of Corporation) By ________________________________________ (Signature of Officer Signing and Title) 6 Remarks. All articles of incorporation must be accompanied by an original appointment or agent. There is no filing fee for this appointment. 7 UNITED STATES OF AMERICA STATE OF OHIO OFFICE THE SECRETARY OF STATE I, BOB TAFT, Secretary of State of the State of Ohio do hereby certify that the foregoing is a true and correct copy consisting of 4 pages, as taken from the original record now in my official capacity as Secretary of State. WITNESS my hand and official seal at Columbus, Ohio this 27th day of March AD 1998 /s/ Bob Taft BOB TAFT Secretary of State /s/ NOTICE: This is an official certification copy when reproduced in red ink. EX-3.4 7 CODE OF REGULATIONS 1 EXHIBIT 3.4 CODE OF REGULATIONS OF TOWER PARKING, INC. ARTICLE I SHAREHOLDERS Section 1. Annual Meeting. The annual meeting of shareholders shall be held in the month of December of each year for the election of Directors and the consideration of reports to be laid before such meeting. Upon due notice, there may also be considered and acted upon at an annual meeting any matter which could properly be considered and acted upon at a special meeting, in which case and for which purpose the annual meeting shall also be considered as and shall be a special meeting. Then the annual meeting is not held or Directors are not elected thereat, they may be elected at a special meeting called for that purpose. Section 2. Special Meetings. Special meetings of shareholders may be called by the President, or the Vice President or the Secretary or the Treasurer or by Directors by action at a meeting or by any two of the Directors acting without a meeting or by any two holders of shares outstanding and entitled to vote on any proposal to be submitted at said meeting. Section 3. Place of Meeting. Any meeting of shareholders may be held either at the principal office of the corporation in Columbus, Ohio, or at such other place within or without the State of Ohio as may be designated in the notice of said meeting. Section 4. Notice of Meetings. Not more than fifteen (15) days nor less than seven (7) days before the date fixed for a meeting of shareholders, whether annual or special, written notice of the time, place and purpose of such meeting shall be given by or at the direction of the President, a Vice-President, the Secretary or an Assistant Secretary. Such notice shall be given either by personal delivery or by mail to each shareholder of record entitled to notice of such meeting. If such notice is mailed, it shall be addressed to the shareholders at their respective addresses as they appear on the records of the corporation, and notice shall be deemed to have been given on the day so mailed. Notice of adjournment of a meeting need not be given if the time and place to which it is adjourned are fixed and announced at such meeting. Section 5. Shareholders Entitled to Notice and to Vote. If a record date shall not be fixed pursuant to statutory authority, the record date for the determination of shareholders who are entitled to notice of a meeting of shareholders shall be the close of business on the date next preceding the day on which notice is given. The record date for the determination of shareholders who are entitled to vote at a meeting of shareholders shall be the close of business on the date next preceding the date on which the meeting is held. 2 Section 6. Quorum; Adjournment. To constitute a quorum at any meeting of shareholders, there shall be present in person or by proxy shareholders of record entitled to exercise a majority of the voting power of the corporation in respect of any one of the purposes for which the meeting is called. The shareholders present in person or by proxy, whether or not a quorum be present, may adjourn the meeting from time to time. Section 7. Action Without a Meeting. Any action which may be authorized or taken at a meeting of the shareholders may be authorized or taken without a meeting in a writing or writings signed by all of the shareholders who would be entitled to notice of a meeting for such purpose, which writing or writings shall be filed with or entered upon the record of the corporation. Section 8. Inspection of Books and Records. Any shareholder, upon five (5) days written notice, shall have the unqualified right to examine, in person or by agent or attorney, all corporate books, records and correspondence and to make copies or extracts thereof. Section 9. Close Corporation Agreement. In the event that the shareholders enter into a close corporation agreement in accordance with Ohio Revised Code Section 1701.591 to govern the internal affairs of the corporation and shareholder relations, then the terms of such agreement shall be construed consistently with these regulations and, in the event of any inconsistency between the agreement and these regulations, the terms of the agreement shall govern. Section 10. Approval and Ratification of Acts of Officers and Board. Except as otherwise provided by the Articles of Incorporation or by law, any contract, act or transaction, prospective or past, of the company or of the Board or of the officers may be approved or ratified by the affirmative vote at a meeting of the shareholders, or by the written consent, with or without a meeting, of the holders of shares entitling them to exercise a majority of the voting power of the company, and such approval or ratification shall be as valid and binding as though affirmatively voted for or consented to by every shareholder of the company. ARTICLE II DIRECTORS Section 1. Election, Number and Term of Office. The Directors shall be elected at the annual meeting of shareholders, or if not so elected, at a special meeting of shareholders for that purpose, and each Director shall hold office until the date fixed by these Regulations for the next succeeding annual meeting of shareholders and until his successor is elected or until his earlier resignation, removal from office or death. At any meeting of shareholders at which Directors are to be elected, only persons nominated as candidates shall be eligible for election. The number of Directors to be elected shall be determined from time to time by the shareholders entitled to vote. -2- 3 Section 2. Meetings. Regular meetings of the Directors shall be held immediately after the annual meeting of shareholders and at such other times and places as may be fixed by the Directors. Special meetings of the Directors may be called by the President or Secretary or Treasurer of the corporation or by any two of the Directors. Notice of the time and place of a special meeting shall be served upon or telephoned to each Director personally at least twenty-four (24) hours, or mailed, telegraphed or cabled to each Director at least seventy-two (72) hours prior to the time of the meeting. Section 3. Quorum. A majority of the number of Directors then in office shall be necessary to constitute a quorum for the transaction of business; but if at any meeting of the Directors there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time without notice other than announcement at the meeting until a quorum shall attend. Section 4. Action Without a Meeting. Any action which may be authorized or taken at a meeting of the Directors may be authorized or taken without a meeting in a writing or writings signed by all of the Directors, which writing or writings shall be filed with or entered upon the records of the corporation. Section 5. Vacancy. A vacancy in the Board of Directors may be filled by the vote of a majority of the whole authorized number of Directors. A Director elected to fill a vacancy shall be a Director until his successor is elected by the shareholders. Section 6. Committees. The Board of Directors may, from time to time, appoint certain of its members but not less than three (3) to act as a committee and may delegate to such committee powers and/or duties to be exercised and performed under the control and direction of the Board of Directors. In particular, the Board of Directors may create from its membership and define the powers and duties of an Executive Committee of not less than three members. During the intervals between the meetings of the Board of Directors, the Executive Committee, unless restricted by resolution of the Board, shall possess and may exercise under the control and direction of the Board of Directors, all of the powers of the Corporation. All action taken by the Executive Committee shall be reported to the Board of Directors at its first meeting thereafter and shall be subject to revision or rescission by the Board of Directors, provided, however, that rights of third parties shall not be adversely affected by any such action of the Board of Directors. In every case, the affirmative vote of the majority or consent of all the members of the Executive Committee shall be necessary for the approval of any action, but action may be taken by the Executive Committee without a formal meeting. The Executive Committee shall meet at the call of any members thereof and shall keep a written record of all actions taken by it. -3- 4 ARTICLE III OFFICERS Section 1. Officers. The corporation shall have a President, a Secretary and a Treasurer. The corporation may also have one or more Vice Presidents and such Assistant Secretaries and Assistant Treasurers as the Directors may deem necessary. All of the officers and assistant officers shall be elected by the Directors. Any two or more offices may be held by the same person but no officer shall execute, acknowledge or verify any instrument in more than one capacity. The President may hold the additional office of Chairman of the Board of Directors and he may hold the office of Treasurer provided he is elected as Treasurer by the unanimous vote of the Directors. The corporation may also elect a Chairman of the Board of Directors who may or may not have executive duties. If no one else is so elected, then the President shall be the Chairman of the Board of Directors. Section 2. Authority, Duties and Compensation of Officers. The officers of the corporation shall have such authority and shall perform such duties as are customarily incident to their respective offices or as may be specified from time to time by the Directors regardless of whether such authority and duties are customarily incident to such office. Upon request of the president of the company as to any other officer or officers and upon request of a majority of the members of the Board of Directors acting individually, as to the president, any officer receiving compensation shall enter into an agreement between the company and himself and thereby such officer shall agree to reimburse the company for any amount of the officer's salary, the deduction for which is disallowed the company by the Internal Revenue Service as being unreasonable in amount. The president is authorized to execute such agreements on behalf of the company except where the subject agreement concerns the president's salary, in which case any other officer shall be authorized to execute the agreement on behalf of the company. Execution of such a reimbursement agreement upon request, as set forth above, is a condition of future employment, and the president is authorized to discharge any officer who refuses to comply with the provisions herein, and likewise the Board of Directors is empowered to discharge the president from office if he refuses so to comply. Although all compensation will be bargained for on an arm's length basis, and every effort will be made to establish reasonable compensation, the application of tax laws are subject to uneven interpretation and the company needs to examine its economic cost of compensation and its deductibility is a factor that significantly affects that economic cost to the company, as well as the company's cash flow and profit. Section 3. Removal. Any officer elected or appointed by the Board of Directors may be removed at any time by the Board of Directors whenever, in the judgment of the Board, the best interests of the Corporation would be served thereby. -4- 5 ARTICLE IV MISCELLANEOUS Section 1. Certificates. Every shareholder in the corporation shall be entitled to have a certificate of shares signed in the name of the Corporation certifying the number and class of shares represented by such certificate. Section 2. Transfer and Registration of Certificate. The Directors shall have authority to make such rules and regulations as they deem expedient concerning the issuance, transfer and registration of certificates for shares and the shares represented thereby and may appoint transfer agents and registrars thereof. Section 3. Substituted Certificates. In case a certificate of shares is lost, stolen or destroyed, a new certificate may be issued therefor upon such terms and indemnity to the Corporation as the Board of Directors may determine. Section 4. Voting Upon Shares Held by the Corporation. Unless otherwise ordered by the Directors, the President, in person or by proxy or proxies appointed by him, shall have full power and authority on behalf of the Corporation to vote, act and consent with respect to any shares issued by other corporations which the Corporation may own. Section 5. Corporate Seal. The Corporation shall not have a corporate seal. Section 6. Articles to Govern. If any provision of these Regulations shall be inconsistent with the Articles, the Articles shall govern. Section 7. Transactions Among Related Parties. If any person who is a member of the Board of Directors or a shareholder of the company causes the rental of real or personal property to the company, the rental agreement shall be fair, shall be bargained for at arm's length and as a condition of any rental agreement, shall, at the company's request, provide that said Lessor agrees to reimburse the company for any amount paid under said agreement the deduction for which is disallowed the company by the Internal Revenue Service as being unreasonable in amount, or bargained for not at arm's length. The president is authorized to execute such agreements on behalf of the company. It is in this manner that the company can evaluate the true economic cost of payment under the agreement in that its deductibility is a factor that significantly affects that economic cost to the company, as well as the company's cash flow and profit. Section 8. Amendments. These Regulations may be amended by the affirmative vote or the written consent of the shareholders of record entitled to exercise a majority of the voting power on such proposal, provided, however, that if an amendment is adopted by written consent without a meeting of the shareholders, the Secretary shall mail a copy of such amendment to each shareholder of record who would have been entitled to vote thereon and did not participate in the adoption thereof. -5- EX-3.5 8 ARTICLES OF INCORPORATION 1 EXHIBIT 3.5 DEPARTMENT OF STATE THE STATE OF OHIO ANTHONY J. CELEBREZZE, JR. Secretary of State 565964 CERTIFICATE IT IS HEREBY CERTIFIED that the Secretary of State of Ohio has custody of the Records of Incorporation and Miscellaneous Filings, that said records show the filing and recording of: AMD CHIN of: GRALEIC, INC. FORMERLY GRAELICK, INC. Recorded on Roll E867 at Frame 0358 of the Records of Incorporation and Miscellaneous Filings. WITNESS MY HAND AND THE SEAL OF THE SECRETARY OF STATE, AT THE CITY OF COLUMBUS, OHIO, THIS 12th DAY OF FEB, A.D. 1981 . ANTHONY J. CELEBREZZE, JR. SECRETARY OF STATE -1- 2 Prescribed by Shares ___________ ANTHONY J. CELEBREZZE, JR. E867-0358 Approved by ______ Secretary of State Date _____________ Fees______________ CERTIFICATE OF AMENDMENT (BY SHAREHOLDERS) TO THE ARTICLES OF INCORPORATION OF GRAELICK, INC. (Name of Corporation) ( ) Chairman of Board HELEN STOCKS , who is (x) President (check one) ( ) Vice President and GERALD STOCKS , who is (x) Secretary (check one) ( ) Assistant Secretary of the above named Ohio corporation for profit with its principal location at 5357 Mill Creek Lane, North Ridgeville, Ohio do hereby certify that: (check the appropriate box and complete appropriate statements) ____ a meeting of the shareholders was duly called and ____ held on , 19 , at which meeting a quorum of the shareholders was present in person or by proxy, and by the affirmative vote of the holders of shares entitling them to exercise % of the voting power of the corporation, X in writing signed by all of the shareholders who ____ would be entitled to a notice of a meeting held for that purpose, the following resolution was adopted to amend the articles: That the name of the corporation be changed from Graelick, Inc. to Graelic, Inc. IN WITNESS WHEREOF, the above named officers, acting for and on behalf of the corporation, have subscribed their names this __________ day of January, 1981. /s/ Helen Stocks (President) /s/ Gerald Stocks (Secretary) -2- 3 NOTE: Ohio law does not permit one officer to sign in two capacities. Two separate signatures are required, even if this necessitates the election of a second officer before the filing can be made. -3- 4 UNITED STATES OF AMERICA, STATE OF OHIO, OFFICE OF THE SECRETARY OF STATE I, BOB TAFT, Secretary of State of the State of Ohio, do hereby certify that the foregoing is a true and correct copy, consisting of 1 pages, as taken from the original record now in my official custody as Secretary of State. WITNESS my hand and official seal at Columbus, Ohio, this 27th day of March AD 1998 /s/ Bob Taft BOB TAFT Secretary of State by: /s/ NOTICE: This is an official certification only when reproduced in red ink. -4- 5 DEPARTMENT OF STATE THE STATE OF OHIO ANTHONY J. CELEBREZZE, JR. Secretary of State 565964 CERTIFICATE IT IS HEREBY CERTIFIED that the Secretary of State of Ohio has custody of the Records of Incorporation and Miscellaneous Filings; that said records show the filing and recording of: ARF of: GRAELICK, INC. Recorded on Roll E844 at Frame 1955 of the Records of Incorporation and Miscellaneous Filings. WITNESS MY HAND AND THE SEAL OF THE SECRETARY OF STATE, AT THE CITY OF COLUMBUS, OHIO, THIS 15th DAY OF DEC, A.D. 1980. ANTHONY J. CELEBREZZE, JR. SECRETARY OF STATE -5- 6 ARTICLES OF INCORPORATION OF GRAELICK, INC. The undersigned, a majority of whom are citizens of the United States, desiring to form a corporation, for profit, under Sections 1701.01 et seq. Of the Revised Code of Ohio, do hereby certify: FIRST. The name of said corporation shall be GRAELICK, INC. SECOND. The place in Ohio where its principal office is to be located is 5357 Mills Creek Lane, North Ridgeville, Lorain County, Ohio. THIRD. The purposes for which it is formed are: To engage in advertising, marketing and consulting work in connection therewith and any other lawful act or activity for which corporations may be formed under Sections 1701.01 to 1701.98, inclusive, of the Ohio Revised Code. FOURTH. The maximum number of shares which the Corporation is authorized to have outstanding is Seven Hundred Fifty Dollars ($750.00), all of which shall be Common shares without par value. The designation and the powers, preferences and rights of each class of stock of the Corporation, and the qualifications, limitations or restrictions thereof, shall be as follows: (a) Except as may be provided by statute, the Common Stock shall have equal voting powers and the holders thereof shall be entitled to one (1) vote in person or by proxy for each share of stock held. (b) The shares of stock of this Corporation shall be issued only upon the full payment of the sums represented by them. (c) No holder of shares of the Corporation shall have any preemptive right to subscribe for or to purchase any shares of the Corporation of any class whether such shares or such class be now or hereafter authorized. (d) Out of any surplus or net profits of the Corporation, dividends may be declared and paid on the Common Stock when and as declared by the Board of Directors; -6- 7 (e) Notwithstanding any provision of the General Corporation Law of Ohio, now or hereafter in force, requiring for any purpose the vote or consent of the holders of shares entitling them to exercise Two-Thirds (2/3) of the voting power of the Corporation or of any class or classes of shares thereof, such action, unless otherwise expressly required by statute, or otherwise herein stated, may be taken by vote or consent of the holders of shares entitling them to exercise a majority of voting power of the Corporation or of such class of shares thereof. (f) On the death or adjudication of incompetency of any stockholder, the shares owned by such stockholder shall be purchased by the Corporation at the fair market value determined by the Board of Directors. FIFTH. Any article in these Articles of Incorporation shall be subject to amendment or repeal, and new articles may be made by the affirmative vote of the holders of record of a majority of the outstanding stock of the Corporation entitled to vote in respect thereof, given at any annual meeting or at any special meeting, provided notice of the proposed amendment or repeal or of the proposed new articles be included in the notice of such meeting. SIXTH. This Corporation may be dissolved at any time by an affirmative vote of stockholders of Common Stock holding Fifty One Percent (51%) of its voting capital stock at a meeting of such stockholders called for that purpose in the manner not inconsistent with law. In the event of such dissolution, the affairs of the corporation shall be wound up in the manner provided in the Articles of Incorporation. SEVENTH. The Corporation, through its Board of Directors, shall have the right and power to repurchase any of its outstanding shares at such price and upon such terms as may be agreed upon between the Corporation and the selling shareholder or shareholders. EIGHTH. A Director or officer of the Corporation shall not be disqualified by his office from dealing or contracting with the Corporation as a vendor, purchaser, employee, agent or otherwise; nor shall any transaction, contract or act of the Corporation be void or voidable or in any way affected or invalidated by reason of the fact that any Director or Officer or any firm of which such Director of Officer is a member or any corporation of which such Director or Officer is a shareholder, Director or Officer is in any way _______ ________________________________________________________________________ Director, Officer, firm or corporation is so interested shall be disclosed or shall be known to the Board of Directors or such members thereof as shall be present at any meeting of the Board of Directors at which action upon any such contract, transaction, or act shall be taken, nor shall any such Director or officer be accountable or responsible to the Corporation for or in respect of any such transaction, contract or act of the Corporation, or for any gains or profits realized by him by reason of the fact that he or any firm of which he is a member, or any corporation of which he is a shareholder, officer or Director, is interested in such -7- 8 transaction, contract or act and any such Director or Officer, if such Officer is a Director, may be counted in determining the existence of quorum at any meeting of the Board of Directors of the Corporation which shall authorize or take action in respect of any such contract, transaction, contract or act, with like force and effect as if he or any firm of which he is a member, or any corporation of which he is shareholder, officer or director, were not interested in such transaction, contract or act. NINTH. Any action required or permitted to be taken by the Board of Directors may be taken without a meeting if all members of the Board individually or collectively consent in writing to such action. Such written consent or consents shall be filed with the minutes of the proceedings of the Board and shall have the same force and effect as a unanimous vote of the Directors. TENTH. The amount of stated capital with which the Corporation shall begin business is Seven Hundred Fifty Dollars ($750.00). IN WITNESS WHEREOF, I have hereunto subscribed my name this 9th day of December, 1980. --------------------------------------- JON R. BURNEY --------------------------------------- JOHN E. SHEPHERD --------------------------------------- DOLORES M. LEDERER -8- 9 ORIGINAL APPOINTMENT OF AGENT OF GRAELICK, INC. The undersigned, being all of the Incorporators of GRAELICK, INC. hereby appoint JON R. BURNEY, a natural person residing in the County in which the corporation's principal office is located, as agent for said corporation, upon whom any process, notice or demand required or permitted by statute, to be served upon the corporation, may be served. His complete address is: Suburban West building, Suite 205 20800 Center Ridge Road Rocky River, Ohio 44116 ----------------------------------------- JON R. BURNEY ----------------------------------------- JOHN E. SHEPHERD ----------------------------------------- DOLORES M. LEDERER * * * * * * Cleveland, Ohio Date: December 11, 1980 Gentlemen: I hereby accept appointment as agent for your corporation upon whom all process, tax notices or demands may be served. ----------------------------------------- JON R. BURNEY -9- 10 UNITED STATES OF AMERICA, STATE OF OHIO, OFFICE OF THE SECRETARY OF STATE I, BOB TAFT, Secretary of State of the State of Ohio, do hereby certify that the foregoing is a true and correct copy, consisting of 4 pages, as taken from the original record now in my official custody as Secretary of State. WITNESS my hand and official seal at Columbus, Ohio, this 27th day of March AD 1998 /s/ Bob Taft BOB TAFT Secretary of State By: /s/ NOTICE: This is an official certification only when reproduced in red ink. -10- EX-3.6 9 CODE OF REGULATIONS 1 EXHIBIT 3.6 ACTION BY WRITTEN CONSENT OF SHAREHOLDERS CODE OF REGULATIONS OF GRAELIC INC. ARTICLE I. MEETINGS OF SHAREHOLDERS (a) ANNUAL MEETINGS. The annual meeting of the shareholders of this corporation shall be held at the principal office of the corporation, in North Ridgeville, Ohio, on the 15th day in December of each year, at 10:00 o'clock A.M., if not a legal holiday, then on the day following at the same hour. The first annual meeting of the corporation shall be held in 19 . (b) SPECIAL MEETINGS. of the shareholders of this corporation shall be called by the Secretary, pursuant to a resolution of the Board of Directors, or upon the written request of two directors, or by shareholders representing 25% of the shares issued and entitled to vote. Calls for special meetings shall specify the time, place and object or objects thereof, and no business other than that specified in the call therefor shall be considered at any such meetings. (c) NOTICE OF MEETINGS. A written or printed notice of any special meeting of the shareholders, stating the time and place, and in case of special meetings, the objects thereof, shall be given to each shareholder entitled to vote at such meeting appearing on the books of the corporation, by mailing same to his address as the same appears on the records of the corporation or of its Transfer Agent, or Agents, at least Ten (10) days before any such meeting; provided, however, that no failure or irregularity of notice of any annual meeting shall invalidate the same or any proceeding thereat. All notices with respect to any shares to which persons are jointly entitled may be given to that one of such persons who is named first upon the books of the Corporation and notice so given shall be sufficient notice to all the holders of such shares. (d) QUORUM. A majority in number of the shares authorized, issued and outstanding, represented by the holders of record thereof, in person or by proxy, shall be requisite to constitute a quorum at any meeting of shareholders, but less than such majority may adjourn the meeting of shareholders from time to time and at any such adjourned meeting any business may be transacted which might have been transacted if the meeting had been as originally called. (e) PROXIES. Any shareholder entitled to vote a meeting of shareholders may be represented and vote thereat by proxy appointed by an instrument in writing, subscribed by each shareholder, or by his duly authorized attorney, and submitted to the Secretary at or before such meeting. 2 *MINUTES OF FIRST SHAREHOLDERS' MEETING OR *ACTION BY WRITTEN CONSENT OF SHAREHOLDERS - -------------------------------------------------------------------------------- ARTICLE II. SEAL The seal of the corporation shall be circular, about two inches in diameter, with the name of the corporation engraved around the margin and the word "SEAL" engraved across the center. It shall remain in the custody of the Secretary, and it or a facsimile thereof shall be affixed to all certificates of the corporation's shares. If deemed advisable by the Board of Directors, a duplicate seal may be kept and used by any other officer of the corporation, or by any Transfer Agent of its shares. ARTICLE III. SHARES SECTION 1. -- Certificates. Certificates evidencing the ownership of shares of the corporation shall be issued to those entitled to them by transfer or otherwise. Each certificate for shares shall bear a distinguishing number, the signature of the President or Vice-President, and of the Secretary or an Assistant Secretary, the seal of the corporation, and such recitals as may be required by law. The certificates for shares shall be of such tenor and design as the Board of Directors from time to time may adopt. SECTION 2. -- Transfers. (a) The shares may be transferred on the proper books of the corporation by the registered holders thereof, or by their attorneys legally constituted, or their legal representatives, by surrender of the certificate therefor for cancellation and a written assignment of the shares evidenced thereby. The Board of Directors may, from time to time, appoint such Transfer Agents or Registrars of shares as it may deem advisable, and may define their powers and duties. (b) All endorsements, assignments, transfers, share powers or other instruments of transfer of securities standing in the name of the corporation shall be executed for and in the name of the corporation by any two of the following officers, to-wit: the President or a Vice-President, and the Treasurer or Secretary, or an Assistant Treasurer or an Assistant Secretary; or by any person or persons thereunto authorized by the Board of Directors. SECTION 3. -- Lost Certificates. The Board of Directors may order a new certificate or certificates of shares to be issued in place of any certificate or certificates alleged to have been lost or destroyed, but in every such case the owner of the lost certificate or certificates shall first cause to be given to the corporation a bond, with surety or sureties satisfactory to the corporation in such sum as said Board of Directors may in its discretion deem sufficient as indemnity against any loss or liability that the corporation may incur by reason of the issuance of such new certificates; but the Board of Directors may, in its discretion, refuse to issue such new certificate save 3 *MINUTES OF FIRST SHAREHOLDERS' MEETING OR *ACTION BY WRITTEN CONSENT OF SHAREHOLDERS - -------------------------------------------------------------------------------- upon the order of some court having jurisdiction in such matters pursuant to the statute made and provided. SECTION 4. -- Closing of Transfer Books. The share transfer books of the corporation may be closed by order of the Board of Directors for a period not exceeding ten (10) days prior to any meeting of the shareholders, and for a period not exceeding ten (10) days prior to the payment of any dividend. The times during which the books may be closed shall, from time to time, be fixed by the Board of Directors. ARTICLE IV. DIRECTORS The number of members of the Board of Directors shall be determined pursuant to law, by resolution of the shareholders entitled to vote, but shall not be less than three (3) members. The election of directors shall be held at the annual meeting of the shareholders, or at a special meeting called for that purpose. Directors shall hold office until the expiration of the term for which they were elected and shall continue in office until their respective successors shall have been duly elected and qualified. ARTICLE V. VACANCIES IN THE BOARD A resignation from the Board of Directors shall be deemed to take effect upon its receipt by the Secretary, unless some other time is specified therein. In case of any vacancy in the Board of Directors, through death, resignation, disqualification, or other cause deemed sufficient by the Board, the remaining directors, though less than a majority of the whole board, by affirmative vote of a majority of those present at any duly convened meeting may, except as hereinafter provided, elect a successor to hold office for the unexpired portion of the term of the director whose place shall be vacant, and until the election and qualification of a successor. ARTICLE VI. REGULAR MEETINGS Regular meetings of the Board of Directors shall be held monthly on such dates as the Board may designate. -2- 4 *MINUTES OF FIRST SHAREHOLDERS' MEETING OR *ACTION BY WRITTEN CONSENT OF SHAREHOLDERS - -------------------------------------------------------------------------------- ARTICLE VII. SPECIAL MEETINGS Special meetings of the Board of Directors shall be called by the Secretary and held at the request of the President or any two of the directors. ARTICLE VIII. NOTICE OF MEETINGS The Secretary shall give notice of each meeting of the Board of Directors, whether regular or special, to each member of the Board. ARTICLE IX. QUORUM A majority of the Directors in office at the time shall constitute a quorum at all meetings thereof. ARTICLE X. PLACE OF MEETINGS The Board of Directors may hold its meetings at such place or places within or without the State of Ohio as the Board may, from time to time, determine. ARTICLE XI. COMPENSATION Directors, as such, shall not receive any stated salary for their services, but, on resolution of the Board, a fixed sum for expenses of attendance, if any, may be allowed for attendance at each meeting, regular or special, provided that nothing herein contained shall be construed to preclude any Director from serving the corporation in any other capacity and receiving compensation therefor. Members of either executive or special committees may be allowed such compensation as the Board of Directors may determine for attending committee meetings. -3- 5 *MINUTES OF FIRST SHAREHOLDERS' MEETING OR *ACTION BY WRITTEN CONSENT OF SHAREHOLDERS - -------------------------------------------------------------------------------- ARTICLE XII. ELECTION OF OFFICERS At the first meeting of the Board of Directors in each year (at which a quorum shall be present) held next after the annual meeting of the shareholders, and at any special meeting provided in Article VII, the Board of Directors shall elect officers of the corporation (including the President), and designate and appoint such subordinate officers and employees as it shall determine. They may also appoint an executive committee or committees from their number and define their powers and duties. ARTICLE XIII. OFFICERS The officers of this corporation shall be a President, who shall be a director, and also a Vice-President, a Secretary, a Treasurer and a who may or may not be directors. Said officers shall be chosen by the Board of Directors, and shall hold office for one year, and until their successors are elected and qualified. Additional Vice-Presidents may be elected from time to time as determined by the Directors who may also appoint one or more Assistant Secretaries, and one or more Assistant Treasurers, and such other officers and agents of the corporation as it may from time to time determine. Any officer or employee elected or appointed by the Board of Directors, other than that of director, may be removed at any time upon vote of the majority of the whole Board of Directors. The same person may hold more than one office, other than that of President and Vice-President, or Secretary and Assistant Secretary, or Treasurer and Assistant Treasurer. In case of the absence of any officer of the corporation, or for any other reason which the Board of Directors may deem sufficient, the Board of Directors may delegate the powers or duties of such officer to any other officer or to any director, provided a majority of the whole Board of Directors concur therein. ARTICLE XIV. DUTIES OF OFFICERS (a) President. The President shall preside at all meetings of shareholders and directors. He shall exercise, subject to the control of the Board of Directors and the shareholders of the corporation, a general supervision over the affairs of the corporation, and shall perform generally all duties incident to the office and such other duties as may be assigned to him from time to time by the Board of Directors. -4- 6 *MINUTES OF FIRST SHAREHOLDERS' MEETING OR *ACTION BY WRITTEN CONSENT OF SHAREHOLDERS - -------------------------------------------------------------------------------- (b) Vice-President. The Vice-President shall perform all duties of the President in his absence or during his inability to act, and shall have such other and further powers, and shall perform such other and further duties as may be assigned to him by the Board of Directors. (c) Secretary. The Secretary shall keep the minutes of all proceedings of the Board of Directors and of the shareholders and make a proper record of the same, which shall be attested by him. He shall keep such books as may be required by the Board of Directors, and shall take charge of the seal of the corporation, and generally perform such duties as may be required by the Board of Directors. (d) Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation which may come into his hands, and shall do with the same as may be ordered by the Board of Directors. When necessary or proper he may endorse on behalf of the corporation for collection, checks, notes and other obligations. He shall deposit the funds of the corporation to its credit in such banks and depositaries as the Board of Directors may, from time to time, designate. The fiscal year of the corporation shall be co-extensive with the calendar year. He shall submit to the annual meeting of the shareholders, a statement of the financial condition of the corporation, and whenever required by the Board of Directors, shall make and render a statement of his accounts, and such other statements as may be required. He shall keep in books of the corporation, full and accurate accounts of all moneys received and paid by him for account of the corporation. He shall perform such other duties as may, from time to time, be assigned to him by the Board of Directors. ARTICLE XV. ORDER OF BUSINESS 1. Call meeting to order. 2. Selection of chairman and secretary. 3. Proof of notice of meeting. 4. Roll call, including filing of proxies with secretary. 5. Appointment of tellers. 6. Reading and disposal of previously unapproved minutes. 7. Reports of officers and committees. 8. If annual meeting, or meeting called for that purpose, election of directors. 9. Unfinished business. 10. New business. 11. Adjournment. -5- 7 CODE OF REGULATIONS - -------------------------------------------------------------------------------- This order may be changed by the affirmative vote of a majority in interest of the shareholders present. ARTICLE XVI. AMENDMENTS No action of the directors of this corporation shall be valid unless approved by all members of the Board of Directors by their unanimous vote, whether or not present at a meeting. No action of the shareholders of the corporation shall be valid unless approved by the unanimous vote of all shareholders, whether or not present at a meeting. These regulations may be amended only by the unanimous vote of all shareholders, whether or not present at a meeting. ARTICLE XVII. STOCK RESTRICTION No present shareholder or future shareholder of this corporation shall sell, transfer, assign or otherwise dispose of any of his shares of stock in this corporation without first offering such shares, for the same price, and upon the same terms and conditions, as the same are being offered to a third person (disclosing the name of the proposed purchaser), to the corporation, and the corporation shall have a period of thirty (30) days in which to accept such offer. Failing a timely acceptance, the selling shareholder shall then offer such shares for the same price, terms and conditions as they are being offered to a third person, to the remaining shareholders of the corporation, pro rata. The remaining shareholders shall have a period of thirty (30) days in which to accept said offer. Failing a timely acceptance by the remaining shareholders, the selling shareholder shall be free to sell such shares, but only to the prospective purchaser so disclosed, but for no more favorable price, terms and/or conditions, provided such sale is consummated within sixty (60) days following the expiration of the last option created herein. After such sixty (60) day period, the shares of stock shall be again subject to the provisions of this Article. All shares of stock of this corporation shall be appropriately endorsed to reflect the restriction upon transferability contained herein. -6- EX-3.7 10 CERTIFICATE OF INCORPORATION 1 EXHIBIT 3.7 CERTIFICATE OF AMENDMENT of CERTIFICATE OF INCORPORATION of HOLBERG REAL ESTATE, INC. Holberg Real Estate, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That by the unanimous written consent of the members of the Board of Directors of Holberg Real Estate, Inc., resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of said corporation and declaring said amendment to be advisable. The resolution setting forth the proposed amendment is as follows: RESOLVED, that the Certificate of Incorporation of this corporation be amended by changing Article 1 so that, as amended said Article shall read as follows: The name of the corporation (which is hereinafter referred to as the "Corporation") is: APCOA Capital Corporation SECOND: That in lieu of a meeting and vote of stockholders, the stockholders of the corporation have given unanimous written consent to said amendment in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware. THIRD: That the amendment was duly adopted in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware. FOURTH: That the capital of said corporation shall not be reduced under or by reason of said amendment. 2 IN WITNESS WHEREOF, said Holberg Real Estate, Inc. has caused this certificate to be signed by its President, and attested by its Secretary, this 10th day of March 1993. BY: ____________________________________ President ATTEST: _________________________________ Secretary -2- 3 CERTIFICATE OF AMENDMENT of CERTIFICATE OF INCORPORATION of AM GROUP II, INC. AM Group II, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That by the unanimous written consent of the members of the Board of Directors of AM Group II, Inc., resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of said corporation and declaring said amendment to be advisable. The resolution setting forth the proposed amendment is as follows: RESOLVED, that the Certificate of Incorporation of this corporation be amended by changing Article 1 so that, as amended said Article shall read as follows: The name of the corporation (which is hereinafter referred to as the "Corporation") is: Holberg Real Estate, Inc. SECOND: That in lieu of a meeting and vote of stockholders, the stockholders of the corporation have given unanimous written consent to said amendment in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware. THIRD: That the amendment was duly adopted in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware. FOURTH: That the capital of said corporation shall not be reduced under or by reason of said amendment. 4 IN WITNESS WHEREOF, said AM Group II, Inc. has caused this certificate to be signed by its President, and attested by its Secretary, this 6th day of January, 1992. BY: /s/ G. Walter Stuelpe ------------------------------- G. Walter Stuelpe, Jr. President ATTEST: /s/ Robert N. Sacks --------------------------- Robert N. Sacks Secretary -2- 5 CERTIFICATE OF INCORPORATION OF AM GROUP II, INC. I, the undersigned, for the purpose of incorporating and organizing a corporation under the General Corporation Law of the State of Delaware, do hereby execute this Certificate of Incorporation and do hereby certify as follows: ARTICLE I The name of the corporation (which is hereinafter referred to as the "Corporation") is: AM Group II, Inc. ARTICLE II The address of the Corporation's registered office in the State of Delaware is The Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County of New Castle. The name of the Corporation's registered agent at such address is The Corporation Trust Company. ARTICLE III The purpose of the Corporation shall be to engage in any lawful act or activity for which corporations may be organized and incorporated under the General Corporation Law of the State of Delaware. 6 ARTICLE IV SECTION 1. The Corporation shall be authorized to issue 1000 shares of capital stock, of which 500 shares shall be shares of Common Stock, $.01 par value ("Common Stock"), and 500 shares shall be shares of Preferred Stock, $.10 par value ("Preferred Stock"). SECTION 2. Shares of Preferred Stock may be issued from time to time in one or more series. The Board of Directors of the Corporation (hereinafter referred to as the "Board") is hereby authorized to fix the voting rights, if any, designations, powers preferences and the relative, participation, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, of any unissued series of Preferred Stock; and to fix the number of shares constituting such series, and to increase or decrease the number of shares of any such series (but not below the number of shares thereof then outstanding). SECTION 3. Except as otherwise provided by law or by the resolution or resolutions adopted by the Board designating the rights, powers and preferences of any series of Preferred Stock, the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes. Each share of Common Stock shall have one vote, and the Common Stock shall vote together as a single class. -2- 7 ARTICLE V Unless and except to the extent that the By-Laws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot. ARTICLE VI In furtherance and not in limitation of the powers conferred by law, the Board is expressly authorized and empowered to make, alter and repeal the By-Laws of the Corporation by a majority vote at any regular or special meeting of the Board or by written consent, subject to the power of the stockholders of the Corporation to alter or repeal any By-Laws made by the Board. ARTICLE VII The Corporation reserves the right at any time from time to time to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, and any other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article. -3- 8 ARTICLE VIII SECTION 1. Elimination of Certain Liability of Directors. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. SECTION 2. Indemnification and Insurance. a. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be -4- 9 amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in paragraph (b) hereof, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board. The right to indemnification conferred in this Section shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the Delaware General Corporation Law requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Section or otherwise. The Corporation may, by action of the Board, -5- 10 provide indemnification to employees and agents of the Corporation with the same scope and affect as the foregoing indemnification of directors and officers. b. Right of Claimant to Bring Suit. If a claim under paragraph (a) of this Section 5 is not paid in full by the Corporation within thirty days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the Delaware General Corporation Law for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. -6- 11 c. Non-Exclusivity of Rights. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Section shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, By-law, agreement, vote of stockholders or disinterested directors or otherwise; d. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law. ARTICLE IX The name and mailing address of the incorporator is Adam O. Emmerich, Esq., c/o Wachtell, Lipton, Rosen & Katz, 299 Park Avenue, New York, New York 10171. IN WITNESS WHEREOF, I, the undersigned, being the incorporator hereinbefore named, do hereby further certify that the facts hereinabove stated are truly set forth and, accordingly, I have hereunto set my hand this 13th day of November, 1990. ________________________________ Adam O. Emmerich Incorporator -7- EX-3.8 11 BY-LAWS OF APCOA 1 EXHIBIT 3.8 BY-LAWS OF AM GROUP II, INC. ARTICLE I OFFICES SECTION 1. REGISTERED OFFICE -- The registered office of AM Group II, Inc. (the "Corporation") shall be established and maintained at the office of The Corporation Trust Company at The Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County of New Castle, State of Delaware, and said Corporation Trust Company shall be the registered agent of the Corporation in charge thereof. SECTION 2. OTHER OFFICES -- The Corporation may have other offices, either within or without the State of Delaware, at such place or places as the board of directors may from time to time select or the business of the Corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS SECTION 1. ANNUAL MEETINGS -- Annual meetings of stockholders for the election of directors, and for such other business as may be stated in the notice of the meeting, shall be held at such place, either within or without the State of Delaware, and at such time and date as the board of directors, by resolution, shall determine and as set forth in the notice of the meeting. If the board of directors fails so to determine the time, date and place of meeting, the annual meeting of stockholders shall be held at the registered office of the Corporation on the first Tuesday in April. If the date of the annual meeting shall fall upon a legal holiday, the meeting shall be held on the next succeeding business day. At each annual meeting, the stockholders entitled to vote shall elect a board of directors and they may transact such other corporate business as shall be stated in the notice of the meeting. SECTION 2. SPECIAL MEETINGS -- Special meetings of the stockholders for any purpose or purposes may be called by the Chairman of the Board, the President or the Secretary, or by resolution of the board of directors. SECTION 3. VOTING -- Each stockholder entitled to vote in accordance with the terms of the Certificate of Incorporation of the Corporation and these By-Laws may vote in person or by proxy, but no proxy shall be voted after three years from its date unless such proxy provides for a longer period. All elections for directors shall be decided by plurality vote; all other questions shall be decided by majority vote except as otherwise provided by the Certificate of Incorporation or the laws of the State of Delaware. 2 A complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, with the address of each, and the number of shares held by each, shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is entitled to be present. SECTION 4. QUORUM -- Except as otherwise required by law, by the Certificate of Incorporation of the Corporation or by these By-Laws, the presence, in person or by proxy, of stockholders holding shares constituting a majority of the voting power of the Corporation shall constitute a quorum at all meetings of the stockholders. In case a quorum shall not be present at any meeting, a majority in interest of the stockholders entitled to vote thereat, present in person or by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until the requisite amount of stock entitled to vote shall be present. At any such adjourned meeting at which the requisite amount of stock entitled to vote shall be represented, any business may be transacted that might have been transacted at the meeting as originally noticed; but only those stockholders entitled to vote at the meeting as originally noticed shall be entitled to vote at any adjournment or adjournments thereof. SECTION 5. NOTICE OF MEETINGS -- Written notice, stating the place, date and time of the meeting, and the general nature of the business to be considered, shall be given to each stockholder entitled to vote thereat at his address as it appears on the records of the Corporation, not less than ten nor more than sixty days before the date of the meeting. No business other than that stated in the notice shall be transacted at any meeting without the unanimous consent of all the stockholders entitled to vote thereat. SECTION 6. ACTION WITHOUT MEETING -- Unless otherwise provided by the Certificate of Incorporation of the Corporation, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. ARTICLE III DIRECTORS SECTION 1. NUMBER AND TERM -- The business and affairs of the Corporation shall be managed under the direction of a board of directors which shall consist of not less -2- 3 than one person. The exact number of directors shall initially be one and may thereafter be fixed from time to time by the board of directors. Directors shall be elected at the annual meeting of stockholders and each director shall be elected to serve until his successor shall be elected and shall qualify. A director need not be a stockholder. SECTION 2. RESIGNATIONS -- Any director may resign at any time. Such resignation shall be made in writing, and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the Chairman of the Board, the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective. SECTION 3. VACANCIES -- If the office of any director becomes vacant, the remaining directors in the office, though less than a quorum, by a majority vote, may appoint any qualified person to fill such vacancy, who shall hold office for the unexpired term and until his successor shall be duly chosen. If the office of any director becomes vacant and there are no remaining directors, the stockholders, by the affirmative vote of the holders of shares constituting a majority of the voting power of the Corporation, at a special meeting called for such purpose, may appoint any qualified person to fill such vacancy. SECTION 4. REMOVAL -- Except as hereinafter provided, any director or directors may be removed either for or without cause at any time by the affirmative vote of the holders of a majority of the voting power entitled to vote for the election of directors, at an annual meeting or a special meeting called for the purpose, and the vacancy thus created may be filled, at such meeting, by the affirmative vote of holders of shares constituting a majority of the voting power of the Corporation. SECTION 5. COMMITTEES -- The board of directors may, by resolution or resolutions passed by a majority of the whole board, designate one or more committees, each committee to consist of two or more directors of the Corporation. Any such committee, to the extent provided in the resolution of the board of directors, or in these By-Laws, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. SECTION 6. MEETINGS -- The newly elected directors may hold their first meeting for the purpose of organization and the transaction of business, if a quorum be present, immediately after the annual meeting of the stockholders; or the time and place of such meeting may be fixed by consent of all the directors. Regular meetings of the directors may be held without notice at such places and times as shall be determined from time to time by resolution of the directors. Special meetings of the board of directors may be called by the Chairman of the Board or the President, or by the Secretary on the written request of any director, on at least two days' notice to each director (except that notice to any director may be waived in writing by such -3- 4 director) and shall be held at such place or places as may be determined by the directors, or as shall be stated in the call of the meeting. Unless otherwise restricted by the Certificate of Incorporation of the Corporation or these By-Laws, members the board of directors, or any committee designated by the board of directors, may participate in any meeting of the board of directors or any committee thereof by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting. SECTION 7. QUORUM -- A majority of the directors shall constitute a quorum for the transaction of business. If at any meeting of the board of directors there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time until a quorum is obtained, and no further notice thereof need be given other than by announcement at the meeting which shall be so adjourned. The vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors unless the Certificate of Incorporation of the Corporation or these By-Laws shall require the vote of a greater number. SECTION 8. COMPENSATION -- Directors shall not receive any stated salary for their services as directors or as members of committees, but by resolution of the board of directors a fixed fee and expenses of attendance may be allowed for attendance at each meeting. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity as an officer, agent or otherwise, and receiving compensation therefor. SECTION 9. ACTION WITHOUT MEETING -- Any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the board of directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the board of directors or such committee. ARTICLE IV OFFICERS SECTION 1. OFFICERS -- The officers of the Corporation shall be a Chairman of the Board, a President, one or more Vice Presidents, a Treasurer and a Secretary, all of whom shall be elected by the board of directors and shall hold office until their successors are elected and qualified. In addition, the board of directors may elect such Assistant Secretaries and Assistant Treasurers as they may deem proper. The board of directors may appoint such other officers and agents as it may deem advisable, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board of directors. SECTION 2. CHAIRMAN OF THE BOARD -- The Chairman of the Board shall be the Chief Executive Officer of the Corporation. He shall preside at all meetings of the -4- 5 board of directors and shall have and perform such other duties as may be assigned to him by the board of directors. The Chairman of the Board shall have the power to execute bonds, mortgages and other contracts on behalf of the Corporation, and to cause the seal of the Corporation to be affixed to any instrument requiring it, and when so affixed, the seal shall be attested to by the signature of the Secretary or the Treasurer or an Assistant Secretary or an Assistant Treasurer. SECTION 3. PRESIDENT -- The President shall be the Chief Operating Officer of the Corporation. He shall have the general powers and duties of supervision and management usually vested in the office of President of a corporation. The President shall have the power to execute bonds, mortgages and other contracts on behalf of the Corporation, and to cause the seal to be affixed to any instrument requiring it and when so affixed the seal shall be attested to by the signature of the Secretary or the Treasurer or an Assistant Secretary or an Assistant Treasurer. SECTION 4. VICE-PRESIDENTS -- Each Vice-President shall have such powers and shall perform such duties as shall be assigned to him by the board of directors. SECTION 5. TREASURER -- The Treasurer shall be the Chief Financial Officer of the Corporation. He shall have the custody of the Corporate funds and securities and shall keep full and accurate account of receipts and disbursements in books belonging to the Corporation. He shall deposit all moneys and other valuables in the name and to the credit of the Corporation in such depositaries as may be designated by the board of directors. He shall disburse the funds of the Corporation as may be ordered by the board of directors, the Chairman of the Board, or the President, taking proper vouchers for such disbursements. He shall render to the Chairman of the Board, the President and board of directors at the regular meetings of the board of directors, or whenever they may request it, an account of all his transactions as Treasurer and of the financial condition of the Corporation. If required by the board of directors, he shall give the Corporation a bond for the faithful discharge of his duties in such amount and with such surety as the board of directors shall prescribe. SECTION 6. SECRETARY -- The Secretary shall give, or cause to be given, notice of all meetings of stockholders and directors and all other notices required by law or by these By-Laws, and in case of his absence or refusal or neglect so to do, any such notice may be given by any person thereunto directed by the Chairman of the Board or the President, or by the directors, upon whose request the meeting is called as provided in these By-Laws. He shall record all the proceedings of the meetings of the board of directors, any committees thereof and the stockholders of the Corporation in a book to be kept for that purpose, and shall perform such other duties as may be assigned to him by the board of directors, the Chairman of the Board or the President. He shall have the custody of the seal of the Corporation and shall affix the same to all instruments requiring it, when authorized by the board of directors, the Chairman of the Board or the President, and attest to the same. SECTION 7. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES -- Assistant Treasurers and Assistant Secretaries, if any, shall be elected and shall have such -5- 6 powers and shall perform such duties as shall be assigned to them, respectively, by the board of directors. ARTICLE V MISCELLANEOUS SECTION 1. CERTIFICATES OF STOCK -- A certificate of stock shall be issued to each stockholder certifying the number of shares owned by such stockholder in the Corporation. Certificates of stock of the Corporation shall be of such form and device as the Board of Directors may from time to time determine. SECTION 2. LOST CERTIFICATES -- A new certificate of stock may be issued in the place of any certificate theretofore issued by the Corporation, alleged to have been lost or destroyed, and the board of directors may, in its discretion, require the owner of the lost or destroyed certificate, or such owner's legal representatives, to give the Corporation a bond, in such sum as they may direct, not exceeding double the value of the stock, to indemnify the Corporation against any claim that may be made against it on account of the alleged loss of any such certificate, or the issuance of any such new certificate. SECTION 3. TRANSFER OF SHARES -- The shares of stock of the Corporation shall be transferable only upon its books by the holders thereof in person or by their duly authorized attorneys or legal representatives, and upon such transfer the old certificates shall be surrendered to the Corporation by the delivery thereof to the person in charge of the stock and transfer books and ledgers, or to such other person as the board of directors may designate, by whom they shall be cancelled, and new certificates shall thereupon be issued. A record shall be made of each transfer and whenever a transfer shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer. SECTION 4. STOCKHOLDERS RECORD DATE -- In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. SECTION 5. DIVIDENDS -- Subject to the provisions of the Certificate of Incorporation of the Corporation, the board of directors may, out of funds legally available therefor at any regular or special meeting, declare dividends upon stock of the Corporation as and when they deem appropriate. Before declaring any dividend there may be set apart out of any funds of -6- 7 the Corporation available for dividends, such sum or sums as the directors from time to time in their discretion deem proper for working capital or as a reserve fund to meet contingencies or for equalizing dividends or for such other purposes as the directors shall deem conducive to the interests of the Corporation. SECTION 6. SEAL -- The corporate seal of the Corporation shall be in such form as shall be determined by resolution of the board of directors. Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise imprinted upon the subject document or paper. SECTION 7. FISCAL YEAR -- The fiscal year of the Corporation shall be determined by resolution of the board of directors. SECTION 8. CHECKS -- All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of the Corporation, and in such manner as shall be determined from time to time by resolution of the board of directors. SECTION 9. NOTICE AND WAIVER OF NOTICE -- Whenever any notice is required to be given under these By-Laws, personal notice is not required unless expressly so stated, and any notice so required shall be deemed to be sufficient if given by depositing the same in the United States mail, postage prepaid, addressed to the person entitled thereto at his address as it appears on the records of the Corporation, and such notice shall be deemed to have been given on the day of such mailing. Stockholders not entitled to vote shall not be entitled to receive notice of any meetings except as otherwise provided by law. Whenever any notice is required to be given under the provisions of any law, or under the provisions of the Certificate of Incorporation of the Corporation or of these By-Laws, a waiver thereof, in writing and signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to such required notice. ARTICLE VI AMENDMENTS These By-Laws may be altered, amended or repealed at any annual meeting of the stockholders (or at any special meeting thereof if notice of such proposed alteration, amendment or repeal to be considered is contained in the notice of such special meeting) by the affirmative vote of the holders of shares constituting a majority of the voting power of the Corporation. Except as otherwise provided in the Certificate of Incorporation of the Corporation, the board of directors may by majority vote of those present at any meeting at which a quorum is present alter, amend or repeal these By-Laws, or enact such other By-Laws as in their judgment may be advisable for the regulation and conduct of the affairs of the Corporation. -7- EX-3.9 12 ARTICLES OF INCORPORATION 1 EXHIBIT 3.9 ARTICLE OF AMENDMENT A-1 AUTO PARKING, INC. I. The name of the corporation is "A-1 AUTO PARKING, INC.", and the purpose of this Amendment is to amend the Articles of Incorporation to change the name of the Corporation to "A-1 AUTO PARK, INC." II. This Amendment to the Articles of Incorporation was adopted by the Corporation on September 11, 1978, said Amendment being for the sole purpose of changing the name of the Corporation to "A-1 AUTO PARK, INC." Hereafter the name of the corporation shall be and is "A-1 AUTO PARK, INC." III. This Amendment is made by the Incorporator prior to the issuance of any shares of stock of the Corporation. IN WITNESS WHEREOF, the undersigned has executed these Articles of Amendment. /s/Harley J. Bell ----------------------------------- HARLEY J. BELL, Incorporator Attorney for Incorporator: Robert E. Price Suite 950 Pharr Center 550 Pharr Road, N.E. Atlanta, Georgia 30305 2 ARTICLES OF INCORPORATION OF A-1 AUTO PARKING, INC. I. The name of the corporation is A-1 AUTO PARKING, INC. II. The corporation has perpetual duration. III. The corporation is a corporation for profit and is organized for the following purposes: (a) To engage in all facets of the automobile parking business, including buying, renting, or leasing real estate, providing management and other related services, and to do each and every thing in furtherance thereof. (b) To engage in all other activities or business otherwise lawful under the Georgia Business Corporation Code, as amended, or other laws of the State of Georgia. IV. The corporation has authority to issue not more than 50,000 shares of common stock of ten cent ($.10) par value. V. The corporation shall not commence business until it shall have received not less than $500.00 in payment for the issuance of shares of stock. 3 VI. The initial registered office of the corporation is located at 1720 Peachtree Street, N.W., Suite 340, Atlanta, Fulton County, Georgia, 30309, and the name its registered agent at such address is Harley J. Bell. VII. The initial Board of Directors shall consist of one (1) member who is: Harley J. Bell 1470 Moores Mill Road, N.W. Atlanta, Georgia 30327 VIII. The name and address of the Incorporator is Harley J. Bell, 1470 Moores Mill Road, N.W., Atlanta, Georgia, 30327. IN WITNESS WHEREOF, the undersigned has executed these Articles of Incorporation. /s/Harley J. Bell ---------------------------------- Incorporator Robert E. Price Suite 950 Pharr Center 550 Pharr Road, N.E. Atlanta, Georgia 30305 (404) 231-2103 Attorney for Incorporator -2- EX-3.10 13 AMENDED AND RESTATED BY-LAWS OF A-1 AUTO PARK 1 AMENDED AND RESTATED BY-LAWS OF A-1 AUTO PARKING, INC. ARTICLE ONE OFFICES 1.1 The address of the registered office of the corporation is 1720 Peachtree Street, N.W., Suite 340, Atlanta, Georgia 30309, and the name of the registered agent at such address is Harley J. Bell. The principal place of business of the corporation is 1720 Peachtree Street, N.W., Suite 340, Atlanta, Georgia 30309. 1.2 The corporation may have other offices at such place or places within or without the State of Georgia as the Board of Directors may from time to time designate or the business of the corporation may require or make desirable. ARTICLE TWO SHAREHOLDERS MEETINGS 2.1 All meetings of the stockholders shall be held at the principal place of business of the corporation in the State of Georgia or at such other place within or without the State of Georgia as may be determined by the Board of Directors or the President and as shall be designated in the notice of said meeting. 2.2 The annual meeting of the shareholders shall be held on the first Tuesday in October of each year beginning with the year 1979, if not a legal holiday, and, if a legal holiday, on the next day thereafter which is not a legal holiday, at 10:00 o'clock in the forenoon, local time, at which the shareholders shall elect by a plurality vote a Board of Directors and transact such other business as may properly be brought before the meeting. In no event shall annual meetings of the shareholders be more than 120 days following the close of the corporation's fiscal year. 2.3 Special meetings of the shareholders, for any purpose or purposes, unless otherwise prescribed by statute and shall be called by the President or the Secretary when so directed by the Board of Directors, or at the request in writing of any two or more directors, or at the request in writing of shareholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state with reasonable definiteness the purpose or purposes of the proposed meeting. 2.4 Except as otherwise required by statute or the articles of incorporation, written notice of each meeting of the shareholders, whether annual or special, shall be served, either personally or by mail, upon each shareholder of record entitled to vote at such meeting, not less than ten nor more than 50 days before such meeting. If mailed, such notice shall be directed to a shareholder at his post office address last shown on the records of the corporation. Notice of any 2 special meeting of shareholders shall not be required to be given to any shareholder who, in person or by proxy, either before or after such meeting, shall waive such notice. Attendance of a shareholder at a meeting, either in person or by proxy, shall of itself constitute waiver of notice and waiver of any and all objections to the place of the meeting, the time of the meeting, and the manner in which it has been called or convened, except when a shareholder attends a meeting solely for the purpose of stating, at the beginning of the meeting, any such objection or objections to the transaction of business. Notice of any adjourned meeting need not be given otherwise than by announcement at the meeting at which the adjournment is taken. 2.5 The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall be requisite and shall constitute a quorum at all meetings of the shareholders for the transaction of business, except as otherwise provided by law, by the articles of incorporation, or by these by-laws. If, however, such majority shall not be present or represented at any meeting of the shareholders, the shareholders entitled to vote thereat, present in person or by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until the requisite amount of voting stock shall be present. At such adjourned meeting at which a quorum shall be present in person or by proxy, any business may be transacted that might have been transacted at the meeting as originally called. 2.6 At every meeting of the shareholders, including (but without limitation of the generality of the foregoing language) meetings of shareholders for the election of directors, any shareholder having the right to vote shall be entitled to vote in person or by proxy, but no proxy shall be voted after eleven months from its date, unless said proxy provides for a longer period. Each shareholder shall have one vote for each share of stock having voting power, registered in his name on the books of the corporation. If a quorum is present, the affirmative vote of the majority of the shares represented at the meeting and entitled to vote on the subject matter shall be the act of the shareholders, except as otherwise provided by law, by the articles of incorporation or by these bylaws. 2.7 Whenever the vote of shareholders at a meeting thereof is required or permitted to be taken in connection with any corporate action, the meeting and vote of the shareholders may be dispensed with, if all of the shareholders who would have been entitled to vote upon the action if such meeting were held shall consent in writing (which consent may be by signature of proxy) to such corporate action being taken. ARTICLE THREE DIRECTORS 3.1 Except as may be otherwise provided by agreement among shareholders, the property and business of the corporation shall be managed by its Board of Directors. In addition to the powers and authority by these by-laws expressly conferred upon it, the Board of Directors may exercise all such powers of the corporation and do all such lawful acts and things as are not by law, by agreement among shareholders, by the articles of incorporation or by these by-laws directed or required to be exercised or done by the shareholders. 2 3 3.2 If there are less than three shareholders, the Board of Directors shall consist of not less than the number of shareholders; provided, however, that if there are three or more shareholders, the Board of Directors shall consist of not less than three nor more than nine members, the precise number to be fixed by resolution of the shareholders from time to time. Each director (whether elected at an annual meeting of shareholders or otherwise) shall hold office until the annual meeting of shareholders held next after his election and until a qualified successor shall be elected, or until his earlier death, resignation, incapacity to serve or removal. Directors need not be shareholders. 3.3 If any vacancy shall occur among the directors by reason of death, resignation, incapacity to serve, increase in the number of directors, or otherwise, the remaining directors shall continue to act, and such vacancies may be filled by a majority of the directors then in office, though less than a quorum, and, if not theretofore filled by action of the directors, may be filled by the shareholders at any meeting held during the existence of such vacancy. 3.4 Directors may be allowed such compensation and expenses for attendance at regular or special meetings of the Board of Directors and of any special or standing committee thereof as may be from time to time determined by resolution of the Board of Directors. 3.5 Any director may be removed from office, with or without cause, upon the majority vote of the shareholders, at a meeting with respect to which notice of such purpose is given. ARTICLE FOUR COMMITTEES 4.1 (a) The Board of Directors may by resolution adopted by a majority of the entire Board, designate an Executive Committee of three or more directors. Each member of the Executive Committee shall hold office until the first meeting of the Board of Directors after the annual meeting of shareholders next following his election and until his successor member of the Executive Committee is elected, or until his death, resignation or removal, or until he shall cease to be a director. (b) During the intervals between the meetings of the Board of Directors, the Executive Committee may exercise all the authority of the Board of Directors; provided, however, that the Executive Committee shall not have the power to amend or repeal any resolution of the Board of Directors which by its terms is not subject to amendment or repeal by the Executive Committee, and the Executive Committee shall not have the authority of the Board of Directors with reference to (1) amending the articles of incorporation or By-laws of the corporation; (2) adopting a plan of merger or consolidation; (3) the sale, lease, exchange or other disposition of all or substantially all the property and assets of the corporation; or (4) a voluntary dissolution of the corporation or a revocation of any such voluntary dissolution. (c) The Executive Committee shall meet from time to time on call of the President or of any two or more members of the Executive Committee. Meetings of the Executive Committee may be held at such place or places, within or without the State of Georgia, 3 4 as the Executive Committee shall determine or as may be specified or fixed in the respective notices or waivers of such meetings. The Executive Committee may fix its own rules of procedure, including provision for notice of its meetings. It shall keep a record of its proceedings and shall report these proceedings to the Board of Directors at the meeting thereof held next after they have been taken, and all such proceedings shall be subject to revision or alteration by the Board of Directors except to the extent that action shall have been taken pursuant to or in reliance upon such proceedings prior to any such revision or alteration. (d) The Executive Committee shall act by a majority vote of its members. (e) The Board of Directors, by resolution adopted in accordance with paragraph (a) of this Article, may designate one or more directors as alternate members of any such committee, who may act in the place and stead of any absent member or members at any meeting of such committee. 4.2 The Board of Directors, by resolution adopted by a majority of the entire Board, may designate one or more additional committees, each committee to consist of three or more of the Directors of the corporation, which shall have such name or names and shall have and may exercise such power of the Board of Directors, except the powers denied to the Executive Committee as may be determined from time to time by the Board of Directors. 4.3 The Board of Directors shall have the power at any time to remove any member of any committee, with or without cause, and to fill vacancies in and to dissolve any such committee. ARTICLE FIVE MEETINGS OF THE BOARD OF DIRECTORS 5.1 Each newly elected Board of Directors shall meet at the place and time which shall have been determined, in accordance with the provisions of these by-laws, for the holding of the regular meeting of the Board of Directors scheduled to be held next following the annual meeting of the shareholders at which the newly elected Board of Directors shall have been elected, or, if no place and time shall have been fixed for the holding of such meeting of the Board of Directors, then immediately following the close of such annual meeting of shareholders and at the place thereof, or such newly elected Board of Directors may hold such meeting at such place and time as shall be fixed by the consent in writing of all the Directors. In any such case no notice of such meeting to the newly elected Directors shall be necessary in order legally to constitute the meeting. 5.2 Annual meetings of the Board of Directors may be held without notice at the same place as and following the annual meeting of the shareholders. 5.3 Special meetings of the Board of Directors may be called at any time by the President on not less than two days' notice by mail, telegram, cablegram or personal delivery to each director, and shall be called by the President or the Secretary in like manner and on like notice on the written request of any two or more Directors. Any such special meeting shall be 4 5 held at such time and place (within or without the State of Georgia) as shall be stated in the notice of meeting. 5.4 No notice of any meeting of the Board of Directors need state the purposes thereof. 5.5 At all meetings of the Board of Directors, the presence of one-third of the authorized number of Directors, but not less than two Directors, shall be necessary and sufficient to constitute a quorum for the transaction of business. The act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by law, by the Articles of Incorporation or by these By-laws. In the absence of a quorum a majority of the directors present at any meeting may adjourn the meeting from time to time until a quorum be had. Notice of any adjourned meeting need only be given by announcement at the meeting at which the adjournment is taken. 5.6 Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if, prior to such action, a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of the proceedings of the Board or committee. ARTICLE SIX OFFICERS 6.1 The Board of Directors at its first meeting after each annual meeting of shareholders shall elect the following officers: A President, a Vice President, a Secretary and a Treasurer. The Board of Directors at any time and from time to time may appoint such other officers as it shall deem necessary, including one or more additional Vice Presidents (one of whom may be designated as Executive Vice President), one or more Assistant Vice Presidents, one or more Assistant Treasurers and one or more Assistant Secretaries, who shall hold their offices for such terms as shall be determined by the Board of Directors and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors or the President. 6.2 Any person may hold any two or more offices, except that no person may hold both the offices of President and Secretary. 6.3 The salaries of the officers of the corporation shall be fixed by the Board of Directors, except that the Board of Directors may delegate to the President the duty to fix the salary of any officer appointed in accordance with the second sentence of Section 6.1 of these By-laws. 6.4 Each officer of the corporation shall hold office until his successor is chosen or until his earlier resignation, death or removal, or the termination of his office. Any officer may be removed by the Board of Directors whenever in its judgment the best interests of the corporation will be served thereby. 5 6 President 6.5 The President shall be the chief executive officer of the corporation and shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall be ex officio a member of all standing committees, unless otherwise provided in the resolution appointing the same. The President shall call meetings of the shareholders, the Board of Directors and the Executive Committee to order and shall act as Chairman of such meetings. Vice Presidents 6.6 The Vice Presidents shall perform such duties as are generally performed by vice presidents. The Vice Presidents shall perform such other duties and exercise such other powers as the Board of Directors or the President shall request or delegate. The Assistant Vice Presidents shall have such powers, and shall perform such duties, as may be prescribed from time to time by the Board of Directors or by the President. Secretary 6.7 The Secretary shall attend all sessions of the Board of Directors and all meetings of the shareholders and record all votes and minutes of all proceedings in books to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, any notice required to be given of any meetings of the shareholders and of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or by the President under whose supervision he shall be. The Assistant Secretary or Assistant Secretaries shall, in the absence or disability of the Secretary, or at his request, perform his duties and exercise his powers and authority. Treasurer 6.8 The Treasurer shall have charge of and be responsible for all funds, securities, receipts and disbursements of the corporation and shall deposit, or cause to be deposited, in the name of the corporation, all monies or other valuable effects, in such banks, trust companies or other depositories as shall, from time to time, be selected by the Board of Directors; he shall render to the President and to the Board of Directors, whenever requested, an account of the financial condition of the corporation, and in general, he shall perform all the duties incident to the office of a Treasurer of a corporation, and such other duties as may be assigned to him by the Board of Directors or by the President. 6.9 In case of the absence of any officer of the corporation, or for any other reason that the Board of Directors may deem sufficient, the Board of Directors may delegate, for the time being, any or all of the powers or duties of such officer or to any Director. 6 7 ARTICLE SEVEN CAPITAL STOCK 7.1 The interest of each shareholder shall be evidenced by a certificate or certificates representing shares of stock of the corporation which shall be in such form as the Board of Directors may from time to time adopt and shall be numbered and shall be entered in the books of the corporation as they are issued. Each certificate shall exhibit the holder's name, the number of shares and class of shares and series, if any, represented thereby, a statement that the corporation is organized under the laws of the State of Georgia, and the par value of each share or a statement that the shares are without par value. Each certificate shall be signed by the President and the Treasurer or the Secretary and shall be sealed with the seal of the corporation, provided, however, that where such certificate is signed by a transfer agent, or by a transfer clerk acting on behalf of the corporation and a registrar, the signature of any such officer and such seal may be facsimile. In case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on, any such certificate or certificates shall cease to be such officer or officers of the corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the corporation, such certificate or certificates may nevertheless be delivered as though the person or persons who signed such certificate or certificates or whose facsimile signatures shall have been used thereon had not ceased to be such officer or officers. 7.2 The corporation shall keep a record of the shareholders of the corporation which readily shows, in alphabetical order or by alphabetical index, and by classes or series of stock, if any, the names of the shareholders entitled to vote, with the address of and the number of shares held by each. Said record shall be present at all meetings of the shareholders. 7.3 Transfers of stock shall be made on the books of the corporation only by the person named in the certificate, or by an attorney lawfully constituted in writing, and upon surrender of the certificate therefor, or in the case of a certificate alleged to have been lost, stolen or destroyed, upon compliance with the provisions of Section 7.7 of these By-laws. 7.4 (a) For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors may provide that stock transfer books shall be closed for a stated period but not to exceed 50 days. If the stock transfer books shall be closed for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, such books shall be closed for at least ten days immediately preceding such meeting. (b) In lieu of closing the stock transfer books, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date to be not more than 50 days and, in case of a meeting of shareholders, not less than ten days, prior to the date on which the particular action requiring such determination of shareholders is to be taken. 7 8 7.5 The corporation shall be entitled to treat the holder of record of any share of stock of the corporation as the person entitled to vote such share, to receive any dividend or other distribution with respect to such share, and for all other purposes and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law. 7.6 The Board of Directors may appoint one or more transfer agents and one or more registrars and may require each stock certificate to bear the signature or signatures of a transfer agent or a registrar or both. 7.7 Any person claiming a certificate of stock to be lost, stolen or destroyed shall make an affidavit or affirmation of the fact and in such manner as the Board of Directors may require and shall if the directors so require, give the corporation a bond of indemnity in form and amount and with one or more sureties satisfactory to the Board of Directors, whereupon an appropriate new certificate may be issued in lieu of the one alleged to have been lost, stolen or destroyed. ARTICLE EIGHT MISCELLANEOUS Fiscal Year 8.1 The fiscal year of the corporation shall be Seal 8.2 The corporate seal shall be in such form as the Board of Directors may from time to time determine. Annual Statements 8.3 Not later than four months after the close of each fiscal year, and in any case prior to the next annual meeting of shareholders, the corporation shall prepare: (1) A balance sheet showing in reasonable detail the financial condition of the corporation as of the close of its fiscal year, and (2) A profit and loss statement showing the results of its operations during its fiscal year. Upon written request, the corporation promptly shall mail to any shareholder of record a copy of the most recent such balance sheet and profit and loss statement. Indemnification 8.4 (a) Under the circumstances prescribed in paragraphs (c) and (d) of this section, the corporation shall indemnify and hold harmless any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, 8 9 whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. and with of the corporation, and with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. (b) Under the circumstances prescribed in paragraphs (c) and (d) of this section, the corporation shall indemnify and hold harmless any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact he is or was a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation, unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnify for such expenses which the court shall deem proper. (c) To the extent that a Director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in paragraphs (a) and (b) of this section, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. (d) Except as provided in paragraph (c) of this section and except as may be ordered by a court, any indemnification under paragraphs (a) and (b) of this section shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in paragraphs (a) and (b). Such determination shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to such action, suit or proceeding, or (2) if such quorum is not obtainable, or, even if obtainable, if a quorum of disinterested Directors so directs, by the firm of independent legal counsel then employed by the corporation, in a written opinion, or (3) by the affirmative vote of a majority of the shareholders entitled to vote thereon. 9 10 (e) Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the Director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the corporation as authorized in this section. (f) The indemnification provided by this section shall not be deemed exclusive of any other rights, in respect of indemnification or otherwise, to which those seeking indemnification may be entitled under any by-law or resolution approved by the affirmative vote of the holders of a majority of the shares entitled to vote thereon taken at a meeting the notice of which specified that such by-law or resolution would be placed before the shareholders, both as to action by a Director, officer, employee or agent in his official capacity and as to action in another capacity while holding such office or position, and shall continue as to a person who has ceased to be a Director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. (g) The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this section. (h) If any expenses or other amounts are paid by way of indemnification, otherwise than by court order or by an insurance carrier pursuant to insurance maintained by the corporation, the corporation shall, not later than the next annual meeting of the shareholders, unless such meeting is held within three months from the date of such payment, and, in any event, within three months from the date of such payment, send by first class mail to its shareholders of record at the time entitled to vote for the election of directors, a statement specifying the persons paid, the amounts paid, and the nature and status at the time of such payment of the litigation or threatened litigation. Disallowed Deductions 8.5 Any payments made to an officer of the corporation such as a salary, commission, bonus, interest, or rent, or entertainment expense incurred by him which shall be disallowed in whole or in part as a deductible expense by the Internal Revenue Service shall be reimbursed by such officer to the corporation to the full extent of such disallowance. It shall be the duty of the Directors, as a Board, to enforce payment of each such amount disallowed. In lieu of payment by the officer, subject to the determination of the Directors, proportionate amounts may be withheld from his future compensation payments until the amount owed to the corporation has been recovered. 10 11 ARTICLE NINE NOTICES: WAIVERS OF NOTICE 9.1 Except as otherwise specifically provided in these By-laws, whenever under the provisions of these By-laws notice is required to be given to any shareholder, director or officer, it shall not be construed to mean personal notice, but such notice may be given either by personal notice or by radio, cable or telegraph, or by mail by depositing the same in the post office or letter box in a postpaid sealed wrapper, addressed to such shareholder, officer or director at such address as appears on the books of the corporation, and such notice shall be deemed to be given at the time when the same shall be thus sent or mailed. 9.2 When any notice whatever is required to be given by law, by the articles of incorporation or by these Bylaws, a waiver thereof by the person or persons entitled to said notice given before or after the time stated therein, in writing, which shall include a waiver given by telegraph, radio, or cable, shall be deemed equivalent thereto. No notice of any meeting need be given to any person who shall attend such meeting, except when a shareholder attends a meeting solely for the purpose of stating at the beginning of the meeting any objection to the transaction of business, and so states his objection at the beginning of the meeting. ARTICLE TEN EMERGENCY POWERS 10.1 The Board of Directors may adopt emergency by-laws, subject to repeal or change by action of the shareholders, which shall, notwithstanding any provision of law, the Articles of Incorporation or these By-laws, be operative in the conduct of the business of the corporation during any emergency resulting from an attack on the United States or on a locality in which the corporation conducts its business or customarily holds meetings of its Board of Directors or its shareholders, or during any nuclear or atomic disaster, or during the existence of any catastrophe, or other similar emergency condition, as a result of which a quorum of the Board of Directors or a standing committee thereof cannot readily be convened for action. The emergency By-laws may make any provision that may be practical and necessary for the circumstances of the emergency. 10.2 The Board of Directors, either before or during any such emergency, may provide, and from time to time modify, lines of succession in the event that during such an emergency any or all officers or agents of the corporation shall for any reason be rendered incapable of discharging their duties. 10.3 The Board of Directors, either before or during any such emergency, may, effective in the emergency, change the head office or designate several alternative head offices or regional offices, or authorize the officers to do so. 10.4 To the extent not inconsistent with any emergency By-laws so adopted, these By-laws shall remain in effect during any such emergency and upon its termination the emergency By-laws shall cease to be operative. 11 12 10.5 Unless otherwise provided in emergency By-laws, notice of any meeting of the Board of Directors during any such emergency may be given only to such of the directors as it may be feasible to reach at the time, and by such means as may be feasible at the time, including publication, radio or television. 10.6 To the extent required to constitute a quorum at any meeting of the Board of Directors during any such emergency, the officers of the corporation who are present shall, unless otherwise provided in emergency By-laws, be deemed, in order of rank and within the same rank in order of seniority, directors for such meeting. 10.7 No officer, Director, agent or employee acting in accordance with any emergency By-laws shall be liable except for willful misconduct. No officer, Director, agent or employee shall be liable for any action taken by him in good faith in such an emergency in furtherance of the ordinary business affairs of the corporation even though not authorized by the By-laws then in effect. ARTICLE ELEVEN AMENDMENTS 11.1 The By-laws of the corporation may be altered or amended and new By-laws may be adopted by the shareholders at any annual or special meeting of the shareholders or by the Board of Directors by unanimous written consent or at any regular or special meeting of the Board of Directors; provided, however, that, if such action is to be taken at a meeting of the shareholders, notice of the general nature of the proposed change in the By-laws shall be given in the notice of the meeting. 12 EX-3.11 14 ARTICLES OF ORGANIZATION 1 The Commonwealth of Massachusetts PAUL GUZZI Secretary of the Commonwealth STATE HOUSE BOSTON, MASS 02133 ARTICLES OF ORGANIZATION (Under G.L Ch. 156b) Incorporators NAME POST OFFICE ADDRESS Include given name in full in case of natural persons; in case of a corporation, give state of incorporation. JEAN M. BLOOMBERG 50 Barney Hill Road, Wayland The above-named incorporator(s) do hereby associate (themselves) with the intention of forming a corporation under the provisions of General Laws, Chapter 156B and hereby state(s): 1. The name by which the corporation shall be known is: METROPOLITAN PARKING SYSTEM, INC. 2. The purposes for which the corporation is formed are as follows: To build, maintain and operate buildings, storage house and garages for the storing, caring for and keeping for hire therein of automobiles, motorcycles and motor vehicles of every kind, nature and description; to engage in the business of operating parking lots, garages and similar establishments primarily involved in the business of renting space for the parking of automobiles and other vehicles; to establish, maintain and carry on a general business for the parking of automobiles, motor vehicles and other vehicles of all sorts; to deal in, sell, operate and let for hire automobiles, motorcycles and motor vehicles of every kind, nature and description; to purchase, sell, acquire, hold, dispose of, encumber or deal in all kinds of personal property; to purchase or lease, sell, mortgage, or otherwise acquire, hold and dispose of any buildings or real estate, or interests therein in connection with the conduct of the business; to own, lease or operate any business in conjunction with any other business owned, leased or operated by the corporation; to carry on in furtherance of these purposes any activity advantageous to the business of corporation. It is the intention that the NOTE: If provisions for which the space provided under Articles 2, 4, 5 and 6 is not sufficient, additions should be set out on continuation sheets to be numbered 2A, 2B etc. Indicate under each Article where the provision is set 2 out. Continuation sheets shall be 8 1/2" x 11" paper and must have a left hand margin 1 inch wide for binding. Only one side should be used. obligations and powers specified in the charter shall in no way be restricted by reference to or inference from the terms of any particular clause herein contained. To have and to exercise, without limitation, all of the powers granted by Massachusetts law to business corporations, including those powers set forth in Section 9 of the General Laws, Chapter 156B, and in any amendment thereof or addition thereto. 3. The total number of shares and the par value, if any, of each class of stock which the corporation is authorized is as follows:
--------------------------------------------------------------------- CLASS OF STOCK WITHOUT PAR VALUE WITH PAR VALUE ------------------------------------------------------- PAR NUMBER OF SHARES NUMBER OF SHARES VALUE AMOUNT --------------------------------------------------------------------- Preferred $ --------------------------------------------------------------------- --------------------------------------------------------------------- Common 12,500 ---------------------------------------------------------------------
*4. If more than one class is authorized, a description of each of the different classes of stock with, if any, the preferences, voting powers, qualifications, special or relative rights or privileges as to each class thereof and any series now established: None *5. The restrictions, if any, imposed by the Articles of Organization upon the transfer of shares of stock of any class are as follows: Any stockholder, including the heirs, executors or administrators of a deceased stockholder, desiring to sell or transfer such stock owned by him or them, shall first offer it to the corporation through the Board of Directors, in the manner following: He shall notify the directors of his desire to sell or transfer by notice in writing, which notice shall contain the price at which he is willing to sell or transfer and the name of one arbitrator. The directors shall within 30 days thereafter either accept the offer, or by notice to him in writing name a second arbitrator, and these two shall name a third. It shall then be the duty of the arbitrators to ascertain the value of the stock and if any arbitrator shall neglect or refuse to appear at any meeting appointed by the arbitrators, a majority may act in the absence of such arbitrator. After the acceptance of the offer, or the report of the arbitrators as to the value of the stock, the directors shall have 30 days within which to purchase the same at such valuation, but if at the expiration of 30 days, the corporation shall not have exercised the right so to purchase, the owner of the stock shall be at liberty to dispose of the same in any manner he may see fit. No shares of stock shall be sold or transferred on the books of the corporation until these provisions have been complied with, but the Board of Directors may in any particular instance waive the requirement. *6. Other Lawful provisions, if any, for the conduct and regulation of the business and affairs of the corporation, for its voluntary dissolution, or for limiting, defining, or regulating the powers of the corporation, or of its directors or stockholders, or of any class of stockholders: -2- 3 None If there are no provisions state "None". -3- 4 7. By-laws of the corporation have been duly adopted and the initial directors, president, treasurer, and clerk, whose names are set out below, have been duly elected. 8. The effective date of organization of the corporation shall be the date of filing with the Secretary of the Commonwealth or if later date is desired, specify date, (not more than 30 days after date of filing.) 9. The following information shall not for any purpose be treated as a permanent part of the Articles of Organization of the corporation. a. The post office address of the initial principal office of the corporation in Massachusetts is: 210 Lincoln Street, Boston 02111 b. The name, residence and post office address of each of the initial directors and following officers of the corporation are as follows: NAME RESIDENCE POST OFFICE ADDRESS President: EDWARD P. SETTINO, Jr. Off Plain Street, Marshfield, Mass. - -------------------------------------------------------------------------------- Treasurer: GEORGE SHAPIRO 151 Tremont Street, Boston - -------------------------------------------------------------------------------- Clerk: JEAN M. BLOOMBERG 50 Barney Hill Road, Wayland - -------------------------------------------------------------------------------- Directors: EDWARD P. SETTINO, Jr. Off Plain Street, Marshfield GEORGE SHAPIRO 151 Tremont Street, Boston JEAN M. BLOOMBERG 50 Barney Hill Road, Wayland c. The date initially adopted on which the corporation's fiscal year ends is: December 31 d. The date initially fixed in the by-laws for the annual meeting of stockholders of the corporation is: 2nd Monday in March e. The name and business address of the resident agent, if any, of the corporation is: IN WITNESS WHEREOF and under the penalties of perjury the above-named INCORPORATOR(S) sign(s) these Articles of Organization this 3rd day of January 1977. -------------------------------- -------------------------------- -------------------------------- -4- 5 The signature of each incorporator which is not a natural person must be by an individual who shall show the capacity in which he acts and by signing shall represent under the penalties of perjury that he is duly authorized on its behalf to sign these Articles of Organization. THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF ORGANIZATION GENERAL LAWS, CHAPTER 156B, SECTION 12 ====================================== I hereby certify that, upon an examination of the within-written articles of organization, duly submitted to me, it appears that the provisions of the General Laws relative to the organization of corporations have been complied with, and I hereby approve said articles; and the filing fee in the amount of $125.00 having been paid, said articles are deemed to have been filed with me this 19th day of January 1977 Effective date /s/ Paul Guzzi PAUL GUZZI Secretary of the Commonwealth TO BE FILLED IN BY CORPORATION PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT TO: GARGILL & SASSOON, Esqs. 85 Devonshire Street Boston; 742-3540 FILING FEE: 1/20 of 1% of the total amount of the authorized capital stock with par value, and one cent a share for all authorized shares without par value, but not less than $125. General Laws, Chapter 156B. Shares of stock with a par value of less than one dollar shall be deemed to have par value of one dollar per share. Copy Mailed FEB 7 19977 -5- EX-3.12 15 BY-LAWS OF METROPOLITAN PARKING SYSTEM 1 BY-LAWS OF METROPOLITAN PARKING SYSTEM, INC. ARTICLE I Section 1. The corporation shall be known by the name of Metropolitan Parking System, Inc. Section 2. The principal office of the corporation shall be located at 210 Lincoln Street, Boston. Section 3. The corporation shall have a corporate seal which shall be circular in form and shall contain the name of the corporation, the year of its incorporation and the word "Massachusetts". ARTICLE II The corporation shall have all the powers and enjoy all the privileges granted by the laws of Massachusetts to corporations organized under General Laws. ARTICLE III OFFICERS AND DIRECTORS Section 1. The officers of the corporation shall be president, treasurer, clerk and Board of not less than three directors, all of whom, excepting the president, shall be chosen by ballot annually at the first meeting of the corporation and at each annual meeting thereafter. The president shall be chosen by and from the Board of Directors at the first meeting of the Board after the annual stockholders' meeting. All officers shall hold office for one year and until their successors are chosen and qualified. It shall not be necessary for any director or other officer to be a holder of stock in the corporation. Two or more offices may be held by one person. In case of the temporary absence or disability of any one officer, the Board of Directors may appoint a person to perform the duties of such officer during such absence or disability. In case a vacancy shall occur, except in the case of the office of president, it may be filled at any special meeting of the stockholders, and until so filled the Board of Directors may appoint a person to perform the duties of said office; except that in the event of a vacancy in the Board of Directors for any reason, that vacancy shall be filled by a vote of a majority of stockholders; in case a vacancy shall occur in the office of president, it may be filled by the Board of Directors. Section 2. The Board of Directors, subject always to the provisions of law, the Articles of Organization and these By-laws as from time to time amended, and to any action at any time taken by such stockholders as then have the right to vote, shall have the entire charge, control and management of the corporation, its property and business and may exercise all or any of its powers. Among other things, the Board of Directors may, subject as aforesaid (1) appoint and, at its discretion, remove or suspend such subordinate officers, agents and employees as it from time 2 to time thinks fit and determine their duties and fix, from time to time as it sees fit, change their compensation; (2) fix and from time to time as it sees fit, change all salaries; (3) appoint any officer permanently or temporarily as it sees fit, to have the powers and perform the duties of any other officer; (4) to delegate any of the powers of the Board to any committee, officer or agent; (5) appoint any person to be agents of the corporation (with power to subdelegate) and upon such terms as it sees fit; (6) appoint any person or persons to accept and hold in trust for the corporation any property belonging to the corporation or in which it is interested and cause to be done such things as it may determine the amounts to be distributed as dividends. The directors shall be elected by the stockholders at their annual meeting, and any director may be removed by the stockholders at any special meeting called for that purpose. Upon the removal of any director the stockholders may elect a successor to fill the vacancy caused thereby, and such successor shall hold office for the unexpired term of the director whose place shall be vacant, and until his successor shall have been duly elected and qualified. Section 3. The president when present shall preside at all meetings of the stockholders and of the directors. It shall be his duty to see that all orders and resolutions of the Board are carried into effect. The president, together with the treasurer, shall sign certificates of stock to be issued by the corporation. The president, as soon as reasonably possible after the close of each fiscal year, shall submit to the Board of Directors a report of the operations of the corporation for such year and a statement of its affairs, and shall from time to time report to the Board all matters within his knowledge which the interests of the corporation may require to be brought to its notice. The president shall perform such duties additional to the foregoing as the directors may designate. Section 4. The treasurer shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name of and to the credit of the corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the corporation as may be ordered by the Board, taking proper vouchers for such disbursements. He shall promptly render to the president and to the Board of Directors such statements of his transactions and accounts as the president and Board respectively may from time to time require. He shall give bond in such amount, with such security and in such form as the Board of Directors shall determine. Certificates of stock signed by the president shall also be signed by the treasurer. The treasurer shall perform such duties additional to the foregoing as the directors may designate. Section 5. The clerk may be sworn to the faithful discharge of his duties. It shall be his duty to record in books kept for the purpose all votes and proceedings of the stockholders at their meetings and of the directors at their meetings. Unless the Board of Directors shall appoint a transfer agent and/or registrar or other officer or officers for the purpose, the clerk shall be charged with the duty of keeping, or causing to be kept, accurate records of all stock outstanding, stock certificates issued and stock transfers; and subject to other or different rules as may be adopted from time to time by the Board of Directors, such records may be kept solely in the stock certificate books. The clerk shall perform such duties additional to the foregoing as the directors may designate. The clerk shall be a resident of Massachusetts. -2- 3 ARTICLE IV MEETINGS Section 1. Immediately after each annual meeting of stockholders, and at the place thereof, if a majority of the directors elected at the meeting were present thereat, there shall be a meeting of the directors without notice; but if a majority of the directors chosen at any annual meeting of the stockholders were not present at such meeting, a meeting of the directors may be called in the manner hereinafter provided with respect to the call of meeting of directors. Meetings of the Board of Directors shall be held as often as needed, and may be called by the president, treasurer or any director, and notice in writing by the clerk, mailed postage prepaid, forty-eight hours at least before the meeting, addressed to each director at his usual place of business or abode, or delivered to him in hand, shall be sufficient notice of the meeting. If the clerk, when requested, refuses for more than twenty-four hours to call such meeting, the president, treasurer or director may in the manner required give notice of such meeting in the name of the clerk. In the event that the office of clerk is vacant or the clerk is absent from the Commonwealth or is incapacitated, a meeting of the directors may be called by any director in his own name, by giving notice thereof in the manner required when notice is given by the clerk. Notice of any meeting may be dispensed with if each director by a writing filed with the records of the meeting waives such notice. At any meeting of the directors a majority of the directors then in office shall constitute a quorum for the transaction of business; provided always that any number of directors (whether one or more and whether or not constituting a quorum) present at any meeting or at any adjourned meeting may make any reasonable adjournment thereof. At any meeting of the directors at which a quorum is present, the action of the directors on any matter brought before the meeting shall be decided by the vote of a majority of those present and voting, unless a different vote is required by law, the Articles of Organization, or these by-laws. Any action by the directors may be taken without a meeting if a written consent thereto is signed by all the directors and filed with the records of the directors' meetings. Such consent shall be treated as a vote of the directors for all purposes. Section 2. Except as otherwise provided in Section 1 of this Article, all meetings of the Board of Directors shall be held at the office of the corporation at 210 Lincoln Street, Boston, Massachusetts or at such other place, wherever situated, as the directors may by majority vote have designated as a place for directors' meetings. Section 3. Regular meetings of the directors may be held at such times and places as shall from time to time be fixed by resolution of the board and no notice need be given of regular meetings held at times and places so fixed, provided, however, that any resolution relating to the holding of regular meetings shall remain in force only until the next annual meeting of stockholders, or the special meeting held in lieu thereof, and that if at any meeting of directors at which a resolution is adopted fixing the times or place or places for any regular meetings any director is absent no meeting shall be held pursuant to such resolution until either each such absent director has in writing or by telegram approved the resolution or seven days have elapsed after copy of the resolution certified by the clerk has been mailed, postage prepaid, addressed to each such absent director at his last known home or business address. -3- 4 Section 4. Special meetings of the directors may be called by the president or by the treasurer or by any two directors and shall be held at the place designated in the call thereof. Section 5. The annual meeting of the stockholders of the corporation shall be held at the office of the corporation in Massachusetts, or at such other place in Massachusetts as the Board of Directors may fix on the second Monday in March to elect officers, hear reports of the officers and transact other business. Special meetings of the stockholders may be called by the president or by a majority of the directors, and shall be called by the clerk, or in the case of the death, absence, incapacity or refusal of the clerk, by any other officer, upon written application of one or more stockholders who are entitled to vote and who hold at least one-tenth part in interest of the capital stock entitled to vote at a meeting, stating the time, place and purpose of the meeting. All special meetings of the stockholders shall be held at the office of the corporation at 210 Lincoln St., Boston, or at such other place in Massachusetts as may be designated by the Board of Directors. At any meeting of the stockholders a quorum for the transaction of business shall consist of a majority of the shares of the corporation then outstanding and entitled to vote, provided that less than such quorum shall have the power to adjourn the meeting from time to time. Notice of all meetings of the stockholders shall be given as follows, to wit: A written notice stating the place, day and hour thereof, shall be given by the clerk at least ten days before the meeting, to each stockholder entitled to vote thereat and to each stockholder who, under the Articles of Organization or any amendment thereof, or under the by-laws, is entitled to such notice, by leaving such notice with him or at his residence or usual place of business, or by mailing it postage prepaid, and addressed to such stockholder at his address as it appears upon the books of the corporation. No notice need be given to any stockholder if a written waiver of notice, executed before or after the meeting by the stockholder or his attorney thereunto authorized, is filed with the records of the meeting. ARTICLE V CAPITAL STOCK Section 1. The capital stock of the corporation shall be as set forth in the Articles of Organization. Section 2. All certificates of shares of capital stock shall be signed by the president and treasurer, shall bear the seal of the corporation, shall be numbered progressively, shall set forth the name of the respective stockholders, and shall consistently, with these provisions and the requirements of law, be in such form as the Board of Directors may determine. Section 3. Shares of capital stock in the corporation shall be transferable only on the books of the corporation by the holder thereof in person or by attorney duly authorized in writing and upon surrender and cancellation of the certificates therefor fully endorsed. Section 4. The corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and shall not be bound to recognize any equitable or -4- 5 other claim to or interest in such share or shares on the part of any other person except as may be otherwise expressly provided by law. Section 5. Upon evidence satisfactory to the Board of Directors that a certificate of stock has been lost or destroyed, and upon receiving indemnity satisfactory to the Board of Directors against loss to the corporation, said Board of Directors may authorize the issue of a new certificate in place thereof. Section 6. Any stockholder, including the heirs, assigns, executors or administrators of a deceased stockholder, desiring to sell or transfer such stock owned by him or them, shall first offer it to the corporation through the Board of Directors in the manner following: He shall notify the directors of his desire to sell or transfer by notice in writing, which notice shall contain the price at which he is willing to sell or transfer and the name of one arbitrator. The directors shall within thirty days thereafter either accept the offer, or by notice to him in writing name a second arbitrator, and these two shall name a third. It shall then be the duty of the arbitrators to ascertain the value of the stock, and if any arbitrator shall neglect or refuse to appear at any meeting appointed by the arbitrators, a majority may act in the absence of such arbitrator. After the acceptance of the offer, or the report of the arbitrators as to the value of the stock, the directors shall have thirty days within which to purchase the same at such valuation, but if at the expiration of thirty days the corporation shall not have exercised the right so to purchase the owner of the stock shall be at liberty to dispose of the same in any manner he may see fit. No shares of stock shall be sold or transferred on the books of the corporation until these provisions have been complied with, but the Board of Directors may in any particular instance waive the requirement. ARTICLE VI STOCK IN OTHER CORPORATIONS The Board of Directors may appoint any person to act as proxy or attorney in fact of this corporation at any meeting of the stockholders or election of directors of any corporation, stock in which shall be held by this corporation. ARTICLE VII INSPECTION OF BOOKS Books, accounts and records of the corporation shall be open to inspection by any member of the Board of Directors at all times during the usual hours of business. The directors shall from time to time determine whether and to what extent, at what times and places, and under what conditions and regulations the accounts and books of the corporation, or any of them, shall be -5- 6 open to inspection of the stockholders; and no stockholder shall have the right of inspection of any account or book or document of the corporation except as conferred by law or authorized by the directors or by resolution of the stockholders at the time entitled to vote. ARTICLE VIII CHECKS, NOTES, DRAFTS AND OTHER INSTRUMENTS Checks, notes, drafts and other instruments for the payment of money drawn or endorsed in the name of the corporation may be signed by any officer or person authorized by the Board of Directors to sign the same. No officer or person shall sign such instrument as aforesaid unless authorized by said Board to do so. ARTICLE IX SEAL The treasurer shall have custody of the seal and may affix it (as may any other officer if authorized by the directors) to any instrument requiring the corporate seal. ARTICLE X VOTING At a meeting of the corporation, no stock owned by the corporation shall be voted on; a "quorum" shall consist of owners of more than one-half of all stock issued and outstanding, each owner being entitled to vote for each share owned by him, and to vote in person, or by representative or proxy given to the clerk, signed by the owner and bearing date not more than six months before the meeting, and no such proxy shall be valid after the final adjournment of such meeting; and a "majority" shall consist of owners of more than one-half of the stock represented and voted on. ARTICLE XI FISCAL YEAR The fiscal year of the corporation shall end December 31. ARTICLE XII AMENDMENTS These by-laws may be amended, repealed or altered at any annual or special meeting of the stockholders by the affirmative vote of two-thirds of the capital stock outstanding and entitled to -6- 7 vote. In the notice of such meeting it shall be stated that the amendment, repeal or alteration of the by-laws may be acted upon. -7- EX-3.13 16 ARTICLES OF ORGANIZATION 1 THE COMMONWEALTH OF MASSACHUSETTS William Francis Galvin FEDERAL IDENTIFICATION Secretary of the Commonwealth NO. 04-3223993 ---------- ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02103 ARTICLES OF AMENDMENT General Laws, Chapter 156B, Section 72 We, Edward P. Settino, Jr. And , President, and Andrew R. Bulens Clerk of METROPOLITAN MARINA MANAGEMENT, INC. - ---------------------------------------------------------------------- (EXACT Name of Corporation) Located at: 84 Seattle Street, Allston, MA 02134 ---------------------------------------------------------- (MASSACHUSETTS Address of Corporation) do hereby certify that these ARTICLES OF AMENDMENT affecting Articles NUMBERED: ARTICLE I AND ARTICLE II - ---------------------------------------------------------------------- (Number those articles 1, 2, 3, 4, 5 and/or 6 being amended hereby) of the Articles of Organization were duly adopted at a meeting held on March 20, -------- 1996, by vote of: -- 100 shares of Common out of 100 shares outstanding, - ------------- ----------------- ----------- type, class & series (if any) shares of out of shares outstanding, and - ------------- ----------------- -------- type, class & series (if any) shares of out of shares outstanding, - ------------- ----------------- ----------- type, class & series (if any) CROSS OUT being all of each type, class or series outstanding and INAPPLICABLE entitled to vote thereon: CLAUSE VOTED To change the name of this corporation to read as follows: "EVENTS PARKING CO., INC." VOTED By adding at the beginning of the first sentence of ARTICLE II the following: "To own, maintain and operate a parking facility; to operate and manage parking facilities owned by others; to operate and manage parking facilities from time to time at public events. (1) For amendments adopted pursuant to Chapter 156B, Section 70. (2) For amendments adopted pursuant to Chapter 156B, Section 71 Note: If the space provided under any Amendment or item on this form is insufficient, additions shall be set forth on separate 81/2 x 11 sheets of paper leaving a left-hand margin of at least 1 inch for binding. Additions to more than one Amendment may be continued on a single sheet so long as each Amendment requiring each such addition is clearly indicated. 2 The foregoing amendment will become effective when these articles of amendment are filed in accordance with Chapter 156B, Section 6 of The General Laws unless these articles specify, in accordance with the vote adopting the amendment, a later effective date not more than thirty days after such filing, in which event the amendment will become effective on such later date. EFFECTIVE DATE: ------------------------------------- IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed our names this 20th day of March, in the year 1996. /s/ Edward P. Settino, Jr. President - ---------------------------------------------------------------- Edward P. Settino, Jr. President /s/ Andrew R. Bulens Clerk - ---------------------------------------------------------------- Andrew R. Bulens, Clerk -2- 3 THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT GENERAL LAWS, CHAPTER 156B SECTION 72 ========================================== I hereby approve the within articles of amendment and, the filing fee in the amount of $100 having been paid, said articles are deemed to have been filed with me this 29th day of MARCH 1996. /s/ William Francis Galvin Secretary of the Commonwealth ----------------------------------------- A TRUE COPY ATTEST /S/ William Francis Galvin WILLIAM FRANCIS GALVIN SECRETARY OF THE COMMONWEALTH DATE 8/27/98 CLERK ---------- ---------- ----------------------------------------- TO BE FILLED IN BY COPORATION PHOTOCOPY OF ARTICLES OF AMENDMENT TO BE SENT TO: Gary Banks, Esquire ----------------------------------------------------- 10 Winthrop Square - 2nd Floor ----------------------------------------------------- Boston, MA 02110 ----------------------------------------------------- Telephone: (617) 350-3050 -------------------------------------------- -3- 4 The Commonwealth of Massachusetts Office of the Secretary of State Michael J. Connolly, Secretary One Ashburton Place, Boston, Massachusetts 02108-1512 ARTICLES OF ORGANIZATION (Under G.L. Ch. 156B) ARTICLE I The name of the corporation is: METROPOLITAN MARINA MANAGEMNT, INC. ARTICLE II The purpose of the corporation is to engage in the following business activities: To build, maintain, and/or operate marinas; To build, maintain and/or operate any buildings and any other facilities in connection with the operation of marinas; To provide fuel for use by any commercial or pleasure boats of any kind or description; To provide for the hauling, storage, repair and maintenance of any boat of any type or description; To deal in, sell, operate and let for hire boats of any kind or description ; To deal in, sell operate and let for hire boats of any kind or description; To purchase, sell, acquire, hold, dispose of, encumber or deal in all kinds of personal property; To purchase, or lease, sell, mortgage, or otherwise acquire, hold and dispose of any buildings or real estate, or interests therein in connection with the conduct of the business; To own, lease or operate any business in conjunction with any other business owned, leased or operated by the corporation; To carry on in furtherance of these purposes any activity advantageous to the business of the corporation; To apply for, obtain and hold any and all licenses or permits needed to conduct any activity or action which this corporation is authorized to conduct; To enter into licensing, franchising, or marketing agreements with respect to any trade names, patents, copyrights or other items of protectable intellectual property; To prepare and serve food for on premises or off premises consumption; To exercise all powers permitted to be exercised by a corporation in Section 9 of Chapter 156B of the Massachusetts General Laws; To carry on any business permitted by the laws of the Commonwealth of Massachusetts to a corporation organized under Chapter 156B. In furtherance and not in limitation of the foregoing purposes and powers to do so, to have all powers necessary, convenient or advisable to accomplish one or more of the purposes of this corporation, or which are calculated directly or indirectly to promote or enhance the value of its property, which may or hereafter be lawful for the corporation to do or exercise under and in pursuance of the laws of the Commonwealth of Massachusetts. -4- 5 ARTICLE III The types and classes of stock and the total number of shares and par value, if any, of each type and class of stock which the corporation is authorized to issue is as follows: =================================== ======================================== WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS - ----------------------------------- ---------------------------------------- TYPE NO. OF SHARES TYPE NO. OF SHARES PAR VALUE - ----------------------------------- ---------------------------------------- COMMON 200,000 COMMON - ----------------------------------- ---------------------------------------- PREFERRED PREFERRED =================================== ======================================== ARTICLE IV If more than one class of stock is authorized, state a distinguishing designation for each class. Prior to the issuance of any shares of a class, if shares of another class are outstanding, the corporation must provide a description of the preferences, voting powers, qualifications, and special or relative rights or privileges of that class and of each other class of which shares are outstanding and of each series then established within any class. ARTICLE V The restrictions, if any, imposed by the Articles of Organization upon the transfer of shares of stock of any class are: See Continuation Sheet 5A attached hereto and made a part hereof. ARTICLE VI Other lawful provisions, if any, for the conduct and regulation of the business and affairs of the corporation, for it voluntary dissolution, or for limiting, defining, or regulating the powers of the corporation, or of its directors or stockholders, or of any class of stockholders: (If there are no provisions state "None".) See Continuation Sheet 6A attached hereto and made a part hereof. Note: The preceding six (6) articles are considered to be permanent and may ONLY be changed by filing appropriate Articles of Amendment. -5- 6 Metropolitan Marina Management, Inc. --------------------- Continuation Sheet 6A (Item 6 continued) The By-Laws may provide that the directors may make, amend or repeal the By-Laws in part or in whole to the extent permitted by law. The corporation may be a partner in any business enterprise which it would itself have the power to direct. A director of the corporation shall not be personally liable to the corporation for monetary damages for breach of fiduciary duty as a director. Such liability is hereby eliminated, not withstanding any provision of law imposing such liability; provided, however, that this provision shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith which involved intentional misconduct or a knowing violation of law, (iii) under Sections 61 or 62 of Chapter 156B of the Massachusetts General Laws or (iv) from any transaction from which the director derived an improper personal benefit, it being the intention of this provision to limit the liability of a director to the maximum extent allowed by law. If the Business Corporation Law hereafter is amended to authorize the further elimination of, or limitation on, the liability of directors, then the liability of a director of the corporation, in addition to the limitation of personal liability provided herein, shall be limited to the fullest extent permitted by such amendment or amendments. Any repeal or modification of this provision by the stockholders of the corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of a corporation existing at the time of such repeal or modification. The benefits of this provision shall be cumulative and not in limitation of any other provision of law, including but not limited to any provision affording the benefit of indemnification to directors of the corporation. -6- 7 Metropolitan Marina Management --------------------- Continuation Sheet 5A (Item 5 continued) Any stockholder, including the heirs, executors or the administrators of a deceased stockholder, desiring to sell or transfer such stock owned by him or them, shall first offer it to the corporation through the Board of Directors, in the manner following: He shall notify the directors of his desire to sell or transfer by notice in writing, which notice shall contain the price at which he is willing to sell or transfer and the name of one arbitrator. The directors shall within thirty days thereafter either accept the offer, or by notice to him in writing name a second arbitrator, and these two shall name a third. It shall then be the duty of the arbitrators to ascertain the value of the stock, and if any arbitrator shall neglect or refuse to appear at any meeting appointed by the arbitrators, a majority may act in the absence of such arbitrator. After the acceptance of the offer, or the report of the arbitrators as to the value of the stock, the directors shall have 30 days within which to purchase the same at such valuation, but if at the expiration of 30 days, the corporation shall not have exercised the right so to purchase, the owner of the stock shall be at liberty to dispose of the same in any manner he may see fit. No shares of stock shall be sold or transferred on the books of the corporation until these provisions have been complied with, but the Board of Directors may in any particular instance waive the requirement. -7- 8 ARTICLE VII The effective date of organization of the corporation shall be the date approved and filed by the Secretary of the Commonwealth. If a later EFFECTIVE DATE is desired, specify such date which shall not be more than thirty days after the date of filing. The information contained in ARTICLE VIII is NOT a PERMANENT part of the Articles of Organization and may be changed ONLY by filing the appropriate form provided therefor. ARTICLE VIII a. The street address of the corporation IN MASSACHUSETTS is: (post office boxes are not acceptable) 20 Linden Street, Boston, MA 02134 b. The name, residence and post office address (if different) of the directors and officers of the corporation are: NAME RESIDENCE POST OFFICE ADDRESS President: Edward P. Settino, Jr. 67 Shadow Lake Road Salem, NH 03079 Treasurer: Edward P. Settino, Jr. " " " " Clerk: Andrew R. Bulens 326 High Street Abington, MA 02351 Directors: Edward P. Settino, Jr. 67 Shadow Lake Road Salem, NH 03079 c. The fiscal year (i.e., tax year) of the corporation shall end on the last day of the month of: December d. The name and BUSINESS address of the RESIDENT AGENT of the corporation, if any, is: NA ARTICLE IX By-laws of the corporation have been duly adopted and the president, treasurer, clerk and directors whose names are set forth above, have been duly elected. IN WITNESS WHEREOF and under the pains and penalties of perjury, I/WE, whose signature(s) appear below as incorporator(s) and whose names and business or residential address(es) ARE CLEARLY TYPED OR PRINTED beneath each signature do hereby associate with the intention of forming this corporation under the provisions of General Laws Chapter 156B and do hereby sign these Articles of Organization as incorporator(s) this -8- 9 7th day of March 1994. /s/ Edward P. Settino, Jr. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Note: If an existing corporation is acting as incorporator, type in the exact name of the corporation, the state or other jurisdiction where it was incorporated, the name of the person signing on behalf of said corporation and the title he/she holds or other authority by which such action is taken. -9- 10 THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF ORGANIZATION GENERAL LAWS, CHAPTER 156B, SECTION 12 ============================================= I hereby certify that, upon examination of these articles of organization, duly submitted to me, it appears that the provisions of the General Laws relative to the organization of corporations have been complied with, and I hereby approve said articles, and the filing fee in the amount of $200 having been paid, said articles are deemed to have been filed with me this 8th day of March 1994. /s/ Michael J. Connolly MICHAEL J. CONNOLLY Secretary of State ----------------------------------------- A TRUE COPY ATTEST /S/ William Francis Galvin WILLIAM FRANCIS GALVIN SECRETARY OF THE COMMONWEALTH DATE 3/31/98 CLERK ----------- ----------- ----------------------------------------- PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT TO: WILLIAM T. CORBETT, ESQ. --------------------------------------------------- 41 Temple Street --------------------------------------------------- Boston, MA 02114 --------------------------------------------------- Telephone: (617) 573-8189 --------------------------------------- -10- EX-3.14 17 BY-LAWS OF EVENTS PARKING COMPANY, INC. 1 Exhibit 3.14 METROPOLITAN MARINA MANAGEMENT, INC. BYLAWS ARTICLE I STOCKHOLDERS 1. PLACE OF MEETINGS. All meetings of the stockholders shall be held either at the principal office of the corporation or at such other place in the United States as is determined by the Board of Directors and stated in the notice. 2. ANNUAL MEETINGS. The annual meeting of the stockholders entitled to vote shall be held at ten (10) o'clock in the forenoon (or at such other time as is determined by the Board of Directors and stated in the notice) on the first Monday of May after the end of each fiscal year, if such day is not a legal holiday, and if a legal holiday, then on the next succeeding day that is not a Saturday, Sunday or legal holiday. Purposes for which an annual meeting is to be held, additional to those prescribed by law, by the Articles of Organization and by the Bylaws, may be specified by the President, the Treasurer or the Board of Directors, or upon written application delivered to the Clerk not less than twenty (20) days before the date of the meeting, by one or more stockholders who are entitled to vote and who hold at least one-tenth part in interest of the capital stock entitled to vote at the meeting. If such annual meeting is not held on the date fixed, or by adjournment therefrom, a special meeting of the stockholders shall be held in place thereof, and any business transacted or elections held at such special meeting shall have the same force and effect as if transacted or held at the annual meeting. Any such special meeting shall be called as provided in Section 3 of this Article I. 3. SPECIAL MEETINGS. Special meetings of the stockholders entitled to vote may be called by the President, the Treasurer or the Directors, and shall be called by the Clerk, or in case of the death, absence, incapacity or refusal of the Clerk, by any other officer upon written application of one or more stockholders who are entitled to vote and who hold at least one-tenth part in interest of the capital stock entitled to vote at the meetings. The call for the meeting shall state the day, hour, place and purposes of the meeting. 4. NOTICE OF MEETINGS. A written notice of every meeting of stockholders, stating the place, date and hour thereof, and the purposes for which the meeting is called, shall be given by the Clerk or other person calling the meeting, at least seven (7) days before the meeting, to each stockholder entitled to vote thereat and to each stockholder who, under the Articles of Organization or Bylaws, is entitled to such notice, by leaving such notice with him, or at his usual place of business or residence, or by mailing it postage prepaid and addressed to him at his address as it appears upon the books of the corporation. Whenever notice of a meeting of the stockholders is required to be given to any stockholder, a written waiver thereof, executed before or after the meeting by such stockholder or his attorney thereunto authorized and filed with the records of the meeting, shall be deemed equivalent to such notice. 2 Every stockholder who is present at a meeting (whether in person or by proxy) shall be deemed to have waived notice thereof; provided, however, that in the absence of his waiver in writing, a stockholder may expressly reserve his objection to the transaction of any business as to which requisite notice was not given to him and on which he does not vote. 5. QUORUM OF STOCKOLDERS. The holders of a majority in interest of all stock issued, outstanding and entitled to vote at a meeting shall constitute a quorum; except that, if two or more classes of stock are outstanding and entitled to vote as separate classes, then in the case of each such class, a quorum shall consist of the holders of a majority in interest of the stock of that class issued, outstanding and entitled to vote. 6. ADJOURNMENTS. Any meeting of the stockholders may be adjourned to any other time and to any other place by the stockholders present or represented at the meeting, although less than a quorum, or by any officer entitled to preside or to act as clerk of such meeting if no stockholder is present. It shall not be necessary to notify any stockholder of any adjournment. Any business which could have been transacted at any meeting of the stockholders as originally called may be transacted at any adjournment thereof. 7. VOTES AND PROXIES. At all meetings of the stockholders, each stockholder shall have one vote for each share of stock having voting power registered in such stockholder's name, and a proportionate vote for a fractional share, unless otherwise provided by the Articles of Organization or in the Bylaws. Scrip shall not carry any right to vote unless otherwise provided therein; but if scrip provides for the right to vote, such voting shall be on the same basis as fractional shares. Absent stockholders may vote by proxy. No proxy which is dated more than six months before the meeting named therein shall be accepted, and no proxy shall be valid after the final adjournment of such meeting. Proxies need not be sealed or attested. A proxy with respect to stock held in the name of two or more persons shall be valid if executed by one of them unless at or prior to exercise of the proxy the corporation receives a specific written notice to the contrary from any one of them. A proxy purporting to be executed by or on behalf of a stockholder shall be deemed valid unless challenged at or prior to its exercise. 8. ACTION AT MEETING. When a quorum is present, the holders of a majority of the stock present or represented and voting on a matter (or if there are two or more classes of stock entitled to vote as separate classes, then in the case of each such class, the holders of a majority of the stock of that class present or represent and voting on a matter), except where a larger vote is required by law, the Articles of Organization or these Bylaws, shall decide any matter to be voted on by the stockholders. Any election by stockholders shall be determined by a plurality of the votes cast by the stockholders entitled to vote at the election. No ballot shall be required for such election unless requested by a stockholder present or represented at the meeting and entitled to vote in the election. The corporation shall not directly or indirectly vote any share of its stock. 9. ACTION WITHOUT MEETING. Any action required or permitted to be taken at any meeting of the stockholders may be taken without a meeting if all stockholders entitled to vote on the matter consent to the action in writing and the written consents are filed with the rec- -2- 3 ords of the meetings of stockholders. Such consents shall be treated for all purposes as a vote at a meeting. ARTICLE II OFFICERS AND DIRECTORS 1. ELECTIONS. The corporation shall have a Board of Directors consisting of such number as may be fixed by the stockholders, a President, a Treasurer and a Clerk. At each annual meeting, the stockholders shall fix the number of Directors to be elected, and shall elect the Board of Directors. At any meeting, the stockholders may increase or decrease the number of Directors within the limits above specified. The Board of Directors shall elect the President, Treasurer and Clerk. The Board of Directors may, from time to time, elect or appoint such other officers as it may determine, including a Chairman of the Board, one or more Vice-Presidents, one or more Assistant Treasurers, one or more Assistant Clerks and a Secretary. No officer or director need be a stockholder. No officer need be a director. Two or more offices may be held by any person. If required by vote of the Board of Directors, an officer shall give bond to the corporation for the faithful performance of his duties, in such form and amount and with such sureties as the Board of Directors may determine. The premiums for such bonds shall be paid by the corporation. 2. TENURE. Each Director shall hold office until the next annual meeting of the stockholders and until his successor is elected and qualified or until he sooner dies, resigns, is removed or becomes disqualified. Each officer shall hold office until the first meeting of the Board of Directors following the next annual meeting of the stockholders and until his successor is elected or appointed and qualified, or until he dies, resigns, is removed or becomes disqualified. Any Director or officer may resign by giving written notice of his resignation to the Chairman of the Board, President, Clerk or Secretary, or to the Board of Directors at a meeting of the Board, and such resignation shall become effective at the time specified therein. Any Director may at any time be removed with or without cause by the affirmative vote of the holders of a majority in interest of the capital stock issued and outstanding and entitled to vote; provided that Directors of a class elected by a particular class of stockholders may be removed only by the affirmative vote of the holders of a majority in interest of the stock of such class. Any officer may at any time be removed with or without cause by vote of the Board of Directors. A Director or officer may be removed for cause only after reasonable notice and an opportunity to be heard before the body proposing to remove him. 3. VACANCIES. Any vacancy in the office of Director may be filled by the stockholders at a meeting called for the purpose. Pending action by the stockholders, a vacancy in the office of Director may be filled by vote of the Board of Directors or by appointment by all of the Directors if less than a quorum shall remain in office. Any vacancy in any other office held by any person shall be filled by vote of the Board of Directors or by appointment by all of the Directors if less than a quorum shall remain in office. During the absence or inability to act of any officer, the Board of Directors may by vote appoint a person to perform the duties of such officer. -3- 4 ARTICLE III BOARD OF DIRECTORS 1. POWERS. The Board of Directors may exercise all the powers of the corporation except such as are required by law or by the Articles of Organization or Bylaws to be otherwise exercised, and shall have the general direction, control and management of the property and business of the corporation. All property of the corporation, which shall be in the custody of the Board of Directors, shall be subject at all times to inspection by the President and the Treasurer or either of them. Unless otherwise provided by law, the Board of Directors shall have power to purchase and to lease, pledge, mortgage and sell such property (including the stock of this corporation) and to make such contracts and agreements as they deem advantageous, to fix the price to be paid for or in connection with any property or rights purchased, sold, or otherwise dealt with by the corporation, to borrow money, issue bonds, notes and other obligations of the corporation, and to secure payment thereof by the mortgage or pledge of all or any part of the property of the corporation. The Board of Directors may determine the compensation of Directors and the compensation and duties, in addition to those prescribed by the Bylaws, of all officers, agents and employees of the corporation. 2. MEETINGS. Meetings of the Directors need not be held in the state of incorporation. (a) Regular Meetings. Regular meetings of the Board of Directors may be held without call or notice at such places and at such times as the Directors may from time to time determine, provided that any Director who is absent when such determination is made shall be given notice of the determination. A regular meeting of the Board of Directors may be held without a call or notice at the same place as the annual meeting of the stockholders, or the special meeting held in lieu thereof, following such meeting of stockholders. (b) Special Meeting. Special meetings of the Board of Directors may be called by the Chairman of the Board, the President, a Vice-President, the Treasurer or any two or more Directors. Notice of the time and place of all special meetings shall be given by the Clerk, Secretary or the officer or Directors calling the meeting. Notice may be given orally, by telephone, telegraph or in writing; and notice shall be sufficient if given in time to enable the Director to attend, or in any case if sent by nail or telegraph at least three days before the meeting, addressed to a Director's usual or last known place of business or residence. No notice of any meeting of the Board of Directors need be given to any Director if such Director, by a writing filed with the records of the meeting (and whether executed before or after such meeting), waives such notice, or if such Director attends the meeting without protesting prior thereto or at its commencement the lack of notice to him. 3. QUORUM OF AND ACTION BY DIRECTORS. At any meeting of the Board of Directors a majority of the number of Directors then constituting a full Board shall constitute a quorum, but a lesser number may adjourn any meeting from time to time without further notice. Unless otherwise provided by law or by the Articles of Organization or by the Bylaws, business may be transacted by vote of a majority of the Directors then present at any meeting at which there is a quorum. Unless otherwise provided by law or by the Articles of Organization or by the -4- 5 Bylaws, any action required or permitted to be taken at any meeting of the Directors may be taken without a meeting if all the Directors consent to the action in writing and the written consents are filed with the records of the meetings of Directors. Such consents shall be treated for all purposes as a vote at a meeting. 4. COMMITTEES OF DIRECTORS. The Board of Directors may, by vote of a majority of the number of Directors then constituting a full Board, elect from its membership an Executive Committee and such other committees as it may determine and delegate to any such committee or committees some or all of its powers except those which, by law, the Articles of Organization or these Bylaws, it is prohibited from delegating. Except as the Directors may otherwise determine, any such committee may make rules for the conduct of its business, but unless otherwise provided by the Directors or in such rules, its business shall be conducted as nearly as may be in the manner as is provided by these Bylaws for the Directors. ARTICLE IV EXECUTIVE OFFICES 1. CHAIRMAN OF THE BOARD. The Chairman of the Board, if any, shall preside at all meetings of the Board of Directors, and shall have such authority and perform such duties as the Board of Directors may from time to time determine. 2. PRESIDENT AND VICE-PRESIDENTS. Except for meetings at which the Chairman of the Board, if any, presides in accordance with Section 1 of this Article IV, the President shall, if present, preside at all meetings of stockholders and of the Board of Directors. He shall, subject to the control and direction of the Board of Directors, have general supervision and control over the business of the corporation, except as otherwise provided by the Bylaws; and he shall have and perform such other powers and duties as may be prescribed by the Bylaws or from time to time be determined by the Board of Directors. The Vice-Presidents, in the order of their election, or in such other order as the Board of Directors may determine by specific vote or by title, shall have and perform the powers and duties of the President (or such of them as the Board of Directors may determine) whenever the President is absent or unable to act. The Vice-Presidents shall also have such other powers and duties as may from time to time be determined by the Board of Directors. 3. TREASURER AND ASSISTANT TREASURERS. The Treasurer shall, subject to the control and direction of the Board of Directors, have and perform such powers and duties as may be prescribed in the Bylaws or from time to time be determined by the Board of Directors. He shall have custody of the stock and transfer books of the corporation, unless and until a transfer agent is appointed, and shall keep accurate books of account of all the transactions of the corporation. All property of the corporation in his custody shall be subject at all times to the inspection and control of the Board of Directors. Unless otherwise voted by the Board of Directors, each Assistant Treasurer shall have and perform the powers and duties of the Treasurer whenever the Treasurer is absent or unable to act, and may at any time exercise such of the powers of the Treasurer, and such other powers and duties, as may from time to time be determined by the Board of Directors. -5- 6 4. CLERK AND ASSISTANT CLERKS. The Clerk shall be a resident of Massachusetts unless the corporation has a resident agent appointed for the purpose of service of process. He shall have and perform the powers and duties prescribed in the Bylaws, and such other powers and duties as may from time to time be determined by the Board of Directors. He shall attend all meetings of the stockholders and shall record upon the record book of the proceedings at such meetings. He shall have custody of the record books of the corporation. Any Assistant Clerk shall have such powers as the Directors may from time to time designate. In the absence of the Clerk from any meeting of stockholders, an Assistant Clerk, if one be elected, otherwise a Temporary Clerk designated by the person presiding at the meeting, shall perform the duties of the Clerk. 5. SECRETARY. The Board of Directors may elect a Secretary, but if no Secretary is elected, the Clerk (or, in the absence of the Clerk, any Assistant Clerk) shall be the Secretary. The Secretary shall attend all meetings of the Directors and shall record all votes of the Board of Directors and minutes of the proceedings at such meetings. He shall notify the Directors of their meetings, and shall have and perform such other powers and duties as may from time to time be determined by the Board of Directors. If a Secretary is elected but is absent from any such meeting, the Clerk (or any Assistant Clerk) may perform the duties of the Secretary; otherwise, a Temporary Secretary may be appointed by the meeting. ARTICLE V CAPITAL STOCK 1. CERTIFICATES OF STOCK. Each stockholder shall be entitled to a certificate of the capital stock of the corporation owned by him. All certificates for shares of stock of the corporation shall state the number and class of shares evidenced thereby (and designate the series, if any), shall be signed by the President or a Vice-President and either the Treasurer or an Assistant Treasurer, may (but need not) bear the seal of the corporation and shall contain such further statements as shall be required by law. The Board of Directors may determine the form of certificates of stock except insofar as prescribed by law or by the Bylaws, and may provide for the use of facsimile signatures thereon to the extent permitted by law. If the corporation is authorized to issue more than one class or series of stock, every stock certificate issued while it is so authorized shall be set forth upon the face or back thereof either: (a) the full text of the preferences, voting powers, qualifications and special and relative rights of the shares of each class and series, if any, authorized to be issued as set forth in the Articles of Organization; or (b) a statement of the existence of such preferences, powers, qualifications and rights, and a statement that the corporation will furnish a copy thereof to the holder of such certificate upon written request and without charge. 2. TRANSFERS. The transfer of all shares of stock in the corporation shall be subject to the restrictions, if any, imposed by the Articles of Organization, the Bylaws or any agreement to which the corporation is a party. Every certificate for shares which are subject to any such restrictions on transfer shall have the restrictions noted conspicuously on the certificate and -6- 7 shall also set forth upon the face or back thereof either the full text of the restriction or a statement of the existence of such restriction and a statement that the corporation will furnish a copy thereof to the holder of such certificate upon written request and without charge. Subject to any such restrictions, title to a certificate of stock and to the shares represented thereby shall be transferable on the books of the corporation (except when closed as provided by the Bylaws) upon surrender of the certificates therefor duly endorsed, or accompanied by a separate document containing an assignment of the certificate or a power of attorney to sell, assign or transfer the same, or the shares represented thereby, signed by the person appearing by the certificate to be the owner of the shares represented thereby, with all such endorsements or signatures verified if required by the corporation; but the person registered on the books of the corporation as the owner of the shares shall have the exclusive right to receive dividends thereon and to vote thereon as such owner, shall be held liable for such calls and assessments as may lawfully be made thereon, and except only as may be required by law, may in all respects be treated by the corporation as the exclusive owner thereof. It shall be the duty of each stockholder to notify the corporation of his post office address. 3. FIXING RECORD DATE. The Board of Directors may fix in advance a time of not more than sixty (60) days preceding the date of any meeting of stockholders or the date for payment of any dividend or the making of any distribution to stockholders or the last day on which the consent or dissent of stockholders may be effectively expressed for any purpose, as the record date for determining the stockholders having the right to notice of and to vote at such meeting and any adjournment thereof, or the right to receive such dividend or distribution, or the right to give such consent or dissent, and in such case, only stockholders of record on such record date shall have such right, notwithstanding any transfer of stock on the books of the corporation after the record date; or without fixing such record date the Board of Directors may, for any such purposes, close the transfer books for all or any part of such sixty-day period. If no record date is fixed and the transfer books are not closed: (a) the record date for determining stockholders having the right to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given. (b) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors acts with respect thereto. 4. LOST CERTIFICATES. In case any certificate of stock of the corporation shall be lost or destroyed, a new certificate may be issued in place thereof on reasonable evidence of such loss or destruction, and upon the giving of such indemnity as the Board of Directors may require for the protection of the corporation or any transfer agent or registrar. In case any certificate shall be mutilated, a new certificate may be issued in place thereof upon such terms as the Board of Directors may prescribe. 5. ISSUE OF STOCK. Unless otherwise voted by the incorporators or stockholders, the whole or any part of any unissued balance of the authorized capital stock of the corporation or the whole or any part of any capital stock of the corporation held in its treasury may be issued or -7- 8 disposed of by vote of the Board of Directors in such manner, for such consideration and on such terms as the Board of Directors may determine. 6. DIVIDENDS. Subject to any applicable provisions of the Articles of Organization and pursuant to law, dividends upon the capital stock of the corporation may be declared by the Board of Directors at any regular or special meeting. Dividends may be paid in cash, in property or in shares of the capital stock. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the Board of Directors may from time to time, in the absolute discretion of the Board, think proper as a reserve fund to meet contingencies, for equalizing dividends, for repairing or maintaining any property of the corporation, for working capital or for such other purposes as the Board of Directors shall think conducive to the interests of the corporation. ARTICLE VI MISCELLANEOUS PROVISIONS 1. FISCAL YEAR. The fiscal year of the corporation shall end on the last day of December. 2. SEAL. The seal of the corporation shall bear its name, the word "Massachusetts" and the year of its incorporation; and may bear such other device or inscription as the Board of Directors may determine. 3. EXECUTION OF INSTRUMENTS. All deeds, leases, transfers, contracts, bonds, notes, checks, drafts and other obligations for payment of money made, accepted or endorsed by the corporation shall be executed on behalf of the corporation by such person, or persons, as may be authorized from time to time by vote of the Board of Directors. 4. CONTRIBUTIONS. The Board of Directors shall have authority to make donations from the funds of the corporation, in such amounts as the Board of Directors may determine to be reasonable and irrespective of corporate benefit, for the public welfare or for community fund, hospital, charitable, religious, educational, scientific, civic or similar purposes, and in time of war or other natural emergency in aid thereof. 5. EVIDENCE OF AUTHORITY. A certificate by the Clerk, an Assistant Clerk or the Secretary, or a Temporary Clerk or Temporary Secretary, as to any action taken by the stockholders, Board of Directors, any Committee of the Board of Directors or any officer or representative of the corporation shall, as to all persons who rely thereon in good faith, be conclusive evidence of such action. The exercise of any power which, by law or under these Bylaws or under any vote of the stockholders or of the Board of Directors, may be exercised in case of absence or any other contingency, shall bind the corporation in favor of anyone relying thereon in good faith, whether or not the absence or contingency existed. 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS. The corporation shall indemnify and hold harmless each person, now or hereafter an officer or Director of the corporation, from and against any and all claims and liabilities to which he may be or become subject by -8- 9 reason of his being or having been an officer or a Director of the corporation or by reason of his alleged acts or omissions as an officer or Director of the corporation, and shall indemnify and reimburse each such officer and Director against and for any and all legal and other expenses reasonably incurred by him in connection with any such claims and liabilities, actual or threatened, whether or not at or prior to the time when so indemnified, held harmless and reimbursed he has ceased to be an officer or a Director of the corporation, except with respect to any matter as to which such officer or Director shall have been adjudicated in any proceeding not to have acted in good faith in the reasonable belief that his action was in the best interest of the corporation; provided, however, that prior to such final adjudication the corporation may compromise and settle any such claims and liabilities and pay such expenses, if such settlement or payment or both appears, in the judgment of a majority of those members of the Board of Directors who are not involved in such matters, to be for the best interest of the corporation as evidenced by a resolution to that effect adopted after receipt by the corporation of a written opinion of counsel for the corporation, that, based on the facts available to such counsel, such officer or Director has not been guilty of acting in a manner that would prohibit indemnification. Such indemnification may include payment by the corporation of expenses incurred in defending a civil or criminal action or proceeding in advance of the final disposition of such action or proceeding, upon receipt of an undertaking by the person indemnified to repay such payment if he shall be adjudicated to be not entitled to indemnification under this section. The corporation shall similarly indemnify and hold harmless persons who serve at its request as directors or officers of another organization in which the corporation owns shares or of which it is a creditor. The right of indemnification herein provided shall be in addition to and not exclusive of any other rights to which any officer or Director of the corporation, or any such persons who serve at its request as aforesaid, may otherwise be lawfully entitled. As used in this Section 6, the terms "officer" and "Director" include their respective heirs, executors and administrators. 7. DEFINITIONS. All references in the Bylaws to the following terms shall have the following meanings unless specifically otherwise provided: Bylaws -- These Bylaws, as altered or amended from time to time. Articles of Organization -- The Articles of Organization as amended from time to time. Number of Directors then Constituting a Full Board -- The number of Directors last fixed by the incorporators or stockholders pursuant to Section 1 of Article II of the Bylaws. Annual Meeting of Stockholders -- Either the annual meeting of the stockholders held on the date fixed therefor, or if it is not held on such fixed date, a special meeting held in place thereof. -9- 10 In addition, whenever the masculine gender is used, it shall include the feminine and the neuter wherever appropriate. ARTICLE VII AMENDMENTS These Bylaws may be altered, amended or repealed, in whole or in part, at any annual or special meeting by vote of the holders of a majority in interest of all stock issued and outstanding and entitled to vote. No change in the date of the annual meeting may be made within sixty (60) days before the date fixed in these Bylaws for such meeting. The nature or substance of the proposed alterations, amendment or repeal shall be stated in the notice of the meeting. A true copy. ATTEST: Dated: March 9, 1994 /s/Andrew R. Bulens ----------------------------------- Andrew R. Bulens, Clerk (Corporate Seal) -10- EX-3.15 18 AGREEMENT OF LIMITED PARTNERSHIP 1 AGREEMENT OF LIMITED PARTNERSHIP OF STANDARD PARKING, L.P. THIS AGREEMENT OF LIMITED PARTNERSHIP is entered into as of January 1, 1994, by and among STANDARD PARKING CORPORATION, an Illinois corporation ("SPC"), as General Partner, and SP ASSOCIATES, an Illinois general partnership ("Associates"), as Limited Partner. In consideration of the mutual covenants set forth in this Agreement, the parties hereto hereby agree to form a limited partnership under the Delaware Revised Uniform Limited Partnership Act upon the following terms and conditions: ARTICLE I Definitions When used in this Agreement, the following terms have the following meanings: Section 1.1. Accountants. "Accountants" means Altschuler, Melvoin & Glasser or such other firm of independent certified public accountants as shall be engaged from time to time by the General Partner for the Partnership. Section 1.2. Act. "Act" means the Delaware Revised Uniform Limited Partnership Act, as amended from time to time. Section 1.3. Affiliate. "Affiliate" means with respect to a specified Person (a) any Person that directly or indirectly through one or more intermediaries controls, alone or through an affiliated group, is controlled by, or is under common control with such Person, (b) any Person that is an officer, director, partner, or trustee of, or serves in a similar capacity with respect to, such Person or of which such Person is an officer, director, partner, or trustee, or with respect to which such Person serves in a similar capacity, (c) any Person that, directly or indirectly, is the beneficial owner of 10% or more of any class of equity securities of, or otherwise has a substantial beneficial interest in, the specified Person or of which the specified Person is directly or indirectly the owner of 10% or more of any class of equity securities or in which the specified Person has a substantial beneficial interest, or (d) any spouse, child, or parent of the specified Person. Notwithstanding the foregoing, a Limited Partner shall not be deemed to be an Affiliate of the Partnership solely as a result of being a Limited Partner. 2 Section 1.4. Agreement. "Agreement" means this Agreement of Limited Partnership, as amended or otherwise modified from time to time. Section 1.5. Assignee. "Assignee" means a person to whom an Interest has been assigned in accordance with the provisions of this Agreement but who has not been admitted as a Substitute Partner. Section 1.6. Associates' Representative. "Associates' Representative" shall have the meaning set forth in Section 8.5. Section 1.7. Bankruptcy. "Bankruptcy" means, with respect to a Person: (i) the commencement against such Person of proceedings for any relief under any bankruptcy or insolvency law, or any law relating to the relief of debtors, readjustment of indebtedness, reorganization, arrangement, composition, or extension of debts, provided such proceedings shall not have been dismissed, nullified, stayed, or otherwise rendered ineffective (but only so long as such stay shall continue in force) within 90 days after the commencement of such proceedings; (ii) the commencement by such Person of proceedings for any relief under any bankruptcy or insolvency law, or any law relating to the relief of debtors, readjustment of indebtedness, reorganization, arrangement, composition, or extension of debts; (iii) a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, or trustee or assignee in bankruptcy or insolvency of such Person or of a substantial part of such Person's property, or for the winding up or liquidation of its affairs, which decree or order remains in force undischarged and unstayed for a period of 90 days; or (iv) a general assignment by such Person for the benefit of creditors or the admission by such Person in writing of its inability to pay its debts generally as they become due. Section 1.8. Capital Account. "Capital Account" means, with respect to a Partner, the sum of the Partner's Class A Capital Account, Class B Capital Account, Class C Capital Account, and Class D Capital Account. Section 1.9. Capital Contribution. "Capital Contribution" means, with respect to any Partner, the amount of cash and the initial Gross Asset Value of property other than cash (less any indebtedness assumed by the Partnership in connection with such Capital Contribution, or to which such contributed property is subject) which has been contributed to the Partnership by such Partner (or, in the case of an Assignee or Substitute Partner, by any prior holder of the Interest held by such Assignee or Substitute Partner). Section 1.10. Capitalized Lease. "Capitalized Lease" means any lease which is or should be capitalized on the balance sheet of the lessee in accordance with GAAP. Section 1.11. Capital Transaction. "Capital Transaction" means (a) a sale, exchange, or other disposition of all or substantially all of the Partnership Property for -2- 3 value (including an involuntary conversion by condemnation, casualty, or otherwise), (b) the incurrence by the Partnership of indebtedness for borrowed money or (c) the refinancing of any existing or replacement indebtedness for borrowed money, or any part thereof. Section 1.12. Capital Transaction Proceeds. "Capital Transaction Proceeds" means any and all cash proceeds received by the Partnership from a Capital Transaction, reduced by (i) expenses incurred by the Partnership in connection with such Capital Transaction, (ii) liabilities of the Partnership which are repaid out of the proceeds from such Capital Transaction, (iii) such reserves as the General Partner may reasonably determine for contingent liabilities, and (iv) amounts applied for other Partnership purposes in accordance with this Agreement. Section 1.13. Certificate. "Certificate" means the Certificate of Limited Partnership filed on behalf of the Partnership in the State of Delaware, as amended from time to time. Section 1.14. Class A Capital Account. "Class A Capital Account" means the Capital Account maintained under Section 3.4 with respect to a Class A Interest. Section 1.15. Class A Cumulative Unpaid Preference. "Class A Cumulative Unpaid Preference" shall have the meaning set forth in Section 3.3(b). Section 1.16. Class A Partner. "Class A Partner" means the holder of a Class A Interest in its capacity as such. Section 1.17. Class A Preferred Return. "Class A Preferred Return" shall have the meaning set forth in Section 3.3(b). Section 1.18. Class A Unrecovered Capital. "Class A Unrecovered Capital" means, with respect to any Class A Partner as of any date, the initial Class A Unrecovered Capital, as set forth in Section 3.3(b), reduced by the amount of any distributions received by such Class A Partner under Section 5.2(a) as of such date. Section 1.19. Class B Capital Account. "Class B Capital Account" means the Capital Account maintained under Section 3.4 with respect to a Class B Interest. Section 1.20. Class B Cumulative Unpald Preference. "Class B Cumulative Unpaid Preference" shall have the meaning set forth in Section 3.3(c). Section 1.21. Class B Partner. "Class B Partner" means the holder of a Class B Interest in its capacity as such. Section 1.22. Class B Preferred Return. "Class B Preferred Return" shall have the meaning set forth in Section 3.3(c). -3- 4 Section 1.23. Class B Unrecovered Capital. "Class B Unrecovered Capital" means, with respect to any Class B Partner as of any date, the initial Class B Unrecovered Capital, as set forth in Section 3.3(c), and decreased by the amount of any distributions received under Section 5.2(b) as of such date. Section 1.24. Class C Capital Account. "Class C Capital Account" means the Capital Account maintained under Section 3.4 with respect to a Class C Interest. Section 1.25. Class C Cumulative Unpaid Preference. "Class C Cumulative Unpaid Preference" shall have the meaning set forth in Section 3.3(d). Section 1.26. Class C Partner. "Class C Partner means the holder of a Class C Interest in its capacity as such. Section 1.27. Class C Preferred Return. "Class C Preferred Return" shall have the meaning set forth in Section 3.3(d). Section 1.28. Class C Unrecovered Capital. "Class C Unrecovered Capital" means, with respect to any Class C Partner as of any date, the initial Class C Unrecovered Capital, as set forth in Section 3.3(d), decreased by the amount of any distributions received under Section 5.2(c) as of such date. Section 1.29. Class D Capital Account. "Class D Capital Account" means the Capital Account maintained under Section 3.4 with respect to a Class D Interest. Section 1.30. Class D Partner. "Class D Partner" means the holder of a Class D Interest in its capacity as such. Section 1.31. Code. "Code" means the Internal Revenue Code of 1986, as amended from time to time, or any successor thereto. Section 1.32. Contingent Liability. "Contingent Liability" means any agreement, undertaking, or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the indebtedness, obligation or any other liability of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the shares of any other Person. The amount of any Person's obligation under any Contingent Liability shall (subject to any limitation set forth therein) be deemed to be the outstanding principal amount (or maximum principal amount, if larger) of the debt, obligation or other liability guaranteed thereby. -4- 5 Section 1.33. CPI. "CPI" means the Consumer Price Index for All Urban Consumers (All Items and Commodity Groups - Chicago Area Only). If the CPI shall become unavailable to the public because publication is discontinued or otherwise, the General Partner shall substitute therefore a comparable index based upon changes in the cost of living or purchasing power of the consumer dollar published by any other governmental agency. Section 1.34. Depreciation. "Depreciation" means, for each fiscal year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such fiscal year, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such fiscal year, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such fiscal year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such fiscal year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partner. Section 1.35. Disability. "Disability" means, with respect to any Person on any date, (i) a state or condition of incapacity or, through illness, age or similar cause, an inability to give reasoned consideration to business or financial matters, from which state or condition such Person is not expected to recover for a period of not less than 12 months, as certified to the Partnership by a physician reasonably acceptable to SPC and Associates, or (ii) a failure by such person to work on a full business time basis for a period of 12 consecutive months by reason of incapacity, illness, age, or similar cause. Section 1.36. Distributable Cash. "Distributable Cash" means, with respect to any fiscal period taken into account under this Agreement: (i) all cash received by the Partnership from all sources during the period (excluding Capital Contributions and Capital Transaction Proceeds); minus (ii) all expenditures paid by the Partnership during the period, including (but not limited to) repayment of principal on Partnership loans; minus (iii) such additions to the Partnership's reserves as the General Partner may reasonably deem necessary for anticipated working capital and capital investment requirements of the Partnership; plus (iv) such additional cash (not theretofore taken into account) as the General Partner may reasonably determine to be available for distribution to the Partners, including amounts released from reserves. Notwithstanding anything to the contrary herein, the General Partner may not make any additions to the Partnership's reserves as of the close of any fiscal quarter if the effect of such additions is to cause (i) the current assets of the Partnership as of the end of such fiscal quarter (determined in accordance with GAAP, but reduced by the amount required to be distributed under Section 5.1 after the close of such period, taking into account such addition to reserves) to exceed the current payables of the Partnership as of the end of such fiscal quarter (determined in accordance with GAAP) by more than $1,200,000. The limitation set forth in the preceding sentence (i) shall be adjusted as of January 1 of each fiscal year (commencing January 1, 1995) by the percentage by which the CPI reported as of the end of the -5- 6 immediately preceding fiscal year of the Partnership shall have increased from the CPI reported as of the end of the second preceding fiscal year of the Partnership, and (ii) may be increased further as of any time with the written consent of Associates (which consent shall not be unreasonably withheld) if the General Partner determines that the Partnership requires additional reserves for working capital, capital expenditures, or expansion of the Partnership's business. For purposes of the foregoing, the Partnership's current assets and current liabilities as of the end of any fiscal quarter shall be (i) as reasonably determined by the General Partner in good faith, in the case of any fiscal quarter other than the fourth quarter and (ii) as determined by the Accountants, in the case of the fourth quarter. Section 1.37. Effective Date. "Effective Date" means January 1, 1994. Section 1.38. Event of Withdrawal. "Event of Withdrawal" means with respect to the General Partner, the cessation of its status as a General Partner as a result of death, dissolution, Bankruptcy, incapacity, complete withdrawal, or any other reason, other than the dissolution of the Partnership. Section 1.39. GAAP. "GAAP" means generally accepted accounting principles in the United States of America as in effect from time to time, consistently applied. Section 1.40. Garage Management Business. "Garage Management Business" means (i) the ownership. management, leasing, or operation of automobile garages or other parking facilities, (ii) the development or exploitation of' or any investment in, any technology used or useful in the Garage Management Business (including without limitation any technology in which AVID has an interest), and (iii) the provision of parking consulting or other parking-related services to any Person engaged in the Garage Management Business. Section 1.41. General Partner. "General Partner" means, as of any particular time, any Person who has been admitted to the Partnership as, and continues to be, a general partner of the Partnership as of such time. Section 1.42. Gross Asset Value. "Gross Asset Value" means, with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows: (a) The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset, as determined in accordance with this Agreement; (b) The Gross Asset Values of all Partnership Property shall be adjusted to equal the respective gross fair market values of such property, as determined by the General Partner, as of the following times: (i) the acquisition of an additional Interest by any new or existing Partner in exchange for more than a de minimis Capital Contribution: (ii) the distribution by the Partnership to a Partner of more than a de mini- -6- 7 mis amount of Partnership Property as consideration for an Interest; and (iii) the liquidation of the Partnership within the meaning ofss. 1.704-1(b)(2)(ii)(g) of the Regulations: provided, however, that adjustments pursuant to clauses (i) and (i) above shall be made only if the General Partner reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership; (c) The Gross Asset Value of any Partnership Property distributed to any Partner shall be adjusted to equal the gross fair market value of such property on the date of distribution as determined by the distributee and the General Partner; provided that, if the distributee is a General Partner, the determination of the fair market value of the distributed asset shall require the consent of all the Limited Partners; and (d) The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to section 734(b) or section 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant toss. 1.704-1(b)(2)(iv)(m) of the Regulations; provided, however, that Gross Asset Values shall not be adjusted pursuant to this subsection (d) to the extent the General Partner determines that an adjustment pursuant to subsection (b) hereof is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subsection (d). If the Gross Asset Value of an asset has been determined or adjusted pursuant to paragraph (a), (b), or (d) hereof, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Net Profits and Net Losses. Section 1.43. Indebtedness. "Indebtedness" means, with respect to any Person (without duplication): (i) any obligation of such Person for borrowed money, including, without limitation, (A) any obligation of such Person evidenced by bonds, debentures, notes or other similar debt instruments, and (B) any obligation for borrowed money which is non-recourse to the credit of such Person but which is secured by a Lien on any asset of such Person; (ii) any obligation of such Person on account of deposits or advances other than in the ordinary course of business; (iii) any obligation of such Person for the deferred purchase price of any property or services, except Trade Accounts Payable; (iv) any obligation of such Person as lessee under a Capitalized Lease; (v) any Indebtedness of another Person secured by a Lien on any asset of such first Person, whether or not such Indebtedness is assumed by such first Person; and (vi) any Contingent Liability of such Person in respect of any of the foregoing. For all purposes of this Agreement, the Indebtedness of any Person shall include -7- 8 the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer. Section 1.44. Interest. "Interest" means the entire ownership interest of a Partner in the Partnership at any particular time, including the right of such Partner to any and all benefits to which a Partner may be entitled under this Agreement and the Act, together with the obligations of such Partner to comply with all the terms and provisions of this Agreement with which such Partner is required to comply. Reference to a Limited Partnership or General Partnership Interest means the Interest of a Limited Partner or General Partner, as such. Reference to a Class A, Class B, Class C, or Class D Interest means an Interest issued pursuant to Section 3.1(c)(i), 3.1(c)(ii), 3.2(b), or 3.1(c)(iii), respectively. Section 1.45. Investment. "Investment" means any investment, made in cash or by delivery of any kind of property or asset, in any Person, whether by acquisition of shares of stock or similar interest, Indebtedness, or other obligation or security, or by loan, advance, or capital contribution, or otherwise. Section 1.46. Legal Counsel. "Legal Counsel" means such legal counsel as shall be engaged from time to time by the General Partner for the Partnership. Section 1.47. Lien. "Lien" means any mortgage, pledge, hypothecation, judgment lien or similar legal process, title retention lien, or other lien or security interest, including, without limitation, the interest of a vendor under any conditional sale or other title retention agreement and the interest of a lessor under any Capitalized Lease. Section 1.48. Limited Partners. "Limited Partners" means, as of any date, any or all of the Persons who have been admitted as, and continue to be, limited partners of the Partnership as of such date. As of the date of this Agreement, Associates, in its capacity as the holder of the Class C Interest, and SPC, in its capacity as the holder of the Class A Interest, are the sole Limited Partners of the Partnership. Section 1.49. Liquidation Preference. "Liquidation Preference" means, (i) with respect to the Class A Partner as of any date, the sum of the Class A Unrecovered Capital, the Class A Cumulative Unpaid Preference, plus the accrued but unpaid Class A Preferred Return for the fiscal year as of such date, (ii) with respect to the Class B Partner as of any date, the sum of the Class B Unrecovered Capital, the Class B Cumulative Unpaid Preference, plus the accrued but unpaid Class B Preferred Return for the fiscal year as of such date, or (iii) with respect to the Class C Partner as of any date, the sum of the Class C Unrecovered Capital, the Class C Cumulative Unpaid Preference, plus the accrued but unpaid Class C Preferred Return for the fiscal year as of such date. Section 1.50. Material Adverse Effect. "Material Adverse Effect" means a material adverse effect on: -8- 9 (i) the consolidated business, assets, financial condition or operations of the Partnership, or SPC and Standard Auto Park, Inc. taken as a whole, as the context requires; or (ii) the ability of Standard Auto Park, Inc. or SPC to perform any of its material obligations under this Agreement or under the Nominee Agreement, the Management Agreement, or the Related Agreements (as such terms are defined in the Partnership Formation Agreement). Section 1.51. Net Profit; Net Loss. "Net Profit" or "Net Loss" means, for each period taken into account under Article IV, an amount equal to the Partnership's taxable income or taxable loss for such period, determined in accordance with federal income tax principles, with the following adjustments: (a) There shall be added to such taxable income or taxable loss an amount equal to any income received by the Partnership during such period which is wholly exempt from federal income tax (e.g., interest income which is exempt from federal income tax under section 103 of the Code); (b) Any expenditures of the Partnership described in section 705(a)(2)(B) of the Code or treated as section 705(a)(2)(B) expenditures pursuant to ss. 1.704-1(b)(2)(iv)(i) of the Regulations, and not otherwise taken into account in computing Net Profits or Net Losses, shall be subtracted from such taxable income or loss; (c) In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to Section 1.42(b) or (c) of this Agreement, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Profits or Net Losses; (d) Gain or loss resulting from any disposition of Partnership Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the Partnership Property disposed of, notwithstanding that the adjusted tax basis of such Partnership Property differs from its Gross Asset Value; (e) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such fiscal year or other period; and (f) To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to section 734(b) or section 743(b) of the Code is required pursuant toss. 1.704-l(b)(2)(iv)(m)(4) of the Regulations to be taken into account in -9- 10 determining Capital Accounts as a result of a distribution other than in liquidation of a Partner's Interest, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Profits or Net Losses. Section 1.52. Partner. "Partner" means as of any particular time any Person who is at such time a General Partner or a Limited Partner. Section 1.53. Partnership. "Partnership" means the limited partnership formed pursuant to the Certificate and this Agreement. Section 1.54. Partnership Formation Agreement. "Partnership Formation Agreement" means that Partnership Formation Agreement by and between Associates and SPC relating to the Partnership, including all Exhibits thereto. Section 1.55. Partnership Property. "Partnership Property" means any or all property, real or personal, tangible or intangible, owned of record or beneficially by the Partnership. Section 1.56. Permitted Lien. "Permitted Lien" means any of the following: (a) Liens for current Taxes not delinquent or Taxes being contested in good faith and by appropriate proceedings and as to which such reserves or other appropriate provisions as may be required by GAAP are being maintained; (b) carriers', warehousemen's, mechanics', materialmen's, repairmen's, and other like statutory Liens arising in the ordinary course of business securing obligations which are not overdue for a period of more than 90 days or which are being contested in good faith and by appropriate proceedings and as to which such reserves or other appropriate provisions as may be required by GAAP are being maintained; (c) pledges or deposits in connection with workers' compensation, unemployment insurance and other social security legislation; (d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations and other obligations of a like nature incurred in the ordinary course of business; and (e) Liens relating to Indebtedness assumed by the Partnership in accordance with the Partnership Formation Agreement. -10- 11 Section 1.57. Person. "Person" means any natural person, corporation, firm, limited liability company, joint venture, partnership, trust, unincorporated organization, government, or any department or agency of government. Section 1.58. Regulations. "Regulations" means the regulations of the United States Treasury Department with respect to a section of the Code, whether in proposed, temporary, or final form, as from time to time amended, or any successor thereto. Section 1.59. SP Parking Associates. "SP Parking Associates" means SP Parking Associates, an Illinois general partnership and an Affiliate of Associates. Section 1.60. SP Parking Option Agreement. "SP Parking Option Agreement" means that Option Agreement between SP Parking Associates and SPC dated as of January 1,1994. Section 1.61. Standard Auto Park, Inc. "Standard Auto Park, Inc." means Standard Auto Park, Inc., an Illinois corporation and an Affiliate of SPC. Section 1.62. Standard Parking Corporation MW. "Standard Parking Corporation MW" means Standard Parking Corporation MW, an Illinois corporation and an Affiliate of SPC. Section 1.63. Standard/Tremont. "Standard/Tremont" means Standard/Tremont Parking Corporation, an Illinois corporation and an Affiliate of SPC. Section 1.64. Standard/Wabash. "Standard/Wabash" means Standard/Wabash Parking Corporation, an Illinois corporation and an Affiliate of SPC. Section 1.65. Substitute Partner. "Substitute Partner" means a Person to whom an Interest has been assigned and who has been admitted to the Partnership as a General Partner ("Substitute General Partner") or Limited Partner ("Substitute Limited Partner") in accordance with this Agreement. Section 1.66. Taxes. "Taxes" with respect to any Person means taxes, assessments or other governmental charges or levies imposed upon such Person, his or its income or any of his or its properties, franchises or assets. Section 1.67. Trade Accounts Payable. "Trade Accounts Payable" of any Person means accounts payable (including, without limitation, professional fees, utility bills and other like expenses) of such Person with a maturity of not greater than 90 days incurred in the ordinary course of such Person's business. -11- 12 ARTICLE II Organization Section 2.1. Formation of Partnership. The parties hereby agree to form a limited partnership pursuant to the Act and the terms of this Agreement. Subject to Section 7.11, SPC is the General Partner and Associates is the Limited Partner of the Partnership. The General Partner shall promptly prepare and arrange for the execution. filing, and recording in the appropriate public offices of a Certificate and shall do all other things required to perfect the formation of the Partnership as a limited partnership and to authorize the conduct of its business in all jurisdictions where the Partnership intends to conduct business. Section 2.2. Name. The business of the Partnership shall be conducted under the name "Standard Parking, L.P.," or under such other name as the General Partner may determine; provided, however, that no such name may contain the name of, or any trade name or trademark used by, a Limited Partner (other than SPC) or any Affiliate of a Limited Partner (other than SPC) or any name similar thereto. Section 2.3. Registered Office; Principal Place of Business. The name of the Partnership's registered agent for service of process in the State of Delaware is The Prentice-Hall Corporation System, Inc., and the address of the Partnership's registered office in the State of Delaware is 32 Loockerman Square, Suite L-100, in the City of Dover, County of Kent, Delaware 19901. The Partnership's principal place of business is 55 E. Monroe Street, Suite 3440, Chicago, Illinois 60603. The General Partner may from time to time, upon written notice to all the Partners, change the registered agent or registered office, change the location of the Partnership's principal place of business, or establish additional places of business at such locations as the General Partner from time to time may determine. Section 2.4. Purposes and Powers. The purposes of the Partnership are to invest in, acquire, own, operate, and sell or otherwise dispose of the Garage Management Business, for profit. Subject to the terms and conditions of this Agreement, the Partnership is authorized to enter into, make, and perform all contracts (including, but not limited to, garage leases and management agreements), and other undertakings, and engage in all other activities and transactions, as the General Partner may deem necessary, advisable, or convenient for carrying out the purposes of the Partnership. Section 2.5. Title to Partnership Property. Title to Partnership Property may be held in the name of the Partnership or a nominee of the Partnership (which nominee may include SPC). Section 2.6. Term. This Agreement shall be effective and the Partnership shall commence its existence as a limited partnership upon the Effective Date. Unless sooner -12- 13 dissolved under Section 9.1, the Partnership shall continue in existence until December 31, 2043. ARTICLE III Capital Section 3.1. Capital Contributions of SPC. (a) Pursuant to the Partnership Formation Agreement, as of the Effective Date, SPC shall contribute to the capital of the Partnership its entire right, title, and interest in and to the SPC Transferred Assets (as defined in the Partnership Formation Agreement), and the Partnership shall assume the Assumed SPC Liabilities (as defined in the Partnership Formation Agreement). (b) In addition, pursuant to the Partnership Formation Agreement, as of the Effective Date SPC shall enter into a Nominee Agreement substantially in the form attached as an Exhibit to the Partnership Formation Agreement pursuant to which it shall agree to hold certain contracts described in said Nominee Agreement as nominee in trust for the sole benefit of the Partnership. (c) In consideration for the aforementioned Capital Contributions, SPC shall receive and have (i) as a Limited Partner, 100% of the Class A Interests, (ii) as the General Partner, 100% of the Class B Interests, and (iii) as the General Partner, 100% of the Class D Interests. (d) SPC agrees that it will, at any time and from time to time after the Effective Date, upon the reasonable request of Associates, perform, execute, acknowledge, and deliver all such further acts, deeds, assignments, transfers, conveyances, and assurances as Associates may reasonably deem necessary to confirm the Partnership's title to and interest in, or to enable the Partnership to deal with and dispose of, any of the Partnership Properties described in Section 3.1(a) and (b). (e) SPC shall not be required to make any additional Capital Contributions to the Partnership. (f) The Partners acknowledge and agree that the aggregate Gross Asset Value of the assets contributed by SPC to the Partnership is the sum of (i) the book value of the SPC Transferred Assets (as defined in the Partnership Formation Agreement) as of the Effective Date (taking into account the adjustments required to be made after the Effective Date under Section 1.2(b)(xiii) of the Partnership Formation Agreement), plus (ii) $6,600,000. The General Partner, in its reasonable discretion, shall determine the manner in which such Gross Asset Value is allocated among the properties so contributed. -13- 14 Section 3.2. Capital Contributions of Associates. (a) Pursuant to the Partnership Formation Agreement, on or before the Effective Date Associates shall have made a Capital Contribution to the Partnership in the amount of One Million Dollars ($1,000,000). (b) In consideration for the aforementioned Capital Contribution, Associates shall receive and have, as a Limited Partner, 100% of the Class C Interests. (c) Associates shall not have any personal liability to contribute money to, or in respect of, the liabilities or obligations of the Partnership, nor shall Associates be personally liable for any obligations of the Partnership, except as otherwise provided in this Section 3.2 or in the Act. Associates shall not be required to make any additional Capital Contributions to the Partnership other than as set forth in Section 3.2(a) of this Agreement. Section 3.3. Partnership, Interests. (a) The Partnership Interests shall be divided into Class A, Class B, Class C, and Class D Interests having the rights provided in this Section 3.3. (b) The Class A Interest shall have an initial Class A Capital Account and an initial Class A Unrecovered Capital in the amount of $5,600,000. The Class A Interest shall accrue a Class A Preferred Return on a daily basis in an amount equal to $1,380.82 per day, payable out of distributions by the Partnership in accordance with the provisions of Section 5.1(b) and 5.2(d)(ii) of this Agreement. To the extent that the Class A Preferred Return for any fiscal year is not paid within 90 days after the end of such year, the amount so unpaid shall be added to the Class A Cumulative Unpaid Preference as of the first day of the succeeding fiscal year. The Class A Cumulative Unpaid Preference shall initially be zero and shall be reduced by distributions received by the Class A Partner under Section 5.1(a) and Section 5.2(d)(i) of this Agreement, but shall not be increased by any interest factor. The holder of the Class A Interest shall be entitled to the allocations of income, gain, loss, and deduction provided by Article IV. (c) The Class B Interest shall have an initial Class B Capital Account and an initial Class B Unrecovered Capital in the amount of the sum of (i) $1,000,000, plus (ii) the excess of the book value of the SPC Transferred Assets (as defined in the Partnership Formation Agreement) over the book value of the liabilities included in the Assumed SPC Liabilities (as defined in the Partnership Formation Agreement) as of the Effective Date (taking into account the adjustments required to be made after the Effective Date under Section 1.2(b)(xiii) of the Partnership Formation Agreement); provided, however, that the initial Class B Capital Account and initial Class B Unrecovered Capital shall not exceed $2,250,000. The Class B Interest shall accrue a Class B Preferred Return on a daily basis in an amount equal to $1,808.22 per day, payable out of distributions by the Partnership in ac- -14- 15 cordance with the provisions of Section 5.1(d) and 5.2(e)(i). To the extent that the Class B Preferred Return for any fiscal year is not paid within 90 days after the end of such year, the amount so unpaid shall be added to the Class B Cumulative Unpaid Preference as of the first day of the succeeding fiscal year. The Class B Cumulative Unpaid Preference shall initially be zero and be reduced by distributions received by the Class B Partner under Section 5.1(c) or Section 5.2(e)(i) of this Agreement, but shall not be increased by any interest factor. The holder of the Class B Interest shall be entitled to the allocations of income, gain, loss, and deduction provided by Article IV. (d) The Class C Interest shall have an initial Class C Capital Account and an initial Class C Unrecovered Capital in an amount equal to $1,000,000. The Class C Interest shall accrue a Class C Preferred Return on a daily basis in an amount equal to $427.40 per day, payable out of distributions by the Partnership in accordance with the provisions of Section 5.1(b) and 5.2(d) of this Agreement. To the extent that the Class C Preferred Return for any fiscal year is not paid within 90 days after the end of such year, the amount so unpaid shall be added to the Class C Cumulative Unpaid Preference as of the first day of the succeeding fiscal year. The Class C Cumulative Unpaid Preference shall initially be zero and shall be: (i) increased as of the last day of any fiscal year of the Partnership by an amount equal to the sum of the products of .115911% times the outstanding balance of the Class C Cumulative Unpaid Preference on each day during such fiscal year; and (ii) reduced, as of the date of any distributions received by the Class C Partner under Section 5.1(a) and Section 5.2(d)(i) of this Agreement during the fiscal year, by the amount of such distributions. The holder of the Class C Interest shall be entitled to the distributions described in Article V of this Agreement and the allocations of income, gain, loss, and deduction provided by Article IV. (e) The Class D Interest shall have an initial Class D Capital Account in the amount of zero. The holder of the Class D Interest shall be entitled to the distributions described in Article V and the allocations of income, gain, loss, and deduction provided by Article IV. Section 3.4. Capital Accounts. (a) Separate Capital Accounts shall be maintained with respect to the Class A, Class B, Class C, and Class D Interests of each Partner. As of any date, the Capital Account of a Partner with respect to any class of Interests shall equal: (i) the initial Capital Account with respect to such Interest, as set forth in Section 3.1 or 3.2; increased by (ii) any additional Capital Contributions of such Partner with respect to such Interest after the date of this Agreement; increased by (iii) the cumulative amount of the Net Profits and other items of income of the Partnership allocated to such Partner with respect to such Interest under Article IV as of such date; decreased by (iv) the cumulative amount of Net Losses and other items of loss or deduction allocated to such Partner with respect to such Interest under Article IV as of such date; and further decreased by (v) the amount of any cash and the -15- 16 Gross Asset Value of any Partnership Property distributed to such Partner with respect to such Interest (net of any liability assumed by the Partner or to which the distributed property is subject). If property other than cash is distributed to one or more Partners, the value of such property shall be restated on the books of the Partnership at its Gross Asset Value immediately prior to such distribution and the Capital Account of each Partner shall be restated to reflect such adjustment, determined as if the Partnership had sold such asset for its Gross Asset Value and the resulting gain or loss had been charged or credited to the Partners' Capital Accounts as provided in this Agreement. Following such adjustment to the Partnership's books, the Capital Accounts of the Partners receiving the distributions shall be adjusted to reflect the amount of the distribution. (b) Upon a transfer of any Interest in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor in respect of the Interest acquired. (c) In the event the Gross Asset Value of the Partnership's assets is adjusted as provided in Section 1.42, the Capital Accounts of all Partners shall be adjusted simultaneously to reflect the aggregate net adjustment to the Gross Asset Value of the Partnership's assets, which shall be determined as if the Partnership recognized Net Profit or Net Loss equal to the amount of such aggregate net adjustment, and such Net Profit or Net Loss were allocated among the Partners and debited or credited to their respective Capital Accounts in accordance with this Agreement. Section 3.5. Withdrawals; Interest. Except as expressly provided herein, no Partner may withdraw from the Partnership or receive the return of, or interest on, its Capital Contribution, Capital Account, or other amounts. ARTICLE IV Allocations Section 4.1. Annual Allocations. As of the end of each fiscal year of the Partnership the Net Loss or Net Profit for the year shall be determined and allocated among the Partners in accordance with this Article IV. Section 4.2. Allocation of Net Profit. The Net Profit for any fiscal period shall be allocated as follows: (i) First, 100% of such Net Profit shall be allocated to those Partners, if any, whose Class A, Class B, Class C, or Class D Capital Account has a negative balance, to the extent of (and in proportion to) the amounts required to eliminate such negative Capital Account balances; -16- 17 (ii) Second, the remaining Net Profit, if any, shall be allocated to the Class A Partner, to the extent of the amount required to increase its Class A Capital Account balance to an amount equal to its Class A Unrecovered Capital; (iii) Third, the remaining Net Profit, if any, shall be allocated to the Class B Partner, to the extent of the amount required to increase its Class B Capital Account balance to an amount equal to its Class B Unrecovered Capital; (iv) Fourth, the remaining Net Profit, if any, shall be allocated to the Class C Partner, to the extent of the amount required to increase its Class C Capital Account balance to an amount equal to its Class C Unrecovered Capital; (v) Fifth, the remaining Net Profit, if any, shall be allocated to the Class A Partner and the Class C Partner, to the extent of (and in proportion to) the amount required (i) to increase the Class A Capital Account balance to an amount equal to the Liquidation Preference with respect to the Class A Interest as of such date and (ii) to increase the Class C Capital Account balance to an amount equal to the Liquidation Preference with respect to the Class C Interest as of such date; (vi) Sixth, the remaining Net Profit, if any, shall be allocated to the Class B Partner, to the extent of the amount required to increase its Class B Capital Account balance to an amount equal to the Liquidation Preference with respect to the Class B Interest as of such date; and (vii) Seventh, the remaining Net Profit, if any, shall be allocated 50% to the Class C Partner and 50% to the Class D Partner. Section 4.3. Allocation of Net Loss. The Net Loss for any period shall be allocated among the Partners as follows: (a) First, such Net Loss shall be allocated to the Class C Partner and the Class D Partner, to the extent of (and in proportion to) the amounts required to (i) reduce the Class D Capital Account balance to zero and (ii) reduce the Class C Capital Account to an amount equal to its Class C Liquidation Preference; (b) Second, the remaining Net Loss, if any, shall be allocated 100% to the Class B Partner, until its Class B Capital Account has been reduced to an amount equal to its Class B Unrecovered Capital; (c) Third, the remaining Net Loss, if any, shall be allocated to the Class A Partner and the Class C Partner, to the extent of (and in proportion to) the amount required to (i) reduce the Class A Capital Account to an amount equal to its Class A Unrecovered Capital and (ii) reduce the Class C Capital Account to an amount equal to the Class C Unrecovered Capital; -17- 18 (d) Fourth, the remaining Net Loss, if any, shall be allocated 100% to the Class C Partner, until the Class C Capital Account has been reduced to zero; (e) Fifth, the remaining Net Loss, if any, shall be allocated 100% to the Class B Partner, until the Class B Capital Account has been reduced to zero; (f) Sixth, the remaining Net Loss, if any, shall be allocated 100% to the Class A Partner, until the Class A Capital Account has been reduced to zero; and (g) Seventh, the remaining Net Loss, if any, shall be allocated 50% to the Class C Partner and 50% to the Class D Partner. Section 4.4. Compliance with Section 704(b) of the Code. The allocations set forth in this Article IV are intended to allocate Net Profits and Net Losses to the Partners in compliance with the requirements of section 704(b) of the Code and the Treasury Regulations promulgated thereunder. To this end, solely for purposes of Section 4.2 and 4.3, the Capital Account with respect to each Class of Interest shall be debited by the items described in ss.ss. 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6) of the Regulations promulgated under section 704(b) of the Code. If the General Partner reasonably determines that the allocation of Net Profits or Net Losses pursuant to the provisions of this Article IV does not satisfy the requirements of section 704(b) of the Code or the Treasury Regulations thereunder (including the minimum gain chargeback requirement of ss. 1.704-2 of the Treasury Regulations and the qualified income offset requirement of ss. 1.704-1(b)(2)(d) of the Treasury Regulations), then notwithstanding anything to the contrary contained in this Agreement, Net Profits and Net Losses shall be allocated in such manner as the General Partner shall reasonably determine to be required by section 704(b) of the Code and the Treasury Regulations promulgated thereunder; provided, however, that any such change in the allocation of Net Profits or Net Losses (or any item included therein) may not change the manner in which distributions are required to be made under this Agreement. Section 4.5. Allocations Pursuant to Section 704(c) of the Code. In accordance with section 704(c) of the Code and the Regulations thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Partnership shall, solely for tax purposes, be allocated among the Partners so as to take account of any variation between the adjusted basis of such property to the Partnership for federal income tax purposes and its initial Gross Asset Value. In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to Section 1.42, subsequent allocations of income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under section 704(c) of the Code and the Regulations thereunder. Any elections or other decisions relating to such allocations shall be made by the General Partner in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations -18- 19 pursuant to this Section 4.5 are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Partner's Capital Account or share of Net Profits, Net Losses, other items, or distributions pursuant to any provision of this Agreement. Section 4.6. Changes in Partners' Interests. If during any fiscal period of the Partnership there is a change in any Partner's Interest as a result of the admission of one or more Partners, the withdrawal of a Partner; or a transfer of a Partner's Interest that does not result in the termination of the Partnership for federal income tax purposes, the Net Profit, Net Loss or any other item allocable to the Partners under this Article IV for the period shall be allocated among the Partners so as to reflect their varying interests in the Partnership during the period. In the event that the change in the interests of the Partners results from the admission or withdrawal of a Partner, the allocation of Net Profit, Net Loss, or any other item allocable among the Partners under this Article IV shall be made on the basis of an interim closing of the Partnership's books as of each date on which a Partner is admitted to or withdraws from the Partnership. In the event that the change in the Interests of the Partners results from a transfer of all or any portion of an Interest by a Partner, the Net Profit, Net Loss, or any other items allocable among the Partners under this Article IV shall be determined on a daily, monthly, or other basis, as determined by the General Partner using any permissible method under section 706 of the Code and the Treasury Regulations promulgated thereunder. Section 4.7. Special Allocations Relating to Partnership-Level Taxes. Notwithstanding anything to the contrary herein, in the event that any state, local or other income tax imposed on the Partnership as an entity (such as the Illinois Personal Property Tax Replacement Income Tax) is reduced by reason of the holding of an Interest by any Partner, no part of the expense of the Partnership for such tax shall be allocated to such Partner. ARTICLE V Distributions Section 5.1. Distributions of Distributable Cash. Within 30 days after the end of each fiscal quarter (60 days in the case of the final quarter of any fiscal year), the General Partner shall cause the Partnership to distribute the amount of the Partnership's Distributable Cash for the portion of the fiscal year ending on the last day of such fiscal quarter (to the extent such Distributable Cash has not previously been distributed). Such distributions shall be made in the following order of priority: (a) First, such Distributable Cash, if any, shall be distributed to the Class A Partner and the Class C Partner, to the extent of and in proportion to the amount required to reduce the Class A Cumulative Unpaid Preference and the Class C Cumulative Unpaid Preference to zero; -19- 20 (b) Second, the remaining Distributable Cash, if any, shall be distributed to the Class A Partner and the Class C Partner, until (i) the Class A Partner has received aggregate distributions under this subsection (b) and Section 5.2(d)(ii) for the year equal to the Class A Preferred Return which has accrued for the portion of the fiscal year ending on the last day of the fiscal quarter, and (ii) the Class C Partner has received aggregate distributions under this subsection (b) and Section 5.2(d) (ii) for the year equal to the Class C Preferred Return which has accrued for the portion of the fiscal year ending on the last day of the fiscal quarter, in proportion to the amounts described in (i) and (ii); (c) Third, the remaining Distributable Cash, if any, shall be distributed to the Class B Partner until the Class B Cumulative Unpaid Preference of such Partner has been reduced to zero; and (d) Fourth, the remaining Distributable Cash, if any, shall be distributed to the Class B Partner, until the Class B Partner has received aggregate distributions under this subsection (d) and Section 5.2(e)(ii) for the year equal to the Class B Preferred Return which has accrued for the portion of the fiscal year ending on the last day of the fiscal quarter; (e) [Fifth, the General Partner shall cause any remaining Distributable Cash to be distributed 50% to the Class C Partner and 50% to the Class D Partner; provided, however, that the General Partner may, for purposes of determining the amount to be distributed under this subsection (e) with respect to the first three fiscal quarters of any fiscal year, establish a reasonable reserve for future distributions required under subsections (a) through (d) of this Section 5.1 for such fiscal year, but only if the General Partner reasonably believes that there will not be enough Distributable Cash in future quarters of such fiscal year to make future distributions of the amounts required to be distributed under paragraphs (a) through (d) of this Section 5.1 for the year. Section 5.2. Distributions of Capital Transaction Proceeds. As soon as reasonably practicable after the completion of a Capital Transaction, the General Partner shall cause the Partnership to distribute the Partnership's Capital Transaction Proceeds attributable to such Capital Transaction. Such Capital Transaction Proceeds shall be distributed in the following order of priority: (a) First, such Capital Transaction Proceeds, if any, shall be distributed 100% to the Class A Partner until its Class A Unrecovered Capital has been reduced to zero; -20- 21 (b) Second, the remaining Capital Transaction Proceeds, if any, shall be distributed 100% to the Class B Partner until its Class B Unrecovered Capital has been reduced to zero; (c) Third, the remaining Capital Transaction Proceeds, if any, shall be distributed 100% to the Class C Partner until its Class C Unrecovered Capital has been reduced to zero; (d) Fourth, the remaining Capital Transaction Proceeds, if any, shall be distributed to the Class A Partner and the Class C Partner (i) to the extent of (and in proportion to) the amount required to reduce the Class A Cumulative Unpaid Preference and the Class C Cumulative Unpaid Preference to zero, and (ii) then, to the extent of (and in proportion to) the amount of any unpaid Class A Preferred Return and unpaid Class C Preferred Return which has accrued as of the date of the distribution; (e) Fifth, the remaining Capital Transaction Proceeds, if any, shall be distributed to the Class B Partner (i) in the amount required to reduce the Class B Cumulative Unpaid Preference to zero, and (ii) then in the amount of any unpaid Class B Preferred Return which has accrued as of the date of the distribution; and (f) Sixth, the remaining Capital Transaction Proceeds, if any, shall be distributed 50% to the Class C Partner and 50% to the Class D Partner. Section 5.3. Treatment of Taxes Withheld; Distributions With Respect to Certain State and Local Taxes. All amounts withheld or paid by the Partnership pursuant to the Code or any provision of any state or local tax law with respect to any payment, distribution, or allocation to the Partners shall be treated as amounts distributed to such Partners pursuant to this Article V and shall be debited to their respective Capital Accounts accordingly. Notwithstanding anything to the contrary herein, in the event that any state, local or other income tax imposed on the Partnership as an entity (such as the Illinois Personal Property Tax Replacement Income Tax) for any fiscal year is reduced by reason of the holding of an Interest by any Partner, an amount equal to the reduction attributable to such Partner shall be distributed to such Partner within 60 days after the end of the fiscal year. Section 5.4. Distributions of Certain Proceeds. The parties agree that notwithstanding any provision of this Agreement, proceeds from a loan or refinancing of existing indebtedness or from a sale of a material portion of the Garage Management Business (other than a Capital Transaction) may not be distributed to the Partners under Section 5.2 or any other provision of this Agreement, until the Partners have agreed on appropriate adjustments to distributions, including distributions in respect of the respective Class A, Class B, and Class C Preferred Returns. -21- 22 ARTICLE VI Fiscal Matters Section 6.1. Records and Accounting. (a) The General Partner shall keep a list of the names and addresses of the Limited Partners and complete and accurate records and books of account of the business of the Partnership at the Partnership's principal office. Each Partner or its duly authorized representative shall have the right to inspect the books and records of the Partnership (including, without limitation, management agreements, leases, and other agreements, budgets (in the aggregate and property-by-property), computer data, insurance contracts, employment agreements, union contracts, nonaggregate financial data, and all other information reasonably necessary to keep each Partner reasonably informed of the Partnership's business) upon reasonable notice at all reasonable times during normal business hours and to meet with the President and, with the consent of SPC (which consent will not be unreasonably withheld). key executive officers of SPC regarding the same. Associates hereby agrees that any such inspection or meeting on its behalf will be made by one or more Associates' Representative or by a person or persons selected by any Associates' Representative and reasonably approved by the General Partner. In addition to the foregoing, SPC shall make available to Associates' Representatives such non-aggregate and property-by-property financial information and records regarding garages and other parking facilities which are permitted to be managed, leased, or operated by SPC or its Affiliates under Section 7.3(b) or Section 7.3(c) as Associates shall reasonably request. (b) The General Partner shall maintain the Partnership's books (i) in accordance with the provisions of this Agreement and (ii) on the basis of a calendar year (unless the Partnership is required under the Code to maintain a different fiscal year). Section 6.2. Financial Reports. (a) Within 45 days after the end of each fiscal quarter (other than the last quarter of the fiscal year), the General Partner shall cause to be delivered to each Partner consolidated financial statements containing (i) an unaudited balance sheet as of the end of the quarter and (ii) unaudited statements of earnings and cash flow of the Partnership for the fiscal quarter and for the period commencing at the end of the previous fiscal year and ending with the end of such fiscal quarter, all of which shall be prepared in accordance with GAAP (subject to year-end adjustments and the absence of footnotes). (b) Within 90 days after the close of the Partnership's fiscal year, the General Partner will cause to be delivered to each Partner consolidated and consolidating financial statements containing an unaudited balance sheet as of the end of such fiscal year and unaudited statements of earnings and cash flow for such fiscal year, all of which shall be -22- 23 prepared in accordance with GAAP. If any Limited Partner delivers to the General Partner a written request for audited financial statements with respect to any fiscal year on or before the 60th day before the end of such fiscal year, the General Partner shall, at the Partnership's expense, cause audited statements for such fiscal year to be prepared by the Accountants and delivered to the Limited Partners not later than 90 days after the end of such fiscal year. (c) The General Partner shall cause financial reports required to be delivered hereunder to be in such form as is reasonably acceptable to Associates and SPC. Section 6.3. Tax Returns. (a) The General Partner shall cause federal, state, and local income tax returns for the Partnership to be prepared and timely filed with the appropriate authorities as soon as reasonably practicable after the close of the Partnership's taxable year. The General Partner may make such tax elections in its sole discretion regarding depreciation methods and recovery periods, basis adjustments, and any other federal, state, or local income tax election, including, without limitation, the election referred to in section 754 of the Code; provided, however, that if Associates requests in writing delivered to the Partnership that the Partnership make an election under section 754 of the Code, the General Partner shall cause the Partnership to make said election; and provided further that any Partner who transfers all or any part of its Interest shall bear all expenses arising as a result of the Partnership's election under section 754 of the Code as it relates to the Interest so transferred. Each Partner will, upon request, supply the information necessary to properly give effect to such election. (b) As soon as practicable after the close of each taxable year but in no event later than ten (10) days after the filing of the Partnership's federal income tax return, the General Partner shall cause to be delivered to each Person who was a Partner during the fiscal year such tax information and schedules as shall be necessary for the preparation by such Person of its income tax returns, and such other tax returns and information as may be required in various jurisdictions in which the Partnership is formed or qualified by the nature of the Partnership's business. Section 6.4. Partnership Funds. Pending use in the business of the Partnership or distribution to the Partners, Partnership funds shall be deposited in such bank account or accounts, or invested in such interest-bearing taxable or nontaxable investments as the General Partner in its sole discretion determines. Partnership funds shall not be commingled with funds of any other person. Withdrawals from Partnership accounts or investments shall be made upon such signatures as the General Partner may designate. Section 6.5. Insurance. The Partnership shall maintain insurance on the Partnership Properties and with respect to the Garage Management Business of such types used in such activity as is consistent with insurance customarily maintained by companies similarly situated. Any insurance maintained by the Partnership with respect to Partnership -23- 24 Properties and with respect to the Garage Management Business shall name Associates (and SP Parking Associates, if it exercises its rights under the SP Parking Option Agreement) as an additional insured (and shall identify its status as a limited partner of the Partnership) and shall provide at least 30 days prior notice of change (other than an increase in coverage), cancellation, or non-renewal to Associates (and, if applicable, to SP Parking Associates). ARTICLE VII Rights, Powers, and Duties of the General Partner Section 7.1. Management Authority. (a) Except as provided in Section 7.2, the General Partner shall have (i) the exclusive right and authority to manage and control the business of the Partnership and (ii) the authority and power on behalf and in the name of the Partnership to perform all acts and enter into and perform all contracts and other undertakings which it may deem necessary, advisable, or incidental to the purposes of the Partnership set forth in Section 2.4. All decisions made for or on behalf of the Partnership by the General Partner in accordance with this Agreement shall be binding upon the Partnership. (b) No Person dealing with the General Partner shall be required to determine its authority to take any action on behalf of the Partnership or any facts or circumstances bearing upon the existence of such authority. Any Person dealing with the Partnership or the General Partner may rely upon a certificate signed by the General Partner, thereunto duly authorized, as to (i) the identity of the General Partner or any Limited Partner; (ii) the existence or non-existence of any fact or facts which constitute a condition precedent to acts by the General Partner or in any other manner germane to the affairs of the Partnership or (iii) the identity of Persons who are authorized to execute and deliver any instrument or document of or on behalf of the Partnership. Section 7.2. Certain Limitations on the General Partner's Authority. (a) Notwithstanding anything to the contrary in this Agreement, the General Partner may not take (or cause the Partnership to take) any of the following actions without the written consent of all the Limited Partners: (i) Borrow any money or incur any Indebtedness (other than Trade Accounts Payables or Indebtedness incurred in connection with Permitted Liens) in excess of $250,000 in any fiscal year of the Partnership; (ii) Enter into or permit to exist any arrangements for the leasing by the Partnership, as lessee, of any real or personal property (or any interest therein) un- -24- 25 der any lease which (A) has a term in excess of 10 years or (B) provides for base rent in excess of $500,000 per year; (iii) Enter into any agreement (including any management agreement, but excluding any lease), if such agreement (A) has a term in excess of 10 years or (B) obligates the Partnership to pay more than $400,000 per year to or for the benefit of the other party to such agreement (or any Affiliate thereof); (iv) Sell, transfer, convey, lease, or otherwise dispose of, or grant options, warrants, or other rights with respect to, Partnership Property (other than sales or other dispositions of obsolete assets or assets being replaced in the ordinary course of business), except to the extent that such sale, transfer, conveyance, or lease does not cause the aggregate sale prices of all such transactions during the year to exceed $150,000; (v) Purchase or otherwise acquire (including, without limitation, acquisition by way of Capitalized Lease), or commit to purchase or otherwise acquire, any fixed asset if, after giving effect to such purchase or other acquisition, the aggregate cost of all fixed assets purchased or otherwise acquired by the Partnership exceeds $350,000 per year; make loans in excess of $350,000 in any year to secure Garage Management Business; or make any other loan for Partnership purposes in excess of $50,000 per year; (vi) Issue any Interests or other equity securities in the Partnership after the Effective Date; (vii) Take any action which would make it impossible to carry on the business of the Partnership; (viii) Take any action that would subject any Limited Partner to liability as a general partner in any jurisdiction; (ix) Confess a judgment against the Partnership; (x) Possess Partnership Property, or assign its rights in specific Partnership Property, for other than a purpose of the Partnership; (xi) Take any action in contravention of this Agreement or the Act; (xii) Settle any claim or related group of claims (A) if made against the Partnership, for an amount requiring the Partnership to pay $250,000 or more in excess of insurance proceeds available to the Partnership to satisfy such claim or claims or (B) if made by the Partnership, if such claim or claims are for an amount of $250,000 or more; or -25- 26 (xiii) File a voluntary petition of bankruptcy, make an assignment for the benefit of creditors, admit in writing the inability to pay debts as they mature, or otherwise invoke general laws for the protection for debtors. All dollar figures set forth in this subsection (a) shall be increased as of January 1 of each fiscal year (commencing January 1, 1995) by the percentage by which the CPI reported as of the end of the immediately preceding fiscal year of the Partnership shall have increased from the CPI reported as of the end of the second preceding fiscal year of the Partnership. (b) If the General Partner proposes to cause the Partnership to take any of the actions described in paragraphs (i) through (vi) or (xii) of subsection (a) hereof, it shall deliver written notice of such proposed action (with reasonable details of the terms and conditions) to the Limited Partners not later than 30 days prior to taking such action; provided, however, that if circumstances not within the control of the General Partner prevents the General Partner from providing 30 days' advance notice, then the General Partner shall provide such advance written notice as is reasonably practicable under the circumstances (but not less than 24 hours). If any Limited Partner fails to object in writing to such action within 30 days after delivery of said notice by the General Partner (or prior to the date on which such action is proposed to be taken if fewer than 30 days' notice is provided in accordance with the previous sentence), such Limited Partner shall be conclusively deemed to have granted its consent to such proposed action. (c) The Partners hereby expressly authorize the Partnership to enter into a management agreement with Standard Auto Park, Inc. substantially in the form prescribed by the Partnership Formation Agreement which may not be amended without the consent of Associates. Section 7.3. Certain Rights and Obligations of SPC and Affiliates. (a) Except as expressly permitted by this Agreement or approved by all the Limited Partners, during the term of this Agreement, SPC shall not, except through the Partnership, (i) own, lease, manage, or operate, or permit any of its Affiliates (including Myron C. Warshauer) to own, lease, manage, or operate, any parking garage or other parking facility, (ii) invest in, own, or otherwise participate in, or permit any of its Affiliates (including Myron C. Warshauer) to invest in, own, or otherwise participate in, the development or exploitation of any technology used or useful in the Garage Management Business (including without limitation any technology in which AVID has an interest), or (iii) otherwise engage in, invest in, or consult with respect to, or permit any of its Affiliates (including Myron C. Warshauer) to engage in, invest in, or consult with respect to, the Garage Management Business. (b) Notwithstanding the provisions of subsection (a), Myron C. Warshauer, SPC, Standard Parking Corporation MW, or any other Affiliate of SPC owned 100% -26- 27 by Myron C. Warshauer may lease, operate, or manage (and receive all income, profits, management fees, and other compensation of every kind and description from such lease, operation, or management of) the Excluded Garages (as defined below), but only so long as such garages or parking facilities constitute Excluded Garages. Notwithstanding the foregoing, SPC may not lease, operate, or manage (or receive any income, profits, management fees, or other compensation of any kind or description from such lease, operation, or management of) any of the Excluded Garages described in clause (y) below. If at any time Associates delivers written notice to SPC to the effect that a garage or parking facility that previously was an Excluded Garage is no longer defined as such, SPC shall use reasonable best efforts to arrange for the Partnership to acquire the right to manage, operate, or lease (and receive all income, profits, management fees, and other compensation of every kind and description from such lease, operation, or management of) such garage or parking facility as soon as practicable thereafter. For purposes of this Agreement, the term "Excluded Garage" means any garage or other parking facility with respect to which neither the Partnership nor Standard Auto Park, Inc. could own, operate, manage, or lease without causing Associates or any of its Affiliates (x) to be in breach of any contracts to which they are parties or of any fiduciary or statutory obligations or (y) to be a party in interest (within the meaning of ERISA) to such arrangement which would be inconsistent with the fiduciary or statutory obligations of such Affiliates. As of the date of this Agreement, the garages or other parking facilities that currently constitute Excluded Garages are listed on Exhibit A. (c) Subject to Section 7.5 and notwithstanding the provisions of subsection (a): (i) SPC or any of its Affiliates may continue to own, directly or indirectly through a partnership or other entity, an interest in all of the parking facilities listed in Exhibit B; (ii) The Partnership, rather than SPC, shall manage the parking facilities listed in paragraphs A and B of Exhibit B; (iii) The management of the parking facilities listed in paragraph C of Exhibit B shall be provided by Standard/Tremont (in the case of the Theatre District Self Park), and by Standard/Wabash (in the case of the Adams Wabash Self Park); (iv) All compensation (whether in the form of management fees or otherwise) payable by reason of the management of the parking facilities listed in paragraph A of Exhibit B shall be paid to the Partnership; (v) The Partnership shall not receive any compensation of any kind by reason of the management of the parking facility listed in paragraph B of Exhibit B -27- 28 so long as Myron C. Warshauer or any of his Affiliates owns an interest in such facility; and (vi) All compensation (whether in the form of management fees or otherwise) payable by reason of the management of the parking facilities listed in paragraph C of Exhibit B shall be paid solely to Standard/Tremont (in the case of the Theatre District Self Park) or Standard/Wabash (in the case of the Adams Wabash Self Park), it being acknowledged that the Partnership has no right to participate in such compensation to any extent whatsoever. (d) Nothing herein shall be construed as prohibiting SPC or any Affiliate thereof from: (i) making any Investments or conducting any business (other than a business or Investment which SPC or such Affiliate is prohibited from conducting under subsection (a) hereof); (ii) making any Investment in publicly-trade debt or equity securities of any issuer which is directly or indirectly (through its Affiliates) engaged in the Garage Management Business, so long as the aggregate amount of such securities held by SPC and its Affiliates does not exceed 5% of the outstanding securities of the same class of securities of the issuer and neither SPC nor any of its Affiliates is otherwise in control of such issuer; or (iii) transacting business with anyone transacting business with the Partnership; provided, however, that SPC shall not make or permit to exist any Investment in any Person, except for (x) stocks, bonds, and other Investments that put at risk not more than the principal amount of such Investment and (y) other Investments outstanding on the Effective Date and listed on Exhibit D. Notwithstanding anything else which is or might be implied to the contrary, there shall be no such limitation on cash or Investments that are replacements for SPC's interest in Sidcor (as defined in the Partnership Formation Agreement), provided that, in connection herewith, SPC may not (A) become a general partner or joint venturer (other than with respect to Sidcor), (B) make any Investment that puts at risk more than the principal amount of such Investment, nor (C) make any Investment which would reasonably be expected to have a Material Adverse Effect. If the activities or Investments conducted or held by SPC (other than activities conducted by SPC on behalf of the Partnership in its capacity as General Partner) result in claims against the Partnership or Associates or its Affiliates, SPC shall indemnify and hold harmless each such Person for the amount of damage, loss, or expense suffered by such Person as a result of such claims; and provided further that, to the extent that assets of SPC (other than its Interest in the Partnership) are insufficient to pay the indemnification required by this subsection (d), such indemnification shall be payable solely out of distributions received by SPC from the Partnership or proceeds received by SPC from any disposition of any portion of its Class B Interest or Class D Interest; provided, however, that neither Associates nor any of its Affiliates may initiate any action for purposes of seeking the disposition of all or any portion of SPC's Interests in satisfaction of any claim for indemnification hereunder. The right of Associates or any Affiliate thereof to receive indemnification hereunder shall be such Person's sole recourse, and in lieu of any and all other rights or remedies, for any damage, loss, or expense suffered by such Person as a result of activities permitted by this Agreement to be conducted by SPC outside of the Partnership. -28- 29 Section 7.4. Employees; Compensation; Life Insurance. (a) The General Partner is authorized to offer employment to the employees of SPC who are involved in the Garage Management Business. The wages, salaries, and benefits of such employees shall be determined by the General Partner. No employee, other than as listed on Exhibit C, shall have any participation in the revenues or profits of the Partnership, and the Partnership has not entered into, and may not enter into, any oral or written agreement with any employee which confers on such employee any right to participate in the capital or appreciation in the value of the Partnership. (b) The Partnership is hereby authorized to enter into oral or written employment agreements with Myron C. Warshauer (the "President") and Sidney Warshauer (the "Chairman"), pursuant to which such individuals shall have such duties as the General Partner may determine. Such employment agreements shall provide that (i) Myron C. Warshauer shall devote his full business time and attention to the business and affairs of the Partnership until at least age 65 (provided that if he retires prior to age 65, the sole remedies shall be that Associates may become General Partner under Section 7.11 of this Agreement, and the employment agreements of the President and Chairman shall be terminated, as hereinafter provided); and (ii) Sidney Warshauer shall devote such time and attention to Partnership matters as the General Partner determines in its sole and absolute discretion to be necessary to the management of the Partnership's business and affairs. Notwithstanding the foregoing, nothing herein shall be construed to prevent Myron or Sidney Warshauer from devoting time and attention to charitable and civic activities, personal investment activities, or the management of garages and other parking facilities which Myron or Sidney Warshauer or their respective Affiliates are permitted to manage or lease under the terms of this Agreement. The Partnership shall pay the Chairman and President salaries in the aggregate amount of $575,000 per annum, which shall be increased as of January 1 of each year (commencing January 1, 1995) by the percentage by which the CPI reported as of the end of the immediately preceding fiscal year of the Partnership shall have increased from the CPI reported as of the end of the second preceding fiscal year of the Partnership. Such salaries shall be allocated between such Chairman and President as SPC shall determine in its sole and absolute discretion. In addition, the Partnership shall provide such benefits and perquisites to such executive officials as were provided to the executive officials by SPC prior to the Effective Date and such other benefits and perquisites as are reasonable and appropriate under the circumstances. Notwithstanding anything to the contrary in this Agreement, the obligation of the Partnership to pay the above-mentioned salaries and provide for the above-mentioned benefits and perquisites shall: (x) survive the death of either of the Chairman or the President, in which case the salary of the deceased Chairman or President, as the case may be, shall be payable to the survivor; (y) survive the Disability of either or both of the Chairman or President, in which case the salaries shall continue to be paid as provided hereunder; and (z) terminate upon (I) the death of both the Chairman and the President, (II) the retirement of the President prior to age 65, or (III) the death of the Chairman and the Disability or retirement of the President. If at any time Associates becomes the General -29- 30 Partner of the Partnership pursuant to Section 7.11 of this Agreement, it shall neither (A) terminate the employment agreement of the President or Chairman nor (B) require Sidney Warshauer to devote more time and attention to the Partnership's business and affairs in any fiscal year than was required by SPC in any prior fiscal year. (c) Except as otherwise provided in this Agreement, without the advance written consent of all the Limited Partners, no Partner or any Affiliate thereof may receive, directly or indirectly, any remuneration, compensation, or benefit from the Partnership for the performance of services to the Partnership or otherwise; provided, however, that nothing in this Agreement shall be construed to prevent the Partnership from hiring Myron C. Warshauer's descendants as employees on an arms-length basis under terms no less favorable to the Partnership than would be available to a disinterested third party under similar circumstances; and provided further, that if at any time Associates becomes the General Partner of the Partnership pursuant to Section 7.11 of this Agreement, nothing in this Agreement shall be construed to prevent the Partnership from entering into transactions with Affiliates of JMB Realty Corporation on an arms-length basis under terms no less favorable to the Partnership than would be available to a disinterested third party under similar circumstances. (d) The Partnership shall, at its expense, procure and maintain term insurance policies on the life of Myron C. Warshauer in the following amounts and on the following terms: (i) A $2 million policy, which shall be acquired and owned by the Myron C. Warshauer Irrevocable Trust dated November 15, 1993, and held under a split-dollar arrangement, pursuant to which the Partnership shall be entitled to a return (out of any proceeds) of the lesser of the amount of premiums which it pays and the cash value of the policy. The Partnership shall enter into an irrevocable death benefit agreement with Myron C. Warshauer (under terms substantially the same as the death benefit agreement now in existence between Myron C. Warshauer and SPC), pursuant to which the Partnership shall pay its share of any death benefit under said life insurance policy (grossed up by the amount of any Taxes payable by the Trust as a result of the receipt of said payment) to the aforementioned Trust; (ii) Various policies aggregating $2 million, which shall be owned by the Partnership and which shall name as beneficiaries certain executives who are parties to agreements to acquire portions of the Interests of SPC as permitted under Section 7.10. (iii) A $2 million policy, which shall be owned by the Partnership and which shall name Associates as beneficiary. In addition, the Partnership shall, at its expense, maintain the insurance policies which are transferred to the Partnership by SPC pursuant to the Partnership Formation Agreement. -30- 31 Section 7.5. Expenses. The Partnership shall be responsible for paying all of its own expenses, including, but not limited to, wages, salaries, and benefits of its employees (other than the Chairman or President, except to the extent permitted by Section 7.4(b)), rent for office space, onsite managers, utilities, telephone, supplies, legal and accounting expenses, and travel and entertainment. The Partnership (i) shall not pay or bear any of the property level expenses (including rent for such properties) incurred in connection with the garages and other parking facilities permitted to be owned, leased, managed, or operated by SPC or its Affiliates under Section 7.3(b) or Section 7.3(c) of this Agreement, (ii) shall permit SPC, Standard Parking Corporation MW, or any of their Affiliates to use Partnership personnel or facilities in connection with the management, lease, or operation of garage or parking facilities which SPC, Standard Parking Corporation MW, or any of their Affiliates is permitted to manage, lease, or operate under Section 7.3(b), without reimbursement for overhead expenses attributable thereto, and (iii) shall be entitled to reimbursement for overhead expenses which are attributable to garage or parking facilities entitled to be owned, managed, leased, or operated by SPC or its Affiliates under Section 7.3(c) in accordance with arrangements in effect prior to the Effective Date, as evidenced by the financial statements of SPC for the period ended December 31,1992. Section 7.6. Tax Matters Partner. (a) The General Partner is hereby appointed the "Tax Matters Partner" of the Partnership for all purposes pursuant to sections 6221-6231 of the Code. As Tax Matters Partner, the General Partner will (i) furnish to each Partner or Assignee affected by an audit of the Partnership income tax returns a copy of each notice or other communication received from the Internal Revenue Service or applicable state authority, (ii) keep each such Partner and Assignee informed of any administrative or judicial proceeding, as required by section 6623(g) of the Code, (iii) allow each such Partner and Assignee an opportunity to participate in all such administrative and judicial proceedings, and (iv) take any action necessary to cause each Partner to be entitled to all notices specified in section 6223(a) of the Code; (b) The Tax Matters Partner has the authority to do all or any of the following: (i) File a petition as contemplated in section 6226(a) or 6228 of the Code; (ii) Intervene in any action as contemplated in section 6226(b) of the Code; (iii) File any request contemplated in section 6227(b) of the Code; and -31- 32 (iv) With the consent of all the Limited Partners, enter into an agreement extending the period of limitations as contemplated in section 6229(b)(1)(B) of the Code. The Tax Matters Partner may not litigate any federal income tax controversy in a forum other than the U.S. Tax Court without obtaining the consent of all the Limited Partners. (c) The Partnership is not obligated to pay any fees or other compensation to the Tax Matters Partner in its capacity as such. However, the Partnership will reimburse the Tax Matters Partner for any and all out-of-pocket costs and expenses (including attorneys' and other professional fees) reasonably incurred by it in its capacity as Tax Matters Partner. Each Partner who elects to participate in Partnership administrative tax proceedings will be responsible for its own expenses incurred in connection with such participation. In addition, the cost of any adjustments to a Partner and the cost of any resulting audits or adjustments of a Partner's tax return will be borne solely by the affected Partner. The Tax Matters Partner shall be entitled to rely on the advice of Legal Counsel as to the nature and scope of its responsibilities and authority as Tax Matters Partner, and any act or omission of the Tax Matters Partner pursuant to such advice shall in no event subject the Tax Matters Partner to liability to the Partnership or any Limited Partner. Section 7.7. Limitation on Liability of General Partner For Certain Acts or Omissions. Neither the General Partner, any Affiliate of the General Partner, nor any officer, director, employee, or agent of the General Partner shall be subject to any liability for damages or losses to the Partnership or to any Partner on account of the act or omission of the General Partner, the Affiliate, officer, director, employee or agent thereof, so long as such act or omission was not done fraudulently or in bad faith or as a result of willful and wanton misconduct or gross negligence. Section 7.8. Indemnification. To the maximum extent permitted by law, the Partnership will indemnify any Person, including the General Partner or any officer, director, agent, employee, Affiliate, or stockholder thereof, who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (including any action by or in the right of the Partnership) by reason of any acts, omissions, or alleged acts or omissions by such Person on behalf of the Partnership, against expenses for which such Person has not otherwise been reimbursed (including attorneys' fees, judgments, fines, and amounts paid in settlement) actually and reasonably incurred in connection with such action, suit, or proceeding, so long as such act or omission was not done fraudulently or in bad faith or as a result of willful and wanton misconduct or gross negligence or, with respect to any criminal action or proceeding, such Person had no reasonable cause to believe his conduct was unlawful. Expenses, including reasonable attorneys' fees, incurred by such Person asserting a right to indemnification hereunder in defending any such civil, criminal, administrative or investigative action, suit or proceeding may, in the reasonable discretion of the General Partner, be -32- 33 paid by the Partnership in advance of the final disposition of such action, suit or proceeding upon receipt of a written undertaking by or on behalf of such Person to repay such amount to the extent it shall ultimately be determined that such Person is not entitled to indemnification under this Section 7.8. The General Partner and any Affiliate, officer, director, stockholder, employee, or agent thereof shall be entitled to rely on the advice of counsel, public accountants, or other independent experts and any act or omission of the General Partner and any Affiliate, officer, director, stockholder, employee, or agent thereof pursuant to such advice shall in no event subject such Person to liability to the Partnership or any Limited Partner. The satisfaction of any indemnification shall be from and limited to Partnership assets, and no Partner shall have any personal liability on account thereof. Section 7.9. Event of Withdrawal of the General Partner. (a) Except as provided in Section 7.11, if, upon an Event of Withdrawal with respect to a General Partner, such General Partner is the sole General Partner of the Partnership, then the Partnership shall dissolve immediately, unless all the Limited Partners elect in writing within 90 days after such Event of Withdrawal to admit a successor General Partner, whose admission shall be effective as of the date the prior General Partner ceased being a General Partner of the Partnership. The Event of Withdrawal of the General Partner shall not affect any rights or obligations of such General Partner which matured prior to such Event of Withdrawal or the value, if any, of its Interest at the time of such event. (b) Upon an Event of Withdrawal of a General Partner and the continuation of the business of the Partnership by a successor General Partner pursuant to subsection (a), the successor General Partner shall have the authority to make such amendments to this Agreement or the Certificate, and shall cause to be executed and filed for recordation such amendments or other documents or instruments, as in any such case are necessary or appropriate to reflect the Event of Withdrawal with respect to the former General Partner and the appointment of the successor General Partner. Consent to such amendments shall be deemed to have been given by each Limited Partner by execution of this Agreement. Section 7.10. Restrictions on Withdrawal of General Partner or Transfer of General Partner's Interest. Except in the case of (i) an assignment of the Class A Interest pursuant to the SP Parking Option Agreement, (ii) an assignment of the Class C Interest by Associates pursuant to Section 8.6 at such time as Associates is the General Partner pursuant to Section 7.11, (iii) an assignment of any portion of SPC's Class B Interest or Class D Interest pursuant to an agreement between SPC and an employee, or (iv) an assignment of any portion of SPC's Class B Interest or Class D Interest to any descendant or other relative of Myron C. Warshauer, the General Partner may not voluntarily withdraw from the Partnership or sell, transfer, assign, or grant a security or other interest in, all or any part of its Interest (including its Interest as Limited Partner), without the consent of all the Limited Partners. The parties hereto agree that in the event that any Person acquires any portion of SPC's Interest under the circumstances described in clause (iii) or (iv) of this Section -33- 34 7.10, such Person shall be admitted to the Partnership as a Limited Partner without the consent of any other Partner; provided that any Person who acquires any portion of SPC's Interest under the circumstances described in clause (iii) or (iv) shall not be entitled to vote on or consent to any matter requiring the vote or consent of Limited Partners under any provision of this Agreement (including without limitation Section 7.2, but excluding Section 10.2 to the extent any amendment referred to therein would (x) affect such Person's right to receive distributions or share in Net Profits or Net Losses under this Agreement or (b) subject such Person to personal liability for the debts, obligations, and liabilities of the Partnership), and any such provision of this Agreement shall be applied by disregarding the Interests acquired by such Persons under clause (iii) or (iv). Section 7.11. Death, Disability or Termination of Employment of Myron C. Warshauer; Removal of the General Partner. (a) In the event of (w) the death or Disability of Myron C. Warshauer, (x) the retirement by Myron C. Warshauer from full business time employment with the Partnership within the meaning of Section 7.4(b), (y) a Change of Control (within the meaning of subsection (d)) with respect to SPC or (z) the commencement of voluntary dissolution proceedings by SPC, Associates may elect, within 60 days after the occurrence of such event, to invoke the provisions of this Section 7.11 by delivery of written notice to SPC to such effect. In the event of the removal of SPC pursuant to Section 7.12, the provisions of this Section 7.11 shall automatically apply. In any case where this Section 7.11 applies: (i) Effective as of the date on which such notice is delivered to SPC (or the date on which the General Partner is removed), (A) SPC shall be deemed to withdraw from the Partnership as General Partner and be admitted to the Partnership as Limited Partner with respect to its Class B Interest and Class D Interest, (B) Associates shall be deemed to withdraw from the Partnership as Limited Partner and be admitted to the Partnership as General Partner with respect to its Class C Interest, (C) SPC's authority to manage the Partnership's business and affairs shall terminate, (D) Associates shall continue the business of the Partnership as the substitute General Partner and shall have all the rights and obligations to manage the Partnership as are provided under this Agreement, and (E) all references in this Agreement to "General Partner" shall be deemed to refer to Associates, rather than SPC. (ii) Notwithstanding the election under this subsection (a), all rights of SPC, Associates, and SP Parking Associates (if it is admitted to the Partnership as a Limited Partner), as holders of the Class A, Class B, Class C, or Class D Interests, to distributions under Article V and allocations under Article IV shall remain in full force and effect. (b) Upon the admission of Associates to the Partnership as a General Partner pursuant to this Section 7.11, it shall make and file such amendments to the Certificate, -34- 35 and shall cause to be executed and filed for recordation such other amendments, documents, or instruments as are necessary or appropriate, to reflect the withdrawal of SPC as General Partner and the admission of Associates as substitute General Partner. Consent to such amendments shall be deemed to have been given by each Limited Partner by execution of this Agreement. (c) If, during any period in which Associates is the General Partner, (i) the Partnership receives a bona fide written offer (the "Purchase Offer") to purchase all or substantially all of the Partnership's business for a purchase price payable in cash at closing equal to or greater than ten (10) times the average of the Partnership's Distributable Cash for each of the two calendar years immediately preceding the calendar year in which such Purchase Offer is received, SPC (or any Person designated by SPC in writing) shall have the right, exercisable in writing (the "SPC Purchase Notice") on or prior to the 45th day after the receipt by SPC of written notice from Associates containing a copy of the Purchase Offer, to purchase the entire Interest of Associates and of SP Parking Associates, if it is then a Partner, for a purchase price equal to the Fair Market Value of such Interest. (Each of Associates and SP Parking Associates is hereinafter referred to as a "Selling Partner.") For purposes of this subsection (c), the Fair Market Value of the Interest of a Selling Partner shall be the amount that would be distributable to such Selling Partner under Section 5.2 of this Agreement, if the Partnership had (A) accepted the aforementioned written offer and sold all its assets and business for the purchase price set forth therein, and (B) distributed the proceeds of such sale, after payment of all expenses of the sale and Partnership liabilities, in accordance with this Agreement. If SPC exercises its right to purchase (or to cause its designee to purchase) the Interests of the Selling Partners, the closing of each such purchase shall occur at such time, date, and place as SPC and the Selling Partners shall agree, but in any event not later than 60 days after the delivery of the SPC Purchase Notice by SPC to the Selling Partners. At the closing, SPC (or its designee) shall pay the purchase price in immediately available funds, and each Selling Partner shall deliver to SPC (or its designee) an instrument or instruments in form and substance reasonably satisfactory to SPC (or such designee), assigning the entire Interest of such Selling Partner to SPC (or such designee), free and clear of all liens and encumbrances. If SPC does not exercise its right to acquire the Interest of Associates and SP Parking Associates under this subsection (c) within the 45-day period prescribed above, Associates may proceed to accept the Purchase Offer on the terms set forth therein without the consent of SPC; provided, however, that if the terms of the Purchase Offer are thereafter amended or modified in any material manner, or if the transaction contemplated by the Purchase Offer is not closed in accordance with the terms specified therein within 180 days after the expiration of the 45-day period for delivery of the SPC Purchase Notice, the Purchase Offer shall be deemed to be a new Purchase Offer and the provisions of this subsection (c) shall thereupon apply as if such new Purchase Offer were received by Associates upon the expiration of said 180-day period or the date on which the original Purchase Offer is so amended and modified. -35- 36 (d) For purposes of this Section 7.11, a Change of Control shall be deemed to occur with respect to SPC if (and only if): (a) any Person(s) other than Myron C. Warshauer and his Affiliates and relatives (the "Current Stockholder Group") acquire the right, by virtue of their ownership of voting securities of SPC or otherwise, to elect or designate a majority of the members of the Board of Directors of SPC; or (b) the stockholders of SPC approve an agreement to merge or consolidate with another corporation, unless following the consummation of such merger or consolidation the Current Stockholder Group, singly or jointly, shall continue to have the right, by virtue of its ownership of voting securities or otherwise, to elect or designate a majority of the members of the Board of Directors of the surviving corporation. Section 7.12. Removal of General Partner. SPC may be removed as the General Partner by the vote of all the Limited Partners, if the Partnership fails to earn a profit (determined in accordance with GAAP) for any two consecutive calendar years ("Loss Years"). Any action of the Limited Partners to remove the General Partner pursuant to this Section 7.12 shall not be effective unless: (i) Written notice of the meeting at which a vote to remove the General Partner will be taken is delivered to all the Partners (including the General Partner) not later than 30 days prior to the commencement of the aforementioned meeting and 120 days after the close of the second Loss Year; (ii) the General Partner is given an opportunity at the meeting of the Partners to defend its performance as General Partner; and (iii) at the meeting all the Limited Partners vote to remove the General Partner. In the event the Limited Partners vote to remove the General Partner in accordance with this Section 7.12, such removal shall be effective as of the date on which such vote is taken, and the provisions of Section 7.11 shall govern with respect to admission of Associates as substitute General Partner and the continuation of the Partnership's business. ARTICLE VIII Limited Partners Section 8.1. Rights And Obligations Of Limited Partners And Assignees. (a) A Limited Partner, as such, shall not be personally liable for any of the debts, liabilities, contracts, or any other obligations of the Partnership. Notwithstanding the foregoing, in accordance with Section 17-608 of the Act, but not otherwise, a Limited Partner may under certain circumstances be required to return to the Partnership, for the benefit of Partnership creditors, amounts previously distributed to such Limited Partner as a return of capital. (b) The General Partner shall not have any personal liability for the repayment of the Capital Contribution of any Limited Partner. -36- 37 (c) No Limited Partner may participate in the control of the business of the Partnership, transact any business for the Partnership, or have any authority to sign for or bind the Partnership. The foregoing does not limit the right of any Limited Partner to consent to major business decisions as set forth in this Agreement. Section 8.2. Assignments By Limited Partners And Assignees. (a) Subject to any restrictions on transferability created by operation of law or contained elsewhere in this Agreement, a Limited Partner may not assign (which term shall include, for purposes of this Article VIII, a sale, gift, pledge, hypothecation, or other disposition or transfer), all or part of its Interest unless all the following conditions are satisfied: (i) The assignee consents in writing in form reasonably satisfactory to the General Partner to be bound by the terms of this Agreement: (ii) Such assignment is made in form reasonably satisfactory to the General Partner; (iii) Except in the case of an assignment described in clause (i), (ii), (iii), or (iv) of Section 7.10 (with respect to which the consent of the General Partner shall not be required), the General Partner has consented in writing to such assignment, which consent may be withheld in the sole and absolute discretion of the General Partner; (iv) The assignor agrees to pay all the costs reasonably incurred by the Partnership in connection with such assignment; and (v) The assignor, Assignee, and (if deemed necessary by the General Partner) all other Partners have executed all such certificates and other documents and performed all such acts as the General Partner reasonably deems necessary or appropriate to effect a valid transfer and to preserve the rights, status, and existence of the Partnership. (b) Notwithstanding subsection (a), no assignment of the Interest of a Limited Partner will be permitted if such assignment would (i) jeopardize the status of the Partnership as a partnership for federal income tax purposes, as reasonably determined by the General Partner following consultation with Legal Counsel, (ii) cause a termination of the Partnership for purposes of the then-applicable provisions of the Code, as reasonably determined by the General Partner following consultation with Legal Counsel, (iii) violate or cause the Partnership to violate any applicable law or governmental rule or regulation, including without limitation any applicable federal or state securities law, or (iv) cause the -37- 38 Partnership to be deemed to be an "Investment Company" for purposes of the Investment Company Act of 1940, as amended. (c) If Limited Partner assigns its entire interest in the Partnership, such Partner shall, upon the effective date of such assignment, cease to be a Limited Partner for all purposes but shall not be relieved of any obligations it may have had under this Agreement before the date of such assignment. Unless otherwise consented to by the General Partner, the effective date of an assignment under this Section 8.2 shall be the first day of the first full calendar month following receipt by the General Partner of written notice of assignment and fulfillment of all conditions precedent to such assignment provided for in this Agreement. (d) Unless and until an Assignee of an Interest in the Partnership becomes a Substitute Limited Partner, such Assignee shall not be entitled to exercise any of the rights provided to a limited partner under the law of the State of Delaware or any other jurisdiction purporting by statute to grant express rights to a limited partner of a limited partnership, except that such Assignee shall be entitled to allocations under Article IV attributable to any Interest in the Partnership acquired by reason of an assignment in accordance with Section 4.6, and any distributions made with respect thereto under Article V arising after the effective date of the assignment. An Assignee shall have the right to become a Substitute Limited Partner only upon the satisfaction of the following conditions: (i) If deemed necessary by the General Partner an amended Certificate has been duly executed and filed in the appropriate public offices; (ii) The conditions of Section 8.2(a) have been satisfied; (iii) Except in the case of an assignment described in clause (i) or (ii) of Section 7.10, the General Partner has consented in writing to such substitution, which consent may be withheld in the sole and absolute discretion of the General Partner; and (iv) The assignor and Assignee execute and acknowledge such other instruments, in form and substance satisfactory to the General Partner, as the General Partner may deem necessary or desirable to effect such substitution. (e) By executing this Agreement, each Limited Partner shall be deemed to have consented to any assignment consented to by the General Partner and to the admission of an assignee as a Substitute Limited Partner permitted by the General Partner. Each Limited Partner agrees, upon request of the General Partner, to execute such certificates or other documents and perform such acts as the General Partner deems appropriate to preserve the status of the Partnership as a limited partnership after the completion of any assignment of -38- 39 an Interest in the Partnership pursuant to the terms of this Agreement under the laws of the jurisdiction in which the Partnership is doing business. (f) Any purported assignment of an Interest of a Limited Partner in violation of the provisions of this Agreement is void. Section 8.3. Death, Bankruptcy, or Incapacity of Limited Partner. In the event an individual Limited Partner or Assignee dies or is adjudged incompetent, or in the event of the Bankruptcy of a Limited Partner or Assignee, the Partnership shall not dissolve, and the duly appointed and qualified legal representative of such Limited Partner or Assignee shall succeed to the interest of such Limited Partner or Assignee upon furnishing to the General Partner satisfactory evidence of such representative's appointment and authority. Such legal representative (i) shall have only the status of an Assignee (except that the Executor or Administrator of the estate of a deceased Limited Partner shall have all the rights of a Limited Partner for the purpose of settling his estate or administering his property), and (ii) may assign the interest of such Limited Partner or Assignee only as permitted by Section 8.2 and the Act. The provisions of clause (ii) shall apply to any assignment or distribution by any legal representative to the beneficiaries under the will of, or the heirs at law of, any deceased Limited Partner or Assignee. Section 8.4. Certain Rights and Obligations of Associates. (a) Excluding garages presently owned or managed by Affiliates of Associates and renewals or modifications of such arrangements, Associates shall use reasonable good faith efforts to present to the Partnership any opportunity to manage or lease any garage or other parking facility or otherwise engage in the Garage Management Business (except with respect to Excluded Garages, as defined in Section 7.3(b)) of which Associates, SP Managers, L.P. (a Delaware limited partnership and the managing partner of Associates), any partner of SP Managers, L.P., or any Affiliate of any partner of SP Managers, L.P. becomes aware. Notwithstanding the foregoing, Associates shall have no duty to present any opportunity to manage or lease any Excluded Garage to SPC or to assist SPC in capturing any such opportunity with respect to any Excluded Garage. (b) During the term of this Agreement and for a period of three years thereafter, Associates agrees that neither it nor any of its Affiliates will engage in the Garage Management Business in North America or Europe; provided. however, that, subject to subsection (a), nothing herein shall preclude Associates or its Affiliates from: (i) owning, directly or indirectly through a partnership or other entity, garages or other parking facilities; (ii) engaging in the Garage Management Business with respect to garages or other parking facilities owned by Affiliates of Associates; (iii) engaging in the Garage Management Business with respect to any garage or other parking facility owned by any Person for whom Associates or any of its Affiliates serves in the capacity of an investment advisor; (iv) engaging -39- 40 in any business other than the Garage Management Business; or (v) transacting business with anyone transacting business with the Partnership. (c) Associates hereby: (i) represents that under the partnership agreement of Associates and the partnership agreement or other governing document of SP Managers, L.P., neither a partnership interest in Associates, nor any partnership interest in SP Managers, L.P., may be transferred without the consent of Standard Managers, Inc. (except for transfers to any Affiliate, relative, or trust for the benefit of a relative of the holder of such interest); (ii) agrees that neither the partnership agreement of Associates nor the partnership agreement of SP Managers, L.P. will be amended or modified to permit a partnership interest in Associates or in SP Managers, L.P. to be transferred without the consent of Standard Managers, Inc. (except for transfers to any Affiliate, relative, or trust for the benefit of a relative of the holder of such interest); and (iii) agrees that throughout the term of this Agreement, Standard Managers, Inc. will be under the control of one or more Associates' Representatives (or their respective Affiliates or descendants). Section 8.5. Associates' Representative. The parties hereto agree that any and all consents and other documents required to be executed by Associates (or by SP Parking Associates, if and when it is admitted to the Partnership as a Limited Partner), and any and all notices and disclosures required to be made to Associates (or to SP Parking Associates), shall be signed by, or made or delivered to, an Associates' Representative. Judd D. Malkin, Neil Bluhm, David Richter, Steve Malkin, Barry Malkin, and Andrew Bluhm are each hereby designated as an Associates' Representative; provided, however, that an Associates' Representative may at any time designate any other Person, with the consent of the General Partner (which consent cannot be unreasonably withheld), as substitute Associates' Representative by written notice to the General Partner. Section 8.6. Certain Provisions Regarding the C Interest. SPC shall have the right, at its option, to purchase (or to cause any other Person to purchase) the entire Class C Interest held by any Class C Partner for a purchase price equal to the greater of the Class C Unrecovered Capital or the balance in the Class C Capital Account of such Class C Partner as of the last of the day of the month in which the notice described below is delivered to the Class C Partner, adjusted to eliminate any increase or decrease in such Capital Account as is attributable to an adjustment of Gross Asset Value under section 1.42(b), (c), or (d). Such option may be exercised, by delivery to the Class C Partner of a written notice of exercise, at any time during the 60-day period commencing 180 days after the expiration of the Exercise Period (as defined in the SP Parking Option Agreement), but only if SP Parking Associates fails to exercise its option under the SP Parking Option Agreement to acquire the Class A Interest. The closing of the purchase of the Class C Interest pursuant to the option granted by this Section 8.6 shall occur at such time, date, and place as SPC and the Class C Partner shall agree, but in any event not later than 45 days after the delivery of notice of exercise by SPC. At the closing, SPC shall pay the purchase price in immediately available funds, and the Class C Partner shall deliver to SPC an instrument or instruments in form and sub- -40- 41 stance reasonably satisfactory to SPC, assigning the Class C Interest to SPC, free and clear of all liens and encumbrances. ARTICLE IX Dissolution and Termination Section 9.1. Dissolution Of Partnership. The Partnership will dissolve and its assets and business will be wound up upon the first to occur of the following events: (a) Expiration of the term of the Partnership; (b) Written election of all the Partners to dissolve the Partnership; (c) The occurrence of an event which makes it unlawful for the Partnership business to be continued under the Act or otherwise; (d) The passage of 90 days after an Event of Withdrawal of the last remaining General Partner (except under the circumstances described in Section 7.11), unless all the Limited Partners vote to elect a new General Partner to carry on the business of the Partnership as a successor General Partner in accordance with Section 7.9(a); or (e) Any other event which, under the Act, requires the dissolution of the Partnership and the winding up of its business and affairs. Dissolution of the Partnership shall be effective on the date on which the event occurs giving rise to the dissolution, but the Partnership shall not terminate until the Certificate shall have been canceled and the assets of the Partnership have been distributed as provided in Sections 9.2 and 9.3. Notwithstanding the dissolution of the Partnership, prior to the termination of the Partnership, as aforesaid, the business of the Partnership and the affairs of the Partners as such shall continue to be governed by this Agreement. Section 9.2. Liquidation and Distribution. Following the occurrence of an event described in Section 9.1, the General Partner (or in the event the dissolution is caused by an Event of Withdrawal of the last remaining General Partner, a Person selected by Associates) will act as liquidating trustee. Such liquidating trustee will wind up the affairs of the Partnership in the following manner: (a) The liquidating trustee shall use its best efforts to sell all of the Partnership's assets in an orderly manner (so as to avoid the loss normally associated with forced sales). -41- 42 (b) The liquidating trustee shall apply and distribute the proceeds of all such sales, together with other funds which the liquidating trustee was unable to dispose of in accordance with paragraph (i), in the following order of priority: (A) First, to the payment of all debts and liabilities of the Partnership (including debts and liabilities owed to Partners); (B) Second, to the establishment of any reserves reasonably necessary to provide for any contingent Partnership liabilities and obligations (such reserves to be paid over to a bank or trust company, as escrowee, to be held by such escrowee for the purpose of disbursing such reserves in payment of any such contingent liability or obligation and to pay over the balance thereafter remaining for distribution in the manner set forth in clause (C) hereof); and (C) Third, as provided in Section 5.2. Section 9.3. Termination. Each of the Partners will be furnished with a statement prepared by the Accountants, which will set forth the assets and liabilities of the Partnership as of the date of the final distribution of Partnership assets under Section 9.2 and the Net Profits or Net Losses and other items allocable under Article IV of this Agreement for the fiscal period ending on such date. Upon compliance with the distribution plan set forth in Section 9.2, the Limited Partners will cease to be such, and the General Partner or the liquidating trustee will cause the Certificate to be canceled, whereupon the Partnership will terminate. ARTICLE X Miscellaneous Section 10.1. Further Assurances. Each Limited Partner hereby agrees that, promptly upon the request of the General Partner, it will do, execute, acknowledge, deliver, record, file, and register any and all such further acts, agreements, notices, certificates, assurances, and other instruments as the General Partner may reasonably require from time to time in order to carry out more effectively the purposes of this Agreement. Section 10.2 Amendments. (a) This Agreement may be amended from time to time by the General Partner, without the consent of any of the Limited Partners, (i) to add to the representations, duties, or obligations of the General Partner or surrender any right or power granted to the General Partner herein if such surrender would be for the benefit of the Limited Partners; (ii) to delete or add any provision of this Agreement required to be so deleted or added by a federal agency or by a state "Blue Sky" commissioner or similar such official, which addition or deletion is deemed by such agency commissioner, or official to be for the benefit or protection of the Limited Partners; (iii) to take such actions as may be necessary (if any) to avoid a Plan Asset Transparency or to avoid the Partnership's engaging in a prohibited transaction as defined in section 4975(c) of the Code with the General Partner or its Affiliates; (iv) to -42- 43 amend or add to the allocation provisions of Article IV to the extent necessary on the advice of Legal Counsel to give effect to such allocations as originally contemplated upon execution of this Agreement if amended final regulations under section 704 to the Code are adopted by the Treasury Department; (v) on the advice of Legal Counsel, to prevent the Partnership from being deemed an "Investment Company" for purposes of the Investment Company Act of 1940, as amended; and (vi) to amend any other provision of this Agreement as the General Partner may be authorized by this Agreement; provided, however, that no amendment shall be adopted pursuant to this Section 10.2(a) unless the adoption thereof (1) is for the benefit of or not adverse to the interest of any Limited Partner; (2) except as provided in clause (iii) or (iv), does not affect the interests of any Partner in distributions of Distributable Cash or Capital Transaction Proceeds or allocations of Net Profit or Net Loss and (3) does not adversely affect the limited liability of the Limited Partners or the status of the Partnership as a partnership for federal income tax purposes. (b) In addition to the amendments otherwise authorized herein, amendments may be made to this Agreement from time to time by the General Partner with the written consent of all the Limited Partners. (c) In making any amendments, there shall be prepared and filed for recordation by the General Partner such documents and certificates as shall be required to be prepared and filed under the Act and under the laws of the other jurisdictions under the laws of which the Partnership is then formed or otherwise required to make such filing. The General Partner shall give written notice to all Partners promptly after any amendment has become effective. Section 10.3 Notices And Addresses. All notices required to be given under this Agreement shall be in writing and may be delivered by certified or registered mail, postage prepaid, by hand, by facsimile, or by any nationally recognized private courier. Such notices shall be mailed or delivered to the Partners at the addresses set forth after the signature of such Partners or such other address as a Partner may notify the other Partners of in writing. Any notices to be sent to the Partnership shall be delivered to the principal place of business of the Partnership or at such other address as the General Partner may specify in a notice sent to all of the Partners. Notices shall be effective (i) if mailed, on the date three days after the date of mailing, (ii) if hand delivered or delivered by private courier, on the date of delivery, or (iii) if transmitted by facsimile, on the date of transmission. Section 10.4. Governing Law. The validity and effectiveness of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without giving effect to the provisions, policies or principles of any state law relating to choice or conflict of laws. -43- 44 Section 10.5. Successors And Assigns. This Agreement shall be binding upon and inure to the benefit of the Partners, Assignees, and their respective legal representatives and successors. Section 10.6 .Counterparts. This Agreement may be executed in multiple counterparts. each of which may bear the signatures of less than all the parties, but all of which together shall constitute one instrument. Section 10.7. Entire Agreement; Severability. This Agreement, together with the Partnership Formation Agreement, the Exhibits hereto and thereto, and the Related Agreements (as defined in the Partnership Formation Agreement), constitutes the entire agreement among the parties hereto with respect to the subject matter hereof, and no party hereto shall be bound by any communications between them on the subject matter of this Agreement unless in writing and bearing a date contemporaneous with or subsequent to the date of this Agreement. Any prior written agreements shall, upon the execution of this Agreement, be null and void. The parties agree that if any term or provision of this Agreement contravenes or is invalid under any federal, state or local law, court decision, rule, ordinance or regulation, this Agreement shall, as to the jurisdiction under which such legal authority is promulgated or rendered, be construed as if it did not contain the offending term or provision, and the remaining provisions of this Agreement shall not be affected thereby; provided, however, that if the removal of such offending term or provision materially alters the burdens or benefits of any of the parties under this Agreement, the parties agree to negotiate in good faith such modifications to this Agreement as are appropriate to insure the burdens and benefits of each party under such modified Agreement are reasonably comparable to the burdens and benefits originally contemplated and expected. Section 10.8. Captions. The captions are inserted for convenience of reference only and shall not affect the construction of this Agreement. Section 10.9. Statutory References. Each reference in this Agreement to a particular statute or regulation, or a provision thereof, shall be deemed to refer to such statute or regulation, or provision thereof, or to any similar or superseding statute or regulation, or provision thereof, as is from time to time in effect. Section 10.10. Partition Action. Each party hereto irrevocably waives any right which it may have to maintain an action for partition with respect to property of the Partnership. Section 10.11. Confidentiality. Each Partner hereby agrees that it (i) will not use Confidential Information other than for a Partnership purpose (provided that nothing herein shall prevent SPC or any of its Affiliates from using Confidential Information for the purpose of conducting the activities which they are permitted to conduct under Section 7.3(b) or Section 7.3(c)), and (ii) it will use its reasonable best efforts to hold Confidential Informa- -44- 45 tion (as defined below) confidential, but will in any event hold such Confidential Information no less confidentially than is customary for it in handling confidential information of this nature. Each Partner further agrees not to disclose any Confidential Information (and Associates agrees that none of the Associates' Representatives will disclose any Confidential Information) except as required or requested pursuant to applicable law; provided that a Partner may make disclosure (i) of summary aggregate financial information regarding the Partnership to its partners or other owners and to any Affiliates or assignees or transferees of partnership interests in such Partner and (ii) to any of its outside auditors and counsel if they agree to be bound by this Section. For this purpose the term "Confidential Information" means: (u) the identity of any Limited Partner; (v) the identity of any client or landlord of the Partnership, SPC, or any Affiliate of SPC; (w) the fees payable to or for the benefit of the Partnership, the expiration date, or any other term of any lease, management agreement, operating agreement, or other agreement with respect to the lease, management, or operation of any parking facility; (x) the profitability of any contract or group of contracts or any financial information of the Partnership; (y) any trade secret; and (z) any other information concerning the Partnership's business; provided, however, that the term "Confidential Information" shall not include information which (A) is or becomes generally available to the public other than, with respect to a Partner, as a result of a disclosure by such Partner which is not legally compelled to be disclosed in any judicial or administrative proceeding, or (B) otherwise becomes available to a Partner on a non-confidential basis. Section 10.12. Waiver. The waiver by any party hereto of the breach of any term, covenant, agreement or condition herein contained shall to be deemed a waiver of any subsequent breach of the same or any other term, covenant, agreement or condition herein, nor shall any custom, practice or course of dealings arising among the parties hereto in the administration hereof be construed as a waiver or diminution of the right of any party hereto to insist upon the strict performance by any other party hereto of the terms, covenants, agreements and conditions herein contained. Section 10.13. Securities Law Provisions. The Interests have not been registered under the Federal or state securities laws of any state and, therefore, may not be resold unless appropriate Federal and state securities laws, as well as the provisions of Article VIII hereof, have been complied with. Section 10.14. Consents and Approval. Whenever under this Agreement the consent or approval of any Partner is required or permitted, such consent must be evidenced by a written consent signed by such Partner. Section 10.15. Remedies Not Exclusive. Unless otherwise provided in this Agreement, any remedy contained in this Agreement for breaches of obligations hereunder shall not be deemed to be exclusive and shall not impair the right of any party to exercise any other right or remedy, whether for damages, injunction or otherwise. -45- 46 Section 10.16. Identification. Wherever from the context it appears appropriate, each term stated in either the singular or the plural shall include the singular and the plural, and pronouns stated in either the masculine or the neuter gender shall include the masculine, feminine and neuter. Section 10.17. Litigation. The General Partner shall prosecute and defend such actions at law or in equity as may be reasonably necessary, in the judgment of the General Partner, to enforce or protect the interest of the Partnership. The Partnership and the General Partner shall respond to any final decree, judgment or decision of any court, board or authority having jurisdiction in judgment, decree or decision, first out of any insurance proceeds available therefor, next out of assets of the Partnership and finally out of the assets of the General Partner. Section 10.18. No Presumption Against Drafter. The parties hereto have jointly participated in the negotiation and drafting of this Agreement. In the event of an ambiguity or if a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by all of the parties hereto and no presumptions or burdens of proof shall arise favoring any party by virtue of the authorship of any of the provisions of this Agreement. -46- 47 IN WITNESS WHEREOF, the undersigned have executed this Agreement of Limited Partnership as of the date first above written. GENERAL PARTNER STANDARD PARKING CORPORATION, an Illinois corporation 55 E. Monroe Street Suite 3440 Chicago, Illinois 60603 By /s/ Myron C. Warshauer ----------------------------------------- Myron C. Warshauer, President LIMITED PARTNERS SP ASSOCIATES, an Illinois general partnership 900 N. Michigan Avenue Suite 1900 Chicago, Illinois 60611 By SP Managers, L.P., a Delaware limited partnership, its managing partner By Standard Managers, Inc., a Delaware corporation, its general partner By /s/ David S. Richter ------------------------------------------ David S Richter, its Vice President STANDARD PARKING CORPORATION, an Illinois corporation 55 E. Monroe Street Suite 3440 Chicago, Illinois 60603 By /s/ Myron C. Warshauer ------------------------------------------ Myron C. Warshauer, President -47- 48 EXHIBIT A Excluded Garages A. The following garages are Excluded Garages under clause (y) of Section 7.3(b) and may not be managed by SPC. 1. 4041 Central, Phoenix, Arizona 2. Shell Building, San Francisco, California 3. Century Park Plaza, Los Angeles, California 4. 1200 New Hampshire, Washington, D.C. 5. 1250 Connecticut, Washington, D.C. 6. INB Bank Building, Indianapolis, Indiana 7. First National Tower, Louisville, Kentucky B. The following garage is an Excluded Garage under clause (x) of Section 7.3(b) and may be managed by SPC. 1. Water Tower Place, Chicago, Illinois 49 EXHIBIT B Schedule of Owned Garage A. Garages Owned by SPC or an Affiliate for which management is to be provided by (and management fees paid to) the Partnership: All garages owned by SIDCOR/SW Partners: Hollywood Towers 260 East Chestnut Imperial Towers 2 East Oak Franklin Lake Self Park Franklin Van Buren Self Park 203 North LaSalle Street Self Park B. Garages Owned by SPC or an Affiliate for which management is to be provided by the Partnership but for which no management fee is payable: Clark-Fullerton C. Garages Owned by SPC or an Affiliate for which management is to be provided by (and management fees paid to) an Affiliate of SPC: Theatre District Self Park (management fees to be paid to Standard/Tremont) Adams Wabash Self Park (management fees to be paid to Standard/Wabash) 50 EXHIBIT C Schedule of Employees and Affiliates With Rights to Participate in Revenues or Profits of the Partnership 1. Agreement dated as of June 19, 1979, between Allan R. Lombardo and Standard Parking Corporation. 2. Agreement dated as of July 23, 1981, between J. Norman Thorson and Standard Parking Corporation, as amended on February 21, 1990. 3. Agreement dated as of June 7, 1991, between Robert B. Anthonyson and SPC, as modified by memorandum dated September 15, 1993 from Robert B. Anthonyson to Myron C. Warshauer. 4. Agreement dated as of April 1, 1992 between George C. Hester and SPC. 5. Agreement, dated as of September 29, 1982, among (a) on the one hand, SPC, and (b) on the other hand, Warshauer Management Corporation, an Illinois corporation, Tremont Auto Park, Inc., an Illinois corporation, Auditorium Garage, Inc., an Illinois corporation, Stanley Warshauer, individually and as Trustee under the Will of Benjamin Warshauer, Deceased, Steven A. Warshauer, and Janet Warshauer, as amended on or before the date hereof. 6. Agreement dated as of May 21, 1990 among Michael K. Wolf and Metropolitan Parking Station, Inc., Standard Auto Park, Inc., Standard Parking Corporation, Standard Parking Corporation of California, Standard Parking Service, Inc., Standard/Tremont Parking Corporation, Standard/Wabash Parking Corporation, Standard Parking. Inc. MA and such other entities (whether then in existence or thereafter created) that directly or indirectly, through one or more intermediaries, control or are controlled by, or are under common control with, Standard Parking Corporation. 7. The transfer to one or more of Allan Lombardo, Michael E. Swartz, J. Norman Thorson, Steven A. Warshauer, James A. Wilhelm, and Michael K. Wolf of a portion of Standard Parking Corporation's Class B and/or Class D interest in Standard Parking, L.P. for an aggregate purchase price not to exceed $2,000,000. 51 EXHIBIT D Schedule of Investments 1. Interest of SPC as General Partner of SW Partners, an Illinois limited partnership, which limited partnership is general partner in SIDCOR/SW Partners, an Illinois general partnership. 2. Interest of SPC in Franklin Garage Limited Partnership. 52 ASSIGNMENT OF CLASS D INTEREST IN STANDARD PARKING, L.P., A DELAWARE LIMITED PARTNERSHIP 1. The undersigned hereby irrevocably assigns forty percent (40%) of its Class D Interest in STANDARD PARKING, L.P., a Delaware limited partnership ("Partnership"), as follows: Transferor Interest Transferred Transferee - ---------- -------------------- ---------- STANDARD PARKING DOSHER PARTNERS, L.P., CORPORATION, an 40% of its Class D a Delaware limited Illinois corporation Interest partnership not as assignee, but as substitute holder of such Class D Interest under the Partnership agreement. 2. The undersigned hereby irrevocably constitutes and appoints MICHAEL K. WOLF to be the attorney of the undersigned to transfer such interest on the books of the Partnership. This Assignment shall be effective as of the date hereof. Dated: May 5, 1997 Standard Parking Corporation, an Illinois corporation -------------------------------------------- By: Myron C. Warshauer Its: President 53 ACCEPTANCE The undersigned hereby accepts the Assignment hereinabove described and agrees to be bound by the terms of the STANDARD PARKING, L.P., Agreement of Limited Partnership. Dated: May 5, 1997 Dosher Partners, L.P., a Delaware limited partnership -------------------------------------------- By: Myron C. Warshauer, President of Standard Parking Corporation, the General Partner of Dosher Partners, L.P. CONSENT The undersigned hereby consent to the Assignment hereinabove described and agree to admit DOSHER PARTNERS, L.P., as substitute holder of such Class D Interest in STANDARD PARKING, L.P., a Delaware limited partnership. Dated: May 5, 1997 STANDARD PARKING CORPORATION, General Partner -------------------------------------------- By: Myron C. Warshauer Its: President SP ASSOCIATES, Limited Partner -------------------------------------------- By: Its: EX-3.16 19 ARTICLES OF INCORPORATION 1 Form BCA-10.30 (Rev. Jan. 1991) ARTICLES OF AMENDMENT File # D 5116--186--6 ========================================================================== George H. Ryan FILED Secretary of State DEC 28 1993 Department of Business GEORGE H. RYAN SUBMIT IN DUPLICATE Services SECRETARY OF STATE Springfield, IL 62756 Telephone (217) 782-6961 ========================= ======================== Remit payment in check This space for use by or money order, payable Secretary of State to "Secretary of State." Date 2/28/93 Franchise Tax $ Filing Fee $25.00 Penalty $ Approved: ========================================================================== 1. CORPORATE NAME: Standard Parking Corporation ------------------------------------------------------------ (Note 1) 2. MANNER OF ADOPTION: The following amendment of the Articles of Incorporation was adopted on November 30, 1993 in the manner indicated below. ("X" one box only) |_| By a majority of the incorporators, provided no directors were named in the articles of incorporation and no directors have been elected; or by a majority of the board of directors, in accordance with Section 10.10, the corporation having issued no shares as of the time of adoption of this amendment; (Note 2) |_| By a majority of the board of directors, in accordance with Section 10.15, shares having been issued by shareholder action not being required for the adoption of this amendment; (Note 3) |_| By the shareholders, in accordance with Section 10.20, a resolution of the board of directors having been duly adopted and submitted to the shareholders. At a meeting of shareholders, not less than the minimum number of votes required by statue and by the articles of incorporation were voted in favor of the amendment; (Note 4) |_| By the shareholders, in accordance with Sections 10.20 and 7.10, a resolution of the board of directors having been duly adopted and submitted to the shareholders. A consent in writing has been signed by shareholders having not less than the minimum number of votes required by statute and by the articles of incorporation. Shareholders who have not consented in writing have been given notice in accordance with Section 7.10; (Note 4) |_| By the shareholders, in accordance with Sections 10.20 and 7.10, a resolution of the board of directors having been duly adopted and submitted to the shareholders. A consent in writing has been signed by all of the shareholders entitled to vote on this amendment. (Note 4) (INSERT AMENDMENT) (Any article being amended is required to be set forth in its entirety.) (Suggested language for an amendment to change the corporate name is RESOLVED, that the Articles of Incorporation be amended to read as follows:) - ------------------------------------------------------------------------------ (NEW NAME) PAID DEC 29 1993 All changes other than name, include on page 2 (over) 2 Resolution RESOLVED, that the Articles of Incorporation be amended to read as follows: "Article 3. Purpose or purposes for which the corporation is organized: To transact any or all lawful activities and businesses which are authorized by the Illinois Business Corporation Act of 1983, as amended, and to purchase or to otherwise acquire, hold use, own mortgage, sell, convey, lease or otherwise dispose of and deal in real and personal property of every class and description or any interest therein. 3 3. The manner in which any exchange, reclassification or cancellation of issued shares, or a reduction of the number of authorized shares of any class below the number of issued shares of that class, provided for or effected by this amendment, is as follows: (If not applicable, insert "No change") No change 4. (a) The manner in which said amendment effects a change in the amount of paid-in capital (Paid-in capital replaces the terms Stated Capital and Paid-in Surplus and is equal to the total of these accounts) is as follows: (If not applicable, insert "No change") No change (b) The amount of paid-in capital (Paid-in Capital replaces the terms Stated Capital and Paid-in Surplus and is equal to the total of these accounts as changed by this amendment is as follows: (If not applicable, insert "No change") No change Before Amendment After Amendment Paid-in Capital $ $ ------------- ------------- (Complete either Item 5 or 6 below) 5. The undersigned corporation has caused this statement to be signed by its duly authorized officers, each of whom affirms, under penalties of perjury, that the facts stated herein are true. Dated December 10, 1993 Standard Parking Corporation -------------------------------- ---------------------------------- (Exact Name of Corporation) attested by /s/ Michael K. Wolf by /s/ Myron C. Warshauer -------------------------- -------------------------------- (Signature of Secretary or (Signature of President or Vice Assistant Secretary) President) Michael K. Wolf, Secretary Myron C. Warshauer, President -------------------------- ------------------------------- (Type or Print Name and Title) (Type or Print Name and Title) 6. If amendment is authorized by the incorporators, the incorporators must sign below. OR If amendment is authorized by the directors and there are no officers, then a majority of the directors or such directors as may be designated by the board, must sign below. The undersigned affirms, under the penalties of perjury, that the facts stated herein are true. Dated ------------------------------ ----------------------------------- ---------------------------------- ----------------------------------- ---------------------------------- ----------------------------------- ---------------------------------- ----------------------------------- ---------------------------------- EX-3.17 20 AMENDED AND RESTATED BY-LAWS 1 AMENDED AND RESTATED BY-LAWS OF STANDARD PARKNG CORPORATION ARTICLE I OFFICES The corporation shall continuously maintain in the State of Illinois a registered office and a registered agent whose office is identical with such registered office, and may have other offices within or without the state. ARTICLE II SHAREHOLDERS SECTION 1. ANNUAL MEETING. An annual meeting of the shareholders shall be held on the second Wednesday in January of each year for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday, such meeting shall be held on the next succeeding business day. SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders may be called either by the president, by the board of directors or by the holders of not less than one-fifth of all the outstanding shares of the corporation entitled to vote, for the purpose or purposes stated in the call of the meeting. SECTION 3. PLACE OF MEETING. The board of directors may designate any place, as the place of meeting for any annual meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be held at the principal office of the corporation. SECTION 4. NOTICE OF MEETINGS. Written notice stating the place, date, and hour of the meeting, and in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten nor more than sixty days before the date of the meeting, or in the case of a merger consolidation, share exchange, dissolution or sale, lease or exchange of assets not less than twenty nor more than sixty days before the date of the meeting, either personally or by mail, by or at the direction of the president, or the secretary, or the officer or persons calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the shareholder at his address as it appears on the records of the corporation, with postage thereon prepaid. When a meeting is adjourned to another time or 2 place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. SECTION 5. FIXING OF RECORD DATE. For the purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or to receive payment of any dividend, or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion or exchange of shares or for the purpose of any other lawful action, the board of directors of the corporation may fix in advance a record date which shall not be more than sixty days and, for a meeting of shareholders, not less than ten days, or in the case of a merger, consolidation, share exchange, dissolution or sale, lease or exchange of assets, not less than twenty days, before the date of such meeting. If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be the date on which notice of the meeting is mailed, and the record date for the determination of shareholders for any other purpose shall be the date on which the board of directors adopts the resolution relating thereto. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting. SECTION 6. VOTING LISTS. The officer or agent having charge of the transfer books for shares of the corporation shall make, within twenty days after the record date for a meeting of shareholders or at least ten days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting, arranged in alphabetical order, showing the address of and the number of shares registered in the name of the shareholder, which list, for a period of ten days prior to such meeting, shall be kept on file at the registered office of the corporation and shall be open to inspection by any shareholder for any purpose germane to the meeting, at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and may be inspected by any shareholder during the whole time of the meeting. The original share ledger or transfer book, or a duplicate thereof kept in this State, shall be prima facie evidence as to who are the shareholders entitled to examine such list or share ledger or transfer book or to vote at any meeting of shareholders. SECTION 7. QUORUM. The holders of a majority of the outstanding shares of the corporation entitled to vote on a matter present in person or represented by proxy shall constitute a quorum at any meeting of shareholders; provided that if less than a majority of the outstanding shares are represented at said meeting, a majority of the shares so represented may adjourn the meeting at any time without further notice. If a quorum is present, the affirmative vote of the majority of the shares represented at the meeting shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by the Business Corporation Act of 1983 ("Business Corporation Act"), the Articles of Incorporation or these by-laws. At any adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the original meeting. Withdrawal of shareholders from any meeting shall not cause failure of a duly constituted quorum at that meeting. SECTION 8. PROXIES. Each shareholder entitled to vote at a meeting of shareholders or to express consent or dissent to corporate action in writing without a meeting -2- 3 may authorize another person or persons to act for him by proxy, but no such proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy. No proxy shall be solicited by means of any communication containing a statement which, at the time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact or which omits to state any material fact necessary in order that the statements made not be false or misleading. SECTION 9. VOTING OF SHARES. Each outstanding share, of each class of shares entitled to vote on a matter, shall be entitled to one vote upon each matter submitted to a vote at a meeting of shareholders, and in all elections for directors, every shareholder shall have the right to vote the number of shares owned by such shareholder for as many persons as there are directors to be elected, or to cumulate such votes and give one candidate as many votes as shall equal the number of directors multiplied by the number of such shares or to distribute such cumulative votes in any proportion among any number of candidates. SECTION 10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares of a corporation held by the corporation in a fiduciary capacity may be voted and shall be counted in determining the total number of outstanding shares entitled to vote at any given time. Shares registered in the name of another corporation, domestic or foreign, may be voted by any officer agent, proxy or other legal representative authorized to vote such shares under the law of incorporation of such corporation. A corporation may treat the president or other person holding the position of chief executive officer of such other corporation as authorized to vote such shares, together with any other person indicated and any other holder of an office indicated by the corporation shareholder to the corporation as a person or an office authorized to vote such shares. Such persons and offices indicated shall be registered by the corporation on the transfer books for shares and included in any voting list. Shares registered in the name of a deceased person, a minor ward or a person under legal disability may be voted by his or her administrator, executor, or court appointed guardian, either in person or by proxy without a transfer of such shares into the name of such administrator, executor, or court appointed guardian. Shares registered in the name of a trustee may be voted by him or her, either in person or by proxy. Shares registered in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his or her name if authority so to do is contained in an appropriate order of the court by which such receiver was appointed. A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred. Any number of shareholders may create a voting trust for the purpose of conferring upon a trustee or trustees the right to vote or otherwise represent their share, for a period not to exceed ten years, by entering into a written voting trust agreement specifying the -3- 4 terms and conditions of the voting trust, and by transferring their shares to such trustee or trustees for the purpose of the agreement. Any such trust agreement shall not become effective until a counterpart of the agreement is deposited with the corporation at its registered office. The counterpart of the voting trust agreement so deposited with the corporation shall be subject to the same right of examination by a shareholder of the corporation, in person or by agent or attorney, as are the books and records of the corporation, and shall be subject to examination by any holder of a beneficial interest in the voting trust, either in person or by agent or attorney, at any reasonable time for any proper purpose. Shares of its own stock belonging to this corporation shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding shares at any given time. SECTION 11. INSPECTORS. At any meeting of shareholders, the presiding officer may, or upon the request of any shareholder shall, appoint one or more persons as inspectors for such meeting. Such inspectors shall ascertain and report the number of shares represented at the meeting, based upon their determination of the validity and effect of proxies; count all votes and report the results; and do such other acts as are proper to conduct the election and voting with impartiality and fairness to all the shareholders. Each report of an inspector shall be in writing and signed by him or by a majority of them if there be more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof. SECTION 12. INFORMAL ACTION BY SHAREHOLDERS. Unless otherwise provided in the Articles of Incorporation, any action required to be taken at any annual or special meeting of the shareholders of the corporation, or any other action which may be taken at a meeting of the shareholders, may be taken without a meeting and without a vote, if a consent in writing, setting forth the action so taken, shall be signed (a) if 5 days prior notice of the proposed action is given in writing to all of the shareholders entitled to vote with respect to the subject matter thereof, by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voting or (b) by all of the shareholders entitled to vote with respect to the subject matter thereof. Prompt notice of the taking of the corporation action without a meeting by less than unanimous written consent shall be given in writing to those shareholders who have not consented in writing. In the event that the action which is consented to is such as would have required the filing of a certificate under any Section of the Business Corporation Act if such action had been voted on by the shareholders at a meeting thereof, the certificate filed under such Section shall state, in lieu of any statement required by such Section concerning any vote of shareholders, that written consent has been given in accordance with the provisions of Section -4- 5 7.10 of the Business Corporation Act and that written notice has been given as provided in such Section. SECTION 13. VOTING BY BALLOT. Voting on any question or in any election may be by voice unless the presiding officer shall order or any shareholder shall demand the voting be by ballot. ARTICLE III DIRECTORS SECTION 1. GENERAL POWERS. The business of the corporation shall be managed by or under the direction of its board of directors. SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors of the corporation shall be three (3). Each director shall hold office until the next annual meeting of shareholders or until his successor shall have been elected and qualified. Directors need not be residents of Illinois or shareholders of the corporation. The number of directors may be increased or decreased from time to time by the amendment of this section; but no decrease shall have the effect of shortening the term of any incumbent director. SECTION 3. REGULAR MEETINGS. A regular meeting of the board of directors shall be held immediately after the annual meeting of shareholders. The board of directors may provide, by resolution, time and place for the holding of additional regular meetings without other notice than such resolution. SECTION 4. SPECIAL MEETINGS. Special meetings of the board of directors may be called by or at the request of the president or any director. The person or persons authorized to call special meetings of the board of directors may fix any place as the place for holding any special meeting of the board of directors called by them. SECTION 5. NOTICE. Notice of any special meeting shall be given at least three (3) days previous thereto by written notice to each director at his business address. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegram company. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting. SECTION 6. QUORUM. A majority of the number of directors fixed by these by-laws shall constitute a quorum for transaction of business at any meeting of the board of directors, provided that if less than a majority of such number of directors are present at said meeting, a majority of the directors present may adjourn the meeting at any time without further notice. -5- 6 SECTION 7. MANNER OF ACTING. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors, unless the act of a greater number is required by statute, these by-laws, or the Articles of Incorporation. SECTION 8. VACANCIES. Any vacancy occurring in the board of directors and any directorship to be filled by reason of an increase in the number of directors, shall be filled by election at an annual meeting or at a special meeting of shareholders called for that purpose. SECTION 9. ACTION WITHOUT A MEETING. Unless specifically prohibited by the Articles of Incorporation, any action required to be taken at a meeting of the board of directors, or any other action which may be taken at a meeting of the board of directors, or of any committee thereof may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all the directors entitled to vote with respect to the subject matter thereof, or by all the members of such committee, as the case may be. Any such consent signed by all the directors or all the members of the committee shall have the same effect as a unanimous vote, and may be stated as such in any document filed with the Secretary of State or with anyone else. SECTION 10. COMPENSATION. The board of directors, by the affirmative vote of a majority of directors then in office, and irrespective of any personal interest of any of its members, shall have authority to establish reasonable compensation of all directors for services to the corporation as directors, officers, or otherwise. By resolution of the board of directors the directors may be paid their expenses, if any, of attendance at each meeting of the board. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. SECTION 11. PRESUMPTION OF ASSENT. A director of the corporation who is present at a meeting of the board of directors at which action on any corporate matter is taken shall be conclusively presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. SECTION 12. COMMITTEES. The board of directors by resolution adopted by a majority of the number of directors fixed by the by-laws or otherwise may create one or more committees and appoint members of the board to serve on the committee or committees. Each committee shall have two or more members, who serve at the pleasure of the board. Unless the appointment by the board of directors requires a greater number, a majority of any committee shall constitute a quorum and a majority of a quorum is necessary for committee action. A committee may act by unanimous consent in writing without a meeting and, subject to the provisions of the by-laws or action by the board of directors, the committee by majority vote of its members shall determine the time and place of meetings and the notice required therefor. -6- 7 To the extent specified by the board of directors or in the Articles of Incorporation, each committee may exercise the authority of the board of directors, provided, however, a committee may not: (a) authorize distributions; (b) approve or recommend to shareholders any act required to be approved by shareholders; (c) fill vacancies on the board or on any of its committees; (d) elect or remove officers or fix the compensation of any member of the committee; (e) adopt, amend or repeal the by-laws; (f) approve a plan of merger not requiring shareholder approval; (g) authorize or approve reacquisition of shares, except according to a general formula or method prescribed by the Board; (h) authorize or approve the issuance or sale, or contract for sale, of shares or determine the designation and relative rights, preferences, and limitations of a series of shares, except that the board may direct a committee to fix the specific terms of the issuance or sale or contract for sale or the number of shares to be allocated to particular employees under an employee benefit plan; or (i) amend, alter, repeal, or take action inconsistent with any resolution or action of the board of directors when the resolution or action of the board of directors provides by its terms that it shall not be amended, altered or repealed by action of a committee. SECTION 13. RESIGNATION AND REMOVAL OF DIRECTORS. A director may resign at any time upon written notice to the board of directors. One or more of the directors may be removed, with or without cause, at a meeting of shareholders by the affirmative vote of the holders of a majority of the outstanding shares then entitled to vote at an election of directors, except as follows: (a) No director shall be removed at a meeting of shareholders unless the notice of such meeting shall state that a purpose of the meeting is to vote upon the removal of one or more directors named in the notice. Only the named director or directors may be removed at such meeting. (b) If less than the entire board is to be removed, no director may be removed, with or without cause, if the votes cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the entire board of directors. -7- 8 SECTION 14. TELEPHONIC MEETINGS. The board of directors or any committee of the board of directors may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation in such meeting shall constitute attendance and presence in person at the meeting of the person or persons so participating. ARTICLE IV OFFICERS SECTION 1. NUMBER. The officers of the corporation shall be a chairman of the board of directors, a president, one or more vice-presidents, a treasurer, a secretary, and such other officers as may be elected or appointed by the board of directors. Any two or more offices may be held by the same person. SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the corporation shall be elected annually by the board of directors at the meeting of the board of directors held after each annual meeting of shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as may be convenient. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until his successor shall have been duly elected and shall have qualified or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. Election of an officer shall not of itself create contract rights. SECTION 3. REMOVAL. Any officer elected or appointed by the board of directors may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. SECTION 4. CHAIRMAN OF THE BOARD. The chairman of the board shall preside over all executive committee meetings of the executive committee of the corporation, and shall preside at all meetings of the shareholders and of the board of directors. He may sign, in lieu of the president, certificates for shares of the corporation, deeds, mortgages, bonds, contracts or other instruments, which the board of directors have authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the board of directors or these by-laws to some other officer or agent of the corporation or in cases where the signing and execution thereof is required by law to be performed by some other officer or agent of the corporation. SECTION 5. PRESIDENT. The president shall be the principal executive officer of the corporation. Subject to the direction and control of the board of directors, he shall be in charge of the business of the corporation; he shall see that the resolutions and directions of the board of directors are carried into effect except in those instances in which that responsibility is specifically assigned to some other person by the board of directors; and, in general, he shall discharge all duties incident to the office of president and such other duties as may be prescribed -8- 9 by the board of directors from time to time. He shall preside at all meetings of the shareholders and of the board of directors. Except in those instances in which the authority to execute is expressly delegated to another officer or agent of the corporation or a different mode of execution is expressly prescribed by the board of directors or these by-laws, he may execute for the corporation certificates for its shares, and any contracts, deeds, mortgages, bonds, or other instruments which the board of directors has authorized to be executed, and he may accomplish such execution either under or without the seal of the corporation and either individually or with the secretary, any assistant secretary, or any other officer thereunto authorized by the board of directors, according to the requirements of the form of the instrument. He may vote all securities which the corporation is entitled to vote except as and to the extent such authority shall be vested in a different officer or agent of the corporation by the board of directors. SECTION 6. THE VICE-PRESIDENTS. The vice-president (or in the event there be more than one vice-president, each of the vice presidents) shall assist the president in the discharge of his duties as the president may direct and shall perform such other duties as from time to time may be assigned to him by the president or by the board of directors. In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the board of directors, or by the president if the board of directors has not made such a designation, or in the absence of any designation, then in the order of seniority of tenure as vice-president) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. Except in those instances in which the authority to execute is expressly delegated to another officer or agent of the corporation or a different mode of execution is expressly prescribed by the board of directors or these by-laws, the vice-president (or each of them if there are more than one) may execute for the corporation certificates for its shares and any contracts, deeds, mortgages, bonds or other instruments which the board of directors has authorized to be executed, and he may accomplish such execution either under or without the seal of the corporation and either individually or with the secretary, any assistant secretary, or any other officer thereunto authorized by the board of directors, according to the requirements on the form of the instrument. SECTION 7. THE TREASURER. The treasurer shall be the principal accounting and financial officer of the corporation. He shall: (a) have charge of and be responsible for the maintenance of adequate books of account for the corporation; (b) have charge and custody of all funds and securities of the corporation, and be responsible therefor and for the receipt and disbursement thereof; and (c) perform all the duties incident to the office of treasurer and such other duties as from time to time may be assigned to him by the president or by the board of directors. SECTION 8. THE SECRETARY. The secretary shall: (a) record the minutes of the shareholders' and the board of directors' meetings in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these by-laws or as required by law; (c) be custodian of the corporate records and of the seal of the corporation; (d) keep a register of the post-office address of each shareholder which shall be furnished to the secretary by such shareholder; (e) sign with the president, or a vice-president, or any other officer thereunto authorized by the board of directors, certificates for shares of the corporation, the issue -9- 10 of which shall have been authorized by the board of directors, and any contracts, deeds, mortgages, bonds, or other instruments which the board of directors has authorized to be executed, according to the requirements of the form of the instrument, except when a different mode of execution is expressly prescribed by the board of directors or these by-laws; (f) have general charge of the stock transfer books of the corporation; (g) perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to him by the president or by the board of directors. SECTION 9. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The assistant treasurers and assistant secretaries shall perform such duties as shall be assigned to them by the treasurer or the secretary, respectively, or by the president or the board of directors. The assistant secretary may sign with the president, or a vice-president, or any other officer thereunto authorized by the board of directors, certificates for shares of the corporation, the issue of which shall have been authorized by the board of directors, and any contracts, deeds, mortgages, bonds, or other instruments which the board of directors has authorized to be executed, according to the requirements of the form of the instrument, except when a different mode of execution is expressly prescribed by the board of directors or these by-laws. SECTION 10. SALARIES. The salaries of the officers shall be fixed from time to time by the board of directors and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the corporation. ARTICLE V CONTRACTS, LOANS, CHECKS AND DEPOSITS SECTION 1. CONTRACTS. The board of directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. SECTION 2. LOANS. No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the board of directors. Such authority may be general or confined to specific instances. SECTION 3. CHECKS, DRAFTS ETC. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by resolution of the board of directors. SECTION 4. DEPOSITS. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositaries as the board of directors may select. -10- 11 ARTICLE VI CERTIFICATES FOR SHARES AND THEIR TRANSFER SECTION 1. CERTIFICATES FOR SHARES. The issued shares of the corporation shall be represented by certificates or shall be uncertificated shares. Certificates representing shares of the corporation shall be signed by the president or a vice-president or by such officer as shall be designated by resolution of the board of directors and by the secretary or an assistant secretary, and may be sealed with the seal or a facsimile of the seal of the corporation. If both of the signatures of the officers be by facsimile, the certificate shall be manually signed by or on behalf of a duly authorized transfer agent or clerk. Each certificate representing shares shall be consecutively numbered or otherwise identified, and shall also state the name of the person to whom issued, the number and class of shares (with designation of series, if any), the date of issue, that the corporation is organized under Illinois law, and the par value or a statement that the shares are without par value. If the corporation is authorized and does issue shares of more than one class or of series within a class, the certificate shall also contain such information or statement as may be required by law. No certificate shall be issued for any shares until such shares are fully paid. The name and address of each shareholder, the number and class of shares held and the date on which the certificates for the shares were issued shall be entered on the books of the corporation. The person in whose name shares stand on the books of the corporation shall be deemed the owner thereof for all purposes as regards the corporation. SECTION 2. LOST CERTIFICATES. If a certificate representing shares allegedly has been lost or destroyed the board of directors may in its discretion, except as may be required by law, direct that a new certificate be issued upon such indemnification and other reasonable requirements as it may impose. SECTION 3. TRANSFERS OF SHARES. Transfers of shares of the corporation shall be recorded on the books of the corporation and, except in the case of a lost or destroyed certificate, shall be made on surrender for cancellation of the certificate for such shares. A certificate presented for transfer must be duly endorsed and proper guaranty of signature and other appropriate assurances that the endorsement is effective may be required. Unless otherwise provided by the Articles of Incorporation, or by these by-laws, the board of directors may provide by resolution that some or all of any or all classes and series of its shares shall be uncertificated shares, provided that such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Within a reasonable time after the issuance or transfer of uncertificated shares, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates. Except as otherwise expressly provided by law, the rights and obligations of the holders of uncertificated shares and rights and obligations of the holders of certificates representing shares of the same class and series shall be identical. -11- 12 ARTICLE VII FISCAL YEAR The fiscal year of the corporation shall be fixed by resolution of the board of directors. ARTICLE VIII DISTRIBUTIONS The board of directors may authorize, and the corporation may make, distributions to its shareholders, subject to any restriction in the Articles of Incorporation and subject also to the limitations following: No distribution may be made if, after giving it effect: (a) The corporation would be insolvent; or (b) The net assets of the corporation would be less than zero or less than the maximum amount payable at the time of distribution to shareholders having preferential rights in liquidation if the corporation were then to be liquidated. The board of directors may base a determination that a distribution may be made either on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances. The effect of a distribution shall be measured as of the earlier of: (a) the date of its authorization if payment occurs within 120 days after the date of authorization or the date of payment if payment occurs more than 120 days after the date of authorization; or (b) In the case of distribution by purchase, redemption, or other acquisition of the corporation's shares, the earlier of (i) the date money or other property is transferred or debt incurred by the corporation of (ii) the date shareholders cease to be shareholders. -12- 13 ARTICLE IX SEAL The corporate seal shall have inscribed thereon the name of the corporation and the words "Corporate Seal, Illinois." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. ARTICLE X WAIVER OF NOTICE Whenever any notice is required to be given under the provisions of these by-laws or under the provisions of the articles of incorporation or under the provisions of The Business Corporation Act, a waiver thereof in writing, signed by the person or person entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. ARTICLE XI AMENDMENTS The by-laws of the corporation may be amended, altered, or repealed by the shareholders or the board of directors, but no by-law adopted by the shareholders may be altered, amended, or repealed by the board of directors. ARTICLE XII INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS (a) The corporation shall and does hereby indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or who is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to the best interest of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably -13- 14 believed to be in or not opposed to the best interests of the corporation or, with respect to any criminal action or proceeding, that the person had reasonable cause to believe that his or her conduct was unlawful. (b) The corporation shall and does hereby indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to the best interests of the corporation, provided that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his or her duty to the corporation, unless, and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper. (c) To the extent that a director, officer, employee or agent of a corporation has been successful, on the merits or otherwise, in the defense of any action, suit or proceeding referred to in subsections (a) and (b), or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith. (d) Any indemnification under subsections (a) and (b) (unless ordered by a court) shall be made by the corporation only as authorized in the specific case, upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in subsections (a) or (b). Such determination shall be made (1) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceedings, or (2) if such a quorum is not obtainable, or even if obtainable, if a quorum of disinterested direct so directs, by independent legal counsel in a written opinion, or (3) by the shareholders. (e) Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding, as authorized by the board of directors in the specific case, upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount, unless it shall ultimately be determined that he or she is entitled to be indemnified by the corporation as authorized in this Article. (f) The indemnification provided by this Article shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any by-law, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his or -14- 15 her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent, and shall inure to the benefit of the heirs, executors and administrators of such a person. (g) A corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or who is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify such person against such liability under the provisions of this Article. (h) If a corporation has paid indemnity or has advanced expenses to a director, officer, employee or agent, the corporation shall report the indemnification or advance in writing to the shareholders with or before the notice of the next shareholders meeting. (i) For purposes of this Article, references to "the corporation" shall include, in addition to the surviving corporation, any merging corporation (including any corporation having merged with a merging corporation) absorbed in a merger which, if its separate existence had continued, would have had the power and authority to indemnify its directors, officers, and employees or agents, so that any person who was a director, officer, employee or agent of such merging corporation, or was serving at the request of such merging corporation as a director, officer, employee or agent or another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article with respect to the surviving corporation as such person would have with respect to such merging corporation if its separate existence had continued. (j) For purposes of this Article, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries. A person who acted in good faith and in a manner he or she reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interest of the corporation" as referred to in this Article. ARTICLE XIII FUTURE AMENDMENTS TO BUSINESS CORPORATION ACT In the event the Business Corporation Act is amended after the adoption of these by-laws in a manner which makes these by-laws conflict with the Business Corporation Act, these by-laws shall be deemed to be amended to comport with such conflicting provisions of the amended Business Corporation Act. -15- 16 UNANIMOUS WRITTEN CONSENT OF THE SOLE DIRECTOR AND SHAREHOLDER OF STANDARD PARKING CORPORATION The undersigned, being the sole Director and Shareholder of Standard Parking Corporation, an Illinois corporation, hereby consents in writing to the adoption of the following resolutions: RESOLVED, that Myron Warshauer be and hereby is elected as sole director of the Corporation, to hold such position until his successor has been duly elected and qualified; FURTHER RESOLVED, that any and all acts previously taken by the directors of the Corporation since the date of the last annual meeting to the date hereof are in all respects expressly ratified and confirmed as the acts and deeds of the Corporation; FURTHER RESOLVED, that the form, terms and provisions of the Agreement to Terminate the Stock Purchase Agreement dated November 20, 1990 by and among Sidney Warshauer as Trustee of the Sidney Warshauer Trust dated November 1, 1979, Myron Warshauer and the Corporation, a copy of which is attached hereto as Exhibit A, terminating that certain Stock Purchase Agreement dated December 5, 1979 and as amended in that certain First Amendment to Stock Purchase Agreement dated July 1, 1986 and in that certain Second Amendment to Stock Purchase Agreement dated October 10, 1986, be and hereby is approved; FURTHER RESOLVED, that the form, terms and provisions of the Stock Assignment dated November 20, 1990 by Sidney Warshauer as Trustee of the Sidney Warshauer Trust dated November 1, 1979, transferring to Myron Warshauer its two (2) shares of common stock of the Corporation, a copy of which is attached hereto as Exhibit B, be and hereby is approved; FURTHER RESOLVED, that Article III, Section 2 of the By-Laws of the Corporation is amended to read as follows: "SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors of the corporation shall be one (1). The directors shall hold office until the next annual meeting of shareholders or until his successor shall have been elected and qualified. The director need not be a resident of Illinois or shareholder of the Corporation. The number of directors may be increased from time to time by the amendment of this Section." 17 FURTHER RESOLVED, that Article IV, Section 4 of the By-Laws of the Corporation is amended to read as follows: "SECTION 4. CHAIRMAN OF THE BOARD. The chairman of the board may sign, in lieu of the president, certificates for shares of the corporation, deeds, mortgages, bonds, contracts or other instruments, which the board of directors have authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the board of directors of these By-Laws to some other officer or agent of the corporation or in cases where the signing and execution thereof is required by law to be performed by some other officer or agent of the corporation." FURTHER RESOLVED, that the appropriate officers of the Corporation be and hereby are authorized and directed to take such actions as may be necessary or appropriate to implement the foregoing resolutions. Dated: November 20, 1990 /s/ Myron Warshauer -------------------------------------- Myron Warshauer, Director and Shareholder -2- EX-3.18 21 ARTICLES OF INCORPORATION 1 ARTICLES OF Form BCA-2.10 INCORPORATION ========================================================================== (Rev. Jan. 1991) George H. Ryan Secretary of State [STAMP] SUBMIT IN DUPLICATE! Department of Business Services Springfield, IL 62756 Telephone (217) 782-6961 ========================= ======================== Payment must be made by APR 12 1993 This space for use by certified check, Secretary of State cashier's check, GEORGE H. RYAN Illinois attorney's SECRETARY OF STATE Date 4-12-98 check, Illinois C.P.A's check or money order, Franchise Tax $25 payable to "Secretary Filing Fee $75 of State." --- Approved: 100 ========================================================================== 1. CORPORATE NAME: Standard Parking Corporation MW ----------------------------------------------------------- (The corporate name must contain the word "corporation", "company," "incorporated," "limited" or an abbreviation thereof.) 2. Initial Registered Agent: Michael K. Wolf ------------------------------------------------- First Name Middle Initial Last Name Initial Registered office: 555 E. Monroe Street, Ste. 3440 ------------------------------------------------ Number Street Suite # Chicago, Illinois 60603 ------------------------------------------------ City Zip Code County - -------------------------------------------------------------------------------- 3. Purpose or purposes for which the corporation is organized: (if not sufficient space to cover this point, add one or more sheets of this size.) To transact any or all lawful activities and businesses which are authorized by the Illinois Business Corporation Act of 1983, as amended, and to purchase or otherwise acquire, hold, use, own, mortgage, sell, convey, lease or otherwise dispose of and deal in real and personal property of every class and description or any interest therein. - -------------------------------------------------------------------------------- 2 4. Paragraph 1: Authorized Shares, Issued Shares and Consideration Received: Number of Number of Consideration Per Value Shares Shares proposed to be Received Class per Share Authorized to be Issued Therefor --------------------------------------------------------------------- Common No Par 100,000 100 $1,000 --------------------------------------------------------------------- --------------------------------------------------------------------- --------------------------------------------------------------------- --------------------------------------------------------------------- TOTAL $1,000 Paragraph 2: The preferences, qualifications; limitations and special or relative rights in respect of the shares of each class are: (if not sufficient space to cover this point, add one or more sheets of this size.) (over) 3 5. OPTIONAL: (a) Number of directors constituting the initial board of directors of the corporation:____________________. (b) Names and addresses of the persons who are to serve as directors until the first annual meeting of shareholders or until their successors be elected and qualify: Name Residential Address ---------------------------------------------------------- ---------------------------------------------------------- ---------------------------------------------------------- - -------------------------------------------------------------------------------- 6. OPTIONAL: (a) It is estimated that the value of all property to be owned by the corporation for the following year wherever located will be: $ __________________ (b) It is estimated that the value of the property to be located within the State of Illinois during the following year will be: $ __________________ (c) it is estimated that the gross amount of business which will be transacted by the corporation during the following year will be: $ __________________ (d) it is estimated that the gross amount of business in the State of Illinois during the following year will be: $ __________________ - -------------------------------------------------------------------------------- 7. OPTIONAL: OTHER PROVISIONS Attach a separate sheet of this size for any other provision to be included in the Articles of Incorporation, e.g., authorizing preemptive rights, denying cumulative voting, regulating internal affairs, voting majority requirements, fixing a duration other than perpetual, etc. - -------------------------------------------------------------------------------- 4 8. NAME(S) & ADDRESS(ES) OF INCORPORATOR(S) The undersigned incorporator(s) hereby declare(s), under penalty of perjury, that the statements made in the foregoing Articles of Incorporation are true. Dated April 9, 1993 Signature and Name Address 1. /s/ Dianne M. Chiappetti 1. 30 South Wacker Drive, 29th Floor -------------------------------- --------------------------------- Signature Street Dianne M. Chiappetti Chicago, Illinois 60606-7434 -------------------------------- --------------------------------- (Type or Print Name) City/Town State Zip Code 2. 2. -------------------------------- --------------------------------- Signature Street -------------------------------- --------------------------------- (Type or Print Name) City/Town State Zip Code 3. 3. -------------------------------- --------------------------------- Signature Street -------------------------------- --------------------------------- (Type or Print Name) City/Town State Zip Code (Signatures must be in ink on original document. Carbon copy, xerox or rubber stamp signatures may only be used on conformed copies.) NOTE: If a corporation acts as incorporator, the name of the corporation and the state of incorporation shall be shown and the execution shall be by its President or Vice-President and verified by him, and attested by its Secretary or an Assistant Secretary. - -------------------------------------------------------------------------------- FEE SCHEDULE o The initial franchise tax is assessed at the rate of 15/100 of 1 percent ($1.50 per $1,000) on the paid-in capital represented in this state, with a minimum of $25 and a maximum of $1,000,000. o The filing fee is $75. o The minimum total due (franchise tax + filing fee) is $100. (Applies when the Consideration to be Received is as set forth in Item 4 does not exceed $16,667) o The Department of Business Services in Springfield will provide assistance in calculating the total fees if necessary. Illinois Secretary of State Springfield, IL 62756 Department of Business Services Telephone (217) 782-6961 5 File # D5726-252-4 - --------------------------- Form BCA-5.10 NFP-105.10 (Rev. Jan. 1995) - --------------------------- George H. Ryan Secretary of State Department of Business Services Springfield, IL 62756 Telephone (217) 782-3647 - --------------------------- STATEMENT OF CHANGE OF REGISTERED AGENT AND/OR REGISTERED OFFICE - --------------------------- [STAMPED] PAID MAR 28 1996 FILED MAR 28 1996 GEORGE H. RYAN SECRETARY OF STATE - --------------------------- SUBMIT IN DUPLICATE - --------------------------- This space for use by Secretary of State Date 3/28/96 Filing Fee $5 Approved: - --------------------------- Remit payment in check or money order, payable to "Secretary of State." - --------------------------- 1. CORPORATE NAME: Standard Parking Corporation MW ----------------------------------------------------------- 2. STATE OF COUNTRY OF INCORPORATION: Illinois ---------------------------------------- 3. Name and address of the registered agent and registered office as they appear on the records of the office of the Secretary of State (before change): Registered Agent Michael K. Wolf -------------------------------------------------- First Name Middle Name Last Name Registered Office 55 E. Monroe St., Suite 3440 -------------------------------------------------- Number Street Suite No. (A P.O. Box alone is not acceptable) Chicago 60603 Cook -------------------------------------------------- City Zip Code County 4. Name and address of the registered agent and registered office shall be (after all changes herein reported): Registered Agent Michael K. Wolf -------------------------------------------------- First Name Middle Name Last Name Registered Office 200 E. Randolph Dr., Suite 4800 -------------------------------------------------- Number Street Suite No. (A P.O. Box alone is not acceptable) Chicago 60601 Cook -------------------------------------------------- City Zip Code County 5. The address of the registered office and the address of the business office of the registered agent, as changed, will be identical. 6 6. The above change was authorized by: ("X" one box only) a. |_| By resolution duly adopted by the board of directors. (Note 5) b. |X| By action of the registered agent. (Note 6) NOTE: When the registered agent changes, the signatures of both president and secretary are required. 7. (If authorized by the board of directors, sign here. See Note 5). The undersigned corporation has caused this statement to be signed by its duly authorized officers, each of whom affirms, under penalty of perjury, that the facts stated herein are true. Dated 19 ---------------- -- --------------------------------------------------- (Exact Name of Corporation) attested by by ---------------------------- ------------------------------------ (Signature of Secretary or (Signature of Vice President) Assistant Secretary) ---------------------------- ------------------------------------ (Type or Print Name and Title) (Type or Print Name and Title) (If change of registered office by registered agent, sign here. See Note 6) The undersigned, under penalties of perjury, affirms that the facts stated herein are true. Dated February 29 1996 /s/ Michael K. Wolf ---------------- ---- -------------------------------------------- (Signature of Registered Agent of Record) NOTES 1. The registered office may, but need not be the same as the principal office of the corporation. However, the registered office and the office address of the registered agent must be the same. 2. The registered office must include a street or road address: a post office box number alone is not acceptable. 3. A corporation cannot act as its own registered agent. 4. If the registered office is changed from one county to another, then the corporation must file with the recorder of deeds of the new county a certified copy of the articles of incorporation and a certified copy of the statement of change of registered office. Such certified copies may be obtained ONLY from the Secretary of State. 5. Any change of registered agent must be by resolution adopted by the board of directors. This statement must then be signed by the president (or vice-president) and by the secretary (or an assistant secretary). 6. The registered agent may report a change of the registered office of the corporation for which he or she is registered agent. When the registered agent reports such a change, this statement must be signed by the registered agent. EX-3.19 22 BY-LAWS OF STANDARD PARKING 1 By-Laws of Standard Parking Corporation MW (an Illinois Corporation) Adopted April 12, 1993 This Document Prepared By: Sachnoff & Weaver, Ltd. 30 South Wacker Drive Suite 2900 Chicago, Illinois 60606 (312) 207-1000 2 TABLE OF CONTENTS ----------------- Page ---- Article 1 - CORPORATE OFFICES.................................................1 Section 1.1 Principal Corporate Office.....................................1 Section 1.2 Registered Office in Illinois..................................1 Article 2 - SHAREHOLDERS......................................................1 Section 2.1 Annual Meeting.................................................1 Section 2.2 Special Meetings...............................................1 Section 2.3 Place of Meeting...............................................1 Section 2.4 Notice of Meeting..............................................2 Section 2.5 Meeting of all Shareholders....................................2 Section 2.6 Fixing of Record Date..........................................2 Section 2.7 Voting Lists...................................................2 Section 2.8 Quorum of Shareholders.........................................3 Section 2.9 Proxies........................................................3 Section 2.10 Voting of Shares..............................................3 Section 2.11 Voting of Shares by Certain Holders...........................3 Section 2.12 Voting by Ballot; Inspectors..................................4 Section 2.13 Informal Action by Shareholders...............................4 Article 3 - DIRECTORS.........................................................5 Section 3.1 General Powers.................................................5 Section 3.2 Number, Tenure and Qualification...............................5 Section 3.3 Regular Meetings...............................................5 Section 3.4 Special Meetings...............................................5 Section 3.5 Notice.........................................................5 Section 3.6 Quorum.........................................................6 Section 3.7 Manner of Action...............................................6 Section 3.8 Vacancies......................................................6 Section 3.9 Removal of Directors...........................................6 Section 3.10 Compensation..................................................6 Section 3.11 Presumption of Assent.........................................7 Section 3.12 Informal Action by Directors..................................7 Section 3.13 Participation by Conference Telephone.........................7 Section 3.14 Committees....................................................7 Section 3.15 Director Conflict of Interest.................................8 Article 4 - OFFICERS..........................................................9 Section 4.1 Number.........................................................9 Section 4.2 Election and Term of Office....................................9 -i- 3 Page ---- Section 4.3 Removal........................................................9 Section 4.4 Vacancies......................................................9 Section 4.5 The President..................................................9 Section 4.6 The Vice-Presidents...........................................10 Section 4.7 The Secretary.................................................10 Section 4.8 The Treasurer.................................................10 Section 4.9 Assistant Secretaries and Assistant Treasurers................10 Section 4.10 Salaries......................................................11 Article 5 - INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS; INSURANCE..................................11 Section 5.1 Actions other than Actions by or in the Right of the Corporation...................................................11 Section 5.2 Actions by or in the Right of the Corporation.................11 Section 5.3 Indemnification in Event of Successful Defense................12 Section 5.4 Procedures for Indemnification................................12 Section 5.5 Indemnity Insurance...........................................13 Article 6 - CONTRACTS, LOANS, CHECKS AND DEPOSITS............................13 Section 6.1 Contracts.....................................................13 Section 6.2 Loans.........................................................14 Section 6.3 Pledges of Property and Assets................................14 Section 6.4 Checks, Drafts, Etc...........................................14 Section 6.5 Deposits......................................................14 Article 7 - SHARES AND THEIR TRANSFER........................................14 Section 7.1 Consideration for Shares......................................14 Section 7.2 Payment for Shares............................................14 Section 7.3 Shares Represented by Certificates............................15 Section 7.4 Uncertificated Shares.........................................16 Article 8 - FISCAL YEAR......................................................16 Article 9 - DIVIDENDS........................................................16 Article 10 - SEAL............................................................16 Article 11 - WAIVER OF NOTICE................................................16 Article 12 - AMENDMENTS TO THE BY-LAWS.......................................17 Article 13 - STATUTORY REFERENCES............................................17 -ii- 4 Standard Parking Corporation MW Article 1 CORPORATE OFFICES Section 1.1 Principal Corporate Office. The principal corporate office of Standard Parking Corporation MW in Illinois shall be located in the City of Chicago, County of Cook, or at such other place as the Board of Directors may determine by resolution from time to time. The Corporation may have such other offices, either within or without the State of Illinois, as the Board of Directors may designate or the Corporation's business may require from time to time. [BCA ss. 3.10(j))] Section 1.2 Registered Office in Illinois. The Registered Office of the Corporation required by the Illinois Business Corporation Act of 1983 ("BCA") to be maintained in the State of Illinois may be, but need not be, the same as the principal corporate office or its principal place of business in the State of Illinois, but shall in any event be identical with the business office of the Corporation's Registered Agent in Illinois. [BCA ss.5.05] The address of the Registered Office in Illinois may be changed from time to time by the Board of Directors or by such Registered Agent. [BCA ss.ss. 5.10, 5.20] Article 2 SHAREHOLDERS Section 2.1 Annual Meeting. Except as the Board of Directors of the Corporation may otherwise provide by resolution duly adopted pursuant to the authority granted hereby, the Annual Meeting of Shareholders of the Corporation shall be held each year on the second Tuesday in April (beginning with the year 1994), commencing at the hour of 10:00A.M., for the purpose of electing Directors and for the transaction of such other business as may properly come before the Meeting. If the day fixed for the Annual Meeting shall be a legal holiday, such Meeting shall be held on the next succeeding business day. [BCA ss. 7.05] Section 2.2 Special Meetings. Special Meetings of the Shareholders may be called by the President, by the Board of Directors, or by the holders of not less than one-fifth of all the outstanding shares of the Corporation entitled to vote on the matter for which the Special Meeting is called. [BCA ss. 7.05] Section 2.3 Place of Meeting. The Board of Directors may by resolution designate any place, either within or without the State of Illinois, as the place of meeting for any Annual Meeting of Shareholders or for any Special Meeting called by the Board of Directors or by the President, and may designate any place within the State of Illinois for any Special Meeting called by Shareholders. A waiver of notice signed by all Shareholders may designate any place, either within or without the State of Illinois, as the place for the holding of any Meeting. If no designation of a meeting place is made, or if a Special Meeting be otherwise called, the place of meeting shall be the Registered Office of the Corporation in the State of Illinois, except as otherwise provided in Section 2.5 of these By-Laws. [BCA ss. 7.05] Section 2.4 Notice of Meeting. Written notice stating the place, day and hour of the Meeting, and, in the case of a Special Meeting, the purpose or purposes for which the Meeting is 5 Standard Parking Corporation MW called, shall be delivered not less than ten (10) nor more than sixty (60) days before the date of the Meeting, or, in the case of a merger, consolidation, share exchange, dissolution, or sale, lease or exchange of assets requiring Shareholder approval, not less than twenty (20) nor more than sixty (60) days before the date of the Meeting, either personally or by mail, by or at the direction of the President, or the Secretary, or the Officer or persons calling the meeting, to each Shareholder of record entitled to vote at such Meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the Shareholder at his or her address as it appears on the records of the Corporation, with postage thereon prepaid. [BCA ss. 7.15] Section 2.5 Meeting of all Shareholders. If all of the Shareholders shall meet at any time and place, either within or without the State of Illinois, and consent to the holding of a Meeting at such time and place, such Meeting shall be valid without call or notice, and at such Meeting any corporate action may be taken. [BCA ss. 7.20] Section 2.6 Fixing of Record Date. For the purpose of determining Shareholders entitled to notice of or to vote at any Meeting of Shareholders, or Shareholders entitled to receive payment of any dividend or distribution, or in order to make a determination of Shareholders for any other proper purpose, the Board of Directors of the Corporation may fix in advance a date as the record date for any such determination of Shareholders, such date in any case to be not more than sixty (60) days immediately preceding the date of the Meeting, payment or other transaction, and, for a Meeting of Shareholders, not less than ten (10) days, or in the case of a merger, consolidation, share exchange, dissolution, or sale, lease or exchange of assets requiring Shareholder approval, not less than twenty (20) days, immediately preceding such Meeting. If no record date is fixed for the determination of Shareholders entitled to notice of or to vote at a Meeting of Shareholders, or Shareholders entitled to receive payment of a dividend or other distribution, the date on which notice of the Meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend or distribution is adopted, as the case may be, shall be the record date for such determination of Shareholders. When a determination of Shareholders entitled to vote at any Meeting of Shareholders has been made as provided in this Section 2.6, such determination shall apply to any adjournment thereof. [BCA ss. 7.25] Section 2.7 Voting Lists. The Officer or agent having charge of the transfer books and records for shares of the Corporation shall make, within twenty (20) days after the record date for a Meeting of Shareholders or ten (10) days before such Meeting, whichever is earlier, a complete list of the Shareholders entitled to vote at such Meeting, arranged in alphabetical order, with the address of and the number of shares held by each, which list, for a period of ten (10) days prior to such Meeting, shall be kept on file at the Registered Office of the Corporation and shall be subject to inspection by any Shareholder, and to copying at the Shareholder's expense, at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the Meeting and shall be subject to the inspection of any Shareholder during the whole time of the Meeting. The original share ledger or transfer book, or a duplicate thereof kept in Illinois, shall be prima facie evidence as to who are the Shareholders entitled to examine such list or share ledger or transfer book, or to vote at any Meeting of Shareholders. Failure to comply with the requirements of this Section 2.7 shall not affect the validity of any action taken at such -2- 6 Standard Parking Corporation MW Meeting. An Officer or agent having charge of the transfer books or records who shall fail to prepare the list of Shareholders, or keep the same on file for a period of ten (10) days, or produce and keep the same open for inspection at the Meeting, as provided in this Section 2.7, shall be liable to any Shareholder suffering damage on account of such failure, to the extent of such damage as provided by law. [BCA ss. 7.30] Section 2.8 Quorum of Shareholders. A majority of the outstanding shares of the Corporation entitled to vote on a matter, represented in person or by proxy, shall constitute a quorum for consideration of such matter at a meeting of Shareholders. If a quorum is present, the affirmative vote of the majority of the shares represented at the Meeting and entitled to vote on a matter shall be the act of the Shareholders, unless the vote of a greater number or voting by classes is required by the Illinois Business Corporation Act of 1983, by the Corporation's Articles of Incorporation, or by these By-Laws. [BCA ss. 7.60] Section 2.9 Proxies. A Shareholder may appoint a proxy to vote or otherwise act for him or her by signing an appointment form and delivering it to the person so appointed. No proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy continues in full force and effect until revoked by the person executing it prior to the vote pursuant thereto, except as otherwise provided in this Section 2.9 and in Section 7.50 of the Illinois Business Corporation Act of 1983. Such revocation may be effected by a writing delivered to the Corporation stating that the proxy is revoked or by a subsequent proxy executed by, or by attendance at the Meeting and voting in person by, the person executing the proxy. The dates contained on the forms of proxy presumptively determine the order of execution, regardless of any postmark dates on envelopes in which they are mailed. An appointment of a proxy is revocable by the Shareholder unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest in the shares or in the Corporation generally. Unless the appointment of a proxy contains an express limitation on the proxy's authority, the Corporation may accept the proxy's vote or other action as that of the Shareholder making the appointment. [BCA ss. 7.50] Section 2.10 Voting of Shares. Each outstanding share of the Corporation shall be entitled to one vote in each matter submitted to a vote by the Shareholders, except as the Illinois Business Corporation Act of 1983 and the Corporation's Articles of Incorporation may otherwise limit or deny voting rights or provide special voting rights as to any class or classes or series of shares. [BCA ss. 7.40] Section 2.11 Voting of Shares by Certain Holders. Shares of its own stock belonging to this Corporation shall not be voted, directly or indirectly, at any Meeting and shall not be counted in determining the total of outstanding shares at any given time, but shares of the Corporation held by the Corporation in a fiduciary capacity may be voted and shall be counted in determining the total number of outstanding shares entitled to vote at any given time. Shares registered in the name of another corporation, domestic or foreign, may be voted by any Officer, agent, proxy or other legal representative authorized to vote such shares under the law of incorporation of such corporation. The Corporation may treat the president or other person holding the position of chief executive officer of such other corporation as authorized to -3- 7 Standard Parking Corporation MW vote such shares, together with any other person indicated and any other holder of an office indicated by the corporate Shareholder to the Corporation as a person or office authorized to vote such shares. Such persons and offices indicated shall be registered by the Corporation on the transfer books for shares and included in any voting list prepared in accordance with Section 2.7 of these By-Laws. Shares registered in the name of a deceased person, a minor ward or a person under legal disability may be voted by his or her administrator, executor or court appointed guardian, either in person or by proxy without a transfer of such shares into the name of such administrator, executor or court appointed guardian. Shares registered in the name of a trustee may be voted by him or her, either in person or by proxy. Shares registered in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his or her name if authority so to do is contained in an appropriate order of the court by which such receiver was appointed. A Shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred. [BCA ss. 7.45] Section 2.12 Voting by Ballot; Inspectors. Voting by Shareholders on any matter or in any election may be viva voce unless the Chairman of the Meeting shall order, or any Shareholder entitled to vote thereon shall demand, that voting be by ballot. At any Meeting of Shareholders, the Chairman of the Meeting may, or upon the request of any Shareholder shall, appoint one or more persons as inspectors for such Meeting. Such inspectors shall ascertain and report the number of shares represented at the Meeting, based upon their determination of the validity and effect of proxies; count all votes and report the results; and do such other acts as are proper to conduct the election and voting with impartiality and fairness to all the Shareholders. Each report of an inspector shall be in writing and signed by him or her or by a majority of them if there be more than one inspector acting at such Meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the Meeting and the results of the voting shall be prima facie evidence thereof. [BCA ss. 7.35] Section 2.13 Informal Action by Shareholders. Any action required to be taken at any Annual or Special Meeting of Shareholders of the Corporation, or any other action which may be taken at a Meeting of the Shareholders, may be taken without a Meeting and without a vote, if a consent in writing, setting forth the action so taken, shall be signed (i) by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voting or (ii) by all of the Shareholders entitled to vote with respect to the subject matter thereof. If such consent is signed by less than all of the Shareholders entitled to vote, then such consent shall become effective only if, at least five (5) days prior to the execution of the consent, a notice of the proposed action is delivered in writing to all of the Shareholders entitled -4- 8 Standard Parking Corporation MW to vote with respect to the subject matter thereof and, after the effective date of the consent, prompt notice of the taking of the action without a meeting by less than unanimous written consent shall be delivered in writing to those Shareholders who have not consented in writing. [BCA ss. 7.10] Article 3 DIRECTORS Section 3.1 General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. [BCA ss. 8.05] Section 3.2 Number, Tenure and Qualification. The number of Directors of the Corporation shall be one (1). Each Director shall serve until the next Annual Meeting of Shareholders or until his or her successor shall have been elected and qualified. Directors need not be residents of Illinois or Shareholders of the Corporation. A Director may resign at any time by giving written notice to the Board of Directors, its Chairman, or to the President or Secretary of the Corporation. A resignation is effective when the notice is given unless the notice specifies a future date. The pending vacancy may be filled before the effective date, but the successor shall not take office until the effective date. [BCA ss.ss. 8.01, 8.10] Section 3.3 Regular Meetings. A Regular Meeting of the Board of Directors shall be held without other notice than this By-Law, immediately after, and at the same place as, the Annual Meeting of Shareholders. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Illinois, for the holding of additional Regular Meetings without other notice than such resolution. [BCA ss.ss. 8.20, 8.25] Section 3.4 Special Meetings. Special Meetings of the Board of Directors may be called by or at the request of the President or any two Directors. The person or persons authorized to call Special Meetings of the Board of Directors may fix any place, either within or without the State of Illinois, as the place for holding any Special Meeting of the Board of Directors called by them. [BCA ss.ss. 8.20, 8.25] Section 3.5 Notice. Notice of any Special Meeting shall be given at least three days previous thereto by written notice delivered personally or by telegram or mailgram to each Director at his or her business address, or given at least five (5) days previous thereto if mailed. If mailed, such notice shall be deemed to be delivered on the second day following the date on which it was deposited in the United States mail so addressed, with proper postage thereon prepaid. If notice be given by telegram or mailgram, such notice shall be deemed to be delivered when the telegram or mailgram is delivered to the telegraph company. Any Director may waive notice of any Meeting by executing a written waiver of notice. The attendance of a Director at any Meeting shall constitute a waiver of notice of such Meeting, except where a Director attends a Meeting for the express purpose of objecting to the transaction of any business because the Meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any Regular or Special Meeting of the Board of Directors need be specified in the -5- 9 Standard Parking Corporation MW notice or waiver of notice of such Meeting. [BCA ss. 8.25] Section 3.6 Quorum. A majority of the number of Directors fixed by these By-Laws shall constitute a quorum for transaction of business at any Meeting of the Board of Directors, provided, that if less than a majority of such number of Directors is present at said Meeting, a majority of the Directors present may adjourn the Meeting from time to time without further notice. [BCA ss. 8.15(a)] Section 3.7 Manner of Action. The act of the majority of Directors present at a Meeting at which a quorum is present shall be the act of the Board of Directors. [BCA ss. 8.15(c)] Section 3.8 Vacancies. Any vacancy occurring in the Board of Directors and any directorship to be filled by reason of an increase in the number of Directors may be filled by election at an Annual Meeting or at a Special Meeting of Shareholders called for that purpose. In the absence of a Special Meeting of Shareholders, the Board of Directors may fill the vacancy, except as otherwise specified in the Articles of Incorporation. A Director elected by the Shareholders to fill a vacancy shall hold office for the balance of the term for which he or she was elected. A Director appointed to fill a vacancy shall serve until the next Meeting of Shareholders at which Directors are to be elected. [BCA ss. 8.30] Section 3.9 Removal of Directors. One or more of the Directors may be removed, with or without cause, at a Meeting of Shareholders by the affirmative vote of the holders of a majority of the outstanding shares then entitled to vote at an election of Directors, except that: (a) No Director shall be removed at a Meeting of Shareholders unless the notice of such Meeting shall state that a purpose of the Meeting is to vote upon the removal of one or more Directors named in the notice. Only the named Director or Directors may be removed at such Meeting. Section 3.10 Compensation. Except as otherwise provided in any written agreement and except as otherwise set forth below, the Board of Directors, by the affirmative vote of a majority of Directors then in office, and irrespective of any personal interest of any of its members, shall have authority to establish reasonable compensation of all Directors for services to the Corporation as Directors, Officers or otherwise. [BCA ss. 8.05(b)] By resolution of the Board of Directors, the Directors may be paid their expenses, if any, of attendance at each Meeting of the Board of Directors. In the event the Internal Revenue Service shall determine any such compensation paid to a Director to be unreasonable or excessive, such Director must repay to the Corporation the excess over what is determined to be reasonable compensation, with interest on such excess at the rate of nine percent (9%) per annum, within ninety (90) days after notice from the Corporation. Section 3.11 Presumption of Assent. A Director of the Corporation who is present at a Meeting of the Board of Directors at which action on any corporate matter is taken shall be conclusively presumed to have assented to the action taken unless his or her dissent shall be entered in the minutes of the Meeting or unless he or she shall file his or her written dissent to -6- 10 Standard Parking Corporation MW such action with the person acting as the Secretary of the Meeting before the adjournment thereof or shall forward such dissent by registered or certified mail to the Secretary of the Corporation immediately after the adjournment of the Meeting. Such right to dissent shall not apply to a Director who voted in favor of such action. [BCA ss. 8.65(b)] Section 3.12 Informal Action by Directors. Unless specifically prohibited by the Articles of Incorporation or by these By-Laws, any action required to be taken at a Meeting of the Board of Directors, or any other action which may be taken at a Meeting of the Board of Directors or of a committee thereof, may be taken without a Meeting if a consent in writing, setting forth the action so taken, is signed by all the Directors entitled to vote with respect to the subject matter thereof, or by all the members of such Committee, as the case may be. The consent shall be evidenced by one or more written approvals, each of which sets forth the action taken and bears the signature of one or more Directors. All the approvals evidencing the consent shall be delivered to the Secretary to be filed in the corporate records. The action taken shall be effective when all the Directors have approved the consent unless the consent specifies a different effective date. Any such consent signed by all the Directors or all the members of a Committee shall have the same effect as a unanimous vote. [BCA ss. 8.45] Section 3.13 Participation by Conference Telephone. Members of the Board of Directors or of any Committee of the Board of Directors may participate in and act at any Meeting of the Board of Directors or any Committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the Meeting can hear each other Participation in such Meeting shall constitute attendance and presence in person at the Meeting of the person or persons so participating. [BCA ss. 8.15(d)] Section 3.14 Committees. A majority of the Directors may create one or more Committees and appoint members of the Board of Directors to serve on such Committee or Committees. Each Committee shall have two or more members, who serve at the pleasure of the Board of Directors. Unless the appointment by the Board of Directors requires a greater number, a majority of any Committee shall constitute a quorum and a majority of a quorum is necessary for Committee action. A Committee may act by unanimous consent in writing without a meeting and, subject to the provisions of these By-Laws or action by the Board of Directors, such Committee, by majority vote of its members, shall determine the time and place of meetings and the notice required therefor. To the extent specified by the Board of Directors, each Committee may exercise the authority of the Board of Directors under Section 3.1 of these By-Laws; provided, however, that a Committee may not: (a) authorize distributions; (b) approve or recommend to Shareholders any act which is required to be approved by Shareholders; -7- 11 Standard Parking Corporation MW (c) fill vacancies on the Board of Directors or on any of its Committees; (d) elect or remove Officers or fix the compensation of any member of the Committee; (e) adopt, amend or repeal these By-Laws; (f) approve a plan of merger not requiring Shareholder approval; (g) authorize or approve reacquisition of shares, except according to a general formula or method prescribed by the Board of Directors; (h) authorize or approve the issuance or sale, or contract for sale, of shares or determine the designation and relative rights, preferences and limitations of a series of shares, except that the Board of Directors may direct a Committee to fix the specific terms of the issuance or sale or contract for sale or the number of shares to be allocated to particular employees under an employee benefit plan; or (i) amend, alter, repeal or take action inconsistent with any resolution or action of the Board of Directors when the resolution or action of the Board of Directors provides by its terms that it shall not be amended, altered or repealed by action of a Committee. [BCA ss. 8.40] Section 3.15 Director Conflict of Interest. If a transaction is fair to the Corporation at the time it is authorized, approved or ratified, the fact that a Director of the Corporation is directly or indirectly a party to the transaction is not grounds for invalidating the transaction. In a proceeding contesting the validity of a transaction described in the preceding paragraph, the person asserting validity has the burden of proving fairness unless: (1) the material facts of the transaction and the Director's interest or relationship were disclosed or known to the Board of Directors or a Committee of the Board of Directors and the Board of Directors or Committee authorized, approved or ratified the transaction by the affirmative votes of a majority of disinterested Directors, even though the disinterested Directors be less than a quorum; or (2) the material facts of the transaction and the Director's interest or relationship were disclosed or known to the Shareholders entitled to vote and they authorized, approved or ratified the transaction without counting the vote of any Shareholder who was an interested Director. The presence of the Director, who is directly or indirectly a party to the transaction described in the first paragraph of this section, or a Director who is otherwise not disinterested, may be counted in determining whether a quorum is present but may not be counted when the Board of Directors or a Committee of the Board of Directors takes action on the transaction. A Director is "indirectly" a party to a transaction if the other party to the transaction is an entity in which the Director has a material financial interest or of which the Director is an Officer, Director or General Partner. [BCA ss. 8.60] -8- 12 Standard Parking Corporation MW Article 4 OFFICERS Section 4.1 Number. The Officers of the Corporation shall be a President, one or more Vice Presidents (the number thereof to be determined by the Board of Directors), a Secretary, and a Treasurer, and such Assistant Secretaries, Assistant Treasurers or other officers as may be elected or appointed by the Board of Directors. Any two or more offices may be held by the same person. All Officers and agents of the Corporation shall have such express authority and perform such duties in the management of the property and affairs of the Corporation as may be provided herein, or as may be determined by resolution of the Board of Directors not inconsistent with these By-Laws, and such implied authority as is recognized by the common law from time to time. [BCA ss. 8.50] Section 4.2 Election and Term of Office. The Officers of the Corporation shall be elected by the Board of Directors at-the first Meeting of the Board of Directors and thereafter at each Annual Meeting of the Board of Directors. The Board of Directors may create and fill new offices at Annual or Special Meetings. If the election of Officers shall not be held at such Meeting, such election shall be held as soon thereafter as is convenient. Each Officer shall hold office until his or her successor shall have been duly elected and shall have qualified or until his or her death or until he or she shall resign or shall have been removed in the manner hereinafter provided. Election or appointment of an Officer or agent shall not of itself create contract rights. [BCA ss. 8.50] Section 4.3 Removal. Any Officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. [BCA ss. 8.55] Section 4.4 Vacancies. A vacancy in any Office because of death, resignation, removal, disqualification, or otherwise, or because of the creation of an office, may be filled by the Board of Directors for the unexpired portion of the term. Section 4.5 The President. The President shall be the principal executive Officer of the Corporation and, subject to the control of the Board of Directors, shall in general supervise and control all of the business and affairs of the Corporation. He or she shall preside at all Meetings of the Shareholders and of the Board of Directors. He or she may sign, with the Secretary or any other Officer of the Corporation thereunto authorized by the Board of Directors, certificates for shares of the Corporation, any deeds, mortgages, bonds, contracts or other instruments which the Board of Directors has authorized to be executed on behalf of the Corporation, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these By-Laws to some other Officer or agent of the Corporation or to the President alone, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties incident to the Office of President and such other duties as may be prescribed by the Board of Directors from time to time. [BCA ss. 8.50] Section 4.6 The Vice-Presidents. In the absence of the President or in the event of his -9- 13 Standard Parking Corporation MW or her inability or refusal to act, the Vice-President (or in the event there be more than one Vice President, the Vice-Presidents in the order designated, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice-President may sign, with the Secretary or an Assistant Secretary, certificates for shares of the Corporation, and shall perform such other duties as from time to time may be assigned to him or her by the President or by the Board of Directors. [BCA ss. 8.50] Section 4.7 The Secretary. The Secretary shall: (a) keep, or supervise and be responsible for the keeping of, the minutes and records of all Meetings and official actions of the Shareholders and of the Board of Directors, and any Committees of the Board of Directors in one or more books provided for that purpose; (b) see that all notices of such Meetings are duly given or waivers of notice obtained in accordance with the provisions of these By-Laws or as required by law; (c) be custodian of the corporate records and of the seal of the Corporation and see that the seal of the Corporation is affixed to all certificates for shares prior to the issuance thereof and to all documents, the execution of which on behalf of the Corporation under its seal is duly authorized in accordance with the provisions of these By-Laws; (d) keep a register of the post office address of each Shareholder which shall be furnished to the Secretary by such Shareholder; (e) sign with the President, or a Vice President, certificates for shares of the Corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; (f) have general charge of the stock transfer books and records of the Corporation; (g) have the authority to certify the By-Laws, resolutions of the Board of Directors and Committees thereof, and other documents of the Corporation as true and correct copies thereof; and (h) in general perform all duties incident to the Office of Secretary and such other duties as from time to time may be assigned to him or her by the President or by the Board of Directors. [BCA ss. 8.50] Section 4.8 The Treasurer. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of his or her duties in sum and with such surety or sureties as the Board of Directors shall determine. He or she shall: (a) have charge and custody of and be responsible for all funds and securities of the Corporation; receive and give receipts for moneys due and payable to the Corporation from any source whatsoever, and deposit all such moneys in the name of the Corporation in such banks, trust companies or other depositaries as shall be selected in accordance with the provisions of Article 6 of these By-Laws; and (b) in general perform all the duties incident to the Office of Treasurer and such other duties as from time to time may be assigned to him or her by the President or by the Board of Directors. [BCA ss. 8.50] Section 4.9 Assistant Secretaries and Assistant Treasurers. The Assistant Secretaries as thereunto authorized by the Board of Directors may sign with the President or a Vice-President certificates for shares of the Corporation, the issuance of which shall have been authorized by a resolution of the Board of Directors. The Assistant Treasurers shall respectively, if required by the Board of Directors, give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board of Directors shall determine. The Assistant Secretaries and Assistant Treasurers, in general, shall perform such duties and exercise such authority as shall be assigned or granted to them by the Secretary or the Treasurer, respectively, or by the President or the Board of Directors. [BCA ss. 8.50] -10- 14 Standard Parking Corporation MW Section 4.10 Salaries. Except as otherwise provided in any written employment agreement duly executed on behalf of the Corporation and except as otherwise set forth below1 the compensation (including salaries and benefits) of the Officers shall be fixed from time to time by resolution of the Board of Directors and no Officer shall be prevented from receiving such salary by reason of the fact that he or she is also a Director of the Corporation. [BCA ss. 8.50] In the event the Internal Revenue Service shall determine any such compensation (including any fringe benefit) paid to an Officer to be unreasonable or excessive, such Officer must repay to the Corporation the excess over what is determined to be reasonable compensation, with interest on such excess at the rate of nine percent (9%) per annum, within ninety (90) days after notice from the Corporation. Article 5 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS; INSURANCE Section 5.1 Actions other than Actions by or in the Right of the Corporation. The Corporation shall indemnify any of its Directors or Officers and may indemnify any of its employees and agents who was or is a party, or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he or she or it is or was a Director, Officer, employee or agent of the Corporation, or who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner he or she or it reasonably believed to be in, or not opposed to, the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her or its conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faiith and in a manner which he or she or it reasonably believed to be in, or not opposed to, the best interests of the Corporation or, with respect to any criminal action or proceeding, that the person had reasonable cause to believe that his or her or its conduct was unlawful. [BCA ss. 8.75(a)] Section 5.2 Actions by or in the Right of the Corporation. The Corporation may indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a Director, Officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the Corporation, provided that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or -11- 15 Standard Parking Corporation MW misconduct in the performance of his or her duty to the Corporation, unless, and only to the extent that, the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper. [BCA ss. 8.75(b)] Section 5.3 Indemnification in Event of Successful Defense. To the extent that a Director, Officer, employee or agent of the Corporation has been successful, on the merits or otherwise, in the defense of any action, suit or proceeding referred to in Sections 5.1 or 5.2, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith. [BCA ss. 8.75(c)] Section 5.4 Procedures for Indemnification. Any indemnification under Sections 5.1 and 5.2 (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case, upon a determination that indemnification of the Director, Officer, employee or agent is proper in the circumstances because he or she or it has met the applicable standard of conduct set forth in said Sections. Such determination shall be made (a) by the Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to such action, suit or proceeding, or (b) if such a quorum is not obtainable, or even if obtainable, if a quorum of disinterested Directors so directs, by independent legal counsel in a written opinion, or (c) by the Shareholders. [BCA ss. 8.75(d)] Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding, as authorized by the Board of Directors in the specific case, upon receipt of a written undertaking by or on behalf of the Director, Officer, employee or agent to repay such amount unless it shall ultimately be determined that he or she or it is entitled to be indemnified by the Corporation as authorized in this Article 5. [BCA ss. 8.75(e)] The indemnification provided by this Article 5 shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any By-Law, agreement, vote of Shareholders or disinterested Directors, or otherwise, both as to action in his or her or its official capacity and as to action in another capacity while holding such Office, and shall continue as to a person who has ceased to be a Director, Officer, employee or agent, and shall inure to the benefit of the heirs, executors and administrators of such a person. [BCA ss. 8.75(f)] If the Corporation has paid indemnity or has advanced expenses to a Director, Officer, employee or agent, the Corporation shall report the indemnification or advance in writing to the Shareholders with or before the notice of the next Shareholders' Meeting. [BCA ss. 8.75(h)] For purposes of this Article 5, references to the "Corporation" shall include, in addition to the surviving corporation, any merging corporation (including any corporation having merged with a merging corporation) absorbed in a merger which, if its separate existence had continued, would have had the power and authority to indemnify its Directors, Officers, and employees or agents, so that any person who was a director, officer, employee or agent of such merging -12- 16 Standard Parking Corporation MW corporation, or was serving at the request of such merging corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article 5 with respect to the surviving corporation as such person would have with respect to such merging corporation if its separate existence had continued. [BCA ss. 8.75(i)] For purposes of this Article 5, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the Corporation" shall include any service as a Director, Officer, employee or agent of the Corporation which imposes duties on, or involves services by, such Director, Officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries. A person who acted in good faith and in a manner he or she or it reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interest of the Corporation" as referred to in this Article 5. [BCA ss. 8.75(j)] Section 5.5 Indemnity Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a Director, Officer, employee or agent of the Corporation, or who is or was serving at the request of the Corporation as a Director, Officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article 5 or under the provisions of ss. 8.75 of the Illinois Business Corporation Act of 1983. [BCA ss. 8.75(g)] Article 6 CONTRACTS, LOANS, CHECKS AND DEPOSITS Section 6.1 Contracts. The Board of Directors may expressly authorize any Officer or Officers and agent or agents of the Corporation to enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation, and such authority may be general or confined to specific instances. [BCA ss. 8.50] Section 6.2 Loans. All loans contracted on behalf of the Corporation and all evidence of indebtedness issued in the Corporation's name shall be authorized by resolution of the Board of Directors. Such authority may be general or confined to specific instances. Section 6.3 Pledges of Property and Assets. The pledge of all, or substantially all, the property and assets of the Corporation in the usual and regular course of business may be authorized by the Board of Directors upon such terms and conditions as the Board of Directors deems necessary or desirable, without authorization or consent of the Shareholders of the Corporation. [BCA ss. 11.55] Section 6.4 Checks, Drafts, Etc. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation, shall be -13- 17 Standard Parking Corporation MW signed by such Officer or Officers, agent or agents of the Corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors. Section 6.5 Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies, or other depositarian as the Board of Directors may select. Article 7 SHARES AND THEIR TRANSFER Section 7.1 Consideration for Shares. Shares may be issued for such consideration as shall be authorized from time to time by the Board of Directors through action which establishes a price in cash or other consideration, or both, or a minimum price or a general formula or method by which the price can be determined. Upon authorization by the Board of Directors, the Corporation may issue its own shares in exchange for or in conversion of its outstanding shares, or may distribute its own shares pro rata to its Shareholders or the Shareholders of one or more classes or series to effectuate dividends or splits, and any such transactions shall not require consideration; provided, that no such issuance of shares of any class or series shall be made to the holders of shares of any other class or series unless it is either expressly provided for in the Articles of Incorporation or authorized by an affirmative vote of the holders of at least a majority of the outstanding shares of the class or series in which the distribution is to be made. [BCA ss. 6.25] Section 7.2 Payment for Shares. The consideration for the issuance of shares shall be paid, in whole or in part, in money, in other property, tangible or intangible, or in labor or services actually performed for the Corporation, as determined by the Board of Directors. When payment of the consideration for which shares are to be issued shall have been received by the Corporation, such shares shall be deemed to be fully paid and non-assessable. In the absence of actual fraud in the transaction, and subject to the provisions of the Business Corporation Act of 1983, the judgment of the Board of Directors or the Shareholders, as the case may be, as to the value of the consideration received for shares shall be conclusive. [BCA ss. 6.30] Section 7.3 Shares Represented by Certificates. Except as otherwise provided pursuant to this Article 7, the issued shares of the Corporation shall be represented by certificates. Certificates shall be signed by the appropriate corporate Officers and may be sealed with the seal, or a facsimile of the seal, of the Corporation. In case the seal of the Corporation is changed after the certificate is sealed with the seal or a facsimile of the seal of the Corporation, but before it is issued, the certificate may be issued by the Corporation with the same effect as if the seal had not been changed. If a certificate is countersigned by a transfer agent or registrar, other than the Corporation itself or its employee, any other signatures or countersignatures on the certificate may be facsimiles. In case any Officer of the Corporation, or any officer or employee of the transfer agent or registrar who has signed, or whose facsimile signature has been placed upon, such certificate ceases to be an Officer of the Corporation, or an officer or employee of the transfer agent or registrar, before such certificate is issued, the certificate may be issued by the Corporation with the same effect as if the Officer of the Corporation, or the officer or employee of the transfer agent or registrar, had not ceased to be such at the date of its issue. -14- 18 Standard Parking Corporation MW Every certificate representing shares issued by the Corporation at a time when the Corporation is authorized to issue shares of more than one class shall set forth upon the face or back of the certificate a full summary or statement of all of the designations, preferences, qualifications, limitations, restrictions and special or relative rights of the shares of each class authorized to be issued, and, if the Corporation is authorized to issue any preferred or special class in series, the variations in the relative rights and preferences between the shares of each such series so far as the same have been fixed and determined, and the authority of the Board of Directors to fix and determine the relative rights and preferences of subsequent series. Such statement may be omitted from the certificate if it shall be set forth upon the face or back of the certificate that such statement, in full, will be furnished by the Corporation to any Shareholder upon request and without charge. Each certificate representing shares shall also state: (a) That the Corporation is organized under the laws of Illinois; (b) The name of the person to whom issued; and (c) The number and class of shares, and the designation of the series, if any, which such certificate represents. No certificate shall be issued for any share until such share is fully paid. [BCA ss. 6.35] Section 7.4 Uncertificated Shares. The Board of Directors of the Corporation may provide by resolution that some or all of any or all classes and series of its shares shall be uncertificated shares, provided that such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to this Article 7. Except as otherwise expressly provided by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of holders of certificates representing shares of the same class and series shall be identical. [BCA ss. 6.35)] Article 8 FISCAL YEAR Except as the Board of Directors of the Corporation may otherwise provide by resolution duly adopted pursuant to the authority granted hereby, the fiscal year of the Corporation shall begin on the first day of January in each year and end on the last day of December in each year. Article 9 DIVIDENDS The Board of Directors may from time to time declare or effect, and the Corporation may pay or make dividends on its outstanding shares or other distributions to Shareholders, including without limitation purchases of shares of the Corporation, subject in each case to any and all -15- 19 Standard Parking Corporation MW terms, conditions, preferences and restrictions provided by law, by the Articles of Incorporation and by any binding contract or instrument duly executed on behalf of the Corporation. [BCA ss.ss. 9.05, 9.10] Article 10 SEAL The Board of Directors may provide a corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the Corporation and the words "Corporate Seal, Illinois." [BCA ss. 3.10] Article 11 WAIVER OF NOTICE Whenever any notice whatever is required to be given to any Shareholder or Director of the Corporation under the provisions of these By-Laws or under the provisions of the Articles of Incorporation or under the Illinois Business Corporation Act of 1983, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Attendance at any Meeting shall constitute waiver of notice thereof unless the person at the Meeting objects to the holding of the Meeting because proper notice was not given. [BCA ss. 7.20] Article 12 AMENDMENTS TO THE BY-LAWS The By-Laws of the Corporation may be made, altered, amended or repealed by the Shareholders or the Board of Directors of the Corporation, but, if such By-Law expressly so provides, no By-Law adopted by the Shareholders may be altered, amended or repealed by the Board of Directors. These By-Laws may be altered or amended to contain any provisions for the regulation and management of the affairs of the Corporation not inconsistent with law or with the Articles of Incorporation. [BCA ss. 2.25] Article 13 STATUTORY REFERENCES The statutory references in these By-Laws to the "Business Corporation Act of 1983" refer, except where the context otherwise requires, to the Illinois Business Corporation Act of 1983, as amended from time to time. The citations to sections of the BCA appearing in brackets throughout the text of these By-Laws are for convenience of reference only, are not made a part hereof, shall not be construed as incorporating the referenced provisions of the law into these By-Laws, and shall not be deemed in any way to alter, affect or qualify the meaning or effect of these By-Laws as written and adopted. -16- EX-3.20 23 ARTICLES OF INCORPORATION 1 Form BCA-2.10 ARTICLES OF INCORPORATION - -------------------------------------------------------------------------------- (Rev Jan 1991) George H. Ryan Secretary of State Department of Business Services Springfield, IL 62756 Telephone (217) 782-6961 - -------------------------------- Payment must be made by certified check, cashier's check, Illinois attorney's check Illinois C.P.A's check or money order, payable to "Secretary of State." - -------------------------------- FILED APR 12 1993 GEORGE H. RYAN SECRETARY OF STATE - -------------------------------- Submit in Duplicate - -------------------------------- This space for use by Secretary of State Date 4-12-93 Franchise Tax $25 Filing Fee $75 --- 100 Approved: - -------------------------------- 1. CORPORATE NAME: Standard Parking Corporation IL ------------------------------------------------------------- ----------------------------------------------------------------------------- (The corporate name must contain the word "corporation", "company," incorporated," "limited" or an abbreviation thereof) - -------------------------------------------------------------------------------- 2. Initial Registered Agent: Michael K. Wolf -------------------------------------------------- First Name Middle Initial Last Name Initial Registered Office: 55 E. Monroe Street, Ste, 3440 -------------------------------------------------- Number Street Suite # Chicago, Illinois 60603 Cook -------------------------------------------------- City Zip Code County - -------------------------------------------------------------------------------- 3. Purpose or purposes for which the corporation is organized: (If not sufficient space to cover this point, add one or more sheets of this size.) To transact any or all lawful activities and businesses which are authorized by the Illinois Business Corporation Act of 1983 as amended, and to purchase or otherwise acquire, hold, use, own, mortgage, sell, convey, lease or otherwise dispose of and deal in real and personal property of every class and description or any interest therein. - -------------------------------------------------------------------------------- 4. Paragraph 1: Authorized Shares, Issued Shares and Consideration Received: Consideration Number of Shares to be Per Value Number of Shares Proposed to be Received Class per Share Authorized Issued Therefor - -------------------------------------------------------------------------------- Common No Par 100,000 100 $1,000 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Total $1,000 Paragraph 2: The preferences, qualifications, limitations, restrictions and special or relative rights in respect of the shares of each class are: (If not sufficient space to cover this point add one or more sheets of this size.) EXPEDITED PAID APR 12 1993 APR 12 1993 SECRETARY OF STATE (over) 2 5. OPTIONAL: (a) Number of directors constituting the initial board of directors of the corporation:____________________. (b) Names and addresses of the persons who are to serve as directors until the first annual meeting of shareholders or until their successors be elected and qualify: Name Residential Address ------------------------------------------------------------------- ------------------------------------------------------------------- ------------------------------------------------------------------- ------------------------------------------------------------------- - -------------------------------------------------------------------------------- 6. OPTIONAL: (a) It is estimated that the value of all property to be owned by the corporation for the following year wherever located will be: $________________ (b) It is estimated that the value of the property to be located within the State of Illinois during the following year will be: $________________ (c) It is estimated that the gross amount of business which will be transacted by the corporation during the following year will be: $________________ (d) It is estimated that the gross amount of business which will be transacted from places of business in the State of Illinois during the following year will be: $________________ - -------------------------------------------------------------------------------- 7. OPTIONAL: OTHER PROVISIONS Attach a separate sheet of this size for any other provision to be included in the Articles of Incorporation, e.g., authorizing preemptive rights, denying cumulative voting, regulating internal affairs, voting majority requirements, fixing and duration other than perpetual, etc. - -------------------------------------------------------------------------------- 8. NAME(S) & ADDRESS(ES) OF INCORPORATOR(S) The undersigned incorporator(s) hereby declare(s), under penalties of perjury, that the statements made in the foregoing Articles of Incorporation are true. Dated April 9, 1993 Signature and Name Address 1. 1. 30 South Wacker Drive, 29th Floor --------------------------------- ----------------------------------- Signature Street Dianne M. Chiappetti Chicago, Illinois 60606-7484 --------------------------------- ----------------------------------- (Type or Print Name) City/Town State Zip Code 2. 2. --------------------------------- ----------------------------------- Signature Street --------------------------------- ----------------------------------- (Type or Print Name) City/Town State Zip Code 3. 3. --------------------------------- ----------------------------------- Signature Street --------------------------------- ----------------------------------- (Type or Print Name) City/Town State Zip Code (Signatures must be in ink on original document. Carbon copy, xerox or rubber stamp signatures may only be used on conformed copies.) NOTE: If a corporation acts as incorporator, the name of the corporation and the state of incorporation shall be shown and the execution shall be by its President or Vice-President and verified by him, and attested by its Secretary or an Assistant Secretary. - -------------------------------------------------------------------------------- 3 FEE SCHEDULE o The initial franchise tax is assessed at the rate of 15/100 of 1 percent ($1.50 per $1,000) on the paid-in capital represented in this state, with a minimum of $25 and a maximum of $1,000,000. o The filing fee is $75 o The minimum total due (franchise tax + filing fee) is $100 (Applies when the Consideration to be Received as set forth in item 4 does not exceed $16,667) o The Department of Business Services in Springfield will provide assistance in calculating the total fees if necessary. Illinois Secretary of State Springfield, IL 62756 Department of Business Services Telephone (217) 782-6961 4 File # D5726-251-6 - --------------------------- Form BCA-5.10 NFP-105.10 (Rev. Jan. 1995) - --------------------------- George H. Ryan Secretary of State Department of Business Services Springfield, IL 62756 Telephone (217) 782-3647 Submit in Duplicate - -------------------------------------------------------------------------------- STATEMENT OF CHANGE OF FILED This space for use by REGISTERED AGENT AND/OR MAR 23 1996 Secretary of State REGISTERED OFFICE GEORGE H. RYAN SECRETARY OF STATE Date PAID MAR 25 1996 Franchise Tax $5 Approved: -------------------------- Remit payment in check or money order, payable to "Secretary of State." - -------------------------------------------------------------------------------- 1. CORPORATE NAME: Standard Parking Corporation IL ------------------------------------------------------------- 2. STATE OR COUNTRY OF INCORPORATION: Illinois ------------------------------------------- - -------------------------------------------------------------------------------- 3. Name and address of the registered agent and registered office as they appear on the records of the office of the Secretary of State (before change): Registered Agent: Michael K. Wolf ----------------------------------------------------- First Name Middle Initial Last Name Registered Office: 55 E. Monroe Street, Ste, 3440 ----------------------------------------------------- Number Street Suite # (A P.O. Box alone is not acceptable) Chicago 60603 Cook ----------------------------------------------------- City Zip Code County 4. Name and address of the registered agent and registered office shall be (after all changes herein reported): Registered Agent: Michael K. Wolf ----------------------------------------------------- First Name Middle Initial Last Name Registered Office: 200 E. Randolph Dr., Suite 4800 ----------------------------------------------------- Number Street Suite # (A P.O. Box alone is not acceptable) Chicago 60601 Cook ----------------------------------------------------- City Zip Code County 5 File Number 5726-251-6 ------------ STATE OF ILLINOIS OFFICE OF THE SECRETARY OF STATE Whereas, ARTICLES OF INCORPORATION OF STANDARD PARKING CORPORATION IL INCORPORATED UNDER THE LAWS OF THE STATE OF ILLINOIS HAVE BEEN FILED IN THE OFFICE OF THE SECRETARY OF STATE AS PROVIDED BY THE BUSINESS CORPORATION ACT OF ILLINOIS, IN FORCE JULY 1, A.D. 1984. Now Therefore, I, George H. Ryan, Secretary of State of the State of Illinois, by virtue of the powers vested in me by law, do hereby issue this certificate and attach hereto a copy of the Application of the aforesaid corporation. In Testimony Whereof, I hereto set my hand and cause to be affixed the Great Seal of the State of Illinois, at the City of Springfield, this 12TH day of APRIL A.D. 1993 and of the Independence of the United States the two hundred and 17TH. /s/ George H. Ryan -------------------------------- Secretary of State 6 5. The address of the registered office and the address of the business office of the registered agent, as changed, will be identical. 6. The above change was authorized by: ("X" one box only) a. |_| By resolution duly adopted by the board of directors. (Note 5) b. |X| By action of the registered agent. (Note 6) NOTE: When the registered agent changes, the signatures of both president and secretary are required. 7. (If authorized by the board of directors, sign here. See Note 5) The undersigned corporation has caused this statement to be signed by its duly authorized officers, each of whom affirms, under penalties of perjury, that the facts stated herein are true. Dated 19, ----------------------- ------ -------------------------------------- (Exact Name of Corporation) attested by by ----------------------- ------------------------------------ (Signature of Secretary of Assistant (Signature of Vice President) Secretary) ----------------------- ------------------------------------ (Type of print Name and Title) (Type or Print Name and Title) (If the change of registered office by registered agent, sign here. See Note 6) The undersigned, under penalties of perjury, affirms that the facts stated herein are true. Dated 19, 96 ------------------------ ----- --------------------------------------- (Signature of Registered Agent of Record) NOTES 1. The registered office may, but need not be the same as the principal office of the corporation. However, the registered office and the office address of the registered agent must be the same. 2. The registered office must include a street or road address; a post office box number alone is not acceptable. 3. A corporation cannot act as its own registered agent. 4. If the registered office is changed from one county to another, then the corporation must file with the recorder of deeds of the new county a certified copy of the articles of incorporation and a certified copy of the statement of change of registered office. Such certified copies may be obtained ONLY from the Secretary of State. 5. Any change of registered agent must be by resolution adopted by the board of directors. This statement must then be signed by the president (or vice-president) and by the secretary (or an assistant secretary). 6. The registered agent may report a change of the registered office of the corporation for which he or she is registered agent. When the agent reports such a change, this statement must be signed by the registered agent. 7 IN WITNESS WHEREOF, the undersigned corporation has caused these Articles of Amendment to be executed in its name by its ____________ President, and its corporate seal to be hereto affixed, attested by its _____________ Secretary, this _______ day of ___________, 1970. STANDARD AUTO PARK, INC. ----------------------------------- (Exact Corporate Name) Place (CORPORATE SEAL) By /s/ Here -------------------------------- Its President ATTEST: /s/ - ------------------------------------- Its Secretary STATE OF ILLINOIS ) ): ss COUNTY OF COOK ) I, Lawrence Kasakoff, a Notary Public, do hereby certify that on the 18th day of December 1970, SIDNEY WARSHAUER personally appeared before me and, being first duly sworn by me, acknowledged that he signed the foregoing document in the capacity therein set forth and declared that the statements therein contained are true. IN WITNESS WHEREOF, I have hereunto set my hand and Seal the day and year before written. Place /s/ L. Kasakoff (CORPORATE SEAL) ----------------------------------- Here Notary Public EX-3.21 24 BY-LAWS OF STANDARD PARKING 1 By-Laws of Standard Parking Corporation IL (an Illinois Corporation) Adopted April 12, 1993 This Document Prepared By: Sachnoff & Weaver, Ltd. 30 South Wacker Drive Suite 2900 Chicago, Illinois 60606 (312) 207-1000 2 TABLE OF CONTENTS ----------------- Article 1 - CORPORATE OFFICES................................................1 Section 1.1 The Principal Corporate Office.............................1 Section 1.2 Registered Office In Illinois..............................1 Article 2 - SHAREHOLDERS.....................................................1 Section 2.1 Annual Meeting.............................................1 Section 2.2 Special Meetings...........................................1 Section 2.3 Place of Meeting...........................................1 Section 2.4 Notice of Meeting..........................................2 Section 2.5 Meeting Of All Shareholders................................2 Section 2.6 Fixing of Record Date......................................2 Section 2.7 Voting Lists...............................................2 Section 2.8 Quorum of Shareholders.....................................3 Section 2.9 Proxies....................................................3 Section 2.10 Voting of Shares..........................................3 Section 2.11 Voting of Shares by Certain Holders......................3 Section 2.12 Voting by Ballot; Inspectors..............................4 Section 2.13 Informal Action by Shareholders...........................4 Article 3 - DIRECTORS........................................................5 Section 3.1 General Powers.............................................5 Section 3.2 Number, Tenure and Qualification...........................5 Section 3.3 Regular Meetings...........................................5 Section 3.4 Special Meetings...........................................5 Section 3.5 Notice.....................................................5 Section 3.6 Quorum.....................................................6 Section 3.7 Manner Of Action...........................................6 Section 3.8 Vacancies..................................................6 Section 3.9 Removal Of Directors.......................................6 Section 3.10 Compensation..............................................6 Section 3.11 Presumption Of Assent.....................................7 Section 3.12 Informal Action By Directors..............................7 Section 3.13 Participation By Conference Telephone.....................7 Section 3.14 Committees................................................7 Section 3.15 Director Conflict of Interest.............................8 Article 4 - OFFICERS.........................................................9 Section 4.1 Number.....................................................9 Section 4.2 Election and Term of Office................................9 Section 4.3 Removal....................................................9 Section 4.4 Vacancies.................................................10 Section 4.5 The President.............................................10 Section 4.6 The Vice-Presidents.......................................10 Section 4.7 The Secretary.............................................10 3 Section 4.8 The Treasurer.............................................11 Section 4.9 Assistant Secretaries and Assistant Treasurers............11 Section 4.10 Salaries.................................................11 Article 5 - INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS; INSURANCE.......................................................11 Section 5.1 Actions Other Than Actions By or in the Right of the Corporation...............................................11 Section 5.2 Actions By or in the Right of the Corporation.............12 Section 5.3 Indemnification in Event of Successful Defense............12 Section 5.4 Procedures for Indemnification............................12 Section 5.5 Indemnity Insurance.......................................14 Article 6 - CONTRACTS, LOANS, CHECKS AND DEPOSITS...........................14 Section 6.1 Contracts.................................................14 Section 6.2 Loans.....................................................14 Section 6.3 Pledges of Property and Assets............................14 Section 6.4 Checks, Drafts, Etc.......................................14 Section 6.5 Deposits..................................................14 Article 7 - SHARES AND THEIR TRANSFER.......................................14 Section 7.1 Consideration for Shares..................................14 Section 7.2 Payment for Shares........................................15 Section 7.3 Shares Represented by Certificates........................15 Section 7.4 Uncertificated Shares.....................................16 Article 8 - FISCAL YEAR.....................................................16 Article 9 - DIVIDENDS.......................................................16 Article 10 - SEAL...........................................................16 Article 11 - WAIVER OF NOTICE...............................................17 Article 12 - AMENDMENTS TO THE BY-LAWS......................................17 Article 13 - STATUTORY REFERENCES...........................................17 4 Standard Parking Corporation IL Article 1 CORPORATE OFFICES Section 1.1 The Principal Corporate Office. The principal corporate office of Standard Parking Corporation IL in Illinois shall be located in the City of Chicago, County of Cook, or at such other place as the Board of Directors may determine by resolution from time to time. The Corporation may have such other offices, either within or without the State of Illinois, as the Board of Directors may designate or the Corporation's business may require from time to time. [BCA ss.3.10(j)] Section 1.2 Registered Office In Illinois. The Registered Office of the Corporation required by the Illinois Business Corporation Act of 1983 ("BCA") to be maintained in the State of Illinois may be, but need not be, the same as the principal corporate office or its principal place of business in the State of Illinois, but shall in any event be identical with the business office of the Corporation's Registered Agent in Illinois. [BCA ss.5.05] The address of the Registered Office in Illinois may be changed from time to time by the Board of Directors or by such Registered Agent. [BCA ss.ss.5.10, 5.20] Article 2 SHAREHOLDERS Section 2.1 Annual Meeting. Except as the Board of Directors of the Corporation may otherwise provide by resolution duly adopted pursuant to the authority granted hereby, the Annual Meeting of Shareholders of the Corporation shall be held each year on the second Tuesday in April (beginning with the year 1994), commencing at the hour of 10:00 A.M., for the purpose of electing Directors and for the transaction of such other business as may properly come before the Meeting. If the day fixed for the Annual Meeting shall be a legal holiday, such Meeting shall be held on the next succeeding business day. [BCA ss.7.05] Section 2.2 Special Meetings. Special Meetings of the Shareholders may be called by the President, by the Board of Directors, or by the holders of not less than one-fifth of all the outstanding shares of the Corporation entitled to vote on the matter for which the Special Meeting is called. [BCA ss.7.05] Section 2.3 Place of Meeting. The Board of Directors may by resolution designate any place, either within or without the State of Illinois, as the place of meeting for any Annual Meeting of Shareholders or for any Special Meeting called by the Board of Directors or by the President, and may designate any place within the State of Illinois for any Special Meeting called by Shareholders. A waiver of notice signed by all Shareholders may designate any place, either within or without the State of Illinois, as the place for the holding of any Meeting. If no designation of a meeting place is made, or if a Special Meeting be otherwise called, the place of meeting shall be the Registered Office of the Corporation in the State of Illinois, except as otherwise provided in Section 2.5 of these By-Laws. [BCA ss.7.05] 5 Standard Parking Corporation IL Section 2.4 Notice of Meeting. Written notice stating the place, day and hour of the Meeting, and, in the case of a Special Meeting, the purpose or purposes for which the Meeting is called, shall be delivered not less than ten (10) nor more than sixty (60) days before the date of the Meeting, or, in the case of a merger, consolidation, share exchange, dissolution, or sale, lease or exchange of assets requiring Shareholder approval, not less than twenty (20) nor more than sixty (60) days before the date of the Meeting, either personally or by mail, by or at the direction of the President, or the Secretary, or the Officer or persons calling the meeting, to each Shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the Shareholder at his or her address as it appears on the records of the Corporation, with postage thereon prepaid. [BCA ss.7.15] Section 2.5 Meeting Of All Shareholders. If all of the Shareholders shall meet at any time and place, either within or without the State of Illinois, and consent to the holding of a Meeting at such time and place, such Meeting shall be valid without call or notice, and at such Meeting any corporate action may be taken. [BCA ss.7.20] Section 2.6 Fixing of Record Date. For the purpose of determining Shareholders entitled to notice of or to vote at any Meeting of Shareholders, or Shareholders entitled to receive payment of any dividend or distribution, or in order to make a determination of Shareholders for any other proper purpose, the Board of Directors of the Corporation may fix in advance a date as the record date for any such determination of Shareholders, such date in any case to be not more than sixty (60) days immediately preceding the date of the Meeting, payment or other transaction, and, for a Meeting of Shareholders, not less than ten (10) days, or in the case of a merger, consolidation, share exchange, dissolution, or sale, lease or exchange of assets requiring Shareholder approval, not less than twenty (20) days, immediately preceding such Meeting. If no record date is fixed for the determination of Shareholders entitled to notice of or to vote at a Meeting of Shareholders, or Shareholders entitled to receive payment of a dividend or other distribution, the date on which notice of the Meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend or distribution is adopted, as the case may be, shall be the record date for such determination of Shareholders. When a determination of Shareholders entitled to vote at any Meeting of Shareholders has been made as provided in this Section 2.6, such determination shall apply to any adjournment thereof. [BCA ss.7.25] Section 2.7 Voting Lists. The Officer or agent having charge of the transfer books and records for shares of the Corporation shall make, within twenty (20) days after the record date for a Meeting of Shareholders or ten (10) days before such Meeting, whichever is earlier, a complete list of the Shareholders entitled to vote at such Meeting, arranged in alphabetical order, with the address of and the number of shares held by each, which list, for a period of ten (10) days prior to such Meeting, shall be kept on file at the Registered Office of the Corporation and shall be subject to inspection by any Shareholder, and to copying at the Shareholder's expense, at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the Meeting and shall be subject to the inspection of any Shareholder during the whole time of the Meeting. The original share ledger or transfer book, or a duplicate thereof kept in Illinois, shall be prima facie evidence as to who are the Shareholders entitled to examine such list -2- 6 Standard Parking Corporation IL or share ledger or transfer book, or to vote at any Meeting of the Shareholders. Failure to comply with the requirements of this Section 2.7 shall not affect the validity of any action taken at such Meeting. An Officer or agent having charge of the transfer books or records who shall fail to prepare the list of Shareholders, or keep the same on file for a period of ten (10) days, or produce and keep the same open for inspection at the Meeting, as provided in this Section 2.7, shall be liable to any Shareholder suffering damage on account of such failure, to the extent of such damage as provided by law. [BCA ss.7.30] Section 2.8 Quorum of Shareholders. A majority of the outstanding shares of the Corporation entitled to vote on a matter, represented in person or by proxy, shall constitute a quorum for consideration of such matter at a meeting of Shareholders. If a quorum is present, the affirmative vote of the majority of the shares represented at the Meeting and entitled to vote on a matter shall be the act of the Shareholders, unless the vote of a greater number or voting by classes is required by the Illinois Business Corporation Act of 1983, by the Corporation's Articles of Incorporation, or by these By-Laws. [BCA ss.7.60] Section 2.9 Proxies. A Shareholder may appoint a proxy to vote or otherwise act for him or her by signing an appointment form and delivering it to the person so appointed. No proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy continues in full force and effect until revoked by the person executing it prior to the vote pursuant thereto, except as otherwise provided in this Section 2.9 and in Section 7.50 of the Illinois Business Corporation Act of 1983. Such revocation may be effected by a writing delivered to the Corporation stating that the proxy is revoked or by a subsequent proxy executed by, or by attendance at the Meeting and voting in person by, the person executing the proxy. The dates contained on the forms of proxy presumptively determine the order of execution, regardless of any postmark dates on envelopes in which they are mailed. An appointment of a proxy is revocable by the Shareholder unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest in the shares or in the Corporation generally. Unless the appointment of a proxy contains an express limitation on the proxy's authority, the Corporation may accept the proxy's vote or other action as that of the Shareholder making the appointment. [BCA ss.7.50] Section 2.10 Voting of Shares. Each outstanding share of the Corporation shall be entitled to one vote in each matter submitted to a vote by the Shareholders, except as the Illinois Business Corporation Act of 1983 and the Corporation's Articles of Incorporation may otherwise limit or deny voting rights or provide special voting rights as to any class or classes or series of shares. [BCA ss.7.40] Section 2.11 Voting of Shares by Certain Holders. Shares of its own stock belonging to this Corporation shall not be voted, directly or indirectly, at any Meeting and shall not be counted in determining the total of outstanding shares at any given time, but shares of the Corporation held by the Corporation in a fiduciary capacity may be voted and shall be counted in determining the total number of outstanding shares entitled to vote at any given time. Shares registered in the name of another corporation, domestic or foreign, may be voted by any Officer, agent, proxy or other legal representative authorized to vote such shares under the -3- 7 Standard Parking Corporation IL law of incorporation of such corporation. The Corporation may treat the president or other person holding the position of chief executive officer of such other corporation as authorized to vote such shares, together with any other person indicated and any other holder of an office indicated by the corporate Shareholder to the Corporation as a person or office authorized to vote such shares. Such persons and offices indicated shall be registered by the Corporation on the transfer books for shares and included in any voting list prepared in accordance with Section 2.7 of these By-Laws. Shares registered in the name of a deceased person, a minor ward or a person under legal disability may be voted by his or her administrator, executor or court appointed guardian, either in person or by proxy without a transfer of such shares into the name of such administrator, executor or court appointed guardian. Shares registered in the name of a trustee may be voted by him or her, either in person or by proxy. Shares registered in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his or her name if authority so to do is contained in an appropriate order of the court by which such receiver was appointed. A Shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred. [BCA ss.7.45] Section 2.12 Voting by Ballot; Inspectors. Voting by Shareholders on any matter or in any election may be viva voce unless the Chairman of the Meeting shall order, or any Shareholder entitled to vote thereon shall demand, that voting be by ballot. At any Meeting of Shareholders, the Chairman of the Meeting may, or upon the request of any Shareholder shall, appoint one or more persons as inspectors for such Meeting. Such inspectors shall ascertain and report the number of shares represented at the Meeting, based upon their determination of the validity and effect of proxies; count all votes and report the results; and do such other acts as are proper to conduct the election and voting with impartiality and fairness to all the Shareholders. Each report of an inspector shall be in writing and signed by him or her or by a majority of them if there be more than one inspector acting at such Meeting. If there be more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the Meeting and the results of the voting shall be prima facie evidence thereof. [BCA ss.7.35] Section 2.13 Informal Action by Shareholders. Any action required to be taken at any Annual or Special Meeting of Shareholders of the Corporation, or any other action which may be taken at a Meeting of the Shareholders, may be taken without a meeting and without a vote, if a consent in writing, setting forth the action so taken, shall be signed (i) by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voting or (ii) by all of the Shareholders entitled to vote with respect to the subject matter thereof. If such consent is signed by less than all of the Shareholders entitled to vote, then -4- 8 Standard Parking Corporation IL such consent shall become effective only if, at least five (5) days prior to the execution of the consent, a notice of the proposed action is delivered in writing to all of the Shareholders entitled to vote with respect to the subject matter thereof and, after the effective date of the consent, prompt notice of the taking of the action without a meeting by less than unanimous written consent shall be delivered in writing to those Shareholders who have not consented in writing. [BCHA ss.7.10] Article 3 DIRECTORS Section 3.1 General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. [BCA ss.8.05] Section 3.2 Number, Tenure and Qualification. The number of Directors of the Corporation shall be one (1). Each Director shall serve until the next Annual Meeting of Shareholders or until his or her successor shall have been elected and qualified. Directors need not be residents of Illinois or Shareholders of the Corporation. A Director may resign at any time by giving written notice to the Board of Directors, its Chairman, or to the President or Secretary of the Corporation. A resignation is effective when the notice is given unless the notice specifies a future date. The pending vacancy may be filled before the effective date, but the successor shall not take office until the effective date. [BCA ss.ss.8.01, 8.10] Section 3.3 Regular Meetings. A Regular Meeting of the Board of Directors shall be held without other notice than this By-Law, immediately after, and at the same place as, the Annual Meeting of Shareholders. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Illinois, for the holding of additional Regular Meetings without other notice than such resolution. [BCA ss.ss.8.20, 8.25] Section 3.4 Special Meetings. Special Meetings of the Board of Directors may be called by or at the request of the President or any two Directors. The person or persons authorized to call Special Meetings of the Board of Directors may fix any place, either within or without the State of Illinois, as the place for holding any Special Meeting of the Board of Directors called by them. [BCA ss.ss.8.20, 8.25] Section 3.5 Notice. Notice of any Special Meeting shall be given at least three days previous thereto by written notice delivered personally or by telegram or mailgram to each Director at his or her business address, or given at least five (5) days previous thereto if mailed. If mailed, such notice shall be deemed to be delivered on the second day following the date on which it was deposited in the United States mail so addressed, with proper postage thereon prepaid. If notice be given by telegram or mailgram, such notice shall be deemed to be delivered when the telegram or mailgram is delivered to the telegraph company. Any Director may waive notice of any Meeting by executing a written waiver of notice. The attendance of a Director at any Meeting shall constitute a waiver of notice of such Meeting, except where a Director attends -5- 9 Standard Parking Corporation IL a Meeting for the express purpose of objecting to the transaction of any business because the Meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any Regular or Special Meeting of the Board of Directors need be specified in the notice or waiver of notice of such Meeting. [BCA ss.8.25] Section 3.6 Quorum. A majority of the number of Directors fixed by these By-Laws shall constitute a quorum for transaction of business at any Meeting of the Board of Directors, provided, that if less than a majority of such number of Directors is present at said Meeting, a majority of the Directors present may adjourn the Meeting from time to time without further notice. [BCA ss.8.15(c)] Section 3.7 Manner Of Action. The act of the majority of Directors present at a Meeting at which a quorum is present shall be the act of the Board of Directors. [BCA ss.8.15(c)] Section 3.8 Vacancies. Any vacancy occurring in the Board of Directors and any directorship to be filled by reason of an increase in the number of Directors may be filled by election at an Annual Meeting or at a Special Meeting of Shareholders called for that purpose. In the absence of a Special Meeting of Shareholders, the Board of Directors may fill the vacancy, except as otherwise specified in the Articles of Incorporation. A Director elected by the Shareholders to fill a vacancy shall hold office for the balance of the term for which he or she was elected. A Director appointed to fill a vacancy shall serve until the next Meeting of Shareholders at which Directors are to be elected. [BCA ss.8.30] Section 3.9 Removal Of Directors. One or more of the Directors may be removed, with or without cause, at a Meeting of Shareholders by the affirmative vote of the holders of a majority of the outstanding shares then entitled to vote at an election of Directors, except that: (a) No Director shall be removed at a Meeting of Shareholders unless the notice of such Meeting shall state that a purpose of the Meeting is to vote upon the removal of one or more Directors named in the notice. Only the named Director or Directors may be removed at such Meeting. Section 3.10 Compensation. Except as otherwise provided in any written agreement and except as otherwise set forth below, the Board of Directors, by the affirmative vote of a majority of Directors then in office, and irrespective of any personal interest of any of its members, shall have authority to establish reasonable compensation of all Directors for services to the Corporation as Directors, Officers or otherwise. [BCA ss.8.05(b)] By resolution of the Board of Directors, the Directors may be paid their expenses, if any, of attendance at each Meeting of the Board of Directors. In the event the Internal Revenue Service shall determine any such compensation paid to a Director to be unreasonable or excessive, such Director must repay to the Corporation the excess over what is determined to be reasonable compensation, with interest on such excess at the rate of nine percent (9%) per annum, within ninety (90) days after notice from the Corporation. Section 3.11 Presumption of Assent. A Director of the Corporation who is present at a Meeting of the Board of Directors at which action on any corporate matter is taken shall be -6- 10 Standard Parking Corporation IL conclusively presumed to have assented to the action taken unless his or her dissent shall be entered in the minutes of the Meeting or unless he or she shall file his or her written dissent to such action with the person acting as the Secretary of the Meeting before the adjournment thereof or shall forward such dissent by registered or certified mail to the Secretary of the Corporation immediately after the adjournment of the Meeting. Such right to dissent shall not apply to a Director who voted in favor of such action. [BCA ss.8.65(b)] Section 3.12 Informal Action By Directors. Unless specifically prohibited by the Articles of Incorporation or by these By-Laws, any action required to be taken at a Meeting of the Board of Directors, or any other action which may be taken at a Meeting of the Board of Directors or of a Committee thereof, may be taken without a Meeting if a consent in writing, setting forth the action so taken, is signed by all the Directors entitled to vote with respect to the subject matter thereof, or by all the members of such Committee, as the case may be. The consent shall be evidenced by one or more written approvals, each of which sets forth the action taken and bears the signature of one or more Directors. All the approvals evidencing the consent shall be delivered to the Secretary to be filed in the corporate records. The action taken shall be effective when all the Directors have approved the consent unless the consent specifies a different effective date. Any such consent signed by all the Directors or all the members of a Committee shall have the same effect as a unanimous vote. [BCA ss.8.45] Section 3.13 Participation By Conference Telephone. Members of the Board of Directors or of any Committee of the Board of Directors may participate in and act at any Meeting of the Board of Directors or any Committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the Meeting can hear each other. Participation in such Meeting shall constitute attendance and presence in person at the Meeting of the person or persons so participating. [BCA ss.8.15(d)] Section 3.14 Committees. A majority of the Directors may create one or more Committees and appoint members of the Board of Directors to serve on such Committee or Committees. Each Committee shall have two or more members, who serve at the pleasure of the Board of Directors. Unless the appointment by the Board of Directors requires a greater number, a majority of any Committee shall constitute a quorum and a majority of a quorum is necessary for Committee action. A Committee may act by unanimous consent in writing without a meeting and, subject to the provisions of these By-Laws or action by the Board of Directors, such Committee, by majority vote of its members, shall determine the time and place of meetings and the notice required therefor. To the extent specified by the Board of Directors, each Committee may exercise the authority of the Board of Directors under Section 3.1 of these By-Laws; provided, however, that a Committee may not: (a) authorize distributions; -7- 11 Standard Parking Corporation IL (b) approve or recommend to Shareholders any act which is required to be approved by Shareholders; (c) fill vacancies on the Board of Directors or on any of its Committees; (d) elect or remove Officers or fix the compensation of any member of the Committee; (e) adopt, amend or repeal these By-Laws; (f) approve a plan of merger not requiring Shareholder approval; (g) authorize or approve reacquisition of shares, except according to a general formula or method prescribed by the Board of Directors; (h) authorize or approve the issuance or sale, or contract for sale, of shares or determine the designation and relative rights, preferences and limitations of a series of shares, except that the Board of Directors may direct a Committee to fix the specific terms of the issuance or sale or contract for sale or the number of shares to be allocated to particular employees under an employee benefit plan; or (i) amend, alter, repeal or take action inconsistent with any resolution or action of the Board of Directors when the resolution or action of the Board of Directors provides by its terms that it shall not be amended, altered or repealed by action of a Committee. [BCA ss.8.40] Section 3.15 Director Conflict of Interest. If a transaction is fair to the Corporation at the time it is authorized, approved or ratified, the fact that a Director of the Corporation is directly or indirectly a party to the transaction is not grounds for invalidating the transaction. In a proceeding contesting the validity of a transaction described in the preceding paragraph, the person asserting validity has the burden of proving fairness unless: (1) the material facts of the transaction and the Director's interest or relationship were disclosed or known to the Board of Directors or a Committee of the Board of Directors and the Board of Directors or Committee authorized, approved or ratified the transaction by the affirmative votes of a majority of disinterested Directors, even though the disinterested Directors be less than a quorum; or (2) the material facts of the transaction and the Director's interest or relationship were disclosed or known to the Shareholders entitled to vote and they authorized, approved or ratified the transaction without counting the vote of any Shareholder who was an interested Director. The presence of the Director, who is directly or indirectly a party to the transaction described in the first paragraph of this section, or a Director who is otherwise not disinterested, may be counted in determining whether a quorum is present but may not be counted when the Board of Directors or a Committee of the Board of Directors takes action on the transaction. -8- 12 Standard Parking Corporation IL A Director is "indirectly" a party to a transaction if the other party to the transaction is an entity in which the Director has a material financial interest or of which the Director is an Officer, Director of General Partner. [BCA ss.8.60] Article 4 OFFICERS Section 4.1 Number. The Officers of the Corporation shall be a President, one or more Vice Presidents (the number thereof to be determined by the Board of Directors), a Secretary, and a Treasurer, and such Assistant Secretaries, Assistant Treasurers or other officers as may be elected or appointed by the Board of Directors. Any two or more offices may be held by the same person. All Officers and agents of the Corporation shall have such express authority and perform such duties in the management of the property and affairs of the Corporation as may be provided herein, or as may be determined by resolution of the Board of Directors not inconsistent with these By-Laws, and such implied authority as is recognized by the common law from time to time. [BCA ss.8.50] Section 4.2 Election and Term of Office. The Officers of the Corporation shall be elected by the Board of Directors at the first Annual Meeting of the Board of Directors and thereafter at each Annual Meeting of the Board of Directors. The Board of Directors may create and fill new offices at Annual or Special Meetings. If the election of Officers shall not be held at such Meeting, such election shall be held as soon thereafter as is convenient. Each Officer shall hold office until his or her successor shall have been duly elected and shall have qualified or until his or her death or until he or she shall resign or shall have been removed in the manner hereinafter provided. Election or appointment of an Officer or agent shall not of itself create contract rights. [BCA ss.8.50] Section 4.3 Removal. Any Officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. [BCA ss.8.55] Section 4.4 Vacancies. A vacancy in any Office because of death, resignation, removal, disqualification, or otherwise, or because of the creation of an office, may be filled by the Board of Directors for the unexpired portion of the term. Section 4.5 The President. The President shall be the principal executive Officer of the Corporation and, subject to the control of the Board of Directors, shall in general supervise and control all of the business and affairs of the Corporation. He or she shall preside at all Meetings of the Shareholders and of the Board of Directors. He or she may sign, with the Secretary or any other Officer of the Corporation thereunto authorized by the Board of Directors, certificates for shares of the Corporation, any deeds, mortgages, bonds, contracts or other instruments which the Board of Directors has authorized to be executed on behalf of the Corporation, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these By-Laws to some other Officer or agent of the Corporation or to the President alone, or -9- 13 Standard Parking Corporation IL shall be required by law to be otherwise signed or executed; and in general shall perform all duties incident to the Office of President and such other duties as may be prescribed by the Board of Directors from time to time. [BCA ss.8.50] Section 4.6 The Vice-Presidents. In the absence of the President or in the event of his or her inability or refusal to act, the Vice-President (or in the event there be more than one Vice President, the Vice-Presidents in the order designated, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice-President may sign, with the Secretary or an Assistant Secretary, certificates for shares of the Corporation, and shall perform such other duties as from time to time may be assigned to him or her by the President or by the Board of Directors. [BCA ss.8.50] Section 4.7 The Secretary. The Secretary shall: (a) keep, or supervise and be responsible for the keeping of, the minutes and records of all Meetings and official actions of the Shareholders and of the Board of Directors, and any Committees of the Board of Directors in one or more books provided for that purpose; (b) see that all notices of such Meetings are duly given or waivers of notice obtained in accordance with the provisions of these By-Laws or as required by law; (c) be custodian of the corporate records and of the seal of the Corporation and see that the seal of the Corporation is affixed to all certificates for shares prior to the issuance thereof and to all documents, the execution of which on behalf of the Corporation under its seal is duly authorized in accordance with the provisions of these By-Laws; (d) keep a register of the post office address of each Shareholder which shall be furnished to the Secretary by such Shareholder; (e) sign with the President, or a Vice President, certificates for shares of the Corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; (f) have general charge of the stock transfer books and records of the Corporation; (g) have the authority to certify the By-Laws, resolutions of the Board of Directors and Committees thereof, and other documents of the Corporation as true and correct copies thereof; and (h) in general perform all duties incident to the Office of Secretary and such other duties as from time to time may be assigned to him or her by the President or by the Board of Directors. [BCA ss.8.50] Section 4.8 The Treasurer. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of his or her duties in sum and with such surety or sureties as the Board of Directors shall determine. He or she shall: (a) have charge and custody of and be responsible for all funds and securities of the Corporation; receive and give receipts for moneys due and payable to the Corporation from any source whatsoever, and deposit all such moneys in the name of the Corporation in such banks, trust companies or other depositaries as shall be selected in accordance with the provisions of Article 6 of these By-Laws; and (b) in general perform all the duties incident to the Office of Treasurer and such other duties as from time to time may be assigned to him or her by the President or by the Board of Directors. [BCA ss.8.50] Section 4.9 Assistant Secretaries and Assistant Treasurers. The Assistant Secretaries as thereunto authorized by the Board of Directors may sign with the President or a Vice-President certificates for shares of the Corporation, the issuance of which shall have been authorized by a -10- 14 Standard Parking Corporation IL resolution of the Board of Directors. The Assistant Treasurers shall respectively, if required by the Board of Directors, give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board of Directors shall determine. The Assistant Secretaries and Assistant Treasurers, in general, shall perform such duties and exercise such authority as shall be assigned or granted to them by the Secretary or the Treasurer, respectively, or by the President or the Board of Directors. [BCA ss.8.50] Section 4.10 Salaries. Except as otherwise provided in any written employment agreement duly executed on behalf of the Corporation and except as otherwise set forth below, the compensation (including salaries and benefits) of the Officers shall be fixed from time to time by resolution of the Board of Directors and no Officer shall be prevented from receiving such salary by reason of the fact that he or she is also a Director of the Corporation. [BCA ss.8.50] In the event the Internal Revenue Service shall determine any such compensation (including any fringe benefit) paid to an Officer to be unreasonable or excessive, such Officer must repay to the Corporation the excess over what is determined to be reasonable compensation, with interest on such excess at the rate of nine percent (9%) per annum, within ninety (90) days after notice from the Corporation. Article 5 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS; INSURANCE Section 5.1 Actions Other Than Actions By or in the Right of the Corporation. The Corporation shall indemnify any of its Directors or Officers and may indemnify any of its employees and agents who was or is a party, or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he or she or it is or was a Director, Officer, employee or agent of the Corporation, or who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner he or she or it reasonably believed to be in, or not opposed to, the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her or its conduct was unlawful. The termination of any action, suite or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she or it reasonably believed to be in, or not opposed to, the best interests of the Corporation or, with respect to any criminal action or proceeding, that the person had reasonable cause to believe that his or her or its conduct was unlawful. [BCA ss.8.75 (a)] Section 5.2 Actions By or in the Right of the Corporation. The Corporation may indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a Director, Officer, -11- 15 Standard Parking Corporation IL employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the Corporation, provided that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his or her duty to the Corporation, unless, and only to the extent that, the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the cause, such person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper. [BCA ss.8.75(b)] Section 5.3 Indemnification in Event of Successful Defense. To the extent that a Director, Officer, employee or agent of the Corporation has been successful, on the merits or otherwise, in the defense of any action, suit or proceeding referred to in Sections 5.1 or 5.2, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith. [BCA ss.8.75(c)] Section 5.4 Procedures for Indemnification. Any indemnification under Sections 5.1 and 5.2 (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case, upon a determination that indemnification of the Director, Officer, employee or agent is proper in the circumstances because he or she or it has met the applicable standard of conduct set forth in said Sections. Such determination shall be made (a) by the Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to such action, suit or proceeding, or (b) if such a quorum is not obtainable, or even if obtainable, if a quorum of disinterested Directors so directs, by independent legal counsel in a written opinion, or (c) by the Shareholders. [BCA ss.8.75(d)] Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding, as authorized by the Board of Directors in the specific case, upon receipt of a written undertaking by or on behalf of the Director, Officer, employee or agent to repay such amount unless it shall ultimately be determined that he or she or it is entitled to be indemnified by the Corporation as authorized in this Article 5. [BCA ss.8.75(e)] The indemnification provided by this Article 5 shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any By-Law, agreement, vote of Shareholders or disinterested Directors, or otherwise, both as to action in his or her or its official capacity and as to action in another capacity while holding such Office, and shall continue as to a person who has ceased to be a Director, Officer, employee or agent, and shall inure to the benefit of the heirs, executors and administrators of such a person. [BCA ss.8.75(f)] -12- 16 Standard Parking Corporation IL If the Corporation has paid indemnity or has advanced expenses to a Director, Officer, employee or agent, the Corporation shall report the indemnification or advance in writing to the Shareholders with or before the notice of the next Shareholders' Meeting. [BCA ss.8.75(h)] For purposes of this Article 5, references to the "Corporation" shall include, in addition to the surviving corporation, any merging corporation (including any corporation having merged with a merging corporation) absorbed in a merger which, if its separate existence had continued, would have had the power and authority to indemnify its Directors, Officers, and employees or agents, so that any person who was a director, officer, employee or agent of such merging corporation, or was serving at the request of such merging corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article 5 with respect to the surviving corporation as such person would have with respect to such merging corporation if its separate existence had continued. [BCA ss.8.75(i)] For purposes of this Article 5, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the Corporation" shall include any service as a Director, Officer, employee or agent of the Corporation which imposes duties on, or involves services by, such Director, Officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries. A person who acted in good faith and in a manner he or she or it reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interest of the Corporation" as referred to in this Article 5. [BCA ss.8.75(j)] Section 5.5 Indemnity Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a Director, Officer, employee or agent of the Corporation, or who is or was serving at the request of the Corporation as a Director, Officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article 5 or under the provisions of ss.8.75 of the Illinois Business Corporation Act of 1983. [BCA ss.8.75 (g)] Article 6 CONTRACTS, LOANS, CHECKS AND DEPOSITS Section 6.1 Contracts. The Board of Directors may expressly authorize any Officer or Officers and agent or agents of the Corporation to enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation, and such authority may be general or confined to specific instances. [BCA ss.8.50] Section 6.2 Loans. All loans contracted on behalf of the Corporation and all evidence of indebtedness issued in the Corporation's name shall be authorized by resolution of the Board of Directors. Such authority may be general or confined to specific instances. -13- 17 Standard Parking Corporation IL Section 6.3 Pledges of Property and Assets. The pledge of all, or substantially all, the property and assets of the Corporation in the usual and regular course of business may be authorized by the Board of Directors upon such terms and conditions as the Board of Directors deems necessary or desirable, without authorization or consent of the Shareholders of the Corporation. [BCA ss.11.55] Section 6.4 Checks, Drafts, Etc. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation, shall be signed by such Officer or Officers, agent or agents of the Corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors. Section 6.5 Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies, or other depositaries as the Board of Directors may select. Article 7 SHARES AND THEIR TRANSFER Section 7.1 Consideration for Shares. Shares may be issued for such consideration as shall be authorized from time to time by the Board of Directors through action which establishes a price in cash or other consideration, or both, or a minimum price or a general formula or method by which the price can be determined. Upon authorization by the Board of Directors, the Corporation may issue its own shares in exchange for or in conversion of its outstanding shares, or may distribute its own shares pro rata to its Shareholders or the Shareholders of one or more classes or series to effectuate dividends or splits, and any such transactions shall not require consideration; provided, that no such issuance of shares of any class or series shall be made to the holders of shares of any other class or series unless it is either expressly provided for in the Articles of Incorporation or authorized by an affirmative vote of the holders of at least a majority of the outstanding shares of the class or series in which the distribution is to be made. [BCA ss.6.25] Section 7.2 Payment for Shares. The consideration for the issuance of shares shall be paid, in whole or in part, in money, in other property, tangible or intangible, or in labor or services actually performed for the Corporation, as determined by the Board of Directors. When payment of the consideration for which shares are to be issued shall have been received by the Corporation, such shares shall be deemed to be fully paid and non-assessable. In the absence of actual fraud in the transaction, and subject to the provisions of the Business Corporation Act of 1983, the judgment of the Board of Directors or the Shareholders, as the case may be, as to the value of the consideration received for shares shall be conclusive. [BCA ss.6.30] Section 7.3 Shares Represented by Certificates. Except as otherwise provided pursuant to this Article 7, the issued shares of the Corporation shall be represented by certificates. Certificates shall be signed by the appropriate corporate Officers and may be sealed with the seal, or a facsimile of the seal, of the Corporation. In case the seal of the Corporation is changed after the certificate is sealed with the seal or a facsimile of the seal of the Corporation, but before it is issued, the certificate may be issued by the Corporation with the same effect as if the seal had not been changed. If a certificate is countersigned by a transfer agent or registrar, other than the -14- 18 Standard Parking Corporation IL Corporation itself or its employee, any other signatures or countersignatures on the certificate may be facsimiles. In case any Officer of the Corporation, or any officer or employee of the transfer agent or registrar who has signed, or whose facsimile signature has been placed upon, such certificate ceases to be an Officer of the Corporation, or an officer or employee of the transfer agent or registrar, before such certificate is issued, the certificate may be issued by the Corporation with the same effect as if the Officer of the Corporation, or the officer or employee of the transfer agent or registrar, had not ceased to be such at the date of its issue. Every certificate representing shares issued by the Corporation at a time when the Corporation is authorized to issue shares of more than one class shall set forth upon the face or back of the certificate a full summary or statement of all of the designations, preferences, qualifications, limitations, restrictions and special or relative rights of the shares of each class authorized to be issued, and, if the Corporation is authorized to issue any preferred or special class in series, the variations in the relative rights and preferences between the shares of each such series so far as the same have been fixed and determined, and the authority of the Board of Directors to fix and determine the relative rights and preferences of subsequent series. Such statement may be omitted from the certificate if it shall be set forth upon the face or back of the certificate that such statement, in full, will be furnished by the Corporation to any Shareholder upon request and without charge. Each certificate representing shares shall also state: (a) That the Corporation is organized under the laws of Illinois; (b) The name of the person to whom issued; and (c) The number and class of shares, and the designation of the series, if any, which such certificate represents; No certificate shall be issued for any share until such share is fully paid. [BCA ss.6.35] Section 7.4 Uncertificated Shares. The Board of Directors of the Corporation may provide by resolution that some or all of any or all classes and series of its shares shall be uncertificated shares, provided that such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to this Article 7. Except as otherwise expressly provided by law, the rights and obligations of holders of uncertificated shares and the rights and obligations of holders of certificates representing shares of the same class and series shall be identical. [BCA ss.6.35] Article 8 FISCAL YEAR Except as the Board of Directors of the Corporation may otherwise provide by resolution duly adopted pursuant to the authority granted hereby, the fiscal year of the Corporation shall begin on the first day of January in each year and end on the last day of December in each year. -15- 19 Standard Parking Corporation IL Article 9 DIVIDENDS The Board of Directors may from time to time declare or effect, and the Corporation may pay or make dividends on its outstanding shares or other distributions to Shareholders, including without limitation purchases of shares of the Corporation, subject in each case to any and all terms, conditions, preferences and restrictions provided by law, by the Articles of Incorporation and by any binding contract or instrument duly executed on behalf of the Corporation. [BCA ss.ss.9.05, 9.10] Article 10 SEAL The Board of Directors may provide a corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the Corporation and the words "Corporate Seal, Illinois." [BCA ss.3.10] Article 11 WAIVER OF NOTICE Whenever any notice whatever is required to be given to any Shareholder or Director of the Corporation under the provisions of these By-Laws or under the provisions of the Articles of Incorporation or under the Illinois Business Corporation Act of 1983, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Attendance at any Meeting shall constitute waiver of notice thereof unless the person at the Meeting objects to the holding of the Meeting because proper notice was not given. [BCA ss.7.20] Article 12 AMENDMENTS TO THE BY-LAWS The By-Laws of the Corporation may be made, altered, amended or repealed by the Shareholders or the Board of Directors of the Corporation, but, if such By-Law expressly so provides, no By-Law adopted by the Shareholders may be altered, amended or repealed by the Board of Directors. These By-Laws may be altered or amended to contain any provisions for the regulation and management of the affairs of the Corporation not inconsistent with law or with the Articles of Incorporation. [BCA ss.2.25] Article 13 STATUTORY REFERENCES The statutory references in these By-Laws to the "Business Corporation Act of 1983" refer, except where the context otherwise requires, to the Illinois Business Corporation Act of 1983, as amended from time to time. The citations to sections of the BCA appearing in brackets throughout the text of these By-Laws are for convenience of reference only, are not made a part hereof, shall not be construed as incorporating the referenced provisions of the law into these By- -16- 20 Standard Parking Corporation IL Laws, and shall not be deemed in any way to alter, affect or qualify the meaning or effect of these By-Laws as written and adopted. -17- EX-3.22 25 ARTICLES OF INCORPORATION 1 Form BCA-55 Box 4024 File 769-6 ----- ------ ================================================================================ ARTICLES OF AMENDMENT to the ARTICLES OF INCORPORATION of STANDARD AUTO PARK, INC. ----------------------------------- FILE IN DUPLICATE Filing Fee $25.00 Filing Fee for Re-Stated Articles $100.00 ================================================================================ 2 EXPEDITED SECRETARY OF STATE MAR 18 EXP. FEES 25.00 ------ COPY CERT. 10.00 ------ [SEAL] STATE OF ILLINOIS Office of the Secretary of State I hereby certify that this is a true and correct copy, consisting of five pages, as taken from the original on file in this office. /s/ George H. Ryan GEORGE H. RYAN SECRETARY OF STATE DATED: March 18, 1998 --------------- BY: /s/ Julie Jaeger ----------------- 3 FORM B BEFORE ATTEMPTING TO EXECUTE THESE BLANKS BE SURE TO READ CAREFULLY THE INSTRUCTIONS ON THE BACK THEREOF. (THESE ARTICLES MUST BE FILED IN DUPLICATE) ------------------------------ (Do not write in this Space) STATE OF ILLINOIS, ) Date Paid 9-14-60 ) ss. Initial License Fee $.50 COOK COUNTY ) Franchise Tax $8.34 Filing Fee $20.00 To CHARLES F. CARPENTIER, Secretary of State: Clerk [illegible] ------------------------------ We the undersigned,
============================================================================ Name Number Street Address City State ============================================================================ Lawrence Kasakoff 110 South Dearborn, Chicago, Illinois - ---------------------------------------------------------------------------- Norman L. Silverman 110 South Dearborn, Chicago, Illinois - ---------------------------------------------------------------------------- Muriel Stineberg 110 South Dearborn, Chicago, Illinois - ---------------------------------------------------------------------------- - --------------------------------------------------------------------------- - ---------------------------------------------------------------------------
being natural persons of the age of twenty-one years or more and subscribers to the shares of the corporation to be organized pursuant hereto, for the purpose of forming a corporation under "The Business Corporation Act" of the State of Illinois, do hereby adopt the following Articles of Incorporation: ARTICLE ONE The name of the corporation is: STANDARD AUTO PARK, INC. ARTICLE TWO The address of its initial registered office in the State of Illinois is: 110 S. Dearborn St. Street, in the City of Chicago ( 3 ) County of Cook and the name (Zone) of its initial Registered Agent at said address is: Lawrence Kasakoff ---------------------------- 4 ARTICLE THREE The duration of the corporation is: Perpetual ARTICLE FOUR The purpose or purposes for which the corporation is organized are: to operate a parking lot, parking facility, or public or private garage ARTICLE FIVE PARAGRAPH 1. The aggregate number of shares which the corporation is authorized to issue is 1000, divided into one class. The designation of each class, the number of shares of each class, and the par value, if any, of the shares of each class, or a statement that the shares of any class are without par value, are as follows:
Par value per share or Series Number of statement that shares Class (If Any) Shares are without par value Common 1000 $10.00 par value
PARAGRAPH 2. The preferences, qualifications, limitations, restrictions and the special or relative rights in respect of the shares of each class are: NONE ARTICLE SIX The class and number of shares which the corporation proposes to issue without further report to the Secretary of State, and the consideration (expressed in dollars) to be received by the corporation therefor, are:
Total consideration to Class of shares Number of shares be received therefor: Common 100 $ 1,000 $ $ $ $ -2- 5 ARTICLE SEVEN The corporation will not commence business until at least one thousand dollars has been received as consideration for the issuance of shares. ARTICLE EIGHT The number of directors to be elected at the first meeting of the shareholders is: three ARTICLE NINE PARAGRAPH 1: It is estimated that the value of all property to be owned by the corporation for the following year wherever located will be $ 1000 PARAGRAPH 2: It is estimated that the value of the property to be located within the State of Illinois during the following year will be $ 1000 PARAGRAPH 3: It is estimated that the gross amount of business which will be transacted by the corporation during the following year will be $ 125,000 PARAGRAPH 4: It is estimated that the gross amount of business which will be transacted at or from places of business in the State of Illinois during the following year will be $ 125,000 ___________________________________ ) ___________________________________ ) ___________________________________ ) ___________________________________ ) Incorporators ___________________________________ ) ___________________________________ ) ___________________________________ ) OATH AND ACKNOWLEDGMENT STATE OF ILLINOIS ) ) Cook County ) - ------------ I, ________________, a Notary Public, do hereby certify that on the 12th day of September 1960, Lawrence Kasakoff, Norman L. Silverman and Muriel Stineberg (Names of Incorporators) -3- 6 personally appeared before me and being first duly sworn by me acknowledged they signed the foregoing document in the respective capacities therein set forth and declared that the statements therein contained are true. IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year above written. Place (NOTARIAL SEAL) Here ------------------------------ Notary Public -4- 7 FORM B ================================================================================ ARTICLES OF INCORPORATION STANDARD AUTO PARK, INC. - -------------------------------------------------------------------------------- ================================================================================ The following fees are required to be paid at the time of issuing certificate of incorporation: Filing fee, $20.00; Initial license fee of 50c per $1,000.00 or 1/20 of 1% of the amount of stated capital and paid-in surplus the corporation proposes to issue without further report (Article Six); Franchise tax of 1/20 of 1% of the issued, as above noted. However, the minimum annual franchise tax is $10.00 and varies monthly on $20,000 or less, as follows: January, $15; February, $14.17; March, $13.34; April, $12.50; May, $11.67; June, $10.84; July, $10.00; Aug., $9.17; Sept., $8.34; Oct., $7.50; Nov., $6.67; Dec., $5.84; (See Sec. 133, BCA). In excess of $20,000 the franchise tax per $1,000.00 is as follows: Jan., $0.75; Feb., .7084; March, .6667; April, .625; May, .5834; June, .5417; July, .50; Aug., .4584; Sept., .4167; Oct., .375; Nov., .3334; Dec., .2917. All shares issued in excess of the amount mentioned in Article Six of this application must be reported within 60 days from date of issuance thereof, and franchise tax and license fee paid thereon; otherwise, the corporation is subject to a penalty of 1% for each month on the amount until reported and subject to a fine not to exceed $500.00. The same fees are required for a subsequent issue of shares except the filing fee is $1.00 instead of $20.00. ================================================================================ -5- 8 FORM BCA-55 ---------------------------- (Do not write in this space) Date Paid 12-28-70 License Fee $ Franchise Tax $ Filing Fee $25.00 Clerk [illegible] ---------------------------- (File in Duplicate) ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF STANDARD AUTO PARK, INC. ------------------------- (Exact Corporate Name) To JOHN W. LEWIS Secretary of State Springfield, Illinois The undersigned corporation, for the purpose of amending its Articles of Incorporation and pursuant to the provisions of Section 55 of "The Business Corporation Act" of the State of Illinois, hereby executes the following Articles of Amendment: ARTICLE FIRST: The name of the corporation is: STANDARD AUTO PARK, INC. ARTICLE SECOND: The following amendment or amendments were adopted in the manner prescribed by "The Business Corporation Act" of the State of Illinois: -6- 9 ARTICLE FIVE of the ARTICLES OF INCORPORATION is amended by increasing the number of $10.00 Par Value Common Shares which the corporation is authorized to issue from 1,000 shares to 25,000 shares. (Disregard separation into classes if class voting does not apply to the amendment voted on.) ARTICLE THIRD: The number of shares of the corporation outstanding at the time of the adoption of said amendment or amendments was 140; and the number of shares of each class entitled to vote as a class on the adoption of said amendment or amendments, and the designation of each such class were as follows:
Class Number of Shares Common 140
(Disregard separation into classes if class voting does not apply to the amendment voted on.) ARTICLE FOURTH: The number of shares voted for said amendment or amendments was 140; and the number of shares voted against said amendment of amendments was _______. The number of shares of each class entitled to vote as a class voted for and against said amendment or amendments; respectively, was:
Class Number of Shares Voted For Against Common 140 None
(Disregard these items unless the amendment restates the articles of incorporation.) -7- 10 Item 1. On the date of the adoption of this amendment, restating the articles of incorporation, the corporation had __________ shares issued, itemized as follows: Par value per share or statement that Series Number shares are without Class (If Any) of Shares par value Item 2. On the date of the adoption of this amendment restating the articles of incorporation, the corporation had a stated capital of $___________ and a paid-in surplus of $__________________ or a total of $____________________. (Disregard this Article where this amendment contains no such provisions.) ARTICLE FIFTH: The manner in which the exchange, reclassification, or cancellation of issued shares, or a reduction of the number of authorized shares of any class below the number of issued shares of that class, provided for in, or effected by, this amendment, is as follows: -8- 11 (Disregard this Paragraph where amendment does not affect stated capital or paid-in surplus.) ARTICLE SIXTH: Paragraph 1: The manner in which said amendment or amendments effect a change in the amount of stated capital or the amount of paid-in surplus, or both, is as follows: (Disregard this Paragraph where amendment does not affect stated capital or paid-in surplus.) Paragraph 2: The amounts of stated capital and of paid-in surplus as changed by this amendment are as follows:
Before Amendment After Amendment Stated capital ........ $ $ Paid-in surplus ....... $ $
-9- EX-3.23 26 AMENDED AND RESTATED BY-LAWS 1 AMENDED AND RESTATED BY-LAWS OF STANDARD AUTO PARK, INC. ARTICLE I OFFICES The corporation shall continuously maintain in the State of Illinois a registered office and a registered agent whose office is identical with such registered office, and may have other offices within or without the state. ARTICLE II SHAREHOLDERS SECTION 1. ANNUAL MEETING. An annual meeting of the shareholders shall be held on the first Wednesday in February of each year for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday, such meeting shall be held on the next succeeding business day. SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders may be called either by the president, by the board of directors or by the holders of not less than one-fifth of all the outstanding shares of the corporation entitled to vote, for the purpose or purposes stated in the call of the meeting. SECTION 3. PLACE OF MEETING. The board of directors may designate any place, as the place of meeting for any annual meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be held at the principal office of the corporation. SECTION 4. NOTICE OF MEETINGS. Written notice stating the place, date, and hour of the meeting, and in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten nor more than sixty days before the date of the meeting, or in the case of a merger consolidation, share exchange, dissolution or sale, lease or exchange of assets not less than twenty nor more than sixty days before the date of the meeting, either personally or by mail, by or at the direction of the president, or the secretary, or the officer or persons calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, 2 addressed to the shareholder at his address as it appears on the records of the corporation, with postage thereon prepaid. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. SECTION 5. FIXING OF RECORD DATE. For the purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or to receive payment of any dividend, or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion or exchange of shares or for the purpose of any other lawful action1 the board of directors of the corporation may fix in advance a record date which shall not be more than sixty days and, for a meeting of shareholders, not less than ten days, or in the case of a merger, consolidation, share exchange, dissolution or sale, lease or exchange of assets, not less than twenty days, before the date of such meeting. If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be the date on which notice of the meeting is mailed, and the record date for the determination of shareholders for any other purpose shall be the date on which the board of directors adopts the resolution relating thereto. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting. SECTION 6. VOTING LISTS. The officer or agent having charge of the transfer books for shares of the corporation shall make, within twenty days after the record date for a meeting of shareholders or at least ten days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting, arranged in alphabetical order, showing the address of and the number of shares registered in the name of the shareholder, which list, for a period of ten days prior to such meeting, shall be kept on file at the registered office of the corporation and shall be open to inspection by any shareholder for any purpose germane to the meeting, at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and may be inspected by any shareholder during the whole time of the meeting. The original share ledger or transfer book, or a duplicate thereof kept in this State, shall be prima facie evidence as to who are the shareholders entitled to examine such list or share ledger or transfer book or to vote at any meeting of shareholders. SECTION 7. QUORUM. The holders of a majority of the outstanding shares of the corporation entitled to vote on a matter present in person or represented by proxy shall constitute a quorum at any meeting of shareholders; provided that if less than a majority of the outstanding shares are represented at said meeting, a majority of the shares so represented may adjourn the meeting at any time without further notice. If a quorum is present, the affirmative vote of the majority of the shares represented at the meeting shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by the Business Corporation Act of 1983 ("Business Corporation Act"), the Articles of Incorporation or these by-laws. At any adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the original meeting. Withdrawal of shareholders from any meeting shall not cause failure of a duly constituted quorum at that meeting. -2- 3 SECTION 8. PROXIES. Each shareholder entitled to vote at a meeting of shareholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him by proxy, but no such proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy. No proxy shall be solicited by means of any communication containing a statement which, at the time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact or which omits to state any material fact necessary in order that the statements made not be false or misleading. SECTION 9. VOTING OF SHARES. Each outstanding share, of each class of shares entitled to vote on a matter, shall be entitled to one vote upon each matter submitted to a vote at a meeting of shareholders, and in all elections for directors, every shareholder shall have the right to vote the number of shares owned by such shareholder for as many persons as there are directors to be elected1 or to cumulate such votes and give one candidate as many votes as shall equal the number of directors multiplied by the number of such shares or to distribute such cumulative votes in any proportion among any number of candidates. SECTION 10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares of a corporation held by the corporation in a fiduciary capacity may be voted and shall be counted in determining the total number of outstanding shares entitled to vote at any given time. Shares registered in the name of another corporation, domestic or foreign, may be voted by any officer agent1 proxy or other legal representative authorized to vote such shares under the law of incorporation of such corporation. A corporation may treat the president or other person holding the position of chief executive officer of such other corporation as authorized to vote such shares, together with any other person indicated and any other holder of an office indicated by the corporation shareholder to the corporation as a person or an office authorized to vote such shares. Such persons and offices indicated shall be registered by the corporation on the transfer books for shares and included in any voting list. Shares registered in the name of a deceased person, a minor ward or a person under legal disability may be voted by his or her administrator, executor, or court appointed guardian, either in person or by proxy without a transfer of such shares into the name of such administrator, executor, or court appointed guardian. Shares registered in the name of a trustee may be voted by him or her, either in person or by proxy. Shares registered in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his or her name if authority so to do is contained in an appropriate order of the court by which such receiver was appointed. A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred. -3- 4 Any number of shareholders may create a voting trust for the purpose of conferring upon a trustee or trustees the right to vote or otherwise represent their share, for a period not to exceed ten years, by entering into a written voting trust agreement specifying the terms and conditions of the voting trust, and by transferring their shares to such trustee or trustees for the purpose of the agreement. Any such trust agreement shall not become effective until a counterpart of the agreement is deposited with the corporation at its registered office. The counterpart of the voting trust agreement so deposited with the corporation shall be subject to the same right of examination by a shareholder of the corporation, in person or by agent or attorney, as are the books and records of the corporation, and shall be subject to examination by any holder of a beneficial interest 'in the voting trust, either in person or by agent or attorney, at any reasonable time for any proper purpose. Shares of its own stock belonging to this corporation shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding shares at any given time. SECTION 11. INSPECTORS. At any meeting of shareholders, the presiding officer may, or upon the request of any shareholder shall, appoint one or more persons as inspectors for such meeting. Such inspectors shall ascertain and report the number of shares represented at the meeting, based upon their determination of the validity and effect of proxies; count all votes and report the results; and do such other acts as are proper to conduct the election and voting with impartiality and fairness to all the shareholders. Each report of an inspector shall be in writing and signed by him or by a majority of them if there be more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof. SECTION 12. INFORMAL ACTION BY SHAREHOLDERS. Unless otherwise provided in the Articles of Incorporation, any action required to be taken at any annual or special meeting of the shareholders of the corporation, or any other action which may be taken at a meeting of the shareholders, may be taken without a meeting and without a vote, if a consent in writing, setting forth the action so taken, shall be signed (a) if 5 days prior notice of the proposed action is given in writing to all of the shareholders entitled to vote with respect to the subject matter thereof, by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voting or (b) by all of the shareholders entitled to vote with respect to the subject matter thereof. Prompt notice of the taking of the corporation action without a meeting by less than unanimous written consent shall be given in writing to those shareholders who have not consented in writing. In the event that the action which is consented to is such as would have required the filing of a certificate under any Section of the Business Corporation Act if such -4- 5 action had been voted on by the shareholders at a meeting thereof, the certificate filed under such Section shall state, in lieu of any statement required by such Section concerning any vote of shareholders, that written consent has been given in accordance with the provisions of Section 7.10 of the Business Corporation Act and that written notice has been given as provided in such Section. SECTION 13. VOTING BY BALLOT. Voting on any question or in any election may be by voice unless the presiding officer shall order or any shareholder shall demand the voting be by ballot. ARTICLE III DIRECTORS SECTION 1. GENERAL POWERS. The business of the corporation shall be managed by or under the direction of its board of directors. SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors of the corporation shall be three (3). Each director shall hold office until the next annual meeting of shareholders or until his successor shall have been elected and qualified. Directors need not be residents of Illinois or shareholders of the corporation. The number of directors may be increased or decreased from time to time by the amendment of this section; but no decrease shall have the effect of shortening the term of any incumbent director. SECTION 3. REGULAR MEETINGS. A regular meeting of the board of directors shall be held immediately after the annual meeting of shareholders. The board of directors may provide, by resolution, time and place for the holding of additional regular meetings without other notice than such resolution. SECTION 4. SPECIAL MEETINGS. Special meetings of the board of directors may be called by or at the request of the president or any director. The person or persons authorized to call special meetings of the board of directors may fix any place as the place for holding any special meeting of the board of directors called by them. SECTION 5. NOTICE. Notice of any special meeting shall be given at least three (3) days previous thereto by written notice to each director at his business address. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegram company. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting. -5- 6 SECTION 6. QUORUM. A majority of the number of directors fixed by these by-laws shall constitute a quorum for transaction of business at any meeting of the board of directors, provided that if less than a majority of such number of directors are present at said meeting, a majority of the directors present may adjourn the meeting at any time without further notice. SECTION 7. MANNER OF ACTING. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors, unless the act of a greater number is required by statute, these by-laws, or the Articles of Incorporation. SECTION 8. VACANCIES. Any vacancy occurring in the board of directors and any directorship to be filled by reason of an increase in the number of directors, shall be filled by election at an annual meeting or at a special meeting of shareholders called for that purpose. SECTION 9. ACTION WITHOUT A MEETING. Unless specifically prohibited by the Articles of Incorporation, any action required to be taken at a meeting of the board of directors, or any other action which may be taken at a meeting of the board of directors, or of any committee thereof may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all the directors entitled to vote with respect to the subject matter thereof, or by all the members of such committee, as the case may be. Any such consent signed by all the directors or all the members of the committee shall have the same effect as a unanimous vote, and may be stated as such in any document filed with the Secretary of State or with anyone else. SECTION 10. COMPENSATION. The board of directors, by the affirmative vote of a majority of directors then in office, and irrespective of any personal interest of any of its members, shall have authority to establish reasonable compensation of all directors for services to the corporation as directors, officers, or otherwise. By resolution of the board of directors the directors may be paid their expenses, if any, of attendance at each meeting of the board. No such payment shall, preclude any director from serving the corporation in any other capacity and receiving compensation therefor. SECTION 11. PRESUMPTION OF ASSENT. A director of the corporation who is present at a meeting of the board of directors at which action on any corporate matter is taken shall be conclusively presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. SECTION 12. COMMITTEES. The board of directors by resolution adopted by a majority of the number of directors fixed by the by-laws or otherwise may create one or more committees and appoint members of the board to serve on the committee or committees. Each committee shall have two or more members, who serve at the pleasure of the board. -6- 7 Unless the appointment by the board of directors requires a greater number, a majority of any committee shall constitute a quorum and a majority of a quorum is necessary for committee action. A committee may act by unanimous consent in writing without a meeting and, subject to the provisions of the by-laws or action by the board of directors, the committee by majority vote of its members shall determine the time and place of meetings and the notice required therefor. To the extent specified by the board of directors or in the Articles of Incorporation, each committee may exercise the authority of the board of directors, provided, however, a committee may not: (a) authorize distributions; (b) approve or recommend to shareholders any act required to be approved by shareholders; (c) fill vacancies on the board or on any of its committees; (d) elect or remove officers or fix the compensation of any member of the committee; (e) adopt, amend or repeal the by-laws; (f) approve a plan of merger not requiring shareholder approval; (g) authorize or approve reacquisition of shares, except according to a general formula or method prescribed by the Board; (h) authorize or approve the issuance or sale, or contract for sale, of shares or determine the designation and relative rights, preferences, and limitations of a series of shares, except that the board may direct a committee to fix the specific terms of the issuance or sale or contract for sale or the number of shares to be allocated to particular employees under an employee benefit plan; or (i) amend, alter, repeal, or take action inconsistent with any resolution or action of the board of directors when the resolution or action of the board of directors provides by its terms that it shall not be amended, altered or repealed by action of a committee. SECTION 13. RESIGNATION AND REMOVAL OF DIRECTORS. A director may resign at any time upon written notice to the board of directors. One of more of the directors may be removed, with or without cause, at a meeting of shareholders by the affirmative vote of the holders of a majority of the outstanding shares then entitled to vote at an election of directors, except as follows: (a) No director shall be removed at a meeting of shareholders unless the notice of such meeting shall state that a purpose of the meeting is to vote upon the removal of one or more directors named in the notice. Only the named director or directors may be removed at such meeting. -7- 8 (b) If less than the entire board is to be removed, no director may be removed, with or without cause, if the votes cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the entire board of directors. SECTION 14. TELEPHONIC MEETINGS. The board of directors or any committee of the board of directors may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation in such meeting shall constitute attendance and presence in person at the meeting of the person or persons so participating. ARTICLE IV OFFICERS SECTION 1. NUMBER. The officers of the corporation shall be a chairman of the board of directors, a president, one or more vice-presidents, a treasurer, a secretary, and such other officers as may be elected or appointed by the board of directors. Any two or more offices may be held by the same person. SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the corporation shall be elected annually by the board of directors at the meeting of the board of directors held after each annual meeting of shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as may be convenient. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until his successor shall have been duly elected and shall have qualified or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. Election of an officer shall not of itself create contract rights. SECTION 3. REMOVAL. Any officer elected or appointed by the board of directors may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. SECTION 4. CHAIRMAN OF THE BOARD. The chairman of the board shall preside over all executive committee meetings of the executive committee of the corporation, and shall preside at all meetings of the shareholders and of the board of directors. He may sign, in lieu of the president, certificates for shares of the corporation, deeds, mortgages, bonds, contracts or other instruments, which the board of directors have authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the board of directors or these by-laws to some other officer or agent of the corporation or in cases where the signing and execution thereof is required by law to be performed by some other officer or agent of the corporation. -8- 9 SECTION 5. PRESIDENT. The president shall be the principal executive officer of the corporation. Subject to the direction and control of the board of directors, he shall be in charge of the business of the corporation; he shall see that the resolutions and directions of the board of directors are carried into effect except in those instances in which that responsibility is specifically assigned to some other person by the board of directors; and, in general, he shall discharge all duties incident to the office of president and such other duties as may be prescribed by the board of directors from time to time. He shall preside at all meetings of the shareholders and of the board of directors. Except in those instances in which the authority to execute is expressly delegated to another officer or agent of the corporation or a different mode of execution is expressly prescribed by the board of directors or these by-laws, he may execute for the corporation certificates for its shares, and any contracts, deeds, mortgages, bonds, or other instruments which the board of directors has authorized to be executed, and he may accomplish such execution either under or without the seal of the corporation and either individually or with the secretary, any assistant secretary, or any other officer thereunto authorized by the board of directors, according to the requirements of the form of the instrument. He may vote all securities which the corporation is entitled to vote except as and to the extent such authority shall be vested in a different officer or agent of the corporation by the board of directors. SECTION 6. THE VICE-PRESIDENTS. The vice-president (or in the event there be more than one vice-president, each of the vice-presidents) shall assist the president in the discharge of his duties as the president may direct and shall perform such other duties as from time to time may be assigned to him by the president or by the board of directors. In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the board of directors, or by the president if the board of directors has not made such a designation, or in the absence of any designation, then in the order of seniority of tenure as vice-president) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. Except in those instances in which the authority to execute is expressly delegated to another officer or agent of the corporation or a different mode of execution is expressly prescribed by the board of directors or these by-laws, the vice-president (or each of them if there are more than one) may execute for the corporation certificates for its shares and any contracts, deeds, mortgages, bonds or other instruments which the board of directors has authorized to be executed, and he may accomplish such execution either under or without the seal of the corporation and either individually or with the secretary, any assistant secretary, or any other officer thereunto authorized by the board of directors, according to the requirements on the form of the instrument. SECTION 7. THE TREASURER. The treasurer shall be the principal accounting and financial officer of the corporation. He shall: (a) have charge of and be responsible for the maintenance of adequate books of account for the corporation; (b) have charge and custody of all funds and securities of the corporation, and be responsible therefor and for the receipt and disbursement thereof; and (c) perform all the duties incident to the office of treasurer and such other duties as from time to time may be assigned to him by the president or by the board of directors. -9- 10 SECTION 8. THE SECRETARY. The secretary shall: (a) record the minutes of the shareholders' and the board of directors' meetings in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these by-laws or as required by law: (c) be custodian of the corporate records and of the seal of the corporation; (d) keep a register of the post-office address of each shareholder which shall be furnished to the secretary by such shareholder; (e) sign with the president, or a vice-president, or any other officer thereunto authorized by the board of directors, certificates for shares of the corporation, the issue of which shall have been authorized by the board of directors, and any contracts, deeds, mortgages, bonds, or other instruments which the board of directors has authorized to be executed, according to the requirements of the form of the instrument, except when a different mode of execution is expressly prescribed by the board of directors or these by-laws; (f) have general charge of the stock transfer books of the corporation; (g) perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to him by the president or by the board of directors. SECTION 9. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The assistant treasurers and assistant secretaries shall perform such duties as shall be assigned to them by the treasurer or the secretary, respectively, or by the president or the board of directors. The assistant secretary may sign with the president, or a vice-president, or any other officer thereunto authorized by the board of directors, certificates for shares of the corporation, the issue of which shall have been authorized by the board of directors, and any contracts, deeds, mortgages, bonds, or other instruments which the board of directors has authorized to be executed, according to the requirements of the form of the instrument, except when a different mode of execution is expressly prescribed by the board of directors or these bylaws. SECTION 10. SALARIES. The salaries of the officers shall be fixed from time to time by the board of directors and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the corporation. ARTICLE V CONTRACTS LOANS, CHECKS AND DEPOSITS SECTION 1. CONTRACTS. The board of directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. SECTION 2. LOANS. No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the board of directors. Such authority may be general or confined to specific instances. SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the -10- 11 corporation, shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by resolution of the board of directors. SECTION 4. DEPOSITS. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositaries as the board of directors may select. ARTICLE VI CERTIFICATES FOR SHARES AND THEIR TRANSFER SECTION 1. CERTIFICATES FOR SHARES. The issued shares of the corporation shall be represented by certificates or shall be uncertificated shares. Certificates representing shares of the corporation shall be signed by the president or a vice-president or by such officer as shall be designated by resolution of the board of directors and by the secretary or an assistant secretary, and may be sealed with the seal or a facsimile of the seal of the corporation. If both of the signatures of the officers be by facsimile, the certificate shall be manually signed by or on behalf of a duly authorized transfer agent or clerk. Each certificate representing shares shall be consecutively numbered or otherwise identified, and shall also state the name of the person to whom issued, the number and class of shares (with designation of series, if any), the date of issue, that the corporation is organized under Illinois law, and the par value or a statement that the shares are without par value. If the corporation is authorized and does issue shares of more than one class or of series within a class, the certificate shall also contain such information or statement as may be required by law. No certificate shall be issued for any shares until such shares are fully paid. The name and address of each shareholder, the number and class of shares held and the date on which the certificates for the shares were issued shall be entered on the books of the corporation. The person in whose name shares stand on the books of the corporation shall be deemed the owner thereof for all purposes as regards the corporation. SECTION 2. LOST CERTIFICATES. If a certificate representing shares allegedly has been lost or destroyed the board of directors may in its discretion, except as may be required by law, direct that a new certificate be issued upon such indemnification and other reasonable requirements as it may impose. SECTION 3. TRANSFERS OF SHARES. Transfers of shares of the corporation shall be recorded on the books of the corporation and, except in the case of a lost or destroyed certificate, shall be made on surrender for cancellation of the certificate for such shares. A certificate presented for transfer must be duly endorsed and proper guaranty of signature and other appropriate assurances that the endorsement is effective may be required. -11- 12 Unless otherwise provided by the Articles of Incorporation, or by these by-laws, the board of directors may provide by resolution that some or all of any or all classes and series of its shares shall be uncertificated shares, provided that such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Within a reasonable time after the issuance or transfer of uncertificated shares, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates. Except as otherwise expressly provided by law, the rights and obligations of the holders of uncertificated shares and rights and obligations of the holders of certificates representing shares of the same class and series shall be identical. ARTICLE VII FISCAL YEAR The fiscal year of the corporation shall be fixed by resolution of the board of directors. ARTICLE VIII DISTRIBUTIONS The board of directors may authorize, and the corporation may make, distributions to its shareholders, subject to any restriction in the Articles of Incorporation and subject also to the limitations following: No distribution may be made if, after giving it effect: (a) The corporation would be insolvent; or (b) The net assets of the corporation would be less than zero or less than the maximum amount payable at the time of distribution to shareholders having preferential rights in liquidation if the corporation were then to be liquidated. The board of directors may base a determination that a distribution may be made either on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances. The effect of a distribution shall be measured as of the earlier of: (a) the date of its authorization if payment occurs within 120 days after the date of authorization or the date of payment if payment occurs more than 120 days after the date of authorization; or -12- 13 (b) In the case of distribution by purchase, redemption, or other acquisition of the corporation's shares, the earlier of (i) the date money or other property is transferred or debt incurred by the corporation of (ii) the date shareholders cease to be shareholders. ARTICLE IX SEAL The corporate seal shall have inscribed thereon the name of the corporation and the words "Corporate Seal, Illinois." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. ARTICLE X WAIVER OF NOTICE Whenever any notice is required to be given under the provisions of these by-laws or under the provisions of the articles of incorporation or under the provisions of The Business Corporation Act, a waiver thereof in writing, signed by the person or person entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. ARTICLE XI AMENDMENTS The by-laws of the corporation may be amended, altered, or repealed by the shareholders or the board of directors, but no by-law adopted by the shareholders may be altered, amended, or repealed by the board of directors. ARTICLE XII INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS (a) The corporation shall and does hereby indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or who is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, -13- 14 suit or proceeding, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to the best interest of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation or, with respect to any criminal action or proceeding, that the person had reasonable cause to believe that his or her conduct was unlawful. (b) The corporation shall and does hereby indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to the best interests of the corporation, provided that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his or her duty to the corporation, unless, and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper. (c) To the extent that a director, officer, employee or agent of a corporation has been successful, on the merits or otherwise, in the defense of any action, suit or proceeding referred to in subsections (a) and (b), or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith. (d) Any indemnification under subsections (a) and (b) (unless ordered by a court) shall be made by the corporation only as authorized in the specific case, upon a determination that indemnification of the director, officer, employee or agent is, proper in the circumstances because he or she has met the applicable standard of conduct set forth in subsections (a) or (b). Such determination shall be made (1) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceedings, or (2) if such a quorum is not obtainable, or even if obtainable, if a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the shareholders. (e) Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding, as authorized by the board of directors in the specific case, upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount, unless it shall -14- 15 ultimately be determined that he or she is entitled to be indemnified by the corporation as authorized in this Article. (f) The indemnification provided by this Article shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any by-law, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent, and shall inure to the benefit of the heirs, executors and administrators of such a person. (g) A corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or who is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify such person against such liability under the provisions of this Article. (h) If a corporation has paid indemnity or has advanced expenses to a director, officer, employee or agent, the corporation shall report the indemnification or advance in writing to the shareholders with or before the notice of the next shareholders meeting. (i) For purposes of this Article, references to "the corporation" shall include, in addition to the surviving corporation, any merging corporation (including any corporation having merged with a merging corporation) absorbed in a merger which, if its separate existence had continued, would have had the power and authority to indemnify its directors, officers, and employees or agents, so that any person who was a director, officer, employee or agent of such merging corporation, or was serving at the request of such merging corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article with respect to the surviving corporation as such person would have with respect to such merging corporation if its separate existence had continued. (j) For purposes of this Article, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries. A person who acted in good faith and in a manner he or she reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interest of the corporation" as referred to in this Article. -15- 16 ARTICLE XIII FUTURE AMENDMENTS TO BUSINESS CORPORATION ACT In the event the Business Corporation Act is amended after the adoption of these by-laws in a manner which makes these by-laws conflict with the Business Corporation Act, these by-laws shall be deemed to be amended to comport with such conflicting provisions of the amended Business Corporation Act. -16- 17 UNANIMOUS WRITTEN CONSENT OF THE SOLE DIRECTOR AND SHAREHOLDER OF STANDARD AUTO PARK, INC. The undersigned, being the sole Director and Shareholder of Standard Auto Park, Inc. an Illinois corporation, hereby consents in writing to the adoption of the following resolutions: RESOLVED, that Myron Warshauer be and hereby is elected as sole director of the Corporation, to hold such position until his successor has been duly elected and qualified; FURTHER RESOLVED, that any and all acts previously taken by the directors of the Corporation since the date of the last annual meeting to the date hereof are in all respects expressly ratified and confirmed as the acts and deeds of the Corporation; FURTHER RESOLVED, that the following persons be and hereby are elected to the positions set opposite their names, to hold such office until their respective successors have been duly elected and qualified: Chairman of the Board Sidney Warshauer President Myron Warshauer Secretary and Treasurer Carol Warshauer Assistant Secretary Sylvia Starzec Assistant Secretary Michael K. Wolf FURTHER RESOLVED, that any and all acts previously taken by the officers of the Corporation since the date of the last annual meeting to the date hereof are in all respects expressly ratified and confirmed as the acts and deeds of the Corporation; FURTHER RESOLVED, that the form, terms and provisions of the Agreement to Terminate the Stock Purchase Agreement dated June 1, 1990 by and among Sidney Warshauer as Trustee of the Sidney Warshauer Trust dated November 1, 1979, Myron Warshauer and the Corporation, a copy of which is attached hereto as Exhibit A, terminating that certain Stock Purchase Agreement dated December 5, 1979 and as amended and restated in that certain Amended and Restated Stock Purchase Agreement dated November 15, 1982, be and hereby is approved; FURTHER RESOLVED, that the form, terms and provisions of the Stock Assignment dated June 1, 1990 by Sidney Warshauer as Trustee of the Sidney Warshauer Trust dated November 1, 1979, transferring to Myron Warshauer its 5,880 shares of common stock of the Corporation, a copy of which is attached hereto as Exhibit B, be and hereby is approved; 18 FURTHER RESOLVED, that the form, terms and provisions of the Lost Certificate Affidavit dated June 1, 1990, executed by Sidney Warshauer as Trustee of the Sidney Warshauer Trust dated November 1, 1979, a copy of which is attached hereto as Exhibit C, be and hereby is approved; FURTHER RESOLVED, that Article III, Section 2 of the By-Laws of the Corporation is amended to read as follows: "SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors of the corporation shall be one (1). The directors shall hold office until the next annual meeting of shareholders or until his successor shall have been elected and qualified. The director need not be a resident of Illinois or shareholder of the Corporation. The number of directors may be increased from time to time by the amendment of this Section." FURTHER RESOLVED, that Article IV, Section 1 of the By-Laws of the Corporation is amended to read as follows: "SECTION 1. NUMBER. The officers of the Corporation shall be a president, a treasurer, a secretary, and such other officers as may be elected or appointed by the board of directors. Any two or more offices may be held by the same person. The board of directors may appoint a chairman of the board, who need not be a director. The chairman of the board, if appointed, may sign, in lieu of the president, certificates for shares of the corporation, deeds, mortgages, bonds, contracts or other instruments, which the board of directors have authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the board of directors or these By-Laws to some other officer or agent of the corporation or in cases where the signing and execution thereof is required by law to be performed by some other officer or agent of the corporation." FURTHER RESOLVED, that the appropriate officers of the Corporation be and hereby are authorized and directed to take such actions as may be necessary or appropriate to implement the foregoing resolutions. Dated: June 20, 1990 /s/ Myron Warshauer -------------------------------- Myron Warshauer, Director and Shareholder -2- 19 FORM B BEFORE ATTEMPTING TO EXECUTE THESE BLANKS BE SURE TO READ CAREFULLY THE INSTRUCTIONS ON THE BACK THEREOF. (THESE ARTICLES MUST BE FILED IN DUPLICATE) ------------------------------ (Do not write in this Space) STATE OF ILLINOIS,) Date Paid 9-14-60 ) ss. Initial License Fee $.50 COOK COUNTY ) Franchise Tax $8.34 Filing Fee $20.00 To CHARLES F. CARPENTIER, Secretary of State: Clerk [illegible] ------------------------------ We the undersigned, - --------------------------------------------------------------------------- Name Number Street Address City State - --------------------------------------------------------------------------- Lawrence Kasakoff 110 South Dearborn, Chicago, Illinois - --------------------------------------------------------------------------- Norman L. Silverman 110 South Dearborn, Chicago, Illinois - --------------------------------------------------------------------------- Muriel Stineberg 110 South Dearborn, Chicago, Illinois - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- being natural persons of the age of twenty-one years or more and subscribers to the shares of the corporation to be organized pursuant hereto, for the purpose of forming a corporation under "The Business Corporation Act" of the State of Illinois, do hereby adopt the following Articles of Incorporation: ARTICLE ONE The name of the corporation is: STANDARD AUTO PARK, INC. ARTICLE TWO The address of its initial registered office in the State of Illinois is: 110 S. Dearborn St. Street, in the City of Chicago ( 3 ) County of Cook and the name (Zone) of its initial Registered Agent at said address is: Lawrence Kasakoff ---------------------------- 20 ARTICLE THREE The duration of the corporation is: Perpetual ARTICLE FOUR The purpose or purposes for which the corporation is organized are: to operate a parking lot, parking facility, or public or private garage ARTICLE FIVE PARAGRAPH 1. The aggregate number of shares which the corporation is authorized to issue is 1000, divided into one class. The designation of each class, the number of shares of each class, and the par value, if any, of the shares of each class, or a statement that the shares of any class are without par value, are as follows: Par value per share or Series Number of statement that shares Class (If Any) Shares are without par value Common 1000 $10.00 par value PARAGRAPH 2. The preferences, qualifications, limitations, restrictions and the special or relative rights in respect of the shares of each class are: NONE ARTICLE SIX The class and number of shares which the corporation proposes to issue without further report to the Secretary of State, and the consideration (expressed in dollars) to be received by the corporation therefor, are: Total consideration to Class of shares Number of shares be received therefor: Common 100 $ 1,000 $ $ $ $ -2- 21 ARTICLE SEVEN The corporation will not commence business until at least one thousand dollars has been received as consideration for the issuance of shares. ARTICLE EIGHT The number of directors to be elected at the first meeting of the shareholders is: three ARTICLE NINE PARAGRAPH 1: It is estimated that the value of all property to be owned by the corporation for the following year wherever located will be $1000 PARAGRAPH 2: It is estimated that the value of the property to be located within the State of Illinois during the following year will be $1000 PARAGRAPH 3: It is estimated that the gross amount of business which will be transacted by the corporation during the following year will be $125,000 PARAGRAPH 4: It is estimated that the gross amount of business which will be transacted at or from places of business in the State of Illinois during the following year will be $125,000 ___________________________________ ) ___________________________________ ) ___________________________________ ) ___________________________________ ) Incorporators ___________________________________ ) ___________________________________ ) ___________________________________ ) OATH AND ACKNOWLEDGMENT STATE OF ILLINOIS ) ) Cook County ) I, ________________, a Notary Public, do hereby certify that on the 12th day of September 1960, Lawrence Kasakoff, Norman L. Silverman and Muriel Stineberg (Names of Incorporators) -3- 22 personally appeared before me and being first duly sworn by me acknowledged they signed the foregoing document in the respective capacities therein set forth and declared that the statements therein contained are true. IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year above written. Place (NOTARIAL SEAL) Here ------------------------------ Notary Public -4- 23 FORM B ================================================================================ ARTICLES OF INCORPORATION STANDARD AUTO PARK, INC. - -------------------------------------------------------------------------------- ================================================================================ The following fees are required to be paid at the time of issuing certificate of incorporation: Filing fee, $20.00; Initial license fee of 50c per $1,000.00 or 1/20 of 1% of the amount of stated capital and paid-in surplus the corporation proposes to issue without further report (Article Six); Franchise tax of 1/20 of 1% of the issued, as above noted. However, the minimum annual franchise tax is $10.00 and varies monthly on $20,000 or less, as follows: January, $15; February, $14.17; March, $13.34; April, $12.50; May, $11.67; June, $10.84; July, $10.00; Aug., $9.17; Sept., $8.34; Oct., $7.50; Nov., $6.67; Dec., $5.84; (See Sec. 133, BCA). In excess of $20,000 the franchise tax per $1,000.00 is as follows: Jan., $0.75; Feb., .7084; March, .6667; April, .625; May, .5834; June, .5417; July, .50; Aug., .4584; Sept., .4167; Oct., .375; Nov., .3334; Dec., .2917. All shares issued in excess of the amount mentioned in Article Six of this application must be reported within 60 days from date of issuance thereof, and franchise tax and license fee paid thereon; otherwise, the corporation is subject to a penalty of 1% for each month on the amount until reported and subject to a fine not to exceed $500.00. The same fees are required for a subsequent issue of shares except the filing fee is $1.00 instead of $20.00. ================================================================================ -5- 24 FORM BCA-55 ---------------------------- (Do not write in this space) Date Paid 12-28-70 License Fee $ Franchise Tax $ Filing Fee $25.00 Clerk [illegible] ---------------------------- (File in Duplicate) ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF STANDARD AUTO PARK, INC. ------------------------- (Exact Corporate Name) To JOHN W. LEWIS Secretary of State Springfield, Illinois The undersigned corporation, for the purpose of amending its Articles of Incorporation and pursuant to the provisions of Section 55 of "The Business Corporation Act" of the State of Illinois, hereby executes the following Articles of Amendment: ARTICLE FIRST: The name of the corporation is: STANDARD AUTO PARK, INC. ARTICLE SECOND: The following amendment or amendments were adopted in the manner prescribed by "The Business Corporation Act" of the State of Illinois: ARTICLE FIVE of the ARTICLES OF INCORPORATION is amended by increasing the number of $10.00 Par Value Common Shares which the corporation is authorized to issue from 1,000 shares to 25,000 shares. -6- 25 (Disregard separation into classes if class voting does not apply to the amendment voted on.) ARTICLE THIRD: The number of shares of the corporation outstanding at the time of the adoption of said amendment or amendments was 140; and the number of shares of each class entitled to vote as a class on the adoption of said amendment or amendments, and the designation of each such class were as follows: Class Number of Shares Common 140 (Disregard separation into classes if class voting does not apply to the amendment voted on.) ARTICLE FOURTH: The number of shares voted for said amendment or amendments was 140; and the number of shares voted against said amendment of amendments was _______. The number of shares of each class entitled to vote as a class voted for and against said amendment or amendments; respectively, was: Class Number of Shares Voted For Against Common 140 None (Disregard these items unless the amendment restates the articles of incorporation.) Item 1. On the date of the adoption of this amendment, restating the articles of incorporation, the corporation had __________ shares issued, itemized as follows: -7- 26 Par value per share or statement that Series Number shares are without Class (If Any) of Shares par value Item 2. On the date of the adoption of this amendment restating the articles of incorporation, the corporation had a stated capital of $___________ and a paid-in surplus of $__________________ or a total of $____________________. (Disregard this Article where this amendment contains no such provisions.) ARTICLE FIFTH: The manner in which the exchange, reclassification, or cancellation of issued shares, or a reduction of the number of authorized shares of any class below the number of issued shares of that class, provided for in, or effected by, this amendment, is as follows: (Disregard this Paragraph where amendment does not affect stated capital or paid-in surplus.) ARTICLE SIXTH: Paragraph 1: The manner in which said amendment or amendments effect a change in the amount of stated capital or the amount of paid-in surplus, or both, is as follows: -8- 27 (Disregard this Paragraph where amendment does not affect stated capital or paid-in surplus.) Paragraph 2: The amounts of stated capital and of paid-in surplus as changed by this amendment are as follows: Before Amendment After Amendment Stated capital ........ $ $ Paid-in surplus ....... $ $ -9- EX-3.24 27 ARTICLES OF INCORPORATION 1 BCA-2.10 (Rev. Jul. 1984) File # - ----------------------------------------- Submit in Duplicate Payment must be made by Certified Check, Cashier's Check, Illinois Attorney's Check, C.P.A.'s Check or Money order, payable to "Secretary of State DO NOT SEND CASH! - ----------------------------------------- JIM EDGAR Secretary of State State of Illinois ARTICLES OF INCORPORATION - ----------------------------------------- This Space For Use By Secretary of State Date 12-24-86 License Fee $ .50 Franchise Tax $ 25.00 Filing Fee $ 75.00 $100.50 Clerk /s/ - ----------------------------------------- Pursuant to the provisions of "The Business Corporation Act of 1983", the undersigned incorporator(s) hereby adopt the following Articles of Incorporation. ARTICLE ONE The name of the corporation is STANDARD/WABASH PARKING CORPORATION (Shall contain the word "corporation", "company", "incorporated".) - -------------------------------------------------------------------------------- ("limited", or an abbreviation thereof) ARTICLE TWO The name and address of the initial registered agent and its registered office are: Registered Agent Myron C. Warshauer ------------------------------------------------------------ First Name Middle Name Last Name Registered Office 55 E. Monroe St., Suite 3512 ------------------------------------------------------------ Number Street Suite # (A.P.O. Box alone is not acceptable) Chicago 60603 Cook ------------------------------------------------------------ City Zip Code County ARTICLE THREE The purpose or purposes for which the corporation is organized are: If not sufficient space to cover this point, add one or more sheets of this size. To engage in any lawful act or activity for which corporations may be organized under the Illinois Business Corporation Act. ARTICLE FOUR Paragraph 1: The authorized shares shall be: Class * Par value per share Number of shares authorized -------------------------------------------------------------------------- Common $1.00 10,000 -------------------------------------------------------------------------- -------------------------------------------------------------------------- -------------------------------------------------------------------------- Paragraph 2: The preferences, qualifications, limitations, restrictions and the special or relative rights in respect of the shares of each class are: If not sufficient space to cover this point, add one or more sheets of this size. ARTICLE FIVE The number of shares to issued initially, and the consideration to be received by the corporation therefor, are: *Par Value Number of shares Consideration to be Class per share proposed to be issued received therefor ------------------------------------------------------------------------------ Common $1.00 1,000 $ 1,000.00 ------------------------------------------------------------------------------ $ ------------------------------------------------------------------------------ $ ------------------------------------------------------------------------------ $ ------------------------------------------------------------------------------ TOTAL $ 1,000.00 -------------------- - ---------- * A declaration as to a "par value" is optional. This space may be marked "n/a" when no reference to a par value is 2 ARTICLE SIX OPTIONAL The number of directors constituting the initial board of directors of the corporation is ________________, and the names and addresses of the persons who are to serve as directors until the first annual meeting of shareholders or until their successors be elected and qualify are: Name Residential Address - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ARTICLE SEVEN OPTIONAL (a) It is estimated that the value of all property to be owned by the corporation for the following year wherever located will be: $________________ (b) It is estimated that the value of the property to be located within the State of Illinois during the following year will be: $________________ (c) It is estimated that the gross amount of business which will be transacted by the corporation during the following year will be: $________________ (d) It is estimated that the gross amount of business which will be transacted from places of business in the State of Illinois during the following year will be: $________________ ARTICLE EIGHT OTHER PROVISIONS Attach a separate sheet of this size for any other provision to be included in the Articles of Incorporation, e.g., authorizing pre-emptive rights; denying cumulative voting; regulating internal affairs; voting majority requirements; fixing a duration other than perpetual; etc. NAMES & ADDRESS OF INCORPORATORS The undersigned incorporator(s) hereby declare(s), under penalties of perjury, that the statements made in the foregoing Articles of Incorporation are true. Dated December 24, 1986 ----------- -- Signatures and Names Post Office Address 1. /s/ Gilbert L. Bratten 1. 100 W. Cook Street ---------------------------------- --------------------------------- Signature Street Gilbert L. Bratten Springfield, IL 62704 ---------------------------------- --------------------------------- Name (please print) City/Town State Zip 2. 2. ---------------------------------- --------------------------------- Signature Street ---------------------------------- --------------------------------- Name (please print) City/Town State Zip 3. 3. ---------------------------------- --------------------------------- Signature Street ---------------------------------- --------------------------------- Name (please print) City/Town State Zip (Signatures must be in ink on original document. Carbon copy, xerox or rubber stamp signatures may only be used on conformed copies) NOTE: If a corporation acts as incorporator, the name of the corporation and the state of incorporation shall be shown and the execution shall be by its President or Vice-President and verified by him, and attested by its Secretary or an Assistant Secretary. Form BCA-2.10 File No.________________________________________________________________________ ================================================================================ The following fees are required to be paid at the time of issuing the Certificate of Incorporation: FILING FEE $75.00; INITIAL LICENSE FEE of 1/20th of 1% of the consideration to be received for initial issued shares (See Art. 5). MINIMUM $.50; INITIAL FRANCHISE TAX of 1/10 of 1% of the consideration to be received for initial issued shares (see Art. 5). MINIMUM $25.00. EXAMPLES OF TOTAL DUE Consideration to TOTAL be Received Due* ================================================================================ up to $1,000 $100.50 - -------------------------------------------------------------------------------- $ 5,000 $102.50 - -------------------------------------------------------------------------------- $ 10,000 $105.00 - -------------------------------------------------------------------------------- $ 25,000 $112.00 - -------------------------------------------------------------------------------- $ 50,000 $150.00 - -------------------------------------------------------------------------------- $150,000 $225.00 - -------------------------------------------------------------------------------- Includes Filing Fee + License Fee + Franchise Tax RETURN TO: Corporation Department Secretary of State Springfield, Illinois 62576 Telephone: (217) 782-6961 ================================================================================ 3 File # D5449-285-5 - --------------------------------- Form BCA-5.10 NFP-105.10 (Rev. Jan. 1995) - --------------------------------- George H. Ryan Secretary of State Department of Business Services Springfield, IL 62756 Telephone (217) 782-3647 - --------------------------------- STATEMENT OF CHANGE OF REGISTERED AGENT AND/OR REGISTERED OFFICE - --------------------------------- FILED DEC 12 1995 GEORGE H. RYAN SECRETARY OF STATE - --------------------------------- SUBMIT IN DUPLICATE - --------------------------------- This space for use by Secretary of State Date 12/12/95 Filing Fee $5 Approved: [Initials] - --------------------------------- Remit payment in check or money order, payable to "Secretary of State." - --------------------------------- 1. CORPORATE NAME: Standard/Wabash Parking Corporation -------------------------------------------------------------- 2. STATE OR COUNTRY OF INCORPORATION: Illinois ------------------------------------------- ================================================================================ 3. Name and address of the registered agent and registered office as they appear on the records of the office of the Secretary of State (before change): Registered Agent Myron C. Warshauer -------------------------------------------------------- First Name Middle Name Last Name Registered Office 55 E. Monroe St., Suite 3440 -------------------------------------------------------- Number Street Suite No. (A P.O. Box alone is not acceptable) Chicago 60603 Cook -------------------------------------------------------- City Zip Code County 4. Name and address of the registered agent and registered office shall be (after all changes herein reported): Registered Agent Myron C. Warshauer -------------------------------------------------------- First Name Middle Name Last Name Registered Office 200 E. Randolph Dr., Suite 4800 -------------------------------------------------------- Number Street Suite No. (A P.O. Box alone is not acceptable) Chicago 60601 Cook -------------------------------------------------------- City Zip Code County 4 5. The address of the registered office and the address of the business office of the registered agent, as changed, will be identical. 6. The above change was authorized by: ("X" one box only) a. |_| By resolution duly adopted by the board of directors. (Note 5) b. |X| By action of the registered agent. (Note 6) NOTE: When the registered agent changes, the signatures of both president and secretary are required. 7. (If authorized by the board of directors, sign here. See Note 5) The undersigned corporation has caused this statement to be signed by its duly authorized officers, each of whom affirms, under penalties of perjury, that the facts stated herein are true. Dated _______________________ 19___ ________________________________________ (Exact Name of Corporation) attested by __________________________ by _____________________________________ (Signature of Secretary or (Signature of Vice President) Assistant Secretary) -------------------------- ---------------------------------------- (Type or Print Name and (Type or Print Name and Title) Title) (If change of registered office by registered agent, sign here. See Note 6) The undersigned, under penalties of perjury, affirms that the facts stated herein are true. Dated November 8, 1995 /s/ ----------- -- ---------------------------------------- (Signature of Registered Agent of Record) NOTES 1. The registered office may, but need not be the same as the principal office of the corporation. However, the registered office and the office address of the registered agent must be the same. 2. The registered office must include a street or road address; a post office box number alone is not acceptable. 3. A corporation cannot act as its own registered agent. 4. If the registered office is changed from one county to another, then the corporation must file with the recorder of deeds of the new county a certified copy of the articles of incorporation and a certified copy of the statement of change of registered office. Such certified copies may be obtained ONLY from the Secretary of State. 5. Any change of registered agent must be by resolution adopted by the board of directors. This statement must then be signed by the president (or vice-president) and by the secretary (or an assistant secretary). 6. The registered agent may report a change of the registered office of the corporation for which he or she is registered agent. When the agent reports such a change, this statement must be signed by the registered agent. 5 EXPEDITED SECRETARY OF STATE MAR 18 1998 EXP. FEES 25.00 COPY - CERT. 10.00 [SEAL of Secretary of State] STATE OF ILLINOIS Office of the Secretary of State I hereby certify that this is a true and correct copy, consisting of five pages, as taken from the original on file in this office. /s/ George H. Ryan GEORGE H. RYAN SECRETARY OF STATE DATED: March 18, 1998 ----------------------------- BY: /s/ Julie Jaeger -------------------------------- EX-3.25 28 BY-LAWS OF STANDARD/WABASH PARKING CORP. 1 BY-LAWS OF STANDARD/WABASH PARKING CORPORATION ARTICLE I OFFICES The corporation shall continuously maintain in the State of Illinois a registered office and a registered agent whose business office is identical with such registered office, and may have other offices within or without the state. ARTICLE II SHAREHOLDERS SECTION 1. ANNUAL MEETING. An annual meeting of the shareholders shall be held on the fourth (4th) Wednesday in December of each year or at such time as the board of directors may designate for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday, such meeting shall be held on the next succeeding business day. SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders may be called either by the president, by the board of directors or by the holders of not less than one-fifth of all the outstanding shares of the corporation entitled to vote, for the purpose or purposes stated in the call of the meeting. SECTION 3. PLACE OF MEETING. The board of directors may designate any place, as the place of meeting for any annual meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be at the office of the corporation. SECTION 4. SECTION 4. NOTICE OF MEETINGS. Written notice stating the place, date, and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than 10 nor more than 60 days before the date of the meeting, or in the case of a merger, consolidation, share exchange, dissolution or sale, lease or exchange of assets not less than 20 nor more than 60 days before the date of the meeting, either personally or by mail, by or at the direction of the president, or the secretary, or the officer or persons calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the shareholder at his or her address as it appears on the records of the corporation, with postage thereon prepaid. When a meeting is adjourned to 2 another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. SECTION 5. FIXING OF RECORD DATE. For the purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholders, or shareholders entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the board of directors of the corporation may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than 60 days and for a meeting of shareholders, not less than 10 days, or in the case of a merger, consolidation, share exchange, dissolution or sale, lease or exchange of assets, not less than 20 days before the date of such meeting. If no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the board of directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. A determination of share-holders shall apply to any adjournment of the meeting. SECTION 6. VOTING LISTS. The officer or agent having charge of the transfer book for shares of the corporation shall make, within 20 days after the record date for a meeting of shareholders or 10 days before such meeting, whichever is earlier, a complete list of the shareholders entitled to vote at such meeting, arranged in alphabetical order, with the address of and the number of shares held by each, which list, for a period of 10 days prior to such meeting, shall be kept on file at the registered office of the corporation and shall be subject to inspection by any shareholder, and to copying at the shareholder's expense, at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting. The original share ledger or transfer book, or a duplicate thereof kept in this State, shall be prima facie evidence as to who are the shareholders entitled to examine such list or share ledger or transfer book or to vote at any meeting of shareholders. SECTION 7. QUORUM. The holders of a majority of the outstanding shares of the corporation entitled to vote on a matter, represented in person or by proxy, shall constitute a quorum for consideration of such matter at any meeting of shareholders, but in no event shall a quorum consist of less than one-third of the outstanding shares entitled so to vote; provided that if less than a majority of the outstanding shares are represented at said meeting, a majority of the shares so represented may adjourn the meeting at any time without further notice. If a quorum is present, the affirmative vote of the majority of the shares represented at the meeting shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by the Business Corporation Act, the articles of incorporation or these by-laws. At any adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the original meeting. Withdrawal of shareholders from any meeting shall not cause failure of a duly constituted quorum at that meeting. SECTION 8. PROXIES. Each shareholder may appoint a proxy to vote or otherwise act for him or her by signing an appointment form and delivering it to the person so -2- 3 appointed, but no such proxy shall be valid after 11 months from the date of its execution, unless otherwise provided in the proxy. SECTION 9. VOTING OF SHARES. Each outstanding share, regardless of class, shall be entitled to one vote in each matter submitted to vote at a meeting of shareholders, and in all elections for directors, every shareholder shall have the right to vote the number of shares owned by such shareholder for as many persons as there are directors multiplied by the number of such shares or to distribute such cumulative votes in any proportion among any number of candidates. Each shareholder may vote either in person or by proxy as provided in SECTION 8 hereof. SECTION 10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares held by the corporation in a fiduciary capacity may be voted and shall be counted in determining the total number of outstanding shares entitled to vote at any given time. Shares registered in the name of another corporation, domestic or foreign, may be voted by any officer, agent, proxy or other legal representative authorized to vote such shares under the law of incorporation of such corporation. Shares registered in the name of a deceased person, a minor ward or a person under legal disability, may be voted by his or her administrator, executor or court appointed guardian, either in person or by proxy without a transfer of such shares into the name of such administrator, executor or court appointed guardian. Shares registered in the name of a trustee may be voted by him or her, either in person or by proxy. Shares registered in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his or her name if authority to do so is contained in an appropriate order of the court by which such receiver was appointed. A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred. Any number of shareholders may create a voting trust for the purpose of conferring upon a trustee or trustees the right to vote or otherwise represent their shares, for a period not to exceed 10 years, by entering into a written voting trust agreement specifying the terms and conditions of the voting trust, and by transferring their shares to such trustee or trustees for the purpose of the agreement. Any such trust agreement shall not become effective until a counterpart of the agreement is deposited with the corporation at its registered office. The counterpart of the voting trust agreement so deposited with the corporation shall be subject to the same right of examination by a shareholder of the corporation, in person or by agent or attorney, as are the books and records of the corporation, and shall be subject to examination by any holder of a beneficial interest in the voting trust, either in person or by agent or attorney, at any reasonable time for any proper purpose. -3- 4 Shares of its own stock belonging to this corporation shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding shares at any given time, but shares of its own stock held by it in a fiduciary capacity may be voted and shall be counted in determining the total number of outstanding shares at any given time. SECTION 11. CUMULATIVE VOTING. In all elections for directors, every shareholder shall have the right to vote in person or by proxy, the number of shares owned by him/her, for as many persons as there are directors to be elected, or to cumulate such votes, and give one candidate as many votes as the number of directors multiplied by the number of his/her shares shall equal, or to distribute them on the same principle among as many candidates as he/she shall think fit. The articles of incorporation may be amended to limit or eliminate cumulative voting rights in all or specified circumstances, or to limit or deny voting rights or to provide special voting rights as to any class or classes or series of shares of the corporation. SECTION 12. INSPECTORS. At any meeting of shareholders, the presiding officer may, or upon the request of any shareholder, shall appoint one or more persons as inspectors for such meeting. Such inspectors shall ascertain and report the number of shares represented at the meeting, based upon their determination of the validity and effect of proxies; count all votes and report the results; and do such other acts as are proper to conduct the election and voting with impartiality and fairness to all the shareholders. Each report of an inspector shall be in writing and signed by him or her or by a majority of them if there be more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof. SECTION 13. INFORMAL ACTION BY SHAREHOLDERS. Any action required to be taken at a meeting of the shareholders, or any other action which may be taken at a meeting of the shareholders, may be taken without a meeting and without a vote, if a consent in writing, setting forth the action so taken shall be signed (a) if 5 days prior notice of the proposed action is given in writing to all of the shareholders entitled to vote with respect to the subject matter hereof, by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voting or (b) by all of the shareholders entitled to vote with respect to the subject matter thereof. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given in writing to those shareholders who have not consented in writing. In the event that the action which is consented to is such as would have required the filing of a certificate under any section of the Business Corporation Act if such -4- 5 action had been voted on by the shareholders at a meeting thereof, the certificate filed under such section shall state, in lieu of any statement required by such section concerning any vote of shareholders, that written consent has been given in accordance with the provisions of SECTION 7.10 of the Business Corporation Act and that written notice has been given as provided in such SECTION 7.10. SECTION 14. VOTING BY BALLOT. Voting on any question or in any election may be by voice unless the presiding officer shall order or any shareholder shall demand that voting be by ballot. ARTICLE III DIRECTORS SECTION 1. GENERAL POWERS. The business of the corporation shall be managed by or under the direction of its board of directors. A majority of the board of directors may establish reasonable compensation for their services and the services of other officers, irrespective of any personal interest. SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors of the corporation shall be two (2). Each director shall hold office until the next annual meeting of shareholders; or until his successor shall have been elected and qualified. Directors need not be residents of Illinois or shareholders of the corporation. The number of directors may be increased or decreased from time to time by the amendment of this section. No decrease shall have the effect of shortening the term of any incumbent director. SECTION 3. REGULAR MEETINGS. A regular meeting of the board of directors shall be held without other notice than this by-law, immediately after the annual meeting of shareholders. The board of directors may provide, by resolution, the time and place for holding of additional regular meetings without other notice than such resolution. SECTION 4. SPECIAL MEETINGS. Special meetings of the board of directors may be called by or at the request of the president or any two directors. The person or persons authorized to call special meetings of the board of directors may fix any place as the place for holding any special meeting of the board of directors called by them. SECTION 5. NOTICE. Notice of any special meeting shall be given at least 5 days previous thereto by written notice to each director at his business address. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegram company. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the -5- 6 purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting. SECTION 6. QUORUM. A majority of the number of directors fixed by these by-laws shall constitute a quorum for transaction of business at any meeting of the board of directors, provided that it less than a majority of such number of directors are present at said meeting, a majority of the directors present may adjourn the meeting at any time without further notice. SECTION 7. MANNER OF ACTING. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors, unless the act of a greater number is required by statute, these by-laws, or the articles of incorporation. SECTION 8. VACANCIES. Any vacancy on the board of directors may be filled by election at the next annual or special meeting of shareholders. A majority of the board of directors may fill any vacancy prior to such annual or special meeting of shareholders. SECTION 9. RESIGNATION AND REMOVAL OF DIRECTORS. A director may resign at any time upon written notice to the board of directors. A director may be removed with or without cause, by a majority of shareholders if the notice of the meeting names the director or directors to be removed at said meeting. SECTION 10. INFORMAL ACTION BY DIRECTORS. The authority of the board of directors may be exercised without a meeting if a consent in writing, setting forth the action taken, is signed by all of the directors entitled to vote. SECTION 11. COMPENSATION. The board of directors, by the affirmative vote of a majority of directors then in office, and irrespective of any personal interest of any of its members, shall have authority to establish reasonable compensation of all directors for services to the corporation as directors, officers or otherwise notwithstanding any director conflict of interest. By resolution of the board of directors, the directors may be paid their expenses, if any, of attendance at each meeting or the board. No such payment previously mentioned in this section shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. SECTION 12. PRESUMPTION OF ASSENT. A director of the corporation who is present at a meeting of the board of directors at which action on any corporate matter is taken shall be conclusively presumed to have assented to the action taken unless his or her dissent shall be entered in the minutes of the meeting or unless he or she shall file his or her written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered or certified mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. SECTION 13. COMMITTEES. A majority of the board of directors may create one or more committees of two or more members to exercise appropriate authority of the board -6- 7 of directors. A majority of such committee shall constitute a quorum for transaction of business. A committee may transact business without a meeting by unanimous written consent. ARTICLE IV OFFICERS SECTION 1. OFFICERS. The officers of the corporation shall be a Chairman of the Board, a President, a Treasurer, and a Secretary, all of whom shall be elected by the Board of Directors and who shall hold office until their successors are elected and qualified. In addition, the Board of Directors may elect one or more Vice-Presidents and such Assistant Secretaries and Assistant Treasurers as they may deem proper. None of the officers (other than the Chairman of the Board) of the corporation need be directors. The officers shall be elected at the first meeting of the Board of Directors after each annual meeting. More than two offices may be held by the same person. SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the corporation shall be elected annually by the board of directors at the first meeting of the board of directors held after each annual meeting of shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until his successor shall have been duly elected and shall have qualified or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. Election of an officer shall not of itself create contract rights. SECTION 3. REMOVAL. Any officer elected or appointed by the board of directors may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. SECTION 4. CHAIRMAN. The Chairman of the Board shall formulate policies with respect to the affairs of the corporation, and shall have general powers of supervision and management. He shall preside at all meetings of directors and stockholders of the corporation and may call meetings of the Board of Directors. The Chairman of the Board shall also perform such other duties as may be assigned to him by the Board of Directors. SECTION 5. PRESIDENT. The President shall be the chief executive officer of the corporation and, subject to the direction of the Chairman, shall supervise and direct and be responsible for the direction of the ongoing business of the corporation. In the absence of the Chairman of the Board of directors, the President shall preside at meetings of the stockholders and the Board of Directors. Except as the Board of Directors shall authorize the execution thereof in some other manner, the President shall be authorized to execute bonds, mortgages and other contracts on behalf of the corporation to cause the corporation's seal to be affixed to any -7- 8 instrument requiring such seal, and when so affixed such seal shall be attested by the signatures of the Secretary or Assistant Secretary. SECTION 6. THE VICE-PRESIDENTS. The vice-presidents (or in the event there be more than one vice-president, each of the vice-presidents) shall assist the president in the discharge of his duties as the president may direct and shall perform such other duties as from time to time may be assigned to him by the president or by the board of directors. In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the board of directors, or by the president if the board of directors has not made such a designation, or in the absence of any designation, then in the order of seniority of tenure as vice-president) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. Except in those instances in which the authority to execute is expressly delegated to another officer or agent of the corporation or a different mode of execution is expressly prescribed by the board of directors or these by-laws, the vice-president (or each of them if there are more than one) may execute for the corporation certificates for its shares and any contracts, deeds, mortgages, bonds or other instruments which the board of directors has authorized to be executed, and he may accomplish such execution either under or without the seal of the corporation and either individually or with the secretary, any assistant secretary, or any other officer thereunto authorized by the board of directors, according to the requirements of the form of the instrument. SECTION 7. THE TREASURER. The treasurer shall be the principal accounting and financial officer of the corporation. He shall: (a) have charge of and be responsible for the maintenance of adequate books of account for the corporation; (b) have charge and custody of all funds and securities of the corporation, and be responsible therefor and for the receipt and disbursement thereof; and (c) perform all the duties incident to the office of treasurer and such other duties as from time to time may be assigned to him by the president or by the board of directors. If required by the board of directors, the treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the board of directors may determine. SECTION 8. THE SECRETARY. The secretary shall: (a) record the minutes of the shareholders' and of the board of directors' meetings in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these by-laws or as required by law; (c) be custodian of the corporate records and of the seal of the corporation; (d) keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder; (e) sign with the president, or a vice-president, or any other officer there unto authorized by the board of directors, certificates for shares of the corporation, the issue of which shall have been authorized by the board of directors, and any contracts, deeds, mortgages, bonds, or other instruments which the board of directors has authorized to be executed, according to the requirements of the form of the instrument, except when a different mode of execution is expressly prescribed by the board of directors or these by-laws; (f) have general charge of the stock transfer books of the corporation; (g) perform all duties -8- 9 incident to the office of secretary and such other duties as from time to time may be assigned to him by the president or by the board of directors. SECTION 9. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The assistant treasurers and assistant secretaries shall perform such duties as shall be assigned to them by the treasurer or the secretary, respectively, or by the president or the board of directors. The assistant secretaries may sign with the president, or a vice-president, or any other officer thereunto authorized by the board of directors, certificates for shares of the corporation, the issue of which shall have been authorized by the board of directors, and any contracts, deeds, mortgages, bonds, or other instruments which the board of directors has authorized to be executed, according to the requirements of the form of the instrument, except when a different mode of execution is expressly prescribed by the board of directors or these by-laws. The assistant treasurers shall respectively, if required by the board of directors give bonds for the faithful discharge of their duties in such sums and with such sureties as the board of directors shall determine. SECTION 10. SALARIES. The salaries of the officers shall be fixed from time to time by the board of directors and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the corporation. ARTICLE V CONTRACTS, LOANS, CHECKS AND DEPOSITS SECTION 1. CONTRACTS. The board of directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. SECTION 2. LOANS. No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the board of directors. SECTION 3. DEPOSITS. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositaries as the board of directors may select. -9- 10 ARTICLE VI SHARES AND THEIR TRANSFER SECTION 1. SHARES REPRESENTED BY CERTIFICATES AND UNCERTIFICATED SHARES. Shares either shall be represented by certificates or shall be uncertificated shares. Certificates representing shares of the corporation shall be signed by the appropriate officers and may be sealed with the seal or a facsimile of the seal of the corporation. If a certificate is countersigned by a transfer agent or registrar, other than the corporation or its employee, any other signatures may be facsimile. Each certificate representing shares shall be consecutively numbered or otherwise identified, and shall also state the name of the person to whom issued, the number and class of shares (with designation of series, if any), the date of issue, and that the corporation is organized under Illinois law. If the corporation is authorized to issue shares of more than one class or of series within a class, the certificate shall also contain such information or statement as may be required by law. Unless prohibited by the articles of incorporation, the board of directors may provide by resolution that some or all of any class or series of shares shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until the certificate has been surrendered to the corporation. Within a reasonable time after the issuance or transfer of uncertificated shares, the corporation shall send the registered owner thereof a written notice of all information that would appear on a certificate. Except as otherwise expressly provided by law, the rights and obligations of the holders of uncertificated shares shall be identical to those of the holders of certificates representing shares of the same class and series. The name and address of each shareholder, the number and class of shares held and the date on which the shares were issued shall be entered on the books of the corporation. The person in whose name shares stand on the books of the corporation shall be deemed the owner thereof for all purposes as regards the corporation. SECTION 2. LOST CERTIFICATES. If a certificate representing shares has allegedly been lost or destroyed the board of directors may in its discretion, except as may be required by law, direct that a new certificate be issued upon such indemnification and other reasonable requirements as it may impose. SECTION 3. TRANSFERS OF SHARES. Transfer of shares of the corporation shall be recorded on the books of the corporation. Transfer of shares represented by a certificate, except in the case of a lost or destroyed certificate, shall be made on surrender for cancellation of the certificate for such shares. A certificate presented for transfer must be duly endorsed and accompanied by proper guaranty of signature and other appropriate assurances that the endorsement is effective. Transfer of an uncertificated share shall be made on receipt by the corporation of an instruction from the registered owner or other appropriate person. The instruction shall be in writing or a communication in such form as may be agreed upon in writing by the corporation. -10- 11 ARTICLE VII FISCAL YEAR The fiscal year of the corporation shall be fixed by resolution of the board of directors. ARTICLE VIII DISTRIBUTIONS The board of directors may authorize, and the corporation may make, distributions to its shareholders, subject to any restrictions in its articles of incorporation or provided by law. ARTICLE IX SEAL The corporate seal shall have inscribed thereon the name of the corporation and the words "Corporate Seal, Illinois." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced, provided that the affixing of the corporate seal to an instrument shall not give the instrument additional force or effect, or change the construction thereof, and the use of the corporate seal is not mandatory. ARTICLE X WAIVER OF NOTICE Whenever any notice is required to be given under the provisions of these by-laws or under the provisions of the articles of incorporation or under the provisions of The Business Corporation Act of the State of Illinois, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Attendance at any meeting shall constitute waiver of notice thereof unless the person at the meeting objects to the holding of the meeting because proper notice was not given. -11- 12 ARTICLE XI INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS SECTION 1. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment or settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interest of the corporation, and with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. SECTION 2. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. SECTION 3. To the extent that a director, officer, employee or agent of a corporation has been successful, on the merits or otherwise, in the defense of any action, suit or proceeding referred to in sections 1 and 2, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses actually and reasonably incurred by such person in connection therewith. SECTION 4. Any indemnification under sections 1 and 2 shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of -12- 13 the director, officer, employee or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in sections 1 and 2. Such determination shall be made (a) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (c) by the shareholders. SECTION 5. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding, as authorized by the board of directors in the specific case, upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount, unless it shall ultimately be determined that he or she is entitled to be indemnified by the corporation as authorized in this article. SECTION 6. The indemnification provided by this article shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any by-law, agreement vote of shareholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. SECTION 7. The corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify such person against such liability under the provisions of these sections. SECTION 8. If the corporation has paid indemnity or had advanced expenses to a director, officer, employee or agent, the corporation shall report the indemnification or advance in writing to the shareholders with or before the notice of the next shareholders' meeting. SECTION 9. References to "the corporation" shall include, in addition to the surviving corporation, any merging corporation, including any corporation having merged with a merging corporation, absorbed in a merger which otherwise would have lawfully been entitled to indemnify its directors, officers, and employees or agents. ARTICLE XII AMENDMENTS Unless the power to make, alter, amend or repeal the bylaws is reserved to the shareholders by the articles of incorporation, the by-laws of the corporation may be made, -13- 14 altered, amended or repealed by the shareholders or the board of directors, but no by-law adopted by the shareholders may be altered, amended or repealed by the board of directors if the by-laws so provide. The by-laws may contain any provisions for the regulation and management of the affairs of the corporation not inconsistent with the law or the articles of incorporation. ARTICLE XIII REPAYMENT OF SALARY AND EXPENSE REIMBURSEMENTS Any payments made to an officer, director, employee, or other agent of the corporation in the nature of salary, wages, other compensation or expense reimbursements which shall be disallowed in whole or in part as a deductible expense by the Internal Revenue Service in any judicial or administrative proceeding, shall be repaid by such officer, director, employee, or other agent of the corporation to the full extent of such disallowance. In lieu of payment by such person or persons, subject to the determination of the Board of Directors, proportionate amounts may be withheld from his or their future compensation payments until the amount so owed to the corporation has been recovered. -14- 15 OFFICERS' AGREEMENT The undersigned, being officers of Standard/Wabash Parking Corporation, do hereby agree to be bound by all of the terms and conditions of Article XIII of the By-laws of the corporation relating to the repayment of salary and expense reimbursements. Said Article XIII reads as follows: ARTICLE XIII REPAYMENT OF SALARY AND EXPENSE REIMBURSEMENTS Any payments made to an officer, director, employee, or other agent of the corporation in the nature of salary, wages, other compensation or expense reimbursements which shall be disallowed in whole or in part as a deductible expense by the Internal Revenue Service in any judicial or administrative proceeding, shall be repaid by such officer, director, employee, or other agent of the corporation to the full extent of such disallowance. In lieu of payment by such person or persons, subject to the determination of the Board of Directors, proportionate amounts may be withheld from his or their future compensation payments until the amount so owed to the corporation has been recovered. Dated: December 24, 1986 /s/ Sylvia Starzec /s/ Stanley Warshauer - -------------------------- --------------------------- Sylvia Starzec Stanley Warshauer /s/ Michael E. Swartz /s/ Myron C. Warshauer - -------------------------- --------------------------- Michael E. Swartz Myron C. Warshauer /s/ James A. Wilhelm /s/ Steven A. Warshauer - -------------------------- --------------------------- James A. Wilhelm Steven A. Warshauer /s/ Allan Lombardo --------------------------- Allan Lombardo -15- EX-3.26 29 AGREEMENT OF LIMITED PARTNERSHIP 1 AGREEMENT OF LIMITED PARTNERSHIP OF STANDARD PARKING OF CANADA, L.P. This Agreement of Limited Partnership (this "Agreement") is made as of July 15, 1996, by and between Standard Parking Corporation, an Illinois corporation, as general partner (the "General Partner") and Standard Parking, L.P., a Delaware limited partnership, as the limited partner (the "Limited Partner"), under and governed by the provisions of laws of Illinois, for the purposes and upon the terms and conditions hereinafter set forth. The General Partner and the Limited Partner are sometimes herein referred to individually as a "Partner" and collectively as the "Partners". Agreement NOW, THEREFORE, in consideration of the mutual promises, terms and conditions contained therein, the receipt and sufficiency of which are hereby acknowledged, the Partners hereby agree as follows: 1. ORGANIZATION a. Formation of Limited Partnership. The Partnership shall commence on the date the certificate of limited partnership is filed with the Secretary of State of the State of Illinois and shall thereafter continue without interruption as a limited partnership pursuant to the governing regulations for partnerships under the laws of the State of Illinois until terminated pursuant to the terms of this Agreement. b. Name. The name of the Partnership shall be Standard Parking of Canada, L.P. (hereinafter referred to as the "Partnership"). However, the business of the Partnership may be conducted, upon compliance with all applicable laws, under any other name designated in writing by the General Partner to the Limited Partner. c. Principal Place of Business. The Partnership's principal place of business shall be: 200 East Randolph Drive, Suite 4800, Chicago, Illinois 60601, or such other place as the General Partner may from time to time designate in writing to Limited Partner. The Partnership may maintain other offices at such other places as the General Partner deems advisable. d. Purpose. The purposes for which the Partnership is formed are to manage and operate parking facilities within the U.S.A. and Canada, and all other activities reasonably associated therewith. e. Term. The term of the Partnership shall be perpetual unless sooner terminated as hereinafter provided. 2 2. PARTNERS' NAMES, ADDRESSES AND CAPITAL CONTRIBUTIONS a. General Partner. (1) The name and address of the General Partner is set forth in Schedule "A" hereto attached, as amended from time to time. The General Partner has contributed $100.00 to the capital of the Partnership; (2) The General Partner, as general partner, shall not be required to make any additional capital contribution to the Partnership. b. Limited Partner. (1) The Limited Partner's address is set forth in Schedule "A". The Limited Partner shall contribute $9,900.00 to the capital of the Partnership; (2) The Limited Partner shall not be required to make any additional capital contribution to the Partnership. c. Partnership's Capital. (1) No Partner shall be paid interest on any capital contribution; (2) No Partner shall have the right to withdraw, or receive any return of its capital contribution, except as may be specifically provided herein; (3) Under circumstances requiring a return of any capital contribution, no Partner shall have the right to receive property, other than cash, except as may be specifically provided herein. d. Liability of Partners. The Limited Partner shall not be liable for the debts, liabilities, contracts or any other obligations of the Partnership. The Limited Partner shall not be required to lend any funds to the Partnership. The General Partner shall not have any personal liability for the repayment of the capital contribution of the Limited Partner. 3. ALLOCATION OF PROFIT OR LOSS; DISTRIBUTIONS a. Profit or Loss. Profit, loss and tax credits for each fiscal period of the Partnership shall be allocated among the Partners as follows: To the General partner, one percent (1%) and to the Limited Partner, ninety-nine percent (99%). b. Distributions. Cash Flow shall be distributed to the Partners in the proportions set forth in Section 3.a. c. Gain. Gain, if any, upon sale of substantially all of its assets or the liquidation of the Partnership, if any, shall be allocated among the Partners as follows: -2- 3 (1) Each Partner with a negative balance in its capital account shall be allocated gain in the proportion which such negative balance bears to the negative balances of all Partners with negative balances in their capital accounts until the gain so allocated equals the aggregate amount of the negative balances of all such Partners. (2) To the extent gain exceeds the amount allocated pursuant to Section 3.c.(1) above, such excess shall be allocated to each Partner in an amount equal to the amount required, if any, to credit the capital account of such Partner so that the balance of its capital account is equal to the amount of his capital contribution provided that, to the extent the gain is insufficient to accomplish the foregoing, gain shall be allocated to the Partners under this Section 3.c.(2) in proportion to the partners' respective capital contribution. (3) The remaining gain, if any, shall be allocated among the Partners in accordance with the ratio of sharing Profit and Loss as set forth in Section 3.a. 4. RIGHTS, POWERS AND DUTIES OF GENERAL PARTNERS AND DESIGNATION OF TAX MATTERS PARTNER a. Management and Control of the Partnership. (1) Subject to the consent of the Limited Partner where required by this Agreement, the General Partner, within the authority granted to it under this Agreement, shall have the exclusive right to manage the business of the Partnership and they are hereby authorized to take any action of any kind and to do anything and everything they deem necessary in accordance with the provisions of this Agreement. (2) The Limited Partner shall not participate in or have any control over the Partnership's business and shall not have any authority or right to act for or bind the Partnership. The Limited Partner hereby consents to the exercise by the General Partner of the powers respectively conferred on them by this Agreement. (3) All of the Partnership's expenses shall be billed directly, to the extent practicable, to and paid by the Partnership. The General Partner shall not be reimbursed by the Partnership for any indirect expenses incurred in performing services for the Partnership, such as salaries, rent, utilities and other overhead items. However, business enterprises owned or controlled by the General Partner or its affiliates may be compensated for services actually performed for the Partnership pursuant to the authority of the General Partner. b. Authority of the General Partners. Except to the extent otherwise provided herein, the General Partner for and in the name and on behalf of the Partnership is hereby authorized: (1) to effect the purposes set forth in Section 1.d. hereof; and -3- 4 (2) to execute any and all agreements, contracts, documents, certifications and instruments necessary or convenient in connection with the management and operation of the Partnership. c. Restrictions on Authority of the General Partner. Without the consent of the Limited Partner, the General Partner shall not have the authority to: (1) sell, exchange, lease, mortgage, pledge, or transfer all or substantially all of the assets of the Partnership other than in the ordinary course of business; (2) incur indebtedness by the Partnership other than in the ordinary course of business; or (3) change the nature of the Partnership's business. d. Duties and Obligations of the General Partner. (1) The General Partner shall take all actions which may be necessary or appropriate for the continuation of the Partnership's valid existence as a limited partnership under the law of the State of Illinois. (2) The General Partner shall devote to the Partnership such time as may be necessary for the proper performance of its duties hereunder, but the General Partner is not expected to devote its full time to the performance of such duties. e. Compensation of General Partners. The General Partner shall not in its capacity as General Partner receive any salary, fees, profits or distributions except profits, distributions, fees and allocations to which they may be entitled under Paragraph 3. f. Designation Duties and Authority of Tax Matters Partner. (1) The General Partner shall be the tax matters partner (the "Tax Matters Partner") of the Partnership, as provided in regulations pursuant to Section 6231 of the Internal Revenue Code (the "Code") and the Tax Matters Partner is the authorized member of the Partnership pursuant to Subsection 165(1.15) of the Income Tax Act (Canada). Each Partner, by the execution of this Agreement consents to such designation of the Tax Matters Partner and agrees to execute, certify, acknowledge, deliver, swear to, file and record at the appropriate public offices such documents as may be necessary or appropriate to evidence such consent. (2) To the extent and in the manner provided by applicable law and regulations, the Tax Matters Partner shall furnish the name, address, interest and taxpayer identification number of each Partner, including any successor, to the Secretary of the Treasury or appropriate delegate (the "Secretary"). -4- 5 (3) To the extent and in the manner provided by applicable law and regulations, the Tax Matters Partner shall keep each Partner informed of the administrative and judicial proceedings for the adjustment at the Partnership's level of any item required to be taken into account by a Partner for income tax purposes. 5. TRANSFERABILITY OF PARTNER'S INTEREST a. Restrictions on Transfers of Interest. (1) No sale or exchange of any interest in the Partnership (an "Interest") may be made if the sale or exchange of the Interest sought to be sold or exchanged, when added to the total of all other Interests sold or exchanged within the period of twelve (12) consecutive months prior thereto, would, in the opinion of counsel for the Partnership, result in the Partnership being considered to have been terminated within the meaning of Section 708 of the Code. (2) No transfer or assignment of any Interest may be made if counsel for the Partnership shall be of the opinion that such transfer or assignment would be in violation of any state securities or "blue sky" laws (including any investment suitability standards) applicable to the Partnership. (3) The Limited Partner may not sell or assign its Partnership Interest except with the written consent of the General Partner. 6. DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP a. Events Causing Dissolution. The Partnership shall terminate upon the happening of any of the following events: (1) The bankruptcy or dissolution of the sole General Partner; (2) After the Partnership's assets have been fully liquidated; (3) The election by the General Partner to dissolve the Partnership. b. Liquidation. Upon dissolution of the Partnership, the General Partner shall liquidate the assets of the Partnership and, after reserving an amount necessary to pay all debts and obligations of the Partnership, apply and distribute the proceeds thereof as contemplated by this Agreement and cause the cancellation of the Partnership's Certificate of Limited Partnership. 7. BOOKS AND RECORDS, ACCOUNTING, REPORTS, TAX ELECTIONS, ETC. a. Records. (1) The General Partner shall maintain at the office of the Partnership established pursuant to Section 1.c., the following records: -5- 6 (a) a current list containing the full name and last known business or residence address of each partner set forth in alphabetical order; (b) a copy of the Certificate of Limited Partnership and all Certificates of Amendment thereto, together with executed copies of any powers of attorney pursuant to which any certificate was executed; (c) copies of the Partnership's federal, state and local income tax returns and reports, if any, for the three most recent years; (2) Records required to be kept pursuant to subparagraph (1) above shall be subject to inspection and copying at the office of the Partnership established pursuant to Section 1.c. at the reasonable request and expense of the requesting Partner during ordinary business hours. (3) The accountants selected by the General Partner shall prepare for execution by the General Partner all tax returns of the Partnership. Partnership books need not be kept in a manner consistent with the accounting principles employed in determining Federal income tax. b. Basis of Accounting and Fiscal Year. The books of the Partnership shall be kept on the same basis as that of the Limited Partner. The fiscal year of the Partnership shall end on same date as that of the Limited Partner. c. Bank Accounts. The bank accounts of the Partnership shall be maintained in such banking institutions as the General Partner shall determine, and withdrawals shall be made only in the regular course of the Partnership's business on such signature or signatures as the General Partner may determine. All deposits and other funds not needed in the operation of the business may be invested in U.S. government securities, securities issued or guaranteed by U.S. government agencies, securities issued or guaranteed by state or municipalities (including for the purposes hereof U.S., state or municipal securities sold by a financial institution with an agreement to repurchase on a fixed date), certificates of deposit and time or demand deposits in commercial banks, bankers' acceptances, and commercial paper. The funds of the Partnership shall not be commingled with the funds of any other person. d. Capital Accounts (1) There shall be maintained a capital account for each Partner. The amount of each Partner's capital contribution to the Partnership and any return thereof shall be credited or debited, as the case may be, to such Partner's capital account. From time to time, but not less often than annually, the share of each Partner in profit and loss and cash flow and sale proceeds shall be credited or charged to such Partner's capital account. -6- 7 (2) If at any time the Partnership shall suffer a loss as a result of which the capital account of any Partner shall be a negative amount, such loss shall be carried as a charge against such Partner's capital account, and such Partner's share of subsequent profits of the Partnership shall be applied to restore such deficit in such Partner's capital account, but no Partner shall be required to make any further contribution to the capital of the Partnership to restore a loss, to discharge any liability of the Partnership or for any other purposes, except as may be required by law nor shall any Limited Partner be personally liable for any liabilities of the Partnership or the General Partners except as otherwise provided by law. (3) Gain upon a sale, if any, shall be allocated among the Partners and credited to their respective capital accounts. 8. MISCELLANEOUS PROVISIONS a. Admission and Amendments (1) Each Limited Partner, substituted Limited Partner, additional General Partner and successor General Partner shall become a signatory hereof by signing such number of counterpart signature pages to this Agreement and such other instrument or instruments, and in such manner and at such time, as the then General Partner shall reasonably determine. By so signing, the substituted Limited Partner, successor General Partner or additional General Partner, as the case may be, shall be deemed to have adopted, and to have agreed to be bound by all of the provisions of this Agreement, as amended from time to time in accordance with the provisions of this Agreement; provided, however, that no such counterpart shall be binding until it shall have been accepted by the General Partner. b. In addition to the amendments otherwise authorized herein, amendments may be made to this Agreement from time to time by the General Partner with the consent of the Limited Partners; provided, however, that without the consent of the Limited Partners to be adversely affected by the amendment, this Agreement may not be amended so as to (a) convert a Limited Partner's Interest into a General Partner's interest; (b) modify the limited liability of a Limited Partner; or (c) alter the Interest of a Partner in profit or loss or cash flow. -7- 8 IN WITNESS WHEREOF, the undersigned General Partner and the Limited Partner have executed this Agreement as of the date and year first above written. Standard Parking Corporation By: /s/ --------------------------------- Its: President ---------------------------- Standard Parking, L.P. By: Standard Parking Corporation, its general partner By: /s/ --------------------------------- Its: President ---------------------------- -8- 9 SCHEDULE A Standard Parking Corporation 200 East, Randolph, Suite 4800 Chicago, Illinois 60601 Standard Parking, L.P. 200 East Randolph, Suite 4800 Chicago, Illinois 60601 -9- EX-3.27 30 OPERATING AGREEMENT 1 STANDARD PARKING/CENTRAL I, L.L.C. OPERATING AGREEMENT - -------------------------------------------------------------------------------- THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION, BUT HAVE BEEN ISSUED PURSUANT TO EXEMPTIONS UNDER THE SECURITIES ACT OF 1933, AS AMENDED. FURTHERMORE, MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED WITH THE SECURITIES COMMISSIONER OF THE STATE OF ILLINOIS OR ANY OTHER STATE. ACCORDINGLY, THE SALE, TRANSFER, PLEDGE, HYPOTHECATION, OR OTHER DISPOSITION OF SUCH MEMBERSHIP INTEREST IS RESTRICTED AND MAY NOT BE ACCOMPLISHED EXCEPT IN ACCORDANCE SECTION 5 AND OTHER APPLICABLE PROVISIONS OF THIS AGREEMENT, AND AN APPLICABLE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT A REGISTRATION STATEMENT IS UNNECESSARY. - -------------------------------------------------------------------------------- 2 STANDARD PARKING/CENTRAL I, L.L.C. OPERATING AGREEMENT This Limited Liability Company Operating Agreement (the "Agreement") is made as of March __, 1995, in Chicago, Illinois by and among Standard Parking Corporation, an Illinois corporation (the "Manager"), and those parties who, from time to time, execute this Agreement as members and are listed on attached Schedule A. The Manager and such signatories to this Agreement are collectively called the "Members", and each is sometimes individually called a "Member". Agreement NOW, THEREFORE, in consideration of the mutual promises, terms and conditions contained herein, the receipt and sufficiency of which are hereby acknowledged, the Members hereby agree as follows: 1. FORMATION, PURPOSES AND DURATION 1.1. Formation and Name. a. The Members agree to and hereby form a company pursuant to the Limited Liability Company Act of the State of Delaware (the "State") to be known as the "Standard Parking/Central I, L.L.C." (the "Company"). b. The ownership interests, rights and obligations of the Members as members in the Company shall be as provided in the Limited Liability Company Act of the State of Delaware (the "LLC Act"), as amended from time to time, except as provided in this Agreement. Such ownership interests, rights and obligations of a Member are called such Member's "Membership Interest" in this Agreement. The portion of all the outstanding Membership Interests held by a Member is expressed as a percentage (the "Percentage Interest") which is listed opposite the Member's name on Schedule A. c. The Company shall bear the expenses incident to its formation, including, but not limited to, filing and recording fees, taxes and legal and accounting fees incident to the formation and operation of the Company. 1.2. Purposes of the Company. The purposes of the Company shall be: a. to undertake any and all lawful business activity under the LLC Act; b. To invest in, acquire, hold, maintain, improve, develop, sell, assign, transfer, operate, lease, mortgage, exchange and otherwise deal in real estate or personal property, or interest in real estate or personal property, or any other venture or business or investment; 3 OPERATING AGREEMENT c. To obtain any financing necessary to pursue such purposes; and d. To perform any and all acts reasonably necessary to the fulfillment of the foregoing purposes. 1.3. Principal Place of Business. The Company shall be deemed to have its principal place of business at: 55 East Monroe Suite 3440 Chicago, Illinois 60603 (the "Company's Office") or such other place as determined by the Manager from time to time. 1.4. Title to Company Property. Legal title to all Company properties shall be taken and at all times held in the name of the Company, except that any real estate held by the Company may alternatively be held in the name of a trustee for the Company, provided that the Company is specifically designated by name as sole beneficiary or principal under a written trust agreement executed by any such trustee. The manner of holding title to the Company real estate, whether in the name of the Company or such trustee, is solely for the convenience of the Company; all such Company real estate shall be treated as the property of the Company subject to the terms of this Agreement; and the power to direct any such trustee shall rest solely in the Company and shall be exercisable solely upon the direction of the Manager. 1.5. Term. The term of the Company shall commence on the date of the filing or the Certificate of Organization (the "Certificate") with the appropriate authorities of the State, and, unless sooner terminated in accordance with other provisions of this Agreement, shall end on December 31, 2045. 2. CAPITAL CONTRIBUTIONS, PERCENTAGE INTERESTS AND DISTRIBUTIONS 2.1. Initial Capital Contribution. Each Member shall contribute that amount of cash indicated on Schedule A opposite such Member's name to the capital of the Company. 2.2. Capital Accounts. a. A capital account (a "Capital Account") shall be established and maintained for each Member in accordance with the Internal Revenue Code of 1986, as amended (the "Code"), and with regulations promulgated thereunder by the U.S. Department of the Treasury (the "Treasury Regulations") and shall be subject to adjustment as provided in Section 2.2.b. -2- 4 OPERATING AGREEMENT b. In accordance with and subject to the Treasury Regulations, the Capital Account of each Member shall from time to time be: (1) Increased by (i) the amount of cash and the gross asset value of property contributed by such Member, (ii) such Member's share of the profits of the Company, determined pursuant to Section 5.7 for Capital Account purposes, whether or not distributed, and (iii) the amount any Company liabilities assumed by such Member or which are secured by any Company Property distributed to such Member; and (2) Decreased by (i) the amount of cash and the gross asset value of property distributed to such Member, (ii) such Member's share of losses of the Company, determined pursuant to Section 5.7 for Capital Account purposes, and (iii) the amount of any liabilities of such Member assumed by the Company or which are secured by any property contributed by such Member to the Company. c. Except as otherwise provided in this Agreement, whenever it becomes necessary to ascertain the balance of any Member's Capital Account, such a determination shall be made after giving effect to all allocations of profits and losses of the Company for the current year and all distributions for such year in respect of transactions effected prior to the date as of which such determination is to be made. No Member shall be entitled to (i) make any withdrawal from its Capital Account or to receive any distribution from the Company, except as expressly provided in this Agreement, or (ii) make any additional capital contribution to the Company other than as provided herein. No Member shall be entitled to any interest on such Member's capital contributions to the Company. d. Any dispute between the Members with respect to determination of Capital Accounts or otherwise with respect to the manner or method of accounting by the Company shall be resolved by the Company's accountants. e. In the event that property is distributed by the Company to a Member (including distributions in liquidation of the Company), the Capital Accounts of the Members shall be adjusted immediately before such distribution, in accordance with the applicable allocation of profits and losses, to reflect the profits or losses that would have been realized by the Company if the distributed property had been sold on the date of its distribution for its fair market value. 2.3. Distributions of Cash Flow. Cash flow shall be distributed in respect of each year or portion of a year after (i) payment of all expenses, debts and obligations of the Company then due and payable, including those due to the Manager, and (ii) the establishment or increase of -3- 5 OPERATING AGREEMENT any reserves established by the Manager in its sole discretion, including reserves for anticipated operating expenses, a. First, to the Members pro rata in accordance with any positive balance in such Members' Capital Accounts to the extent of such positive balances; and b. Second, any remaining cash flow shall be distributed according to the Members' Percentage Interests. 2.4. Time of Determination and Distribution of Cash Flow. Cash flow shall, except as otherwise provided in this Agreement, be determined and distributed from time to time by the Manager in its sole discretion. 3. RIGHTS AND DUTIES OF THE MANAGER 3.1. Management of Company Business. The Manager shall be solely responsible for the management of the Company's business with all rights and powers generally conferred by law or necessary, advisable or consistent in connection therewith. a. The signature of a duly authorized Officer of the Company or of the Manager shall be required and sufficient to bind the Company. No creditor, vendor or other persons dealing with the Company shall be required to investigate the authority of the Manager or secure approval or confirmation of any of the other Members. b. The Manager shall have all rights and powers required for or appropriate for the management of the Company's business. 3.2. Expenses. The Company shall pay all of its reasonable expenses (which expenses may be either billed directly to the Company or reimbursed to the Manager. The Manager may retain and pay compensation to persons or firms rendering administrative, architectural, technical, management, leasing, brokerage, insurance, development, accounting, legal and other services to the Company, including, without limitation, one or more Manager or affiliates of the Manager. 3.3. Indemnification of the Manager. The Manager shall not be liable, responsible or accountable in damages or otherwise to the Company or to a Member for any acts performed by them, within the scope of the authority conferred on the Manager, provided they have acted in good faith and shall not be guilty of willful misconduct, gross negligence or breach of fiduciary duty. a. Except where the Manager has acted in bad faith or shall be guilty of willful misconduct, the Company shall indemnify and hold such Manager harmless from and against any judgments, penalties, fines, amounts paid in settlement and any other loss, damages or expense (including reasonable attorneys fees, court costs -4- 6 OPERATING AGREEMENT and witness fees) incurred because of any action performed by them on behalf of the Company in accordance with the terms hereof. In the event of any action by a Member or the Company against the Manager, the Company shall indemnify and hold harmless such Manager, from and against all expenses incurred by such Manager in the defense or settlement of such action, including reasonable attorneys' fees that may be paid or incurred, if the indemnified party is not liable as a result of his, her or its own bad faith, willful misconduct, gross negligence or breach of his, her or its fiduciary duty, provided that: (i) no indemnification shall be made in respect of any claim, issue or matter as to which such Person shall have been adjudged to be liable under such standards unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such Person is fairly and reasonably entitled to indemnity of such expenses that such court shall deem proper; and (ii) to the extent that such Person has been successful on the merits or otherwise in defense of any such action, or in defense of any claim, issue or matter therein, such Person shall be indemnified by the Company against expenses, including reasonable attorneys' fees, actually and reasonably incurred by such person in connection therewith. Expenses incurred by the Manager in defending any action, suit or proceeding shall be paid or reimbursed by the Company promptly upon receipt from such Manager of an undertaking on its part to repay such expenses if it shall ultimately be determined that it is not entitled to be indemnified. b. If any counsel shall be retained to represent the Manager at Company expense under this Section with respect to any claim by a third party; and if the same claim shall be made against a Member, then, the Member shall request of the Manager that such counsel, at Company expense, represent the interests of such Member with respect to such claim to the extent such counsel shall determine it can do so without conflict of interest, and the Member shall not be entitled to reimbursement for any counsel fees charged by counsel retained by such Member for representation that shall duplicate representation available from the Manager's counsel. A Member shall be entitled to reimbursement from the Company for counsel fees incurred for representation that the Manager's counsel shall have refused to supply, provided that such Member has made a request to the Manager for legal representation and is otherwise entitled to reimbursement of such fees under the provisions of this Section. c. Notwithstanding the foregoing provisions, (i) no person shall be entitled to any indemnity with respect to any matters as to which such person shall have acted in bad faith and shall have been adjudicated guilty of willful misconduct, gross negligence or breach of his, her or its fiduciary duties; and (ii) any indemnity under this Section shall be provided out of and to the extent of Company assets only, and no Member shall have any personal liability on account thereof. The -5- 7 OPERATING AGREEMENT foregoing provisions shall not be construed to require any Member to contribute any additional capital to the Company, and the sole recourse for any such indemnity shall be limited to the assets of the Company, at any time, and from time to time. d. The indemnification provisions of this Agreement are not intended to be for the benefit of any creditor or other person (other than the Manager in its capacity as the Manager and other than any person acting in his or her capacity as a Delegatee) to whom any debts, liabilities, or obligations are owed by (or who otherwise has any claim against) the Company or any of the Members; and no such provisions shall create any right or remedy enforceable by such creditor or other person against the Company or any of the Members. For the purposes of this Section, any Delegatee shall have the same rights to indemnification as the Manager. e. The Manager shall not be liable to the Members because any taxing authorities disallow or adjust income, deduction or credits in the Company tax returns. Furthermore, the Manager shall not have any liability for the repayment of the capital contributions or loans of the Members. 3.4. Other Business Activities; Disclosure; Waiver. a. Any Member, Manager or any officer, director, employee, partner, shareholder, member or other person holding legal or beneficial interest in any entity which is a Member or Manager, may engage in or possess an interest in other business ventures of every nature and description, including business ventures which compete with the Company, independently or with others, and neither the Company nor the Members shall have any right by virtue of this Agreement in or to such independent ventures or to the income or profits derived therefrom. b. If a business in which a Member has an interest, or in which an affiliate of a Member has an interest, proposes to transact business with the Company, then such Member shall give notice to the Manager of its interest or the interest of its affiliate and business may be conducted with such entity upon terms approved by the Manager. 4. OFFICERS 4.1. Appointment of Officers. The Manager may select such Officers as it deems necessary or desirable for the effective management of the Company and the pursuit of the Company's business. Manager hereby appoints those persons designated in Section 4.11 to the offices set forth after their names. -6- 8 OPERATING AGREEMENT 4.2. Number. The Officers of the Company may be a President, one or more Vice-Presidents (the number thereof to be determined by the Manager), a Secretary, and a Treasurer, and such Assistant Secretaries, Assistant Treasurers or other Officers as may be appointed by the Manager. Any two or more offices may be held by the same Person. All Officers and agents of the Company shall have such express authority and perform such duties in the management of the property and affairs of the Company as may be provided herein, or as may be determined by resolution of the Manager not inconsistent with this Agreement, and such implied authority as is recognized by the common law from time to time. 4.3. Appointment and Term of Office. The initial Officers of the Company are designated in Section 4.11, and otherwise the Officers of the Company shall be appointed by the Manager by written action taken and/or meetings held for such purpose. The Manager may create and fill new offices from time to time. An Officer shall hold office until his or her successor shall have been duly appointed and shall have qualified, until his or her death or until he or she shall resign or shall have been removed in the manner hereinafter provided. Election or appointment of an Officer or agent shall not of itself create contract rights. 4.4. Removal. Any Officer or agent may be removed by the Manager whenever in its judgment the best interests of the Company would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the Person so removed. 4.5. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification, or otherwise, or because of the creation of an office, may be filled by the Manager for the unexpired portion of the term. 4.6. The President. The President shall be the principal executive Officer of the Company and, subject to the control of the Manager, shall in general supervise and control all of the business and affairs of the Company. He or she may sign, with the Secretary or any other Officer of the Company thereunto authorized by the Manager, contracts or other instruments which the Manager has authorized to be executed on behalf of the Company, except in cases where the signing and execution thereof shall be expressly delegated by the Manager or by this Agreement to some other Officer or agent of the Company or to the President alone, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties incident to the office of President and such other duties as may be prescribed by the Manager from time to time. 4.7. The Vice-Presidents. In the absence of the President or in the event of his or her inability or refusal to act, the Vice-President (or in the event there be more than one Vice-President, the Vice-Presidents in the order designated, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice-President may perform such other duties as from time to time may be assigned to him or her by the President or by the Manager. -7- 9 OPERATING AGREEMENT 4.8. The Secretary. The Secretary shall: (a) keep, or supervise and be responsible for the keeping of, the minutes and records of all meetings and official actions of the Members and of the Manager, and any committees of the Manager in one or more books provided for that purpose; (b) see that all notices of such meetings are duly given or waivers of notice obtained in accordance with the provisions of this Agreement or as required by law; (c) be custodian of the Company records; (d) keep a register of the post office address of each Member which shall be furnished to the Secretary by such Member; (e) have the authority to certify this Agreement, resolutions of the Manager and committees thereof, and other documents of the Company as true and correct copies thereof; and (f) in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him or her by the President or by the Manager. 4.9. Assistant Secretaries. The Assistant Secretaries, in general, shall perform such duties and exercise such authority as shall be assigned or granted to them by the President or by the Manager. 4.10. Compensation. Except as otherwise provided in any written employment agreement duly executed on behalf of the Company and except as otherwise set forth below, the compensation (including salaries and benefits) of the Officers shall be fixed from time to time by resolution of the Manager and no Officer shall be prevented from receiving such compensation by reason of the fact that he or she is also the Manager of the Company. 4.11. Identity of Officers. The initial Officers of the Company shall be as follows: a. Myron C. Warshauer shall be the President. b. Michael K. Wolf shall be a Senior Vice President and the Secretary. c. Allan Lombardo shall be the Executive Vice President. d. Steven A. Warshauer shall be a Senior Vice President. e. Michael E. Swartz shall be a Senior Vice President. f. James A. Wilhelm shall be a Senior Vice President. 5. ACCOUNTING AND TAXES 5.1. Books and Records. a. At all times during the term hereof, the Manager shall use its best efforts to cause accurate books and records of account to be maintained in which are to be entered all matters relating to the business and operations of the Company, including all income, expenditures, assets and liabilities thereof. -8- 10 OPERATING AGREEMENT b. Each Member is entitled to any information reasonably necessary for the Member for the preparation of such Member's federal or state tax returns. 5.2. Rights of Inspection. Each Member and/or its authorized representatives shall have the right to inspect, examine and copy (at such Member's expense) the books, records, files, securities and other documents of the Company during the regular business hours of the Company upon giving reasonable notice and stating reasonable cause therefore. 5.3. Fiscal Year. The fiscal year of the Company shall end on December 31 of each year. 5.4. Accounts. The Manager may deposit Company funds in such bank or investment accounts as they select in its sole discretion. The Manager shall be an authorized signatory on such accounts. 5.5. Other Accounting Decisions. All accounting decisions for the Company (other than those specifically provided for in any other Section of this Agreement) shall be made by the Manager. 5.6. Preparation of Tax Returns. Upon being provided by the Members with all information required for their preparation, the Manager or its agents shall, on behalf of the Company, use its best efforts to cause all federal, state and local income tax returns of the Company to be prepared. The Manager will use its best efforts to cause copies of all tax returns of the Company to be made available for review by the Members at least twenty days prior to the statutory date for filing, including extensions thereof, if any. 5.7. Allocations to Members. a. Subject to Sections 5.7.b and 5.7.c, all items of income, gain, profits, losses, credits and deductions of the Company shall be allocated to the Members in proportion to the Members' Percentage Interests. b. Solely for federal, state, and local income tax purposes and not for book or Capital Account purposes, except to the extent required by Treasury Regulations, depreciation, amortization, gain, or loss with respect to property that is properly reflected on the Company's books at a value that differs from its adjusted basis for federal income tax purposes shall be allocated in accordance with the principles and requirements of Section 704(c) of the Code and the Treasury Regulations promulgated thereunder, and in accordance with the requirements of the relevant provisions of the Treasury Regulations issued under Code Section 704(b). For Capital Account purposes, depreciation, amortization, gain, or loss with respect to property that is properly reflected on the Company's books at a value that differs from its adjusted basis for tax purposes shall be determined in accordance with the rules of Treasury Regulation Section 1.704-1 (b)(2)(iv)(g). -9- 11 OPERATING AGREEMENT c. To the extent required to give the foregoing allocations effect for federal income tax purposes, the requirements of Treasury Regulations Sections 1.704(b)(2)(ii)(d) and 1.704-2 are incorporated herein by reference, and this Agreement shall be construed as having any provisions necessary to satisfy such requirements. d. Allocations with Respect to Transferred Membership Interests. In the event of a Transfer (as defined in Section 6, below) of a Member's Membership Interest or any portion thereof, the Member's items of profits and losses shall be allocated between the Transferor (as defined herein) and the Transferee (as defined herein) in the ratio of the number of days in the fiscal year of the Company before and after the effective date of the Transfer. 5.8. Tax Decisions Not Specified. Tax decisions and elections for the Company not provided for herein shall be made in the discretion of the Manager. 5.9. Tax Matters Member. The Manager named first in the Articles will be the tax matters partner (the "Tax Matters Partner") for purposes of Sections 6221-6231 of the Code and the Treasury Regulations. The Tax Matters Partner agrees to use its best efforts to comply in good faith with all provisions of the Code concerning a tax matters partner and to take all actions necessary to make each Member a notice partner under the Code. The Tax Matters Partner will use its best efforts to give each Member copies of all notices or other material communications delivered to or by it with respect to federal, state or local tax matters, negotiations, decisions, settlements or other events. The Tax Matters Partner may choose the forum in which to pursue any litigation without the consent of the Members. 6. SALE OR TRANSFER 6.1. General. Except as provided in Section 6.4.c, below, no Member shall (i) sell, assign, transfer, convey, give, mortgage, pledge, charge or otherwise encumber (collectively, "Transfer"), all or any part of its Membership Interest, or (ii) contract to Transfer all or any part of its Membership Interest, or (iii) suffer or permit the Transfer of all or any part of its Membership Interest whether voluntarily or by operation of law, without in each instance obtaining the prior written consent of the Manager, which consent may be withheld in the sole discretion of the Manager. Any attempt to Transfer a Membership Interest without the required consent shall be void. The giving of consent in connection with one or more Transfers shall not limit or waive the need for such consent in connection with any other Transfers. 6.2. Securities Law Limitations. Notwithstanding anything in this Agreement, no Membership Interests may be Transferred except as permitted under the Securities Act of 1933, as amended, and applicable state securities laws or exemption therefrom. -10- 12 OPERATING AGREEMENT 6.3. Agreement with Transferees. In the event that, pursuant to the provisions of this Section 6 and with any required prior written consent of the Manager, any Member (a "Transferor") shall Transfer its Membership Interest to any person or entity (a "Transferee"), no such Transfer shall be made or shall be effective to make such Transferee a Member or entitle such Transferee to any benefits or rights hereunder until the proposed Transferee agrees in writing to (i) assume and be bound by all of the terms and provisions of this Agreement and all of the obligations of the Transferor, and (ii) be subject to all the restrictions to which the Transferor is subject under the terms of this Agreement and any further agreements with respect to the Facility or as contemplated by this Agreement to which the Transferor is then subject or is then required to be a party. 6.4. Transfer by Reason of Death and Other Events. a. If, as a result of a Member's death, divorce, bankruptcy, or, in the case of a non-natural person, dissolution, termination, liquidation or distribution, a Membership Interest or a portion thereof is Transferred, without consideration to the estate of the Transferor, to or in trust substantially for the benefit of lineal descendants of the Transferor or to the Transferor's grantor or controlling owner, the Transferee shall not become a Member as a result of such Transfer without the consent of the Manager, except as provided in Section 6.4.c, below. b. If the Company does not dissolve as a result of a Transfer by reason of an election of the remaining Members to continue the Company (or because the Transfer is not a cause of dissolution described in Section 7.1) but the Manager does not consent to the Transferee becoming a Member, the Transferee of a Transfer described in Section 6.4.a shall have the right to receive a payment of cash, by means of a promissory note of the Company and/or the distribution of an undivided interest in the property of the Company the sum of the values of which shall not exceed the Transferor's rights in liquidation of the Transferor's Membership Interest under Section 7.3 determined as of the date of the Transfer. c. Sections 6.4.a, and 6.4.b notwithstanding, if the Transferee to whom the Withdrawing Transferor's Membership Interest is being Transferred pursuant to an event described in Section 6.4.a is already a Member, consent of the Manager shall not be required for the Transfer to be effective. -11- 13 OPERATING AGREEMENT 7. DISSOLUTION 7.1. Causes of Dissolution. The Company shall be dissolved only in the event: a. Of the death, removal, liquidation, dissolution, withdrawal or bankruptcy of any Member; b. That all or substantially all of the Company's non-cash property is sold or otherwise transferred to any person which is not controlled by the Company; c. That the Members mutually agree to terminate the Company; d. That the Company by its terms, as set forth in this Agreement, is terminated; e. That there is a general assignment of the assets of the Company for the benefit of its creditors, or the adjudication of the Company as bankrupt; or f. That the Company is dissolved by operation of law. 7.2. Procedure in Dissolution and Liquidation. a. Upon dissolution of the Company pursuant to Section 7.1, unless the Company is reconstituted under Section 9.2, the Manager shall proceed with reasonable promptness to wind up the affairs of and liquidate the business of the Company. b. During the period of the winding up of the affairs of the Company, the rights and obligations of the Manager set forth herein with respect to the management of the Company shall continue. c. The assets of the Company shall be applied or distributed in liquidation in the following order of priority: (1) In payment of debts and obligations of the Company; (2) To the Members in payment of their respective outstanding Capital Accounts; and (3) Any excess to the Members in proportion to their Percentage Interests. 7.3. Liquidation of a Membership Interest. A distribution in respect of the liquidation of a Member's Membership Interest shall be in the same amount as would have been distributed to such Member had the Company liquidated at the time of the liquidation of the Membership Interest. Payment of such liquidation amount shall be made in cash, a promissory note of the -12- 14 OPERATING AGREEMENT Company and/or an undivided interest in the property of the Company, in the Manager's sole discretion. 8. MEMBERS 8.1. Limitation on Members' Liabilities. A Member, including the Manager, shall not be bound by, or be personally liable for, the expenses, liabilities or obligations of the Company or the Manager, and the liability of each Member shall be limited solely to the amount of such Member's contribution to the capital of the Company required under the provisions of Section 2 hereof, except as required by the laws of the State, 8.2. No Control of Business or Right to Act for Company. Other than the Manager, a Member shall take no part in the management, conduct or control of the business of the Company and shall have no right or authority to act for or to bind the Company. 9. WITHDRAWAL OR DEATH OF THE MANAGER 9.1. Withdrawal by the Manager. The Manager may upon thirty (30) days notice to the Members withdraw as manager of the Company. 9.2. Reconstitution of Company After Withdrawal or Death of the Manager. Upon the withdrawal, liquidation, dissolution or bankruptcy of the Manager or other event causing a dissolution under Section 7.1.a, the remaining Members (not including for such purposes the estate of a deceased Manager or any Transferee who has not satisfied the requirements of Section 6 to become a Member) shall have the right to elect to continue the business of the Company, in a reconstituted form if necessary, if, within 90 days after the withdrawal of the Manager, all Members agree in writing to continue the business of the Company and to the appointment of one or more additional managers, if necessary. The exercise of the rights of reconstitution granted in this Section 9 shall not in any way constitute any Member a manager or impose any personal liability on any Member. Immediately upon the agreement of all Members to continue the business, the Members, and/or any successor Manager shall prepare, execute, and file for recordation of new Articles of Organization, or an amendment thereto, if required, and shall take or cause to be taken all steps required in connection with the continuation of the business in accordance with the applicable laws of the State. 9.3. Accounting. If the withdrawal or other terminating event of the Manager does not result in the dissolution and winding up of the Company's business because such business is being continued in a reconstituted form as provided above, the Members, and/or the successor Manager shall promptly have an accounting prepared by the auditors of the Company covering the transactions of the Company from the end of the immediately preceding fiscal year through the date of such withdrawal, death or other terminating event. -13- 15 OPERATING AGREEMENT 10. GENERAL PROVISIONS 10.1. Entire Agreement. This Agreement constitutes the entire agreement among the Members and supersedes all agreements, representations, warranties, statements, promises and understandings, whether oral or written, with respect to the subject matter hereof. None of the Members shall be bound by nor charged with any oral or written agreements, representations, warranties, statements, promises or understandings not specifically set forth in this Agreement or the exhibits and schedules hereto. 10.2. Notices. a. Any and all notices, requests, demands, elections and other communications (collectively "Communications" and each separately a "Communication") given in connection with this Agreement shall be effective and deemed adequately delivered (a "Deemed Delivery") only if delivered in writing to the Member for whom such Communications are intended (the "Recipient") and such Deemed Delivery shall be deemed to occur on the earlier of (a) the date it shall be delivered to the address of the Recipient on the records of the Company (the "Recipient's Address"), (b) the date delivery shall have been refused at the Recipient's Address, (c) with respect to a notice sent by mail, the date as of which the postal service shall have indicated such notice to be undeliverable at the Recipient's Address or (d) with respect to a notice sent by facsimile to the facsimile number required by this Agreement and in respect of which a facsimile receipt confirmation statement is printed, (i) the next business day after receipt, if the notice is sent at or after five (5) p.m. in the time zone of the Recipient, or (ii) the day of receipt if the notice is sent before five (5) p.m. in the time zone of the Recipient. The addresses and facsimile numbers required by this Agreement, unless changed pursuant to Section 10.2.b, are: (1) To the Company or the Manager: 55 East Monroe Suite 3440 Chicago, Illinois 60603 Facsimile: (312) 621-3354 Attn: Myron C. Warshauer -14- 16 OPERATING AGREEMENT with a copy in each case to: Sachnoff & Weaver, Ltd. 30 South Wacker Drive 29th Floor Chicago, Illinois 60606 Facsimile: (312) 207-6400 Attn: Stewart Dolin (2) To the remaining Members, at the addresses or facsimile numbers listed on Schedule A. b. By giving to the Company at least ten (10) days' written notice thereof, the Members and their respective Transferees shall have the right from time to time and at any time during the term of this Agreement to change their respective addressee, address and/or facsimile number for notices, and each shall have the right to specify as its address and/or facsimile number for notices any other address and/or facsimile number within the United States of America. 10.3. Validity. In the event that any provision of this Agreement shall be held to be invalid or unenforceable, the same shall not affect in any respect whatsoever the validity or enforceability of the remainder of this Agreement. 10.4. Attorneys' Fees. Should any litigation be commenced by the Company against any Member or between by any Member or Members against the Company or the Manager concerning any provision of this Agreement or the rights and duties of any person or entity in relation thereto, the party or parties prevailing in such litigation shall be entitled, in addition to such other relief as may be granted, to a reasonable sum as and for its or their attorneys' fees and court costs in such litigation which shall be determined by the court in such litigation or in a separate action brought for that purpose. 10.5. Survival of Rights. Except as provided herein to the contrary, this Agreement shall be binding upon and inure to the benefit of the Members signatory hereto, and their respective permitted successors and assigns. 10.6. Governing Law. This Agreement has been entered into in the State and all questions with respect to this Agreement and the rights and liabilities of the parties hereto shall be governed by the internal laws of the State. 10.7. Submission to Jurisdiction, etc. The Members hereby irrevocably submit to the jurisdiction of any state or federal court sitting in the State of Illinois in connection with any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby and waive irrevocably any objection to venue or objections in the nature of forum non -15- 17 OPERATING AGREEMENT conveniens that they may have. The venue for any action to enforce or construe this Agreement shall be Cook County, Illinois. 10.8. No Partition. No Member shall have the right to, and each Member hereby covenants that it will not, withdraw from the Company, bring any action to partition any Company property nor dissolve, terminate or liquidate, or petition a court for the dissolution, termination, or liquidation of the Company, except as provided in this Agreement, and no Member at any time shall have the right to petition or to take any action to subject any Company assets or any part thereof to the authority of any court of bankruptcy, insolvency, receivership or similar proceeding, unless there is unanimous consent of the Members. 10.9. Waiver. No consent or waiver, express or implied, by a Member to or of any breach or default by another Member in the performance by such other Member of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such other Member of the same or any other obligations of such other Member hereunder. 10.10. Remedies Not Exclusive. The rights and remedies of the Members and the Company hereunder shall not be mutually exclusive, i.e., the exercise of one or more of the provisions hereof shall not preclude the exercise of any other provisions hereof. Each of the Members confirms that damages at law will be an inadequate remedy for a breach or threatened breach of this Agreement and agrees that, in the event of a breach or threatened breach of any provision hereof, the respective rights and obligations hereunder shall be enforceable by specific performance, injunction or other equitable remedy, but nothing herein contained is intended to, nor shall it, limit or affect any rights at law or by statute or otherwise of any Member aggrieved as against the other for a breach or threatened breach of any provision hereof, it being the intention of this Section to make clear the agreement of the Members that the respective rights and obligations of the Members hereunder shall be enforceable in equity as at law or otherwise. 10.11. Construction. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders; and the singular shall include the plural and vice versa. Titles of Sections and Subsections are for convenience only, and neither limit nor amplify the provisions of this Agreement itself. References to Sections or Subsections shall refer to Sections or Subsections of this Agreement, unless otherwise indicated. The use herein of the word "including," when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as "without limitation," or "but not limited to," or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter. For the purposes of this Agreement, "and/or" means one or the other or both, or anyone or more or all, of the things or persons in connection with which the conjunction is used. -16- 18 OPERATING AGREEMENT 10.12. Incorporation by Reference. Any exhibits or schedules referred to herein are those attached to this Agreement and shall be deemed to be incorporated as a part of this Agreement. 10.13. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the same agreement. 10.14. Further Assurances. Each party hereto agrees to do all acts and things, and to make, execute and deliver such written instruments, as shall from time to time be reasonably required to carry out the terms and provisions of this Agreement. 10.15. No Third Party Rights. This Agreement shall not (directly, indirectly, contin-gently or otherwise) confer or be construed as conferring any rights or benefits on any person or entity that is not a named Member or a permitted Transferee of a Member hereunder. IN WITNESS WHEREOF, this Agreement is executed as of the date first stated above. Standard Parking Corporation, Member Standard Parking, L.P., Member and Manager By: Standard Parking Corporation, its General Partner By: /s/ Myron C. Warshauer By: /s/ Myron C. Warshauer ------------------------- -------------------------- Its: President Its: President ------------------------- -------------------------- -17- 19 OPERATING AGREEMENT SCHEDULE A MEMBERS THIS SCHEDULE MAY BE AMENDED FROM TIME TO TIME WITHOUT THE CONSENT OF THE MEMBERS TO REFLECT THE ADDITION OF NEW MEMBERS, THE ISSUANCE OF NEW INTERESTS, THE SALE OR EXCHANGE OF INTERESTS, OR OTHER SHIFTS OF MEMBERSHIP INTERESTS PURSUANT TO THE AGREEMENT OR A CHANGE OF ADDRESS OR FACSIMILE NUMBER OF A MEMBER FOR WHICH NOTICE WAS GIVEN TO THE COMPANY PURSUANT TO THIS AGREEMENT.
Facsimile Initial Percentage Name and Address Number Capital Contribution Interest - ---------------- ------ -------------------- -------- Standard Parking (312) 621-3354 $ 200.00 1% Corporation 55 East Monroe Suite 3440 Chicago, Illinois 60603 Standard Parking, L.P (312) 621-3354 $19,800.00 99% 55 East Monroe. Suite 3440 Chicago, Illinois 60603
-18- EX-3.28 31 OPERATING AGREEMENT 1 STANDARD PARKING/CENTRAL II, L.L.C. OPERATING AGREEMENT - -------------------------------------------------------------------------------- THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION, BUT HAVE BEEN ISSUED PURSUANT TO EXEMPTIONS UNDER THE SECURITIES ACT OF 1933, AS AMENDED. FURTHERMORE, MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED WITH THE SECURITIES COMMISSIONER OF THE STATE OF ILLINOIS OR ANY OTHER STATE. ACCORDINGLY, THE SALE, TRANSFER, PLEDGE, HYPOTHECATION, OR OTHER DISPOSITION OF SUCH MEMBERSHIP INTEREST IS RESTRICTED AND MAY NOT BE ACCOMPLISHED EXCEPT IN ACCORDANCE SECTION 5 AND OTHER APPLICABLE PROVISIONS OF THIS AGREEMENT, AND AN APPLICABLE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT A REGISTRATION STATEMENT IS UNNECESSARY. - -------------------------------------------------------------------------------- 2 STANDARD PARKING/CENTRAL II, L.L.C. OPERATING AGREEMENT This Limited Liability Company Operating Agreement (the "Agreement") is made as of March __, 1995, in Chicago, Illinois by and among Standard Parking Corporation, an Illinois corporation (the "Manager"), and those parties who, from time to time, execute this Agreement as members and are listed on attached Schedule A. The Manager and such signatories to this Agreement are collectively called the "Members", and each is sometimes individually called a "Member". AGREEMENT NOW, THEREFORE, in consideration of the mutual promises, terms and conditions contained herein, the receipt and sufficiency of which are hereby acknowledged, the Members hereby agree as follows: 1. FORMATION, PURPOSES AND DURATION 1.1. Formation and Name. a. The Members agree to and hereby form a company pursuant to the Limited Liability Company Act of the State of Delaware (the "State") to be known as the "Standard Parking Central II, L.L.C." (the "Company"). b. The ownership interests, rights and obligations of the Members as members in the Company shall be as provided in the Limited Liability Company Act of the State of Delaware (the "LLC Act"), as amended from time to time, except as provided in this Agreement. Such ownership interests, rights and obligations of a Member are called such Member's "Membership Interest" in this Agreement. The portion of all the outstanding Membership Interests held by a Member is expressed as a percentage (the "Percentage Interest") which is listed opposite the Member's name on Schedule A. c. The Company shall bear the expenses incident to its formation, including, but not limited to, filing and recording fees, taxes and legal and accounting fees incident to the formation and operation of the Company. 1.2. Purposes of the Company. The purposes of the Company shall be: a. to undertake any and all lawful business activity under the LLC Act; b. To invest in, acquire, hold, maintain, improve, develop, sell, assign, transfer, operate, lease, mortgage, exchange and otherwise deal in real estate or personal 3 OPERATING AGREEMENT property, or interest in real estate or personal property, or any other venture or business or investment; c. To obtain any financing necessary to pursue such purposes; and d. To perform any and all acts reasonably necessary to the fulfillment of the foregoing purposes. 1.3. Principal Place of Business. The Company shall be deemed to have its principal place of business at: 55 East Monroe Suite 3440 Chicago, Illinois 60603 (the "Company's Office") or such other place as determined by the Manager from time to time. 1.4. Title to Company Property. Legal title to all Company properties shall be taken and at all times held in the name of the Company, except that any real estate held by the Company may alternatively be held in the name of a trustee for the Company, provided that the Company is specifically designated by name as sole beneficiary or principal under a written trust agreement executed by any such trustee. The manner of holding title to the Company real estate, whether in the name of the Company or such trustee, is solely for the convenience of the Company; all such Company real estate shall be treated as the property of the Company subject to the terms of this Agreement; and the power to direct any such trustee shall rest solely in the Company and shall be exercisable solely upon the direction of the Manager. 1.5. Term. The term of the Company shall commence on the date of the filing or the Certificate of Organization (the "Certificate") with the appropriate authorities of the State, and, unless sooner terminated in accordance with other provisions of this Agreement, shall end on December 31, 2045. 2. CAPITAL CONTRIBUTIONS, PERCENTAGE INTERESTS AND DISTRIBUTIONS 2.1. Initial Capital Contribution. Each Member shall contribute that amount of cash indicated on Schedule A opposite such Member's name to the capital of the Company. 2.2. Capital Accounts. a. A capital account (a "Capital Account") shall be established and maintained for each Member in accordance with the Internal Revenue Code of 1986, as amended (the "Code"), and with regulations promulgated thereunder by the U.S. -2- 4 OPERATING AGREEMENT Department of the Treasury (the "Treasury Regulations") and shall be subject to adjustment as provided in Section 2.2.b. b. In accordance with and subject to the Treasury Regulations, the Capital Account of each Member shall from time to time be: (1) Increased by (i) the amount of cash and the gross asset value of property contributed by such Member, (ii) such Member's share of the profits of the Company, determined pursuant to Section 5.7 for Capital Account purposes, whether or not distributed, and (iii) the amount any Company liabilities assumed by such Member or which are secured by any Company Property distributed to such Member; and (2) Decreased by (i) the amount of cash and the gross asset value of property distributed to such Member, (ii) such Member's share of losses of the Company, determined pursuant to Section 5.7 for Capital Account purposes, and (iii) the amount of any liabilities of such Member assumed by the Company or which are secured by any property contributed by such Member to the Company. c. Except as otherwise provided in this Agreement, whenever it becomes necessary to ascertain the balance of any Member's Capital Account, such a determination shall be made after giving effect to all allocations of profits and losses of the Company for the current year and all distributions for such year in respect of transactions effected prior to the date as of which such determination is to be made. No Member shall be entitled to (i) make any withdrawal from its Capital Account or to receive any distribution from the Company, except as expressly provided in this Agreement, or (ii) make any additional capital contribution to the Company other than as provided herein. No Member shall be entitled to any interest on such Member's capital contributions to the Company. d. Any dispute between the Members with respect to determination of Capital Accounts or otherwise with respect to the manner or method of accounting by the Company shall be resolved by the Company's accountants. e. In the event that property is distributed by the Company to a Member (including distributions in liquidation of the Company), the Capital Accounts of the Members shall be adjusted immediately before such distribution, in accordance with the applicable allocation of profits and losses, to reflect the profits or losses that would have been realized by the Company if the distributed property had been sold on the date of its distribution for its fair market value. -3- 5 OPERATING AGREEMENT 2.3. Distributions of Cash Flow. Cash flow shall be distributed in respect of each year or portion of a year after (i) payment of all expenses, debts and obligations of the Company then due and payable, including those due to the Manager, and (ii) the establishment or increase of any reserves established by the Manager in its sole discretion, including reserves for anticipated operating expenses, a. First, to the Members pro rata in accordance with any positive balance in such Members' Capital Accounts to the extent of such positive balances; and b. Second, any remaining cash flow shall be distributed according to the Members' Percentage Interests. 2.4. Time of Determination and Distribution of Cash Flow. Cash flow shall, except as otherwise provided in this Agreement, be determined and distributed from time to time by the Manager in its sole discretion. 3. RIGHTS AND DUTIES OF THE MANAGER 3.1. Management of Company Business. The Manager shall be solely responsible for the management of the Company's business with all rights and powers generally conferred by law or necessary, advisable or consistent in connection therewith. a. The signature of a duly authorized Officer of the Company or of the Manager shall be required and sufficient to bind the Company. No creditor, vendor or other persons dealing with the Company shall be required to investigate the authority of the Manager or secure approval or confirmation of any of the other Members. b. The Manager shall have all rights and powers required for or appropriate for the management of the Company's business. 3.2. Expenses. The Company shall pay all of its reasonable expenses (which expenses may be either billed directly to the Company or reimbursed to the Manager. The Manager may retain and pay compensation to persons or firms rendering administrative, architectural, technical, management, leasing, brokerage, insurance, development, accounting, legal and other services to the Company, including, without limitation, one or more Manager or affiliates of the Manager. 3.3. Indemnification of the Manager. The Manager shall not be liable, responsible or accountable in damages or otherwise to the Company or to a Member for any acts performed by them, within the scope of the authority conferred on the Manager, provided they have acted in good faith and shall not be guilty of willful misconduct, gross negligence or breach of fiduciary duty. -4- 6 OPERATING AGREEMENT a. Except where the Manager has acted in bad faith or shall be guilty of willful misconduct, the Company shall indemnify and hold such Manager harmless from and against any judgments, penalties, fines, amounts paid in settlement and any other loss, damages or expense (including reasonable attorneys fees, court costs and witness fees) incurred because of any action performed by them on behalf of the Company in accordance with the terms hereof. In the event of any action by a Member or the Company against the Manager, the Company shall indemnify and hold harmless such Manager, from and against all expenses incurred by such Manager in the defense or settlement of such action, including reasonable attorneys' fees that may be paid or incurred, if the indemnified party is not liable as a result of his, her or its own bad faith, willful misconduct, gross negligence or breach of his, her or its fiduciary duty, provided that: (i) no indemnification shall be made in respect of any claim, issue or matter as to which such Person shall have been adjudged to be liable under such standards unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such Person is fairly and reasonably entitled to indemnity of such expenses that such court shall deem proper; and (ii) to the extent that such Person has been successful on the merits or otherwise in defense of any such action, or in defense of any claim, issue or matter therein, such Person shall be indemnified by the Company against expenses, including reasonable attorneys' fees, actually and reasonably incurred by such person in connection therewith. Expenses incurred by the Manager in defending any action, suit or proceeding shall be paid or reimbursed by the Company promptly upon receipt from such Manager of an undertaking on its part to repay such expenses if it shall ultimately be determined that it is not entitled to be indemnified. b. If any counsel shall be retained to represent the Manager at Company expense under this Section with respect to any claim by a third party; and if the same claim shall be made against a Member, then, the Member shall request of the Manager that such counsel, at Company expense, represent the interests of such Member with respect to such claim to the extent such counsel shall determine it can do so without conflict of interest, and the Member shall not be entitled to reimbursement for any counsel fees charged by counsel retained by such Member for representation that shall duplicate representation available from the Manager's counsel. A Member shall be entitled to reimbursement from the Company for counsel fees incurred for representation that the Manager's counsel shall have refused to supply, provided that such Member has made a request to the Manager for legal representation and is otherwise entitled to reimbursement of such fees under the provisions of this Section. c. Notwithstanding the foregoing provisions, (i) no person shall be entitled to any indemnity with respect to any matters as to which such person shall have acted in -5- 7 OPERATING AGREEMENT bad faith and shall have been adjudicated guilty of willful misconduct, gross negligence or breach of his, her or its fiduciary duties; and (ii) any indemnity under this Section shall be provided out of and to the extent of Company assets only, and no Member shall have any personal liability on account thereof. The foregoing provisions shall not be construed to require any Member to contribute any additional capital to the Company, and the sole recourse for any such indemnity shall be limited to the assets of the Company, at any time, and from time to time. d. The indemnification provisions of this Agreement are not intended to be for the benefit of any creditor or other person (other than the Manager in its capacity as the Manager and other than any person acting in his or her capacity as a Delegatee) to whom any debts, liabilities, or obligations are owed by (or who otherwise has any claim against) the Company or any of the Members; and no such provisions shall create any right or remedy enforceable by such creditor or other person against the Company or any of the Members. For the purposes of this Section, any Delegatee shall have the same rights to indemnification as the Manager. e. The Manager shall not be liable to the Members because any taxing authorities disallow or adjust income, deduction or credits in the Company tax returns. Furthermore, the Manager shall not have any liability for the repayment of the capital contributions or loans of the Members. 3.4. Other Business Activities; Disclosure; Waiver. a. Any Member, Manager or any officer, director, employee, partner, shareholder, member or other person holding legal or beneficial interest in any entity which is a Member or Manager, may engage in or possess an interest in other business ventures of every nature and description, including business ventures which compete with the Company, independently or with others, and neither the Company nor the Members shall have any right by virtue of this Agreement in or to such independent ventures or to the income or profits derived therefrom. b. If a business in which a Member has an interest, or in which an affiliate of a Member has an interest, proposes to transact business with the Company, then such Member shall give notice to the Manager of its interest or the interest of its affiliate and business may be conducted with such entity upon terms approved by the Manager. -6- 8 OPERATING AGREEMENT 4. OFFICERS 4.1. Appointment of Officers. The Manager may select such Officers as it deems necessary or desirable for the effective management of the Company and the pursuit of the Company's business. Manager hereby appoints those persons designated in Section 4.11 to the offices set forth after their names. 4.2. Number. The Officers of the Company may be a President, one or more Vice-Presidents (the number thereof to be determined by the Manager), a Secretary, and a Treasurer, and such Assistant Secretaries, Assistant Treasurers or other Officers as may be appointed by the Manager. Any two or more offices may be held by the same Person. All Officers and agents of the Company shall have such express authority and perform such duties in the management of the property and affairs of the Company as may be provided herein, or as may be determined by resolution of the Manager not inconsistent with this Agreement, and such implied authority as is recognized by the common law from time to time. 4.3. Appointment and Term of Office. The initial Officers of the Company are designated in Section 4.11, and otherwise the Officers of the Company shall be appointed by the Manager by written action taken and/or meetings held for such purpose. The Manager may create and fill new offices from time to time. An Officer shall hold office until his or her successor shall have been duly appointed and shall have qualified, until his or her death or until he or she shall resign or shall have been removed in the manner hereinafter provided. Election or appointment of an Officer or agent shall not of itself create contract rights. 4.4. Removal. Any Officer or agent may be removed by the Manager whenever in its judgment the best interests of the Company would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the Person so removed. 4.5. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification, or otherwise, or because of the creation of an office, may be filled by the Manager for the unexpired portion of the term. 4.6. The President. The President shall be the principal executive Officer of the Company and, subject to the control of the Manager, shall in general supervise and control all of the business and affairs of the Company. He or she may sign, with the Secretary or any other Officer of the Company thereunto authorized by the Manager, contracts or other instruments which the Manager has authorized to be executed on behalf of the Company, except in cases where the signing and execution thereof shall be expressly delegated by the Manager or by this Agreement to some other Officer or agent of the Company or to the President alone, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties incident to the office of President and such other duties as may be prescribed by the Manager from time to time. -7- 9 OPERATING AGREEMENT 4.7. The Vice-Presidents. In the absence of the President or in the event of his or her inability or refusal to act, the Vice-President (or in the event there be more than one Vice-President, the Vice-Presidents in the order designated, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice-President may perform such other duties as from time to time may be assigned to him or her by the President or by the Manager. 4.8. The Secretary. The Secretary shall: (a) keep, or supervise and be responsible for the keeping of, the minutes and records of all meetings and official actions of the Members and of the Manager, and any committees of the Manager in one or more books provided for that purpose; (b) see that all notices of such meetings are duly given or waivers of notice obtained in accordance with the provisions of this Agreement or as required by law; (c) be custodian of the Company records; (d) keep a register of the post office address of each Member which shall be furnished to the Secretary by such Member; (e) have the authority to certify this Agreement, resolutions of the Manager and committees thereof, and other documents of the Company as true and correct copies thereof; and (f) in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him or her by the President or by the Manager. 4.9. Assistant Secretaries. The Assistant Secretaries, in general, shall perform such duties and exercise such authority as shall be assigned or granted to them by the President or by the Manager. 4.10. Compensation. Except as otherwise provided in any written employment agreement duly executed on behalf of the Company and except as otherwise set forth below, the compensation (including salaries and benefits) of the Officers shall be fixed from time to time by resolution of the Manager and no Officer shall be prevented from receiving such compensation by reason of the fact that he or she is also the Manager of the Company. 4.11. Identity of Officers. The initial Officers of the Company shall be as follows: a. Myron C. Warshauer shall be the President. b. Michael K. Wolf shall be a Senior Vice President and the Secretary. c. Allan Lombardo shall be the Executive Vice President. d. Steven A. Warshauer shall be a Senior Vice President. e. Michael E. Swartz shall be a Senior Vice President. f. James A. Wilhelm shall be a Senior Vice President. -8- 10 OPERATING AGREEMENT 5. ACCOUNTING AND TAXES 5.1. Books and Records. a. At all times during the term hereof, the Manager shall use its best efforts to cause accurate books and records of account to be maintained in which are to be entered all mailers relating to the business and operations of the Company, including all income, expenditures, assets and liabilities thereof. b. Each Member is entitled to any information reasonably necessary for the Member for the preparation of such Member's federal or state tax returns. 5.2. Rights of Inspection. Each Member and/or its authorized representatives shall have the right to inspect, examine and copy (at such Member's expense) the books, records, files, securities and other documents of the Company during the regular business hours of the Company upon giving reasonable notice and stating reasonable cause therefore. 5.3. Fiscal Year. The fiscal year of the Company shall end on December 31 of each year. 5.4. Accounts. The Manager may deposit Company funds in such bank or investment accounts as they select in its sole discretion. The Manager shall be an authorized signatory on such accounts. 5.5. Other Accounting Decisions. All accounting decisions for the Company (other than those specifically provided for in any other Section of this Agreement) shall be made by the Manager. 5.6. Preparation of Tax Returns. Upon being provided by the Members with all information required for their preparation, the Manager or its agents shall, on behalf of the Company, use its best efforts to cause all federal, state and local income tax returns of the Company to be prepared. The Manager will use its best efforts to cause copies of all tax returns of the Company to be made available for review by the Members at least twenty days prior to the statutory date for filing, including extensions thereof, if any. 5.7. Allocations to Members. a. Subject to Sections 5.7.b and 5.7.c, all items of income, gain, profits, losses, credits and deductions of the Company shall be allocated to the Members in proportion to the Members' Percentage Interests. b. Solely for federal, state, and local income tax purposes and not for book or Capital Account purposes, except to the extent required by Treasury Regulations, depreciation, amortization, gain, or loss with respect to property that is properly -9- 11 OPERATING AGREEMENT reflected on the Company's books at a value that differs from its adjusted basis for federal income tax purposes shall be allocated in accordance with the principles and requirements of Section 704(c) of the Code and the Treasury Regulations promulgated thereunder, and in accordance with the requirements of the relevant provisions of the Treasury Regulations issued under Code Section 704(b). For Capital Account purposes, depreciation, amortization, gain, or loss with respect to property that is properly reflected on the Company's books at a value that differs from its adjusted basis for tax purposes shall be determined in accordance with the rules of Treasury Regulation Section 1.704-1 (b)(2)(iv)(g). c. To the extent required to give the foregoing allocations effect for federal income tax purposes, the requirements of Treasury Regulations Sections 1.704(b)(2)(ii)(d) and 1.704-2 are incorporated herein by reference, and this Agreement shall be construed as having any provisions necessary to satisfy such requirements. d. Allocations with Respect to Transferred Membership Interests. In the event of a Transfer (as defined in Section 6, below) of a Member's Membership Interest or any portion thereof, the Member's items of profits and losses shall be allocated between the Transferor (as defined herein) and the Transferee (as defined herein) in the ratio of the number of days in the fiscal year of the Company before and after the effective date of the Transfer. 5.8. Tax Decisions Not Specified. Tax decisions and elections for the Company not provided for herein shall be made in the discretion of the Manager. 5.9. Tax Matters Member. The Manager named first in the Articles will be the tax matters partner (the "Tax Matters Partner") for purposes of Sections 6221-6231 of the Code and the Treasury Regulations. The Tax Matters Partner agrees to use its best efforts to comply in good faith with all provisions of the Code concerning a tax matters partner and to take all actions necessary to make each Member a notice partner under the Code. The Tax Matters Partner will use its best efforts to give each Member copies of all notices or other material communications delivered to or by it with respect to federal, state or local tax matters, negotiations, decisions, settlements or other events. The Tax Matters Partner may choose the forum in which to pursue any litigation without the consent of the Members. 6. SALE OR TRANSFER 6.1. General. Except as provided in Section 6.4.c, below, no Member shall (i) sell, assign, transfer, convey, give, mortgage, pledge, charge or otherwise encumber (collectively, "Transfer"), all or any part of its Membership Interest, or (ii) contract to Transfer all or any part of its Membership Interest, or (iii) suffer or permit the Transfer of all or any part of its Membership Interest whether voluntarily or by operation of law, without in each instance -10- 12 OPERATING AGREEMENT obtaining the prior written consent of the Manager, which consent may be withheld in the sole discretion of the Manager. Any attempt to Transfer a Membership Interest without the required consent shall be void. The giving of consent in connection with one or more Transfers shall not limit or waive the need for such consent in connection with any other Transfers. 6.2. Securities Law Limitations. Notwithstanding anything in this Agreement, no Membership Interests may be Transferred except as permitted under the Securities Act of 1933, as amended, and applicable state securities laws or exemption therefrom. 6.3. Agreement with Transferees. In the event that, pursuant to the provisions of this Section 6 and with any required prior written consent of the Manager, any Member (a "Transferor") shall Transfer its Membership Interest to any person or entity (a "Transferee"), no such Transfer shall be made or shall be effective to make such Transferee a Member or entitle such Transferee to any benefits or rights hereunder until the proposed Transferee agrees in writing to (i) assume and be bound by all of the terms and provisions of this Agreement and all of the obligations of the Transferor, and (ii) be subject to all the restrictions to which the Transferor is subject under the terms of this Agreement and any further agreements with respect to the Facility or as contemplated by this Agreement to which the Transferor is then subject or is then required to be a party. 6.4. Transfer by Reason of Death and Other Events. a. If, as a result of a Member's death, divorce, bankruptcy, or, in the case of a non-natural person, dissolution, termination, liquidation or distribution, a Membership Interest or a portion thereof is Transferred, without consideration to the estate of the Transferor, to or in trust substantially for the benefit of lineal descendants of the Transferor or to the Transferor's grantor or controlling owner, the Transferee shall not become a Member as a result of such Transfer without the consent of the Manager, except as provided in Section 6.4.c, below. b. If the Company does not dissolve as a result of a Transfer by reason of an election of the remaining Members to continue the Company (or because the Transfer is not a cause of dissolution described in Section 7.1) but the Manager does not consent to the Transferee becoming a Member, the Transferee of a Transfer described in Section 6.4.a shall have the right to receive a payment of cash, by means of a promissory not of the Company and/or the distribution of an undivided interest in the property of the Company the sum of the values of which shall not exceed the Transferor's rights in liquidation of the Transferor's Membership Interest under Section 7.3 determined as of the date of the Transfer. c. Sections 6.4.a, and 6.4.b notwithstanding, if the Transferee to whom the Withdrawing Transferor's Membership Interest is being Transferred pursuant to -11- 13 OPERATING AGREEMENT an event described in Section 6.4.a is already a Member, consent of the Manager shall not be required for the Transfer to be effective. 7. DISSOLUTION 7.1. Causes of Dissolution. The Company shall be dissolved only in the event: a. Of the death, removal, liquidation, dissolution, withdrawal or bankruptcy of any Member; b. That all or substantially all of the Company's non-cash property is sold or otherwise transferred to any person which is not controlled by the Company; c. That the Members mutually agree to terminate the Company; d. That the Company by its terms, as set forth in this Agreement, is terminated; e. That there is a general assignment of the assets of the Company for the benefit of its creditors, or the adjudication of the Company as bankrupt; or f. That the Company is dissolved by operation of law. 7.2. Procedure in Dissolution and Liquidation. a. Upon dissolution of the Company pursuant to Section 7.1, unless the Company is reconstituted under Section 9.2, the Manager shall proceed with reasonable promptness to wind up the affairs of and liquidate the business of the Company. b. During the period of the winding up of the affairs of the Company, the rights and obligations of the Manager set forth herein with respect to the management of the Company shall continue. c. The assets of the Company shall be applied or distributed in liquidation in the following order of priority: (1) In payment of debts and obligations of the Company; (2) To the Members in payment of their respective outstanding Capital Accounts; and (3) Any excess to the Members in proportion to their Percentage Interests. -12- 14 OPERATING AGREEMENT 7.3. Liquidation of a Membership Interest. A distribution in respect of the liquidation of a Member's Membership Interest shall be in the same amount as would have been distributed to such Member had the Company liquidated at the time of the liquidation of the Membership Interest. Payment of such liquidation amount shall be made in cash, a promissory note of the Company and/or an undivided interest in the property of the Company, in the Manager's sole discretion. 8. MEMBERS 8.1. Limitation on Members' Liabilities. A Member, including the Manager, shall not be bound by, or be personally liable for, the expenses, liabilities or obligations of the Company or the Manager, and the liability of each Member shall be limited solely to the amount of such Member's contribution to the capital of the Company required under the provisions of Section 2 hereof, except as required by the laws of the State, 8.2. No Control of Business or Right to Act for Company. Other than the Manager, a Member shall take no part in the management, conduct or control of the business of the Company and shall have no right or authority to act for or to bind the Company. 9. WITHDRAWAL OR DEATH OF THE MANAGER 9.1. Withdrawal by the Manager. The Manager may upon thirty (30) days notice to the Members withdraw as manager of the Company. 9.2. Reconstitution of Company After Withdrawal or Death of the Manager. Upon the withdrawal, liquidation, dissolution or bankruptcy of the Manager or other event causing a dissolution under Section 7.1. a, the remaining Members (not including for such purposes the estate of a deceased Manager or any Transferee who has not satisfied the requirements of Section 6 to become a Member) shall have the right to elect to continue the business of the Company, in a reconstituted form if necessary, if, within 90 days after the withdrawal of the Manager, all Members agree in writing to continue the business of the Company and to the appointment of one or more additional managers, if necessary. The exercise of the rights of reconstitution granted in this Section 9 shall not in any way constitute any Member a manager or impose any personal liability on any Member. Immediately upon the agreement of all Members to continue the business, the Members, and/or any successor Manager shall prepare, execute, and file for recordation of new Articles of Organization, or an amendment thereto, if required, and shall take or cause to be taken all steps required in connection with the continuation of the business in accordance with the applicable laws of the State. 9.3. Accounting. If the withdrawal or other terminating event of the Manager does not result in the dissolution and winding up of the Company's business because such business is being continued in a reconstituted form as provided above, the Members, and/or the successor Manager shall promptly have an accounting prepared by the auditors of the Company covering -13- 15 OPERATING AGREEMENT the transactions of the Company from the end of the immediately preceding fiscal year through the date of such withdrawal, death or other terminating event. 10. GENERAL PROVISIONS 10.1. Entire Agreement. This Agreement constitutes the entire agreement among the Members and supersedes all agreements, representations, warranties, statements, promises and understandings, whether oral or written, with respect to the subject matter hereof. None of the Members shall be bound by nor charged with any oral or written agreements, representations, warranties, statements, promises or understandings not specifically set forth in this Agreement or the exhibits and schedules hereto. 10.2. Notices. a. Any and all notices, requests, demands, elections and other communications (collectively "Communications" and each separately a "Communication") given in connection with this Agreement shall be effective and deemed adequately delivered (a "Deemed Delivery") only if delivered in writing to the Member for whom such Communications are intended (the "Recipient") and such Deemed Delivery shall be deemed to occur on the earlier of (a) the date it shall be delivered to the address of the Recipient on the records of the Company (the "Recipient's Address"), (b) the date delivery shall have been refused at the Recipient's Address, (c) with respect to a notice sent by mail, the date as of which the postal service shall have indicated such notice to be undeliverable at the Recipient's Address or (d) with respect to a notice sent by facsimile to the facsimile number required by this Agreement and in respect of which a facsimile receipt confirmation statement is printed, (i) the next business day after receipt, if the notice is sent at or after five (5) p.m. in the time zone of the Recipient, or (ii) the day of receipt if the notice is sent before five (5) p.m. in the time zone of the Recipient. The addresses and facsimile numbers required by this Agreement, unless changed pursuant to Section 10.2.b, are: (1) To the Company or the Manager: 55 East Monroe Suite 3440 Chicago, Illinois 60603 Facsimile: (312) 621-3354 Attn: Myron C. Warshauer -14- 16 OPERATING AGREEMENT with a copy in each case to: Sachnoff & Weaver, Ltd. 30 South Wacker Drive 29th Floor Chicago, Illinois 60606 Facsimile: (312) 207-6400 Attn: Stewart Dolin (2) To the remaining Members, at the addresses or facsimile numbers listed on Schedule A. b. By giving to the Company at least ten (10) days' written notice thereof, the Members and their respective Transferees shall have the right from time to time and at any time during the term of this Agreement to change their respective addressee, address and/or facsimile number for notices, and each shall have the right to specify as its address and/or facsimile number for notices any other address and/or facsimile number within the United States of America. 10.3. Validity. In the event that any provision of this Agreement shall be held to be invalid or unenforceable, the same shall not affect in any respect whatsoever the validity or enforceability of the remainder of this Agreement. 10.4. Attorneys' Fees. Should any litigation be commenced by the Company against any Member or between by any Member or Members against the Company or the Manager concerning any provision of this Agreement or the rights and duties of any person or entity in relation thereto, the party or parties prevailing in such litigation shall be entitled, in addition to such other relief as may be granted, to a reasonable sum as and for its or their attorneys' fees and court costs in such litigation which shall be determined by the court in such litigation or in a separate action brought for that purpose. 10.5. Survival of Rights. Except as provided herein to the contrary, this Agreement shall be binding upon and inure to the benefit of the Members signatory hereto, and their respective permitted successors and assigns. 10.6. Governing Law. This Agreement has been entered into in the State and all questions with respect to this Agreement and the rights and liabilities of the parties hereto shall be governed by the internal laws of the State. 10.7. Submission to Jurisdiction. etc. The Members hereby irrevocably submit to the jurisdiction of any state or federal court sitting in the State of Illinois in connection with any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby and waive irrevocably any objection to venue or objections in the nature of forum non -15- 17 OPERATING AGREEMENT conveniens that they may have. The venue for any action to enforce or construe this Agreement shall be Cook County, Illinois. 10.8. No Partition. No Member shall have the right to, and each Member hereby covenants that it will not, withdraw from the Company, bring any action to partition any Company property nor dissolve, terminate or liquidate, or petition a court for the dissolution, termination, or liquidation of the Company, except as provided in this Agreement, and no Member at any time shall have the right to petition or to take any action to subject any Company assets or any part thereof to the authority of any court of bankruptcy, insolvency, receivership or similar proceeding, unless there is unanimous consent of the Members. 10.9. Waiver. No consent or waiver, express or implied, by a Member to or of any breach or default by another Member in the performance by such other Member of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such other Member of the same or any other obligations of such other Member hereunder. 10.10. Remedies Not Exclusive. The rights and remedies of the Members and the Company hereunder shall not be mutually exclusive, i.e., the exercise of one or more of the provisions hereof shall not preclude the exercise of any other provisions hereof. Each of the Members confirms that damages at law will be an inadequate remedy for a breach or threatened breach of this Agreement and agrees that, in the event of a breach or threatened breach of any provision hereof, the respective rights and obligations hereunder shall be enforceable by specific performance, injunction or other equitable remedy, but nothing herein contained is intended to, nor shall it, limit or affect any rights at law or by statute or otherwise of any Member aggrieved as against the other for a breach or threatened breach of any provision hereof, it being the intention of this Section to make clear the agreement of the Members that the respective rights and obligations of the Members hereunder shall be enforceable in equity as at law or otherwise. 10.11. Construction. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders; and the singular shall include the plural and vice versa. Titles of Sections and Subsections are for convenience only, and neither limit nor amplify the provisions of this Agreement itself. References to Sections or Subsections shall refer to Sections or Subsections of this Agreement, unless otherwise indicated. The use herein of the word "including," when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as "without limitation," or "but not limited to," or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter. For the purposes of this Agreement, "and/or" means one or the other or both, or anyone or more or all, of the things or persons in connection with which the conjunction is used. -16- 18 OPERATING AGREEMENT 10.12. Incorporation by Reference. Any exhibits or schedules referred to herein are those attached to this Agreement and shall be deemed to be incorporated as a part of this Agreement. 10.13. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the same agreement. 10.14. Further Assurances. Each party hereto agrees to do all acts and things, and to make, execute and deliver such written instruments, as shall from time to time be reasonably required to carry out the terms and provisions of this Agreement. 10.15. No Third Party Rights. This Agreement shall not (directly, indirectly, contingently or otherwise) confer or be construed as conferring any rights or benefits on any person or entity that is not a named Member or a permitted Transferee of a Member hereunder. IN WITNESS WHEREOF, this Agreement is executed as of the date first stated above. Standard Parking Corporation, Standard Parking, L.P., Member Member and Manager By: Standard Parking Corporation, its General Partner By: /s/ Myron C. Warshauer By: /s/ Myron C. Warshauer ---------------------------- ---------------------------- Its: President Its: President ---------------------------- ---------------------------- -17- 19 OPERATING AGREEMENT SCHEDULE A MEMBERS THIS SCHEDULE MAY BE AMENDED FROM TIME TO TIME WITHOUT THE CONSENT OF THE MEMBERS TO REFLECT THE ADDITION OF NEW MEMBERS, THE ISSUANCE OF NEW INTERESTS, THE SALE OR EXCHANGE OF INTERESTS, OR OTHER SHIFTS OF MEMBERSHIP INTERESTS PURSUANT TO THE AGREEMENT OR A CHANGE OF ADDRESS OR FACSIMILE NUMBER OF A MEMBER FOR WHICH NOTICE WAS GIVEN TO THE COMPANY PURSUANT TO THIS AGREEMENT.
Facsimile Initial Percentage Name and Address Number Capital Contribution Interest - ---------------- ------ -------------------- -------- Standard Parking (312) 621-3354 $ 200.00 1% Corporation 55 East Monroe Suite 3440 Chicago, Illinois 60603 Standard Parking, L.P (312) 621-3354 $19,800.00 99% 55 East Monroe Suite 3440 Chicago, Illinois 60603
-18- EX-4.1 32 INDENTURE 1 EXECUTION COPY ================================================================================ APCOA, Inc. ---------------------------------------- $140,000,000 9 1/4% SENIOR SUBORDINATED NOTES DUE 2008 ---------------------------------------- ------------------------------ INDENTURE DATED AS OF MARCH 30, 1998 ------------------------------ State Street Bank and Trust Company Trustee ================================================================================ 2 CROSS-REFERENCE TABLE* Trust Indenture Act Section Indenture Section 310 (a)(1) 7.10 (a)(2) 7.10 (a)(3) NA. (a)(4)N.A. (a)(5) 7.10 (b) 7.03; 7.10 (c) N.A. 311(a) 7.11 (b) 7.11 (c) N.A. 312 (a) 2.05 (b)13.03 (c) 13.03 313(a) 7.06 (b)(1) 7.06 (b)(2) 7.06; 7.07 (c) 7.06;13.02 (d)7.06 314(a) 4.03;13.05 (b) N.A. (c)(1) 13.04 (c)(2) 13.04 (c)(3) N.A. (d)N.A. (e) 13.05 (f)N.A. 315 (a)7.0l (b)7.05,13.02 (c) 7.01 (d)7.01 (e)6.1 1 316 (a)(last sentence) 2.09 (a)( 1 )(A)6.05 (a)(1)(B) 6.04 (a)(2) N.A. (b) 6.07 (c) 2.13 317 (a)(1) 6.08 (a)(2)6.09 3 (b) 2.04 318(a) 13.01 (b) N.A. (c)13.01 N.A. means not applicable. * This Cross-Reference Table is not part of the Indenture. 4 TABLE OF CONTENTS Page ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.....................1 Section 1.1 Definitions..............................................1 Section 1.2. Other Definitions.......................................18 Section 1.3 Incorporation by Reference of Trust Indenture Act.......18 Section 1.4 Rules of Construction...................................19 ARTICLE 2. THE NOTES.....................................................19 Section 2.1 Form and Dating.........................................19 Section 2.2 Execution and Authentication............................21 Section 2.3 Registrar and Paying Agent..............................22 Section 2.4 Paying Agent to Hold Money in Trust.....................22 Section 2.5 Holder Lists............................................23 Section 2.6 Transfer and Exchange...................................23 Section 2.7 Replacement Notes.......................................31 Section 2.8 Outstanding Notes.......................................32 Section 2.9 Treasury Notes..........................................32 Section 2.10 Temporary Notes.........................................32 Section 2.11 Cancellation............................................33 Section 2.12 Defaulted Interest......................................33 Section 2.13 Record Date.............................................33 Section 2.14 Computation of Interest.................................33 Section 2.15 CUSIP Number............................................34 ARTICLE 3. REDEMPTION AND PREPAYMENT.....................................34 Section 3.1 Notices to Trustee......................................34 Section 3.2 Selection of Notes to be Redeemed or Purchased..........34 Section 3.3 Notice of Redemption....................................35 Section 3.4 Effect of Notice of Redemption..........................36 Section 3.5 Deposit of Redemption or Purchase Price.................36 Section 3.6 Notes Redeemed in Part..................................36 Section 3.7 Optional Redemption.....................................36 Section 3.8 Mandatory Redemption....................................36 Section 3.9 Repurchase Offers.......................................37 ARTICLE 4. COVENANTS.....................................................39 Section 4.1 Payment of Notes........................................39 Section 4.2 Maintenance of Office or Agency.........................39 Section 4.3 Commission Reports......................................40 Section 4.4 Compliance Certificate..................................40 Section 4.5 Taxes...................................................41 Section 4.6 Stay, Extension and Usury Laws..........................41 -i- 5 Section 4.7 Restricted Payments.....................................42 Section 4.8 Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries.................................44 Section 4.9 Incurrence of Indebtedness and Issuance of Preferred Stock.........................................45 Section 4.10 Assets Sales............................................48 Section 4.11 Transactions with Affiliates............................48 Section 4.12 Liens...................................................50 Section 4.13 Sale and Leaseback Transactions.........................50 Section 4.14 Offer to Purchase Upon Change of Control................50 Section 4.15 Corporate Existence.....................................51 Section 4.16 Limitation on Issuances of Capital Stock of Wholly Owned Restricted Subsidiaries...........................51 Section 4.17 Limitations on Issuances of Guarantees of Indebtedness............................................52 Section 4.18 Business Activities.....................................52 Section 4.19 Additional Guarantees...................................52 Section 4.20 Payment for Consents....................................53 Section 4.21 Anti-Layering...........................................53 ARTICLE 5. SUCCESSORS....................................................53 Section 5.1 Merger, Consolidation of Sale of Assets.................53 Section 5.2 Successor Corporation Substituted.......................54 ARTICLE 6. DEFAULTS AND REMEDIES.........................................54 Section 6.1 Events of Default.......................................54 Section 6.2 Acceleration............................................56 Section 6.3 Other Remedies..........................................57 Section 6.4 Waiver of Past Defaults.................................57 Section 6.5 Control by Majority.....................................57 Section 6.6 Limitation on Suits.....................................58 Section 6.7 Rights of Holders of Notes to Receive Payment...........58 Section 6.8 Collection Suit by Trustee..............................58 Section 6.9 Trustee May File Proofs of Claim........................58 Section 6.10 Priorities..............................................59 Section 6.11 Undertaking for Costs...................................59 ARTICLE 7. TRUSTEE.......................................................60 Section 7.1 Duties of Trustee.......................................60 Section 7.2 Rights of Trustee.......................................61 Section 7.3 Individual Rights of Trustee............................62 Section 7.4 Trustee's Disclaimer....................................62 Section 7.5 Notice of Defaults......................................62 Section 7.6 Reports by Trustee to Holders of the Notes..............62 Section 7.7 Compensation And Indemnity..............................63 Section 7.8 Replacement of Trustee..................................64 Section 7.9 Successor Trustee by Merger, etc........................65 -ii- 6 Section 7.10 Eligibility; Disqualification...........................65 Section 7.11 Preferential Collection of Claims Against The Company.................................................65 ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE......................65 Section 8.1 Option to Effect Legal Defeasance or Covenant Defeasance..............................................65 Section 8.2 Legal Defeasance and Discharge..........................65 Section 8.3 Covenant Defeasance.....................................66 Section 8.4 Conditions to Legal or Covenant Defeasance..............66 Section 8.5 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions...........68 Section 8.6 Repayment to The Company................................68 Section 8.7 Reinstatement...........................................69 ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER..............................69 Section 9.1 Without Consent of Holders of the Notes.................69 Section 9.2 With Consent of Holders of Notes........................70 Section 9.3 Compliance with Trust Indenture Act.....................71 Section 9.4 Revocation and Effect of Consents.......................71 Section 9.5 Notation on or Exchange of Notes........................72 Section 9.6 Trustee to Sign Amendments, etc.........................72 ARTICLE 10. SUBORDINATION.................................................72 Section 10.1 Agreement to Subordinate................................72 Section 10.2 Liquidation; Dissolution; Bankruptcy....................72 Section 10.3 Default on Designated Senior Debt.......................73 Section 10.4 Acceleration of Notes...................................74 Section 10.5 When Distribution Must Be Paid Over.....................74 Section 10.6 Notice by the Company...................................74 Section 10.7 Subrogation.............................................74 Section 10.8 Relative Rights.........................................75 Section 10.9 Subordination May Not Be Impaired by the Company........75 Section 10.10 Distribution or Notice to Representative................76 Section 10.11 Rights of Trustee and Paying Agent......................76 Section 10.12 Authorization to Effect Subordination...................77 Section 10.13 Amendments..............................................77 ARTICLE 11. GUARANTEE OF NOTES............................................77 Section 11.1 Note Guarantee..........................................77 Section 11.2 Execution and Delivery of Note Guarantee................78 Section 11.3 Subsidiary Guarantors May Consolidate, etc., on Certain Terms...........................................79 Section 11.4 Releases Following Sale of Assets, Merger, Sale of Capital Stock Etc.......................................80 Section 11.5 Additional Subsidiary Guarantors........................80 Section 11.6 Limitation on Subsidiary Guarantor Liability............80 Section 11.7 "Trustee" to Include Paying Agent.......................81 -iii- 7 ARTICLE 12. SUBORDINATION OF NOTE GUARANTEE...............................81 Section 12.1 Agreement to Subordinate................................81 Section 12.2 Liquidation; Dissolution; Bankruptcy....................81 Section 12.3 Default on Designated Guarantor Senior Debt.............82 Section 12.4 Acceleration of Note Guarantees.........................82 Section 12.5 When Distribution Must Be Paid Over.....................83 Section 12.6 Notice by Subsidiary Guarantor..........................83 Section 12.7 Subrogation.............................................83 Section 12.8 Relative Rights.........................................84 Section 12.9 Subordination May Not Be Impaired by Subsidiary Guarantor...............................................84 Section 12.10 Distribution or Notice to Representative................85 Section 12.11 Rights of Trustee and Paying Agent......................85 Section 12.12 Authorization to Effect Subordination...................86 Section 12.13 Amendments..............................................86 ARTICLE 13. MISCELLANEOUS.................................................86 Section 13.1 Trust Indenture Act Controls............................86 Section 13.2 Notices.................................................86 Section 13.3 Communication by Holders of Notes with Other Holders of Notes........................................87 Section 13.4 Certificate and Opinion as to Conditions Precedent......88 Section 13.5 Statements Required in Certificate or Opinion...........88 Section 13.6 Rules by Trustee and Agents.............................88 Section 13.7 No Personal Liability of Directors, Officers, Employees and Stockholders..............................88 Section 13.8 Governing Law...........................................89 Section 13.9 No Adverse Interpretation of Other Agreements...........89 Section 13.10 Successors..............................................89 Section 13.11 Severability............................................89 Section 13.12 Counterpart Originals...................................89 Section 13.13 Table of Contents, Headings, etc........................89 EXHIBITS Exhibit A FORM OF NOTE.................................................... Exhibit B FORM OF CERTIFICATE OF TRANSFEROR............................... Exhibit C FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR............................... Exhibit D FORM OF NOTE GUARANTEE.......................................... Exhibit E FORM OF SUPPLEMENTAL INDENTURE.................................. -iv- 8 Indenture, dated as of March 30, 1998, among APCOA, Inc., a Delaware corporation (the "Company"), Tower Parking, Inc., a Ohio corporation, Graelic, Inc. a Ohio corporation, APCOA Capital Corporation, a Delaware corporation, A-1 Auto Park, Inc., a Georgia corporation, Metropolitan Parking System, Inc., a Massachusetts corporation, Events Parking Company, Inc., a Massachusetts corporation, Standard Parking, L.P., a Delaware limited partnership, Standard Parking Corporation, an Illinois corporation, Standard Parking Corporation, MW, an Illinois corporation, Standard Auto Park, Inc., an Illinois corporation, Standard/Wabash Parking Corporation, an Illinois corporation, Standard Parking of Canada, L.P., an Illinois limited partnership, Standard Parking I, L.L.C., a Delaware limited Liability corporation and Standard Parking II, L.L.C., a Delaware limited Liability corporation (each of the above, with the exception of the Company, a "Subsidiary Guarantor" and together, the "Subsidiary Guarantors") and State Street Bank and Trust Company, as trustee (the "Trustee"). The Company, the Subsidiary Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the holders of the Company's 9 1/4% Senior Subordinated Notes due 2008 (the "Senior Subordinated Notes") and the new 9 1/4% Senior Subordinated Notes due 2008 (the "New Senior Subordinated Notes" and, together with the Senior Subordinated Notes, the "Notes"): 9 ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.1. Definitions. "Acquired Debt" means, with respect to any specified Person, (i) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, including, without limitation, Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the voting securities of a Person shall be deemed to be control. "Agent" means any Registrar, Paying Agent or co-registrar. "Applicable Procedures" means, with respect to any transfer or exchange of beneficial interests in a Global Note, the rules and procedures of the Depositary that apply to such transfer and exchange. "Asset Sale" means (i) the sale, lease, conveyance or other disposition of any assets or rights (including, without limitation, by way of a sale and leaseback) other than sales of inventory in the ordinary course of business consistent with past practices provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole will be governed by the provisions of the Indenture described above under the caption "--Change of Control" and/or the provisions described above under the caption "--Merger, Consolidation or Sale of Assets" and not by the provisions of the Asset Sale covenant), and (ii) the issue or sale by the Company or any of its Restricted Subsidiaries of Equity Interests of any of the Company's Restricted Subsidiaries, in the case of either clause (i) or (ii), whether in a single transaction or a series of related transactions (a) that have a fair market value in excess of $3.0 million or (b) for net proceeds in excess of $3.0 million. Notwithstanding the foregoing: (i) a transfer of assets by the Company to a Wholly Owned Restricted Subsidiary or by a Wholly Owned Restricted Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary, (ii) an issuance of Equity Interests by a Wholly Owned Restricted Subsidiary to the Company or to another Wholly Owned Restricted 10 Subsidiary, and (iii) a Restricted Payment that is permitted by the covenant described above under the caption "--Restricted Payments" will not be deemed to be Asset Sales. "Attributable Debt" in respect of a sale and leaseback transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended). "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state law for the relief of debtors. "Board of Directors" means the board of directors of the Company or any authorized committee of such board of directors. "Business Day" means any day other than a Legal Holiday. "Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP. "Capital Stock" means (i) in the case of a corporation, corporate stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited) and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. "Cash Equivalents" means (i) United States dollars, (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof having maturities of not more than six months from the date of acquisition, (iii) certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any lender party to the New Credit Facility or with any domestic commercial bank having capital and surplus in excess of $500 million and a Thompson Bank Watch Rating of "B" or better, (iv) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (ii) and (iii) above entered into with any financial institution meeting the qualifications specified in clause (iii) above, and (v) commercial paper having the highest rating obtainable from Moody's Investors Service, Inc. or Standard & Poor's Corporation and in each case maturing within six months after the date of acquisition. "Cedel" means Cedel Bank, societe anonyme. 2 11 "Change of Control" means the occurrence of any of the following: (i) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of Holdings and its Subsidiaries or of the Company and its Subsidiaries, in each case, taken as a whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange Act) other than the Principals or their Related Parties (as defined below), (ii) the adoption of a plan relating to the liquidation or dissolution of Holdings or the Company, (iii) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as defined above), other than the Principals and their Related Parties, becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that a person shall be deemed to have "beneficial ownership" of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition), directly or indirectly, of more than 50% of the Voting Stock of Holdings or the Company (measured by voting power rather than number of shares), (iv) the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors or (v) Holdings or the Company consolidates with, or merges with or into, any Person or sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of its assets to any Person, or any Person consolidates with, or merges with or into, Holdings or the Company, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of Holdings or the Company is converted into or exchanged for cash, securities or other property, other than any such transaction where the Voting Stock of Holdings or the Company outstanding immediately prior to such transaction is converted into or exchanged for Voting Stock (other than Disqualified Stock) of the surviving or transferee Person constituting a majority of the outstanding shares of such Voting Stock of such surviving or transferee Person (immediately after giving effect to such issuance). "Commission" means the Securities and Exchange Commission. "Company" means APCOA, Inc., a Delaware corporation. "Consolidated Cash Flow" means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus (i) an amount equal to any extraordinary loss plus any net loss realized in connection with an Asset Sale (to the extent such losses were deducted in computing such Consolidated Net Income), plus (ii) provision for taxes based on income or profits of such Person and its Subsidiaries for such period, to the extent that such provision for taxes was included in computing such Consolidated Net Income, plus (iii) consolidated interest expense of such Person and its Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments (if any) pursuant to Hedging Obligations), to the extent that any such expense was deducted in computing such Consolidated Net Income, plus (iv) depreciation, amortization (including amortization of goodwill and other intangibles but excluding 3 12 amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income, plus (v) one-time charges related to the Combination, to the extent that such charges were deducted in computing Consolidated Net Income, plus (vi) in connection with any acquisition by the Company or a Restricted Subsidiary, projected quantifiable improvements in operating results (on an annualized basis) due to cost reductions calculated in good faith by the Company or one of its Restricted Subsidiaries, as evidenced by (A) in the case of cost reductions of less than $10.0 million, an Officers' Certificate delivered to the Trustee and (B) in the case of cost reductions of $10.0 million or more, a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee, minus (vii) non-cash items increasing such Consolidated Net Income for such period. Notwithstanding the foregoing, the provision for taxes on the income or profits of, and the depreciation and amortization and other non-cash charges of, a Subsidiary of the referent Person shall be added to Consolidated Net Income to compute Consolidated Cash Flow only to the extent that a corresponding amount would be permitted at the date of determination to be dividend to the Company by such Subsidiary without prior governmental approval (that has not been obtained), and without direct or indirect restriction pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Subsidiary or its stockholders. "Consolidated Net Income" means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that (i) the Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the referent Person or a Wholly Owned Restricted Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders, (iii) the Net Income of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded, (iv) the cumulative effect of a change in accounting principles shall be excluded and (v) the Net Income of any Unrestricted Subsidiary shall be excluded, whether or not distributed to the Company or one of its Restricted Subsidiaries for purposes of the covenant described under the covenant "Incurrence of Indebtedness and Issuance of Preferred Stock." "Consolidated Net Worth" means, with respect to any Person as of any date, the sum of (i) the consolidated equity of the common stockholders of such Person and its consolidated Subsidiaries as of such date plus (ii) the respective amounts reported on such Person's balance sheet as of such date with respect to any series of preferred stock (other than 4 13 Disqualified Stock) that by its terms is not entitled to the payment of dividends unless such dividends may be declared and paid only out of net earnings in respect of the year of such declaration and payment, but only to the extent of any cash received by such Person upon issuance of such preferred stock, less (x) all write-ups (other than write-ups resulting from foreign currency translations and write-ups of tangible assets of a going concern business made within 12 months after the acquisition of such business) subsequent to the date of the Indenture in the book value of any asset owned by such Person or a consolidated Subsidiary of such Person, (y) all investments as of such date in unconsolidated Subsidiaries and in Persons that are not Subsidiaries (except, in each case, Permitted Investments), and (z) all unamortized debt discount and expense and unamortized deferred charges as of such date, all of the foregoing determined in accordance with GAAP. "Continuing Directors" means, as of any date of determination, any member of the Board of Directors of the Company who (i) was a member of such Board of Directors on the date of the Indenture or (ii) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election. "Corporate Trust Office of the Trustee" shall be at the address of the Trustee specified in Section 13.2 hereof or such other address as to which the Trustee may give notice to the Company. "Credit Agent" means The First National Bank of Chicago, in its capacity as Agent for the lenders party to the New Credit Facility or any successor thereto or any person otherwise appointed. "Default" means any event that is or with the passage of time or the giving of notice or both would be an Event of Default. "Definitive Notes" means Notes that are in the form of EXHIBIT A-1 attached hereto (but without including the text referred to in footnotes 1 and 3 thereto). "Depositary" means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.3 hereof as the Depositary with respect to the Notes, until a successor shall have been appointed and become such pursuant to Section 2.6 of this Indenture, and, thereafter, "Depositary" shall mean or include such successor. "Designated Senior Debt" means (i) any Indebtedness outstanding under the New Credit Facility and (ii) any other Senior Debt permitted under the Indenture the principal amount of which is $25.0 million or more and that has been designated by the Company as "Designated Senior Debt. "Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the Holder thereof, in whole or in part, on or prior to 5 14 the date that is 91 days after the date on which the Notes mature; provided, however, that any Capital Stock that would not qualify as Disqualified Stock but for change of control provisions shall not constitute Disqualified Stock if the provisions are not more favorable to the holders of such Capital Stock than the provisions described under Section 4.14 hereof. "DLJ" means Donaldson, Lufkin & Jenrette Securities Corporation. "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock). "Euroclear" means Morgan Guaranty Trust Company of New York, the Brussels office, as operator of the Euroclear system. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exchange Offer" means the offer by the Company to Holders to exchange Senior Subordinated Notes for New Senior Subordinated Notes. "Exchange Offer Registration Statement" has the meaning set forth in the Registration Rights Agreement. "Existing Indebtedness" means Indebtedness of the Company and its Subsidiaries (other than Indebtedness under the New Credit Facility) in existence on the date of the Indenture, until such amounts are repaid. "Fixed Charges" means, with respect to any Person for any period, the sum, without duplication, of (i) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation, original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments (if any) pursuant to Hedging Obligations) and (ii) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period, and (iii) to the extent paid by such Person, any interest expense on Indebtedness of another Person that is Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon) and (iv) the product of (a) all dividend payments, whether or not in cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than dividend payments on Equity Interests payable solely in Equity Interests of the Company, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP. 6 15 "Fixed Charge Coverage Ratio" means with respect to any Person for any period, the ratio of the Consolidated Cash Flow of such Person and its Restricted Subsidiaries for such period to the Fixed Charges of such Person and its Restricted Subsidiaries for such period. In the event that the Company or any of its Restricted Subsidiaries incurs, assumes, Guarantees or redeems any Indebtedness (other than revolving credit borrowings) or issues preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, Guarantee or redemption of Indebtedness, or such issuance or redemption of preferred stock, as if the same had occurred at the beginning of the applicable four-quarter reference period. In addition, for purposes of making the computation referred to above, (i) acquisitions that have been made by the Company or any of its Restricted Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be deemed to have occurred on the first day of the four-quarter reference period and Consolidated Cash Flow for such reference period shall be calculated without giving effect to clause (iii) of the proviso set forth in the definition of Consolidated Net Income, and (ii) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, and (iii) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the referent Person or any of its Restricted Subsidiaries following the Calculation Date. "Foreign Subsidiary" means any Subsidiary organized and existing under the laws of a jurisdiction other than those of any state or commonwealth in the Unites States of America. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the date of the Indenture. "Global Notes" means the Rule 144A Global Notes, the Regulation S Temporary Global Notes and the Regulation S Permanent Global Notes. "Government Securities" means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States is pledged. "Guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner 7 16 (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness. "Guarantor Senior Debt" means Senior Debt of a Subsidiary Guarantor. "Hedging Obligations" means, with respect to any Person, the obligations of such Person under (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements and (ii) other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency rates. "Holberg" means Holberg Industries, Inc., a Delaware corporation, the indirect parent of the Company. "Holder" means a Person in whose name a Note is registered. "Holdings" means AP Holdings, Inc., a Delaware corporation and the parent (but not 100% owner) of APCOA, Inc. "Indebtedness" means, with respect to any Person, any indebtedness of such Person, whether or not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or banker's acceptances or representing Capital Lease Obligations or the balance deferred and unpaid of the purchase price of any property or representing any Hedging Obligations, except any such balance that constitutes an accrued expense or trade payable, if and to the extent any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, as well as all indebtedness of others secured by a Lien on any asset of such Person (whether or not such indebtedness is assumed by such Person) and, to the extent not otherwise included, the Guarantee by such Person of any indebtedness of any other Person. The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof, in the case of any Indebtedness that does not require current payments of interest, and (ii) the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness. "Indenture" means this Indenture, as amended or supplemented from time to time. "Indirect Participant" means a Person who holds an interest through a Participant. "Initial Purchasers" means Donaldson, Lufkin & Jenrette Securities Corporation and First Chicago Capital Markets, Inc. "Insolvency or Liquidation Proceedings" means (i) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding, relative to the Company or to the creditors of the Company, as such, or to the assets of the Company, or (ii) any liquidation, dissolution, reorganization or winding up of the Company, whether voluntary or involuntary and involving insolvency or bankruptcy, or (iii) any 8 17 assignment for the benefit of creditors or any other marshalling of assets and liabilities of the Company. "Institutional Accredited Investor" means an "accredited investor" as defined in Rule 501(a)(l), (2), (3) or (7) under the Securities Act. "Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of the covenant described above under the caption "--Restricted Payments." "Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in the City of New York, the city in which the principal Corporate Trust Office of the Trustee is located or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment shall be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction). "Liquidated Damages" means all liquidated damages then owing pursuant to Section 5 of the Registration Rights Agreement. "AP Holdings" means AP Holdings, Inc., a Delaware corporation, the parent of the Company. "Net Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however, (i) any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with (a) any Asset Sale (including, without limitation, dispositions pursuant to sale and leaseback transactions) or (b) the 9 18 disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain (but not loss), together with any related provision for taxes on such extraordinary or nonrecurring gain (but not loss). "Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), and any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP. "New Credit Facility" means that certain Credit Agreement, dated as of the date of the Indenture, by and among the Company, the lenders and other parties thereto from time to time and The First National Bank of Chicago, as agent, together with all related documents executed or delivered pursuant thereto at any time (including, without limitation, all mortgages, guarantees, security agreements and all other collateral and security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), supplemented or otherwise modified from time to time, including any agreement extending the maturity of, refinancing, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder provided that such increase in borrowings is within the definition of Permitted Indebtedness or is otherwise permitted under the covenant described "Incurrence of Indebtedness and Issuance of Preferred Stock") or adding Subsidiaries as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness and other Obligations under such agreement or agreements or any successor or replacement agreement or agreements, and whether by the same or any other agent, lender or group of lenders. "New Senior Subordinated Notes" means the Company's 9 1/4% Senior Subordinated Notes due 2008, which will be issued in exchange for the Company's Senior Subordinated Notes. "Non-Recourse Debt" means Indebtedness (i) as to which neither the Company nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor or otherwise), or (c) constitutes the lender; (ii) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness (other than the Notes being offered hereby) of the Company or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and (iii) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries. 10 19 "Note Custodian" means the Trustee, when serving as custodian for the Depositary with respect to the Notes in global form, or any successor entity thereto. "Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness, and in all cases whether now outstanding or hereafter created, assumed or incurred and including, without limitation, interest accruing subsequent to the filing of a petition in bankruptcy at the rate provided in the relevant document, whether or not an allowed claim, and any obligation to redeem or defease any of the foregoing. "Offering" means the offer and sale of the Senior Subordinated Notes as contemplated by the Offering Memorandum. "Offering Memorandum" means the Offering Memorandum, dated March 25, 1998, relating to the Company's offering and placement of the Senior Subordinated Notes. "Officer" means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person. "Officers' Certificate" means a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements of Section 13.5 hereof. "Opinion of Counsel" means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 13.5 hereof. The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee. "Participant" means, with respect to DTC, Euroclear or Cedel, a Person who has an account with DTC, Euroclear or Cedel, respectively (and, with respect to DTC, shall include Euroclear and Cedel). "payment in full" (together with any correlative phrases e.g. "paid in full" and "pay in full") means (i) with respect to any Senior Debt other than Senior Debt under or in respect of the New Credit Facility, payment in full thereof or due provision for payment thereof (x) in accordance with the terms of the agreement or instrument pursuant to which such Senior Debt was issued or is governed or (y) otherwise to the reasonable satisfaction of the holders of such Senior Debt, which shall include, in any Insolvency or Liquidation Proceeding, approval by such holders individually or as a class, of the provision for payment thereof, and (ii) with respect to Senior Debt under or in respect of the New Credit Facility, payment in full thereof in cash or Cash Equivalents. 11 20 "Permitted Business" means any of the businesses and any other businesses related to the businesses engaged in by the Company and its respective Restricted Subsidiaries on the date of the Indenture. "Permitted Investments" means (a) any Investment in the Company or in a Wholly Owned Restricted Subsidiary of the Company that is engaged in a Permitted Business; (b) any Investment in Cash Equivalents; (c) any Investment by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment (i) such Person becomes a Wholly Owned Restricted Subsidiary of the Company that is engaged in a Permitted Business or (ii) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Wholly Owned Restricted Subsidiary of the Company that is engaged in a Permitted Business; (d) any Restricted Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption "--Repurchase at the Option of Holders--Asset Sales"; (e) any acquisition of assets solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company; (f) loans and advances made after the date of the Indenture to Holberg Industries, Inc. not to exceed $10.0 million at any time outstanding; (g) make and permit to remain outstanding travel and other like advances in the ordinary course of business consistent with past practices to officers and employees of the Company or a Subsidiary of the Company; (h) other Investments made after the date of the Indenture in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (h) that are at the time outstanding, not to exceed $10 million; and (i) loans and advances made after the date of the Indenture to Holdings, not to exceed $9.0 million at any time outstanding. "Permitted Liens" means (i) Liens securing Senior Debt under the New Credit Facility that were permitted by the terms of the Indenture to be incurred; (ii) Liens in favor of the Company; (iii) Liens on property of a Person existing at the time such Person is merged into or consolidated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company; (iv) Liens on property existing at the time of acquisition thereof by the Company or any Restricted Subsidiary of the Company, provided that such Liens were in existence prior to the contemplation of such acquisition; (v) Liens to secure the performance of bids, tenders, contracts, statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business; (vi) Liens existing on the date of the Indenture; (vii) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor; (viii) Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to obligations that do not exceed $5.0 million at any one time outstanding and that (a) are not incurred in connection with the borrowing of money or the obtaining of advances or credit (other than trade credit in the ordinary course of business) and (b) do not in the aggregate 12 21 materially detract from the value of the property or materially impair the use thereof in the operation of business by the Company or such Restricted Subsidiary; (ix) Liens on assets of Unrestricted Subsidiaries that secure Non-Recourse Debt of Unrestricted Subsidiaries; (x) Liens on the daily revenues in favor of Persons other than the Company and its Restricted Subsidiaries who are parties to parking facility agreements for the amounts due to them pursuant thereto; (xi) Liens arising by applicable law in respect of employees' wages, salaries or commissions not overdue; and (xii) Liens arising out of judgments or awards not in excess of $5.0 million with respect to which the Company or its Subsidiary with respect to which the Company or such Subsidiaries are prosecuting an appeal or a proceeding or review and the enforcement of such lien is stayed pending such appeal or review. "Permitted Refinancing Indebtedness" means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries; provided that: (i) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus accrued interest on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded plus the amount of reasonable expenses incurred in connection therewith); (ii) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and (iv) such Indebtedness is incurred either by the Company or by the Restricted Subsidiary who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Principals" means Holberg Industries, Inc., John V. Holten or, in the case of the Company, Holdings. "Private Placement Legend" means the legend initially set forth on the Senior Subordinated Notes in the form set forth in Section 2.6(f) hereof. "Public Equity Offering" means a public offering of Equity Interests (other than Disqualified Stock) of (i) the Company or (ii) Holdings, to the extent that the net proceeds thereof are contributed to the Company as a capital contribution, that, in each case, results in net proceeds to the Company of at least $25.0 million. 13 22 "QIB" means a "qualified institutional buyer" as defined in Rule 144A under the Securities Act. "Receivables" means, with respect to any Person or entity, all of the following property and interests in property of such Person or entity, whether now existing or existing in the future or hereafter acquired or arising: (i) accounts, (ii) accounts receivable incurred in the ordinary course of business, including without limitation, all rights to payment created by or arising from sales of goods, leases of goods or the rendition of services no matter how evidenced, whether or not earned by performance, (iii) all rights to any goods or merchandise represented by any of the foregoing after creation of the foregoing, including, without limitation, returned or repossessed goods, (iv) all reserves and credit balances with respect to any such accounts receivable or account debtors, (v) all letters of credit, security, or guarantees for any of the foregoing, (vi) all insurance policies or reports relating to any of the foregoing, (vii) all collection or deposit accounts relating to any of the foregoing, (viii) all proceeds of the foregoing and (ix) all books and records relating to any of the foregoing. "Registration Rights Agreement" means the Registration Rights Agreement, dated as of the date hereof, by and among the Company, the Subsidiary Guarantors and the Initial Purchasers. "Regulation S" means Regulation S promulgated under the Securities Act. "Regulation S Global Notes" means the Regulation S Temporary Global Notes or the Regulation S Permanent Global Notes as applicable. "Regulation S Permanent Global Notes" means the permanent global notes that do not contain the paragraphs referred to in footnote 1 to the form of the Note attached hereto as EXHIBIT A-2, and that are deposited with and registered in the name of the Depositary or its nominee, representing a series of Notes sold in reliance on Regulation S. "Regulation S Temporary Global Notes" means the temporary global notes that contain the paragraphs referred to in footnote 1 to the form of the Note attached hereto as EXHIBIT A-2, and that are deposited with and registered in the name of the Depositary or its nominee, representing a series of Notes sold in reliance on Regulation S. "Related Party" with respect to any Principal means (A) any controlling stockholder or partner, 80% (or more) owned Subsidiary, or spouse or immediate family member (in the case of an individual) of such Principal or (B) any trust, corporation, partnership, limited liability company or other entity, the beneficiaries, stockholders, partners, members, owners or Persons beneficially holding an 80% or more controlling interest of which consist of such Principal and/or such other Persons referred to in the immediately preceding clause (A). "Reorganization Securities" means securities distributed to the Holders of the Notes in an Insolvency or Liquidation Proceeding pursuant to a plan of reorganization consented to by each class of the Senior Debt, but only if all of the terms and conditions of such securities (including, without limitation, term, tenor, interest, amortization, subordination, standstills, 14 23 covenants and defaults), are at least as favorable (and provide the same relative benefits) to the holders of Senior Debt and to the holders of any security distributed in such Insolvency or Liquidation Proceeding on account of any such Senior Debt as the terms and conditions of the Notes and the Indenture are, and provide to the holders of Senior Debt. "Representative" means the trustee, agent or representative for any Senior Debt. "Responsible Officer" when used with respect to the Trustee, means any officer within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other officer of the trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Beneficial Interest" means any beneficial interest of a Participant or Indirect Participant in the Rule 144A Global Note or the Regulation S Global Note. "Restricted Broker Dealer" has the meaning set forth in the Registration Rights Agreement. "Restricted Global Notes" means the Rule 144A Global Notes and the Regulation S Global Notes, all of which shall bear the Private Placement Legend. "Restricted Investment" means an Investment other than a Permitted Investment. "Restricted Subsidiary" of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary. "Rule 144A" means Rule 144A promulgated under the Securities Act. "Rule 144A Global Notes" means the permanent global notes that contain the paragraph referred to in footnote 1 and the additional schedule referred to in footnote 3 to the form of the Note attached hereto as EXHIBIT A-1, and that is deposited with and registered in the name of the Depositary or its nominee, representing a series of Notes sold in reliance on Rule 144A. "Securities Act" means the Securities Act of 1933, as amended. "Senior Debt" means (i) all Indebtedness outstanding under the New Credit Facility, including any Guarantees thereof and all Hedging Obligations with respect thereto, (ii) any other Indebtedness permitted to be incurred by the Company or its Restricted Subsidiaries under the terms of the Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the Notes and (iii) all Obligations with respect to the foregoing. Notwithstanding anything to the contrary in the foregoing, Senior Debt will not include (w) any liability for federal, state, local or other taxes owed or owing by the Company, (x) any Indebtedness of the Company to any of its 15 24 Subsidiaries or other Affiliates, (y) any trade payables or (z) any Indebtedness that is incurred in violation of the Indenture. "Senior Subordinated Notes" means the Company's 9 1/4% Senior Subordinated Notes due 2008. "Shelf Registration Statement" means the Shelf Registration Statement as defined in the Registration Rights Agreement. "Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date hereof. "Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof. "Subsidiary" means, with respect to any Person, (i) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof) and (ii) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof). "Subsidiary Guarantors" means all Subsidiaries of the Company that execute a Note Guarantee of the Notes substantially in the form of EXHIBIT D attached hereto. "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb), as amended, as in effect on the date hereof. "Transfer Restricted Securities" means Notes or beneficial interests therein that bear or are required to bear the Private Placement Legend. "Trustee" means State Street Bank and Trust Company until a successor replaces it in accordance with the applicable provisions of this Indenture, and thereafter means the successor. "Unrestricted Global Notes" means one or more Global Notes that do not and are not required to bear the Private Placement Legend. "Unrestricted Subsidiary" means (i) any Subsidiary that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution; but only to the 16 25 extent that such Subsidiary: (a) has no Indebtedness other than Non-Recourse Debt; (b) is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company; (c) is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (x) to subscribe for additional Equity Interests or (y) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results; (d) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries; and (e) has at least one director on its board of directors that is not a director or executive officer of the Company or any of its Restricted Subsidiaries and has at least one executive officer that is not a director or executive officer of the Company or any of its Restricted Subsidiaries. Any such designation by the Board of Directors shall be evidenced to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing conditions and was permitted by Section 4.7 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under Section 4.9 hereof, the Company shall be in default of such covenant). The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if (i) such Indebtedness is permitted under Section 4.9 hereof, and (ii) no Default or Event of Default would be in existence following such designation. "Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person. "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing (i) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by (ii) the then outstanding principal amount of such Indebtedness. "Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person and one or more Wholly Owned Subsidiaries of such Person. 17 26 Section 1.2. Other Definitions. Defined in Term Section "Affiliate Transaction".............................4.11 "Asset Sale Offer"..................................4.10 "Change of Control Offer"...........................4.14 "Change of Control Payment".........................4.14 "Change of Control Payment Date"....................4.14 "Covenant Defeasance"................................8.3 "Custodian"..........................................6.1 "DTC"................................................2.3 "Event of Default"...................................6.1 "Excess Proceeds"...................................4.10 "incur"..............................................4.9 "Legal Defeasance"...................................8.2 "Offer Amount".......................................3.9 "Offer Period".......................................3.9 "Paying Agent".......................................2.3 "Payment Default"....................................6.1 "Permitted Debt".....................................4.9 "Purchase Date"......................................3.9 "Registrar"..........................................2.3 "Repurchase Offer"...................................3.9 "Restricted Payments"................................4.7 Section 1.3. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in, and made a part of, this Indenture. The following TIA terms used in this Indenture have the following meanings: "indenture securities" means the Notes; "indenture security holder" means a Holder of a Note; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; "obligor" on the Notes means the Company, each Subsidiary Guarantor and any successor obligor upon the Notes. 18 27 All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by the Commission rule under the TIA have the meanings so assigned to them therein. Section 1.4. Rules of Construction. Unless the context otherwise requires: (1) term has the meaning assigned to it herein; (2) an accounting term not otherwise defined herein has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) words in the singular include the plural, and in the plural include the singular; (5) provisions apply to successive events and transactions; and (6) references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the Commission from time to time. ARTICLE 2. THE NOTES Section 2.1. Form and Dating. The Notes and the Trustee's certificate of authentication shall be substantially in the form of EXHIBIT A-1 or EXHIBIT A-2 attached hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note shall be dated the date of its authentication. The Notes initially shall be issued in denominations of $1,000 and integral multiples thereof. The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Company, the Subsidiary Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. (a) Global Notes. Notes offered and sold to QIBs in reliance on Rule 144A shall be issued initially in the form of Rule 144A Global Notes, which shall be deposited on behalf of the purchasers of the Notes represented thereby with a custodian of the Depositary, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the Rule 144A Global Notes may from time to time be increased or decreased by 19 28 adjustments made on the records of the Trustee and the Depositary or its nominee as hereinafter provided. Notes offered and sold in reliance on Regulation S shall be issued initially in the form of the Regulation S Temporary Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee, as custodian for the Depositary, and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Cedel, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The "40-day restricted period" (as defined in Regulation S) shall be terminated upon the receipt by the Trustee of (i) a written certificate from the Depositary, together with copies of certificates from Euroclear and Cedel certifying that they have received certification of non-United States beneficial ownership of 100% of the aggregate principal amount of the Regulation S Temporary Global Notes (except to the extent of any beneficial owners thereof who acquired an interest therein pursuant to another exemption from registration under the Securities Act and who will take delivery of a beneficial ownership interest in a Rule 144A Global Note, all as contemplated by Section 2.6(a)(ii) hereof), and (ii) an Officers' Certificate from the Company certifying as to the same matters covered in clause (i) above. Following the termination of the 40-day restricted period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in Regulation S Permanent Global Notes pursuant to the Applicable Procedures. Simultaneously with the authentication of Regulation S Permanent Global Notes, the Trustee shall cancel the Regulation S Temporary Global Notes. The aggregate principal amount of the Regulation S Temporary Global Notes and the Regulation S Permanent Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided. Each Global Note shall represent such of the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate amount of outstanding Notes from time to time endorsed thereon and that the aggregate amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges, redemptions and transfers of interests. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Note Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.6 hereof. The provisions of the "Operating Procedures of the Euroclear System" and "Terms and Conditions Governing Use of Euroclear" and the "Management Regulations" and "Instructions to Participants" of Cedel shall be applicable to interests in the Regulation S Temporary Global Notes and the Regulation S Permanent Global Notes that are held by Participants through Euroclear or Cedel. The Trustee shall have no obligation to notify Holders of any such procedures or to monitor or enforce compliance with the same. 20 29 Except as set forth in Section 2.6 hereof, the Global Notes may be transferred, in whole and not in part, only to another nominee of the Depositary or to a successor of the Depositary or its nominee. (b) Book-Entry Provisions. This Section 2.1(b) shall apply only to Rule 144A Global Notes and Regulation S Permanent Global Notes deposited with or on behalf of the Depositary. The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b), authenticate and deliver the Global Notes that (i) shall be registered in the name of the Depositary or the nominee of the Depositary and (ii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary's instructions or held by the Trustee as custodian for the Depositary. Participants shall have no rights either under this Indenture with respect to any Global Note held on their behalf by the Depositary or by the Note Custodian as custodian for the Depositary or under such Global Note, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Participants, the operation of customary practices of such Depositary governing the exercise of the rights of an owner of a beneficial interest in any Global Note. (c) Definitive Notes. Notes issued in certificated form shall be substantially in the form of EXHIBIT A-1 attached hereto (but without including the text referred to in footnotes 1 and 3 thereto). Section 2.2. Execution and Authentication. An Officer shall sign the Notes for the Company by manual or facsimile signature. If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid. A Note shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture. The form of Trustee's certificate of authentication to be borne by the Notes shall be substantially as set forth in EXHIBIT A-1 or EXHIBIT A-2 hereto. The Trustee shall, upon a written order of the Company signed by an Officer directing the Trustee to authenticate the Notes, authenticate Notes for original issue up to the aggregate principal amount stated in paragraph 4 of the Notes. The Trustee shall, upon written order of the Company signed by an Officer, authenticate New Senior Subordinated Notes for 21 30 original issuance in exchange for a like principal amount of Senior Subordinated Notes exchanged in the Exchange Offer or otherwise exchanged for New Senior Subordinated Notes pursuant to the terms of the Registration Rights Agreement. The aggregate principal amount of Notes outstanding at any time may not exceed such amount except as provided in Section 2.7 hereof. The Trustee may (at the Company's expense) appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate of the Company. Section 2.3. Registrar and Paying Agent. The Company shall maintain (i) an office or agency where Notes may be presented for registration of transfer or for exchange ("Registrar") and (ii) an office or agency where Notes may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more additional paying agents. The term "Paying Agent" includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar. The Company initially appoints The Depository Trust Company ("DTC") to act as Depositary with respect to the Global Notes. The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Note Custodian with respect to the Global Notes. The Company initially appoints the Trustee to act as the Registrar and Paying Agent with respect to the Definitive Notes. Section 2.4. Paying Agent to Hold Money in Trust. The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium or Liquidated Damages, if any, or interest on the Notes, and shall notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon the 22 31 occurrence of events specified in Section 6.1(vii) through (ix) hereof, the Trustee shall serve as Paying Agent for the Notes. Section 2.5. Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is not the Registrar, the Company and/or the Subsidiary Guarantors shall furnish to the Trustee at least seven (7) Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Company and the Subsidiary Guarantors shall otherwise comply with TIA ss. 312(a). Section 2.6. Transfer and Exchange. (a) Transfer and Exchange of Global Notes. The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depositary, in accordance with this Indenture and the procedures of the Depositary therefor, which shall include restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Beneficial interests in a Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Global Note in accordance with the transfer restrictions set forth in the legend in subsection (g) of this Section 2.6. Transfers of beneficial interests in the Global Notes to Persons required to take delivery thereof in the form of an interest in another Global Note shall be permitted as follows: (i) Rule 144A Global Note to Regulation S Global Note. If, at any time, an owner of a beneficial interest in a Rule 144A Global Note deposited with the Depositary (or the Trustee as custodian for the Depositary) wishes to transfer its beneficial interest in such Rule 144A Global Note to a Person who is required or permitted to take delivery thereof in the form of an interest in a Regulation S Global Note, such owner shall, subject to the Applicable Procedures, exchange or cause the exchange of such interest for an equivalent beneficial interest in a Regulation S Global Note as provided in this Section 2.6(a)(i). Upon receipt by the Trustee of (1) instructions given in accordance with the Applicable Procedures from a Participant directing the Trustee to credit or cause to be credited a beneficial interest in the Regulation S Global Note in an amount equal to the beneficial interest in the Rule 144A Global Note to be exchanged, (2) a written order given in accordance with the Applicable Procedures containing information regarding the Participant account of the Depositary and the Euroclear or Cedel account to be credited with such increase, and (3) a certificate in the form of EXHIBIT B-1 hereto given by the owner of such beneficial interest stating that the transfer of such interest has been made in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with Rule 903 or Rule 904 of Regulation S, then the Trustee, as Registrar, shall instruct the Depositary to reduce or cause to be reduced the aggregate principal amount at maturity of the applicable Rule 144A Global Note and to increase or cause to be increased the aggregate principal amount at maturity of the applicable Regulation S Global Note by the 23 32 principal amount at maturity of the beneficial interest in the Rule 144A Global Note to be exchanged or transferred, to credit or cause to be credited to the account of the Person specified in such instructions, a beneficial interest in the Regulation S Global Note equal to the reduction in the aggregate principal amount at maturity of the Rule 144A Global Note, and to debit, or cause to be debited, from the account of the Person making such exchange or transfer the beneficial interest in the Rule 144A Global Note that is being exchanged or transferred. (ii) Regulation S Global Note to Rule 144A Global Note. If, at any time, after the expiration of the 40-day restricted period, an owner of a beneficial interest in a Regulation S Global Note deposited with the Depositary or with the Trustee as custodian for the Depositary wishes to transfer its beneficial interest in such Regulation S Global Note to a Person who is required or permitted to take delivery thereof in the form of an interest in a Rule 144A Global Note, such owner shall, subject to the Applicable Procedures, exchange or cause the exchange of such interest for an equivalent beneficial interest in a Rule 144A Global Note as provided in this Section 2.6(a)(ii). Upon receipt by the Trustee of (1) instructions from Euroclear or Cedel, if applicable, and the Depositary, directing the Trustee, as Registrar, to credit or cause to be credited a beneficial interest in the Rule 144A Global Note equal to the beneficial interest in the Regulation S Global Note to be exchanged, such instructions to contain information regarding the Participant account with the Depositary to be credited with such increase, (2) a written order given in accordance with the Applicable Procedures containing information regarding the participant account of the Depositary and (3) a certificate in the form of Exhibit B-2 attached hereto given by the owner of such beneficial interest stating (A) if the transfer is pursuant to Rule 144A, that the Person transferring such interest in a Regulation S Global Note reasonably believes that the Person acquiring such interest in a Rule 144A Global Note is a QIB and is obtaining such beneficial interest in a transaction meeting the requirements of Rule 144A and any applicable blue sky or securities laws of any state of the United States, (B) that the transfer complies with the requirements of Rule 144 under the Securities Act, (C) if the transfer is to an Institutional Accredited Investor that such transfer is in compliance with the Securities Act and a certificate in the form of Exhibit C attached hereto and, if such transfer is in respect of an aggregate principal amount of less than $250,000, an Opinion of Counsel acceptable to the Company that such transfer is in compliance with the Securities Act or (D) if the transfer is pursuant to any other exemption from the registration requirements of the Securities Act, that the transfer of such interest has been made in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the requirements of the exemption claimed, such statement to be supported by an Opinion of Counsel from the transferee or the transferor in form reasonably acceptable to the Company and to the Registrar and in each case, in accordance with any applicable securities laws of any state of the United States or any other applicable jurisdiction, then the Trustee, as Registrar, shall instruct the Depositary to reduce or cause to be reduced the aggregate principal amount at maturity of such Regulation S Global Note and to increase or cause to be increased the aggregate principal amount at maturity of the applicable Rule 144A Global Note by the principal amount at maturity of the beneficial interest in the Regulation S Global Note to be exchanged or transferred, and the Trustee, as Registrar, shall instruct the Depositary, concurrently with such reduction, to credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the applicable Rule 144A Global Note equal to the reduction in the aggregate principal amount at maturity of 24 33 such Regulation S Global Note and to debit or cause to be debited from the account of the Person making such transfer the beneficial interest in the Regulation S Global Note that is being exchanged or transferred. (b) Transfer and Exchange of Definitive Notes. When Definitive Notes are presented by a Holder to the Registrar with a request to register the transfer of the Definitive Notes or to exchange such Definitive Notes for an equal principal amount of Definitive Notes of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested only if the Definitive Notes are presented or surrendered for registration of transfer or exchange, are endorsed and contain a signature guarantee or accompanied by a written instrument of transfer in form satisfactory to the Registrar duly executed by such Holder or by his attorney and contains a signature guarantee, duly authorized in writing and the Registrar received the following documentation (all of which may be submitted by facsimile): (i) in the case of Definitive Notes that are Transfer Restricted Securities, such request shall be accompanied by the following additional information and documents, as applicable: (A) if such Transfer Restricted Security is being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, or such Transfer Restricted Security is being transferred to the Company or any of its Subsidiaries, a certification to that effect from such Holder (in substantially the form of Exhibit B-3 hereto); or (B) if such Transfer Restricted Security is being transferred to a QIB in accordance with Rule 144A under the Securities Act or pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act or pursuant to an effective registration statement under the Securities Act, a certification to that effect from such Holder (in substantially the form of EXHIBIT B-3 hereto); or (C) if such Transfer Restricted Security is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 904 under the Securities Act, a certification to that effect from such Holder (in substantially the form of EXHIBIT B-3 hereto); (D) if such Transfer Restricted Security is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) and (C) above, a certification to that effect from such Holder (in substantially the form of EXHIBIT B-3 hereto), a certification substantially in the form of EXHIBIT C hereto, and, if such transfer is in respect of an aggregate principal amount of Notes of less than $250,000, an Opinion of Counsel acceptable to the Company that such transfer is in compliance with the Securities Act; or (E) if such Transfer Restricted Security is being transferred in reliance on any other exemption from the registration requirements of the Securities Act, a certification to that effect from such Holder (in substantially the form of EXHIBIT B-3 hereto) and 25 34 an Opinion of Counsel from such Holder or the transferee reasonably acceptable to the Company and to the Registrar to the effect that such transfer is in compliance with the Securities Act. (c) Transfer of a Beneficial Interest in a Rule 144A Global Note or Regulation S Permanent Global Note for a Definitive Note. (i) Any Person having a beneficial interest in a Rule 144A Global Note or Regulation S Permanent Global Note may upon request, subject to the Applicable Procedures, exchange such beneficial interest for a Definitive Note. Upon receipt by the Trustee of written instructions or such other form of instructions as is customary for the Depositary (or Euroclear or Cedel, if applicable), from the Depositary or its nominee on behalf of any Person having a beneficial interest in a Rule 144A Global Note or Regulation S Permanent Global Note, and, in the case of a Transfer Restricted Security, the following additional information and documents (all of which may be submitted by facsimile): (A) if such beneficial interest is being transferred to the Person designated by the Depositary as being the beneficial owner, a certification to that effect from such Person (in substantially the form of EXHIBIT B-4 hereto); (B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act or pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act or pursuant to an effective registration statement under the Securities Act, a certification to that effect from the transferor (in substantially the form of EXHIBIT B-4 hereto); (C) if such beneficial interest is being transferred to an Institutional Accredited Investor, pursuant to a private placement exemption from the registration requirements of the Securities Act (and based on an opinion of counsel if the Company so requests), a certification to that effect from such Holder (in substantially the form of EXHIBIT B-4 hereto) and a certificate from the applicable transferee (in substantially the form of EXHIBIT C hereto); or (D) if such beneficial interest is being transferred in reliance on any other exemption from the registration requirements of the Securities Act, a certification to that effect from the transferor (in substantially the form of EXHIBIT B-4 hereto) and an Opinion of Counsel from the transferee or the transferor reasonably acceptable to the Company and to the Registrar to the effect that such transfer is in compliance with the Securities Act, in which case the Trustee or the Note Custodian, at the direction of the Trustee, shall, in accordance with the standing instructions and procedures existing between the Depositary and the Note Custodian, cause the aggregate principal amount of Rule 144A Global Notes or Regulation S Permanent Global Notes, as applicable, to be reduced accordingly and, following such reduction, the Company shall execute and, the Trustee shall authenticate and deliver to the transferee a Definitive Note in the appropriate principal amount. (ii) Definitive Notes issued in exchange for a beneficial interest in a Rule 144A Global Note or Regulation S Permanent Global Note, as applicable, pursuant to this 26 35 Section 2.6(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or Indirect Participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Following any such issuance of Definitive Notes, the Trustee, as Registrar, shall instruct the Depositary to reduce or cause to be reduced the aggregate principal amount at maturity of the applicable Global Note to reflect the transfer. (d) Restrictions on Transfer and Exchange of Global Notes. Notwithstanding any other provision of this Indenture (other than the provisions set forth in subsection (f) of this Section 2.6), a Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. (e) Transfer and Exchange of a Definitive Note for a Beneficial Interest in a Global Note. A definitive Note may not be transferred or exchanged for a beneficial interest in a Global Note. (f) Authentication of Definitive Notes in Absence of Depositary. If at any time: (i) the Depositary for the Notes notifies the Company that the Depositary is unwilling or unable to continue as Depositary for the Global Notes and a successor Depositary for the Global Notes is not appointed by the Company within 90 days after delivery of such notice; or (ii) the Company, at its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of Definitive Notes under this Indenture, then the Company shall execute, and the Trustee shall, upon receipt of an authentication order in accordance with Section 2.2 hereof, authenticate and deliver, Definitive Notes in an aggregate principal amount equal to the principal amount of the Global Notes in exchange for such Global Notes. (g) Legends. (i) Except as permitted by the following paragraphs (ii), (iii) and (iv), each Note certificate evidencing Global Notes and Definitive Notes (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend (the "Private Placement Legend") in substantially the following form: "THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY 27 36 EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (l)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR"), THAT PRIOR TO SUCH TRANSFER, FURNISHED THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND, IN THE CASE OF CLAUSE (b), (c), (d) OR (e), BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY 28 37 EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE." (ii) Upon any sale or transfer of a Transfer Restricted Security (including any Transfer Restricted Security represented by a Global Note) pursuant to Rule 144 under the Securities Act or pursuant to an effective registration statement under the Securities Act: (A) in the case of any Transfer Restricted Security that is a Definitive Note, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Security for a Definitive Note that does not bear the legend set forth in (i) above and rescind any restriction on the transfer of such Transfer Restricted Security upon receipt of a certification from the transferring holder substantially in the form of EXHIBIT B-4 hereto; and (B) in the case of any Transfer Restricted Security represented by a Global Note, such Transfer Restricted Security shall not be required to bear the legend set forth in (i) above, but shall continue to be subject to the provisions of Section 2.6(a) and (b) hereof; provided, however, that with respect to any request for an exchange of a Transfer Restricted Security that is represented by a Global Note for a Definitive Note that does not bear the legend set forth in (i) above, which request is made in reliance upon Rule 144, the Holder thereof shall certify in writing to the Registrar that such request is being made pursuant to Rule 144 (such certification to be substantially in the form of EXHIBIT B-4 hereto). (iii) Upon any sale or transfer of a Transfer Restricted Security (including any Transfer Restricted Security represented by a Global Note) in reliance on any exemption from the registration requirements of the Securities Act (other than exemptions pursuant to Rule 144A or Rule 144 under the Securities Act) in which the Holder or the transferee provides an Opinion of Counsel to the Company and the Registrar in form and substance reasonably acceptable to the Company and the Registrar (which Opinion of Counsel shall also state that the transfer restrictions contained in the legend are no longer applicable): (A) in the case of any Transfer Restricted Security that is a Definitive Note, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Security for a Definitive Note that does not bear the legend set forth in (i) above and rescind any restriction on the transfer of such Transfer Restricted Security; and (B) in the case of any Transfer Restricted Security represented by a Global Note, such Transfer Restricted Security shall not be required to bear the legend set forth in (i) above, but shall continue to be subject to the provisions of Section 2.6(a) and (b) hereof. (iv) Notwithstanding the foregoing, upon the consummation of the Exchange Offer in accordance with the Registration Rights Agreement, the Company shall issue and, upon receipt of an authentication order in accordance with Section 2.2 hereof, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in aggregate principal amount equal to the principal amount of the Restricted Beneficial Interests tendered for acceptance by persons 29 38 that are not (x) broker-dealers, (y) Persons participating in the distribution of the Notes or (z) Persons who are affiliates (as defined in Rule 144) of the Company and accepted for exchange in the Exchange Offer and (ii) Definitive Notes that do not bear the Private Placement Legend in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly and the Company shall execute and the Trustee shall authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted Definitive Notes in the appropriate principal amount. (h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in Global Notes have been exchanged for Definitive Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned to or retained and cancelled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for Definitive Notes, redeemed, repurchased or cancelled, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note, by the Trustee or the Notes Custodian, at the direction of the Trustee, to reflect such reduction. (i) General Provisions Relating to Transfers and Exchanges. (i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes at the Registrar's request. (ii) No service charge shall be made to a Holder for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any stamp or transfer tax or similar governmental charge payable in connection therewith (other than any such stamp or transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.6, 4.10, 4.14 and 9.5 hereto). (iii) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange. (iv) The Registrar shall not be required:(A) to issue, to register the transfer of or to exchange Notes during a period beginning at the opening of fifteen (15) Business Days before the day of any selection of Notes for redemption under Section 3.2 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part, or (C) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date. (v) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name 30 39 any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and neither the Trustee, any Agent nor the Company shall be affected by notice to the contrary. (vi) The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.2 hereof. Section 2.7. Replacement Notes. If any mutilated Note is surrendered to the Trustee, or the Company and the Trustee receives evidence to their satisfaction of the destruction, loss or theft of any Note, the Company shall issue and the Trustee, upon the written order of the Company signed by an Officer of the Company, shall authenticate a replacement Note if the Trustee's requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company and the Trustee may charge for their expenses in replacing a Note. Every replacement Note is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder. Section 2.8. Outstanding Notes. The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.8 as not outstanding. Except as set forth in Section 2.9 hereof, a Note does not cease to be outstanding because the Company or any Subsidiary Guarantor or an Affiliate of the Company or any Subsidiary Guarantor holds the Note. If a Note is replaced pursuant to Section 2.7 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser. If the principal amount of any Note is considered paid under Section 4.1 hereof, it ceases to be outstanding and interest on it ceases to accrue. If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest. 31 40 Section 2.9. Treasury Notes. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company or any Subsidiary Guarantor, or by any Affiliate of the Company or any Subsidiary Guarantor shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes shown on the Trustee's register as being so owned shall be so disregarded. Notwithstanding the foregoing, Notes that are to be acquired by the Company or any Subsidiary Guarantor or an Affiliate of the Company or any Subsidiary Guarantor pursuant to an exchange offer, tender offer or other agreement shall not be deemed to be owned by such entity until legal title to such Notes passes to such entity. Section 2.10. Temporary Notes. Until Definitive Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes upon a written order of the Company signed by an Officer of the Company. Temporary Notes shall be substantially in the form of Definitive Notes but may have variations that the Company considers appropriate for temporary Notes. Without unreasonable delay, the Company shall prepare and the Trustee shall upon receipt of a written order of the Company signed by an Officer authenticate Definitive Notes in exchange for temporary Notes. Holders of temporary Notes shall be entitled to all of the benefits of this Indenture. Section 2.11. Cancellation. The Company at any time may deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder or which the Company may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly cancelled by the Trustee. All Notes surrendered for registration of transfer, exchange or payment, if surrendered to any Person other than the Trustee, shall be delivered to the Trustee. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation. Subject to Section 2.7 hereof, the Company may not issue new Notes to replace Notes that it has redeemed or paid or that have been delivered to the Trustee for cancellation. All cancelled Notes held by the Trustee shall be destroyed and certification of their destruction delivered to the Company, unless by a written order, signed by an Officer of the Company, the Company shall direct that cancelled Notes be returned to it. Section 2.12. Defaulted Interest. If the Company or any Subsidiary Guarantor defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, which date shall be at the earliest practicable date but in all events at least five (5) 32 41 Business Days prior to the payment date, in each case at the rate provided in the Notes and in Section 4.1 hereof. The Company shall fix or cause to be fixed each such special record date and payment date, and shall promptly thereafter, notify the Trustee of any such date. At least fifteen (15) days before the special record date, the Company (or the Trustee, in the name and at the expense of the Company) shall mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid. Section 2.13. Record Date. The record date for purposes of determining the identity of Holders of the Notes entitled to vote or consent to any action by vote or consent authorized or permitted under this Indenture shall be determined as provided for in TIA ss. 316 (c). Section 2.14. Computation of Interest. Interest on the Notes shall be computed on the basis of a 360-day year comprised of twelve 30-day months. Section 2.15. CUSIP Number. The Company in issuing the Notes may use a "CUSIP" number, and if it does so, the Trustee shall use the CUSIP number in notices of redemption or exchange as a convenience to Holders, provided that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed in the notice or on the Notes and that reliance may be placed only on the other identification numbers printed on the Notes. The Company shall promptly notify the Trustee of any change in the CUSIP number. ARTICLE 3. REDEMPTION AND PREPAYMENT Section 3.1. Notices to Trustee. If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.7 hereof, it shall furnish to the Trustee, at least 45 days but not more than 60 days before a redemption date (unless a shorter period is acceptable to the Trustee) an Officers' Certificate setting forth (i) the Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price. If the Company is required to make an offer to purchase Notes pursuant to Section 4.10 or 4.14 hereof, it shall furnish to the Trustee, at least 45 days before the scheduled purchase date, an Officers' Certificate setting forth (i) the section of this Indenture pursuant to which the offer to purchase shall occur, (ii) the terms of the offer, (iii) the principal amount of Notes to be purchased, (iv) the purchase price, (v) the purchase date and (vi) and further setting forth a statement to the effect that (a) the Company or one its Subsidiaries has affected an Asset Sale 33 42 and there are Excess Proceeds aggregating more than $15.0 million or (b) a Change of Control has occurred, as applicable. Section 3.2. Selection of Notes to be Redeemed or Purchased. If less than all of the Notes are to be redeemed at any time, selection of Notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed, or, if the Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided that no Notes of $1,000 or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered address. Notices of redemption may not be conditional. If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption. Section 3.3. Notice of Redemption. At least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed. The notice shall identify the Notes to be redeemed and shall state: (1) the redemption date; (2) the redemption price for the Notes and accrued interest, and Liquidated Damages, if any; (3) if any Note is being redeemed in part, the portion of the principal amount of such Notes to be redeemed and that, after the redemption date, upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion shall be issued upon surrender of the original Note; (4) the name and address of the Paying Agent; (5) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; (6) that, unless the Company defaults in making such redemption payment, interest and Liquidated Damages, if any, on Notes called for redemption ceases to accrue on and after the redemption date; 34 43 (7) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and (8) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense; provided, however, that the Company shall have delivered to the Trustee, at least 45 days prior to the redemption date (or such shorter period as shall be acceptable to the Trustee), an Officers' Certificate requesting that the Trustee give such notice and setting forth the information to be stated in the notice as provided in the preceding paragraph. The notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the Holder of any Note shall not affect the validity of the proceeding for the redemption of any other Note. Section 3.4. Effect of Notice of Redemption. Once notice of redemption is mailed in accordance with Section 3.3 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price plus accrued and unpaid interest and Liquidated Damages, if any, to such date. A notice of redemption may not be conditional. Section 3.5. Deposit of Redemption or Purchase Price. On or before 10:00 a.m. (New York City time) on each redemption date or the date on which Notes must be accepted for purchase pursuant to Section 4.10 or 4.14, the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price of and accrued and unpaid interest and Liquidated Damages, if any, on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent shall promptly return to the Company upon its written request any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of (including any applicable premium), accrued interest and Liquidated Damages, if any, on all Notes to be redeemed or purchased. If Notes called for redemption or tendered in an Asset Sale Offer or Change of Control Offer are paid or if the Company has deposited with the Trustee or Paying Agent money sufficient to pay the redemption or purchase price of, unpaid and accrued interest and Liquidated Damages, if any, on all Notes to be redeemed or purchased, on and after the redemption or purchase date interest and Liquidated Damages, if any, shall cease to accrue on the Notes or the portions of Notes called for redemption or tendered and not withdrawn in an Asset Sale Offer or Change of Control Offer (regardless of whether certificates for such securities are actually surrendered). If a Note is redeemed or purchased on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest and Liquidated Damages, if any, shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption shall not be so paid upon 35 44 surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal and Liquidated Damages, if any, from the redemption or purchase date until such principal and Liquidated Dames, if any, is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case, at the rate provided in the Notes and in Section 4.1 hereof. Section 3.6. Notes Redeemed in Part. Upon surrender of a Note that is redeemed in part, the Company shall issue and, upon the Company's written request, the Trustee shall authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed portion of the Note surrendered. Section 3.7. Optional Redemption. (a) Except as set forth in the next paragraph, the Notes will not be redeemable at the Company's option prior to March , 2003. Thereafter, the Notes will be subject to redemption at any time at the option of the Company, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on the years indicated below:
Year Percentage 2003..................................... 104.625% 2004..................................... 103.083% 2005..................................... 101.542% 2006 and thereafter...................... 100.000%
(b) Notwithstanding the foregoing, at any time prior to March 15, 2001, the Company may redeem up to 35% of the original aggregate principal amount of Notes at a redemption price of 109.25% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the redemption date, with the net cash proceeds of a Public Equity Offering; provided that at least 65% of the original aggregate principal amount of Notes remains outstanding immediately after the occurrence of such redemption; and provided, further, that such redemption shall occur within 45 days of the date of the closing of such Public Equity Offering. Section 3.8. Mandatory Redemption. Except as set forth under Sections 3.9, 4.10 and 4.14 hereof, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes. 36 45 Section 3.9. Repurchase Offers. In the event that the Company shall be required to commence an offer to all Holders to repurchase Notes (a "Repurchase Offer") pursuant to Section 4.10 hereof, an "Excess Proceeds Offer," or pursuant to Section 4.14 hereof, a "Change of Control Offer," the Company shall follow the procedures specified below. A Repurchase Offer shall commence no earlier than 30 days and no later than 60 days after a Change of Control (unless the Company is not required to make such offer pursuant to Section 4.14(c) hereof) or an Excess Proceeds Offer Triggering Event (as defined below), as the case may be, and remain open for a period of twenty (20) Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the "Offer Period"). No later than five (5) Business Days after the termination of the Offer Period (the "Purchase Date"), the Company shall purchase the principal amount of Notes required to be purchased pursuant to Section 4.10 hereof, in the case of an Excess Proceeds Offer, or 4.14 hereof, in the case of a Change of Control Offer (the "Offer Amount") or, if less than the Offer Amount has been tendered, all Notes tendered in response to the Repurchase Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made. If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest and Liquidated Damages, if any, shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest or Liquidated Damages, if any, shall be payable to Holders who tender Notes pursuant to the Repurchase Offer. Upon the commencement of a Repurchase Offer, the Company shall send, by first class mail, a notice to the Trustee and each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to such Repurchase Offer. The Repurchase Offer shall be made to all Holders. The notice, which shall govern the terms of the Repurchase Offer, shall describe the transaction or transactions that constitute the Change of Control or Excess Proceeds Offer Triggering Event, as the case may be and shall state: (a) that the Repurchase Offer is being made pursuant to this Section 3.9 and Section 4.10 or 4.14 hereof, as the case may be, and the length of time the Repurchase Offer shall remain open; (b) the Offer Amount, the purchase price and the Purchase Date; (c) that any Note not tendered or accepted for payment shall continue to accrue interest; (d) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Repurchase Offer shall cease to accrue interest and Liquidated Damages, if any, after the Purchase Date; 37 46 (e) that Holders electing to have a Note purchased pursuant to a Repurchase Offer shall be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note, duly completed, or transfer by book-entry transfer, to the Company, the Depositary, or the Paying Agent at the address specified in the notice not later than the close of business on the last day of the Offer Period; (f) that Holders shall be entitled to withdraw their election if the Company, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; (g) that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Offer Amount, the Company shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased); and (h) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer). On or before 10:00 a.m. (New York City time) on each Purchase Date, the Company shall irrevocably deposit with the Trustee or Paying Agent in immediately available funds the aggregate purchase price with respect to a principal amount of Notes equal to the Offer Amount, together with accrued and unpaid interest and Liquidated Damages, if any, thereon, to be held for payment in accordance with the terms of this Section 3.9. On the Purchase Date, the Company shall, to the extent lawful, (i) accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Repurchase Offer, or if less than the Offer Amount has been tendered, all Notes tendered, (ii) deliver or cause the Paying Agent or depository, as the case may be, to deliver to the Trustee Notes so accepted and (iii) deliver to the Trustee an Officers' Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.9. The Company, the Depositary or the Paying Agent, as the case may be, shall promptly (but in any case not later than three (3) Business Days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, plus any accrued and unpaid interest and Liquidated Damages, if any, thereon, and the Company shall promptly issue a new Note, and the Trustee, shall authenticate and mail or deliver such new Note, to such Holder, equal in principal amount to any unpurchased portion of such Holder's Notes surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce in a newspaper of general circulation or in a press release provided to a nationally recognized financial wire service the results of the Repurchase Offer on the Purchase Date. 38 47 Other than as specifically provided in this Section 3.9, any purchase pursuant to this Section 3.9 shall be made pursuant to the provisions of Sections 3.1, 3.2, 3.5 and 3.6 hereof. ARTICLE 4. COVENANTS Section 4.1. Payment of Notes. The Company shall pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes. The Company shall pay all Liquidated Damages, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement. Principal, premium and Liquidated Damages, if any, and interest, shall be considered paid for all purposes hereunder on the date the Paying Agent if other than the Company or a Subsidiary thereof holds, as of 10:00 a.m. (New York City time) money deposited by the Company in immediately available funds and designated for and sufficient to pay all such principal, premium and Liquidated Damages, if any, and interest, then due. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful, it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages (without regard to any applicable grace period) at the same rate to the extent lawful. Section 4.2. Maintenance of Office or Agency. The Company shall maintain in the Borough of Manhattan, the City of New York an office or agency (which may be an office of the Trustee or an affiliate of the Trustee or Registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, the City of New York for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.3 hereof. 39 48 Section 4.3. Commission Reports. From and after the earlier of the effective date of the Exchange Offer Registration Statement or the effective date of the Shelf Registration Statement, whether or not required by the rules and regulations of the Commission, so long as any Notes are outstanding, the Company shall furnish to the Holders of Notes (i) all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report thereon by the Company's certified independent accountants and (ii) all current reports that would be required to be filed with the Commission on Form 8-K if the Company were required to file such reports. In addition, whether or not required by the rules and regulations of the Commission, the Company shall file a copy of all such information and reports with the Commission for public availability (unless the Commission will not accept such a filing) within the time periods that would have been applicable had the Company been subject to such rules and regulations and make such information available to securities analysts and prospective investors upon request. In addition, the Company has agreed that, for so long as any Notes remain outstanding, it shall furnish to the Holders, to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. The Company shall at all times comply with TIA ss. 314(a). The financial information to be distributed to Holders of Notes shall be filed with the Trustee and mailed to the Holders at their addresses appearing in the register of Notes maintained by the Registrar, within 90 days after the end of the Company's fiscal years and within 45 days after the end of each of the first three quarters of each such fiscal year. The Company shall provide the Trustee with a sufficient number of copies of all reports and other documents and information and, if requested by the Company, the Trustee will deliver such reports to the Holders under this Section 4.3. Section 4.4. Compliance Certificate. The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers' Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether each has kept, observed, performed and fulfilled its obligations under this Indenture (including, with respect to any Restricted Payments made during such year, the basis upon which the calculations required by Section 4.7 hereof were computed, which calculations may be based on the Company's latest available financial statements), and further stating, as to each such Officer signing such certificate, that, to the best of his or her knowledge, each entity has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and 40 49 that, to the best of his or her knowledge, no event has occurred and remains in existence by reason of which payments on account of the principal of, premium or Liquidated Damages, if any, or interest on the Notes is prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto. So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, in connection with the year-end financial statements delivered pursuant to Section 4.3 hereof, the Company shall use its best efforts to deliver a written statement of the Company's independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements, nothing has come to their attention that would lead them to believe that the Company has violated any provisions of Article Four or Section 5.1 hereof or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. In the event that such written statement of the Company's independent public accountants cannot be obtained, the Company shall deliver an Officers' Certificate certifying that it has used its best efforts to obtain such statements and was unable to do so. The Company shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers' Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto. Section 4.5. Taxes. The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency all material taxes, assessments and governmental levies, except such as are contested in good faith and by appropriate proceedings and with respect to which appropriate reserves have been taken in accordance with GAAP. Section 4.6. Stay, Extension and Usury Laws. The Company and each Subsidiary Guarantor covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company and each Subsidiary Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted. 41 50 Section 4.7. Restricted Payments. From and after the date hereof the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make any other payment or distribution on account of the Company's or any of its Restricted Subsidiaries' Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Company) or to the direct or indirect holders of the Company's or any of its Restricted Subsidiaries' Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company); (ii) purchase, redeem or otherwise acquire or retire for value (including without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any direct or indirect parent of the Company; (iii) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is pari passu with or subordinated to the Notes (other than Notes), except a payment of interest or principal at Stated Maturity; or (iv) make any Restricted Investment (all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as "Restricted Payments"), unless, at the time of and after giving effect to such Restricted Payment: (a) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; and (b) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described below under caption "--Incurrence of Indebtedness and Issuance of Preferred Stock"; and (c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Subsidiaries after the date of the Indenture (excluding Restricted Payments permitted by clause (ii) and (iii) of the next succeeding paragraph), is less than the sum of (i) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the date of the Indenture to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus (ii) 100% of the aggregate net cash proceeds received by the Company from the issue or sale since the date of the Indenture of Equity Interests of the Company (other than Disqualified Stock) or of Disqualified Stock or debt securities of the Company that have been converted into such Equity Interests (other than Equity Interests (or Disqualified Stock or convertible debt securities) sold to a Subsidiary of the Company and other than Disqualified Stock or convertible debt securities that have been converted into Disqualified Stock), plus (iii) to the extent that any Restricted Investment that was made after the date of the Indenture is sold for cash or otherwise liquidated or repaid for cash, the lesser of (A) the cash return of capital with 42 51 respect to such Restricted Investment (less the cost of disposition, if any) and (B) the initial amount of such Restricted Investment plus (iv) if any Unrestricted Subsidiary (A) is redesignated as a Restricted Subsidiary, the fair market value of such redesignated Subsidiary (as determined in good faith by the Board of Directors) as of the date of its redesignation or (B) pays any cash dividends or cash distributions to the Company or any of its Restricted Subsidiaries, 50% of any such cash dividends or cash distributions made after the date of the Indenture. The foregoing provisions will not prohibit (i) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the Indenture; (ii) the redemption, repurchase, retirement, defeasance or other acquisition of any pari passu or subordinated Indebtedness or Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale or issuance (other than to a Restricted Subsidiary of the Company) of, other Equity Interests of the Company (other than any Disqualified Stock); (iii) the defeasance, redemption, repurchase or other acquisition of pari passu or subordinated Indebtedness with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness; (iv) the payment of any dividend by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis; (v) Investments in any Person (other than the Company or a Wholly-Owned Restricted Subsidiary) engaged in a Permitted Business in an amount taken together with all other Investments made pursuant to this clause (v) that are at that time outstanding not to exceed $5.0 million; (vi) other Investments in Unrestricted Subsidiaries having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (vi) that are at that time outstanding, not to exceed $2.0 million; (vii) payments to Holdings or Holberg pursuant to the tax sharing agreement among Holberg and other members of the affiliated corporations of which Holberg is the common parent; (viii) the designation of certain of the Company's Subsidiaries as Unrestricted Subsidiaries immediately prior to the date of the Indenture; (ix) the payment of a one-time dividend or distribution by the Company to pay fees, expenses, commissions and discounts in connection with the offering by Holdings of debt securities used to finance the Preferred Stock Contribution; (x) the redemption in connection with the Transactions of the preferred stock of the Company held by Holberg; (xi) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of Holdings or the Company held by any member of Holdings' or the Company's (or any of their Restricted Subsidiaries) management pursuant to any management equity subscription agreement or stock option agreement or in connection with the termination of employment of any employees or management of Holdings or the Company or their Subsidiaries; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $2.0 million in the aggregate plus the aggregate cash proceeds received by Holdings or the Company after the date of the Indenture from any reissuance of Equity Interests by Holdings or the Company to members of management of Holdings or the Company and their Restricted Subsidiaries; and (xii) other Restricted Payments in an aggregate amount not to exceed $10.0 million. The Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such designation would not cause a Default; provided that in no event shall the business currently operated by any Subsidiary Guarantor be transferred to or held by an 43 52 Unrestricted Subsidiary. For purposes of making such determination, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary so designated will be deemed to be Restricted Payments at the time of such designaiion and will reduce the amount available for Restricted Payments under the first paragraph of this covenant. All such outstanding Investments will be deemed to constitute Investments in an amount equal to the fair market value of such Investments at the time of such designation (as determined in good faith by the Board of Directors). Such designation will only be permitted if such Restricted Payment would be permitted at such time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any non-cash Restricted Payment shall be determined in good faith by the Board of Directors whose resolution with respect thereto shall be delivered to the Trustee such determination to be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if such fair market value exceeds $10.0 million. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by the covenant `tRestricted Paymentstt were computed, together with a copy of any fairness opinion or appraisal required by the Indenture. Section 4.8. Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary to (i)(a) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits, or (b) pay any indebtedness owed to the Company or any of its Restricted Subsidiaries, (ii) make loans or advances to the Company or any of its Restricted Subsidiaries or (iii) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries, except for such encumbrances or restrictions existing under or by reason of (a) Existing Indebtedness as in effect on the date of the Indenture, (b) the New Credit Facility as in effect as of the date of the Indenture, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacement or refinancings are no more restrictive in the aggregate (as determined by the Credit Agent in good faith) with respect to such dividend and other payment restrictions than those contained in the New Credit Facility as in effect on the date of the Indenture, (c) the Indenture and the Notes, (d) any applicable law, rule, regulation or order, (e) any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets 44 53 of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the Indenture to be incurred, (f) by reason of customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices, (g) purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the nature described in clause (iii) above on the property so acquired, (h) Permitted Refinancing Indebtedness; provided that the material restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are no more restrictive than those contained in the agreements governing the Indebtedness being refinanced, (i) contracts for the sale of assets, including without limitation customary restrictions with respect to a Subsidiary pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary, and Q) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business. Section 4.9. Incurrence of Indebtedness and Issuance of Preferred Stock. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and that the Company will not issue any Disqualified Stock and will not permit any of its Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The provisions of the first paragraph of this covenant will not apply to the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"): (i) the incurrence by the Company of revolving credit Indebtedness and letters of credit pursuant to New Credit Facility; provided that the aggregate principal amount of all revolving credit Indebtedness (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) outstanding under the New Credit Facility after giving effect to such incurrence does not exceed $40.0 million less the aggregate amount of all Net Proceeds of Asset Sales applied to repay revolving credit Indebtedness under the New Credit Facility and to permanently reduce the commitment thereunder pursuant to the covenant described under Section 4.10; (ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness; (iii) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the Note Guarantees, respectively; 45 54 (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 46 55 Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause (x); (xi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation to letters of credit in respect to workers' compensation claims or self-insurance, surety bonds or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence; (xii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, asset or Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability of all such Indebtedness shall at no time exceed 50% of the gross proceeds actually received by the Company; (xiii) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business; (xiv) guarantees incurred in the ordinary course of business in an aggregate principal amount not to exceed $5.0 million; and (xv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness, including Attributable Debt incurred after the date of the Indenture, in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (xv), not to exceed $25.0 million. For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xv) above or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company shall, in its sole discretion, classify such item of Indebtedness in any manner that complies with this covenant and such item of Indebtedness will be treated as having been incurred pursuant to only one of such clauses or pursuant to the first paragraph hereof. The incurrence of Indebtedness pursuant to the first paragraph of the covenant described above shall not be classified as any of the Items in clauses (i) through (xv) above. Accrual of interest and the accretion of accreted value will not be deemed to be an incurrence of Indebtedness for purposes of this covenant. 47 56 Section 4.10. Assets Sales. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company (or the Restricted Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value (evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee) of the assets or Equity Interests issued or sold or otherwise disposed of and (ii) at least 80% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of cash; provided that the amount of (x) any liabilities (as shown on the Company's or such Restricted Subsidiary's most recent balance sheet), of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any guarantee thereof) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability and (y) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash within 180 days (to the extent of the cash received), shall be deemed to be cash for purposes of this provision. Within 360 days after the receipt of any Net Proceeds from an Asset Sale, the Company may apply such Net Proceeds, at its option, (a) to permanently repay Senior Debt, (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings), or (b) to the acquisition of a controlling interest in another business, the making of a capital expenditure or the acquisition of other long-term assets and parking facility agreements, in each case, in a Permitted Business. Pending the final application of any such Net Proceeds, the Company may temporarily reduce the revolving Indebtedness under the New Credit Facility or otherwise invest such Net Proceeds in any manner that is not prohibited by the Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as provided in the first sentence of this paragraph will be deemed to constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company will be required to make an offer to all Holders of Notes (an "Asset Sale Offer") to purchase the maximum principal amount of Notes that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the date of purchase, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for general corporate purposes. If the aggregate principal amount of Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be purchased on a pro rata basis. Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero. Section 4.11. Transactions with Affiliates. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, 48 57 contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction") unless (i) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee (a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $5.0 million, a resolution of the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (i) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors and (b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving either aggregate consideration in excess of $10.0 million, an opinion as to the fairness to the Holders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing; provided that the following shall not be deemed Affiliate Transactions: (q) the Company's lease on behalf of Holberg of a plane under arrangements consistent with past practices, (r) the Company's payment of the fees and expenses of the offering of Holdings' 11__% Senior Discount Notes due 2008, (s) on or about the Effective Date, the Company's cancellation and forgiveness of approximately $4.5 million of advances previously made to Holberg, (t) any employment agreement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business and consistent with the past practice of the Company or such Restricted Subsidiary, (u) transactions between or among the Company and/or its Restricted Subsidiaries, (v) Permitted Investments and Restricted Payments that are permitted by the provisions of Section 4.7 hereof, (w) customary loans, advances, fees and compensation paid to, and indemnity provided on behalf of, officers, directors, employees or consultant of the Company or any of its Restricted Subsidiaries, (x) annual management fees paid to Holberg not to exceed $5.0 million in any one year, (y) transaction pursuant to any contract or agreement in effect on the date hereof as the same may be amended, modified or replaced from time to time so long as any such amendment, modification or replacement is no less favorable to the Company and its Restricted Subsidiaries than contract or agreement as in effect on the Issue Date or is approved by a majority of the disinterested directors of AP Holdings, Inc., (z) transactions between the Company or its Restricted Subsidiaries on the one hand, and Holberg on the other hand, involving the procuring on provision of financial or advisory services by Holberg; provided that fees and expenses payable to Holberg do not exceed the usual and customary fees and expenses for similar services, (aa) transactions between the Company or its Restricted Subsidiaries on the one hand, and DLJ or its Affiliates on the other hand, involving the provision of financial, advisory, lending, placement or underwriting services by DLJ; provided that fees payable to DLJ do not exceed the usual and customary fees of DLJ for similar services, (bb) the insurance arrangements between AP Holdings, Inc. and its Subsidiaries and an Affiliate of Holberg that are not less favorable to the Company or any of its Subsidiaries than those that are in effect on the date hereof provided such arrangements are conducted in the ordinary course of business consistent with past practices, and (cc) payments under the tax sharing agreement among Holberg and other members of the affiliated group of corporations of which it is the common parent. 49 58 Section 4.12. Liens. The Company shall not and shall not permit any of its Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind securing trade payables or Indebtedness that does not constitute Senior Debt (other than Permitted Liens) upon any of their property or assets, now owned or hereafter acquired. Section 4.13. Sale and Leaseback Transactions. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction; provided that the Company may enter into a sale and leaseback transaction if (i) the Company could have (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction pursuant to the covenant described above under the caption "--Incurrence of Additional Indebtedness and Issuance of Preferred Stock" and (b) incurred a Lien to secure such Indebtedness pursuant to the covenant described above under the caption "--Liens," (ii) the gross cash proceeds of such sale and leaseback transaction are at least equal to the fair market value (as determined in good faith by the Board of Directors and set forth in an Officers' Certificate delivered to the Trustee) of the property that is the subject of such sale and leaseback transaction and (iii) the transfer of assets in such sale and leaseback transaction is permitted by, and the Company applies the proceeds of such transaction in compliance with, the covenant described hereof under Section 4.10." Section 4.14. Offer to Purchase Upon Change of Control. Upon the occurrence of a Change of Control, each Holder of Notes will have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the offer described below (the "Change of Control Offer") at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the date of purchase (the "Change of Control Payment"). Within 30 days following any Change of Control, the Company will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the date specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the "Change of Control Payment Date"), pursuant to the procedures required by Section 3.9 hereof and described in such notice. The Company shall comply with the requirements of Rule 1 4e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. On the Change of Control Payment Date, the Company shall, to the extent lawful, (1) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered and (3) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company. The Paying Agent will promptly mail to each Holder of Notes so tendered the Change of Control 50 59 Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a principal amount of $1,000 or an integral multiple thereof. Prior to complying with the provisions of this Section 4.14, but in any event within 90 days following a Change of Control, the Company shall either repay all outstanding Senior Debt or obtain the requisite consents, if any, under all agreements governing outstanding Senior Debt to permit the repurchase of Notes required by this Section 4.14. The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. The Change of Control provisions described above will be applicable whether or not any other provisions of this Indenture are applicable. Except as described above with respect to a Change of Control, this Indenture does not contain provisions that permit the Holders of the Notes to require that the Company repurchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction. The Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth herein applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. Section 4.15. Corporate Existence. Subject to Section 4.14 and Article 5 hereof, as the case may be, the Company and each Subsidiary Guarantor shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate, partnership or other existence of each of its Subsidiaries in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Subsidiary and the rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries; provided that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Subsidiaries, if the Board of Directors of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders of the Notes. Section 4.16. Limitation on Issuances of Capital Stock of Wholly Owned Restricted Subsidiaries. The Company (i) shall not, and shall not permit any Wholly Owned Restricted Subsidiary of the Company to, transfer, convey, sell, lease or otherwise dispose of any Capital Stock of any Wholly Owned Subsidiary of the Company to any Person (other than the Company or a Wholly Owned Restricted Subsidiary of the Company), unless (a) such transfer, conveyance, sale, lease or other disposition is of all the Capital Stock of such Wholly Owned Restricted Subsidiary and (b) the cash Net Proceeds from such transfer, conveyance, sale, lease or other disposition are applied in accordance with Section 4.10 hereof and (ii) will not permit any 51 60 Wholly Owned Restricted Subsidiary of the Company to issue any of its Equity Interests (other than, if necessary, shares of its Capital Stock constituting directors' qualifying shares) to any Person other than to the Company or a Wholly Owned Restricted Subsidiary of the Company. Section 4.17. Limitations on Issuances of Guarantees of Indebtedness. The Company shall not permit any Restricted Subsidiary, directly or indirectly, to Guarantee or pledge any assets to secure the payment of any other Indebtedness of the Company unless either such Restricted Subsidiary (x) is a Subsidiary Guarantor or (y) simultaneously executes and delivers a supplemental indenture to the Indenture providing for the Guarantee of the payment of the Notes by such Restricted Subsidiary, which Guarantee shall be senior to or pari passu with such Restricted Subsidiary's Guarantee of or pledge to secure such other Indebtedness. Notwithstanding the foregoing, any such Guarantee by a Restricted Subsidiary of the Notes shall provide by its terms that it shall be automatically and unconditionally released and discharged upon any sale, exchange or transfer, to any Person not an Affiliate of the Company, of all of the Company's stock in, or all or substantially all the assets of, such Restricted Subsidiary, which sale, exchange or transfer is made in compliance with the applicable provisions hereof. The form and substance of such Guarantee shall be substantially similar to EXHIBIT D hereto. Section 4.18. Business Activities. The Company shall not, and shall not permit any Restricted Subsidiary to, engage in any business other than Permitted Businesses, except to such extent as would not be material to the Company and its Restricted Subsidiaries taken as a whole. Section 4.19. Additional Guarantees. If (i) the Company or any of its Restricted Subsidiaries shall, after the date hereof, transfer or cause to be transferred, including by way of any Investment, in one or a series of transactions (whether or not related), any assets, businesses, divisions, real property or equipment having an aggregate fair market value (as determined in good faith by the Board of Directors) in excess of $1.0 million to any Restricted Subsidiary that is not a Subsidiary Guarantor or a foreign Subsidiary, (ii) the Company or any of its Restricted Subsidiaries shall acquire another Restricted Subsidiary other than a foreign Subsidiary having total assets with a fair market value (as determined in good faith by the Board of Directors) in excess of $1.0 million, or (iii) any Restricted Subsidiary other than a foreign Subsidiary shall incur Acquired Debt in excess of $1.0 million, then the Company shall, at the time of such transfer, acquisition or incurrence, (A) cause such transferee, acquired Restricted Subsidiary or Restricted Subsidiary incurring Acquired Debt (if not then a Subsidiary Guarantor) to execute a Note Guarantee of the Obligations of the Company under the Notes in the form and substance substantially similar to EXHIBIT D hereto and (B) deliver to the Trustee an Opinion of Counsel, in form reasonably satisfactory to the Trustee, that such Note Guarantee is a valid, binding and enforceable obligation of such transferee, acquired Restricted Subsidiary or Restricted Subsidiary incurring Acquired Debt, subject to customary exceptions for bankruptcy, fraudulent conveyance and equitable principles. Notwithstanding the foregoing, the Company or any of its Restricted Subsidiaries may make a 52 61 Restricted Investment in any Wholly Owned Restricted Subsidiary of the Company without compliance with this Section 4.19, provided that such Restricted Investment is permitted by Section 4.7 hereof. Section 4.20. Payment for Consents. Neither the Company nor any of its Subsidiaries shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder of any Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions hereof or the Notes unless such consideration is offered to be paid or is paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. Section 4.21. Anti-Layering. The Company shall not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is both (a) subordinate or junior in right of payment to any Senior Debt and (b) senior in any respect in right of payment to the Notes. No Subsidiary Guarantor shall incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is both (a) subordinate or junior in right of payment to its Senior Debt and (b) senior in right of the Section 4.9 hereof. ARTICLE 5. SUCCESSORS Section 5.1 Merger, Consolidation of Sale of Assets. The Company shall not consolidate or merge with or into (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to another corporation, Person or entity unless (i) the Company is the surviving corporation or the entity or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia; (ii) the entity or Person formed by or surviving any such consolidation or merger (if other than the Company) or the entity or Person to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made assumes all the obligations of the Company under the Notes and this Indenture pursuant to a supplemental indenture in a form substantially similar to EXHIBIT E hereto; (iii) immediately after such transaction no Default or Event of Default exists; (iv) except in the case of a merger of the Company with or into a Wholly Owned Restricted Subsidiary of the Company, the Company or the entity or Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made will, at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period, 53 62 be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the Section 4.9 hereof. Section 5.2. Successor Corporation Substituted. Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.1 hereof, the successor corporation formed by such consolidation or into or with which the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, lease, conveyance or other disposition, the provisions of this Indenture referring to the "Company" shall refer instead to the successor corporation and not to the Company), and shall exercise every right and power of the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein; provided, that, (i) solely for the purposes of computing Consolidated Net Income for purposes of clause (b) of the first paragraph of Section 4.7 hereof, the Consolidated Net Income of any person other than the Company and its Subsidiaries shall be included only for periods subsequent to the effective time of such merger, consolidation, combination or transfer of assets; and (ii) in the case of any sale, assignment, transfer, lease, conveyance, or other disposition of less than all of the assets of the predecessor Company, the predecessor Company shall not be released or discharged from the obligation to pay the principal of or interest and Liquidated Damages, if any, on the Notes. ARTICLE 6. DEFAULTS AND REMEDIES Section 6.1 Events of Default. Each of the following constitutes an "Event of Default": (i) default for 30 days in the payment when due of interest on, or Liquidated Damages with respect to, the Notes; (ii) default in payment when due of principal of or premium, if any, on the Notes; (iii) failure by the Company to comply with the provisions described under Sections 4.10 or 4.14 or Article 5 hereof; (iv) failure by the Company for 30 days after notice from the Trustee or at least 30% in principal amount of the Notes then outstanding to comply with the provisions described under Sections 4.7 or 4.9 hereof; (v) failure by the Company for 60 days after notice from the Trustee or at least 25% in principal amount of the Notes then outstanding to comply with any of its other agreement in this Indenture or the Notes; 54 63 (vi) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Subsidiaries (or the payment of which is guaranteed by the Company or any of its Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created after the date hereof, which default (a) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a "Payment Default") or (b) results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $15.0 million or more; (vii) failure by the Company or any of its Subsidiaries to pay final judgments aggregating in excess of $5.0 million, which judgments are not paid, discharged or stayed for a period of 60 days; (viii) the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, pursuant to or within the meaning of Bankruptcy Law: (a) commences a voluntary case, (b) consents to the entry of an order for relief against it in an involuntary case, (c) consents to the appointment of a Custodian of it or for all or substantially all of its property, (d) makes a general assignment for the benefit of its creditors, or (e) generally is not paying its debts as they become due; or (i) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (f) is for relief against the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary in an involuntary case; (g) appoints a Custodian of the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary or for all or substantially all of the property of the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary; or (h) orders the liquidation of the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary; and the order or decree remains unstayed and in effect for 60 consecutive days. 55 64 The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. Section 6.2. Acceleration. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately provided, however, that if any Indebtedness or Obligation is outstanding pursuant to the New Credit Facility, upon a declaration of acceleration by the holders of the Notes or the Trustee, all principal and interest under this Indenture shall be due and payable upon the earlier of (x) the day five Business Days after the provision to the Company, the Credit Agent and the Trustee of such written notice of acceleration or (y) the date of acceleration of any Indebtedness under the New Credit Facility; and provided, further, that in the event of an acceleration based upon an Event of Default set forth in clause (vi) above, such declaration of acceleration shall be automatically annulled if the holders of Indebtedness which is the subject of such failure to pay at maturity or acceleration have rescinded their declaration of acceleration in respect of such Indebtedness or such failure to pay at maturity shall have been cured or waived within 30 days thereof and no other Event of Default has occurred during such 30-day period which has not been cured, paid or waived. Notwithstanding the foregoing, in the case of an Event of Default as described in (viii) and (ix) of Section 6.1 hereof, all outstanding Notes will become due and payable without further action or notice. Holders of the Notes may not enforce this Indenture or the Notes except as provided in this Indenture. In the case of any Event of Default occurring by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to the optional redemption provisions of Section 3.7(a) hereof, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes. If an Event of Default occurs prior to March 15, 2003 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding the prohibition on redemption of the Notes prior to March 15, 2003, then the amount payable in respect of such Notes for purposes of this paragraph for each of the twelve-month periods beginning on March 15 of the years indicated below shall be set forth below, expressed as percentages of the principal amount that would otherwise be due but for the provisions of this sentence, plus accrued and unpaid interest and Liquidated Damages, if any, to the date of payment:
Year Percentage ---- ---------- 1998............................................109.250% 1999............................................108.325% 2000............................................107.400% 2001............................................106.475% 2002............................................105.550%
56 65 Section 6.3. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, interest and Liquidated Damages, if any, on the Notes or to enforce the performance of any provision of the Notes or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. Section 6.4. Waiver of Past Defaults. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under this Indenture (including any acceleration (other than an automatic acceleration resulting from an Event of Default under clause (viii) or (ix) of Section 6.1 hereof) except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes (other than as a result of an acceleration), which shall require the consent of all of the Holders of the Notes then outstanding. Section 6.5. Control by Majority. The Holders of a majority in principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust power conferred on it. However, (i) the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability, and (ii) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. In case an Event of Default shall occur (which shall not be cured), the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Notwithstanding any provision to the contrary in this Indenture, the Trustee is under no obligation to exercise any of its rights or powers under this Indenture at the request of any Holder of Notes, unless such Holder shall offer to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. 57 66 Section 6.6. Limitation on Suits. A Holder of a Note may pursue a remedy with respect to this Indenture, the Note Guarantees or the Notes only if: (a) the Holder of a Note gives to the Trustee written notice of a continuing Event of Default or the Trustee receives such notice from the Company; (b) the Holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy; (c) such Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and (e) during such 60-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request. A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note. Section 6.7. Rights of Holders of Notes to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, interest, and Liquidated Damages, if any, on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. Section 6.8. Collection Suit by Trustee. If an Event of Default specified in Section 6.1(i) or (ii) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium and Liquidated Damages, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. Section 6.9. Trustee May File Proofs of Claim. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings 58 67 relative to the Company (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other securities or property payable or deliverable upon the conversion or exchange of the Notes or on any such claims and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. Section 6.10. Priorities. If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order: First: to the Trustee, its agents and attorneys for amounts due under Section 7.7 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; Second: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, interest, and Liquidated Damages, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, interest, and Liquidated Damages, if any, respectively; Third: without duplication, to the Holders for any other Obligations owing to the Holders under this Indenture and the Notes; and Fourth: to the Company or to such party as a court of competent jurisdiction shall direct. The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10. Section 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its 59 68 discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.7 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes. ARTICLE 7. TRUSTEE Section 7.1. Duties of Trustee. (a) If an Event of Default has occurred and is continuing of which a Responsible Officer of the Trustee has knowledge, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) Except during the continuance of an Event of Default: (i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture or the TIA and the Trustee need perform only those duties that are specifically set forth in this Indenture or the TIA and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section 7.1; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.5 hereof. 60 69 (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.1. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. Section 7.2. Rights of Trustee. (a) The Trustee may conclusively rely on the truth of the statements and correctness of the opinions contained in, and shall be protected from acting or refraining from acting upon, any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. Prior to taking, suffering or admitting any action, the Trustee may consult with counsel of the Trustee's own choosing and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture. (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company or any Subsidiary Guarantor shall be sufficient if signed by an Officer of the Company or Subsidiary Guarantor, as applicable. (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction. 61 70 Section 7.3. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner of Notes and may otherwise deal with the Company, the Subsidiary Guarantors or any Affiliate of the Company or any Subsidiary Guarantor with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the Commission for permission to continue as Trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof. Section 7.4. Trustee's Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Note Guarantees or the Notes, it shall not be accountable for the Company's use of the proceeds from the Notes or any money paid to the Company or upon the Company's direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication. Section 7.5. Notice of Defaults. If a Default or Event of Default occurs and is continuing and if it is known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment on any Note pursuant to Section 6.1(i) or (ii) hereof, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. Section 7.6. Reports by Trustee to Holders of the Notes. Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA ss. 313(b). The Trustee shall also transmit by mail all reports as required by TIA ss. 313(c). A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the Commission and each stock exchange on which the Company has informed the Trustee in writing the Notes are listed in accordance with TIA ss. 313(d). The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange and of any delisting thereof. 62 71 Section 7.7. Compensation And Indemnity. The Company and the Subsidiary Guarantors shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. To the extent permitted by law, the Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. The Company and the Subsidiary Guarantors shall indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company and the Subsidiary Guarantors (including this Section 7.7) and defending itself against any claim (whether asserted by the Company, the Subsidiary Guarantors or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder except to the extent any such loss, liability or expense may be attributable to its negligence or bad faith. The Trustee shall notify the Company and the Subsidiary Guarantors promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company and the Subsidiary Guarantors shall not relieve the Company and the Subsidiary Guarantors of its obligations hereunder. The Company and the Subsidiary Guarantors shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company and the Subsidiary Guarantors shall pay the reasonable fees and expenses of such counsel. The Company and the Subsidiary Guarantors need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The obligations of the Company and the Subsidiary Guarantors under this Section 7.7 shall survive the satisfaction and discharge of this Indenture. To secure the Company's and the Subsidiary Guarantors' payment obligations in this Section 7.7, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal, interest and Liquidated Damages, if any, on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.1 (viii) or (ix) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to the extent applicable. 63 72 Section 7.8. Replacement of Trustee. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.8. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if: (a) the Trustee fails to comply with Section 7.10 hereof; (b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (c) a Custodian or public officer takes charge of the Trustee or its property; or (d) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee, after written request by any Holder of a Note who has been a Holder of a Note for at least six months, fails to comply with Section 7.10 hereof, such Holder of a Note may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and the duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to the Holders of the Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided that all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.7 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the Company's obligations under Section 7.7 hereof shall continue for the benefit of the retiring Trustee. 64 73 Section 7.9. Successor Trustee by Merger, etc. If the Trustee or any Agent consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee or any Agent, as applicable. Section 7.10. Eligibility; Disqualification. There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities. The Trustee and its direct parent shall at all times have a combined capital surplus of at least $50.0 million as set forth in its most recent annual report of condition. This Indenture shall always have a Trustee who satisfies the requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA ss. 310(b). Section 7.11. Preferential Collection of Claims Against The Company. The Trustee is subject to TIA ss. 311(a), excluding any creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be subject to TIA ss. 311(a) to the extent indicated therein. ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE Section 8.1. Option to Effect Legal Defeasance or Covenant Defeasance. The Company and the Subsidiary Guarantors may, at the option of their respective Boards of Directors evidenced by a resolution set forth in an Officers' Certificate, at any time, elect to have either Section 8.2 or 8.3 hereof be applied to all outstanding Notes and Note Guarantees upon compliance with the conditions set forth below in this Article 8. Section 8.2. Legal Defeasance and Discharge. Upon the Company's exercise under Section 8.1 hereof of the option applicable to this Section 8.2, the Company and each Subsidiary Guarantor shall, subject to the satisfaction of the conditions set forth in Section 8.4 hereof, be deemed to have been discharged from their respective obligations with respect to all outstanding Notes and Note Guarantees on the date the conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that the Company and each Subsidiary Guarantor shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes and Note Guarantees, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.5 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all their respective other obligations under such Notes and Note Guarantees and 65 74 this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes to receive payments in respect of the principal of, premium, if any, and interest and Liquidated Damages, if any, on such Notes when such payments are due from the trust referred to in Section 8.4(a); (b) the Company's obligations with respect to such Notes under Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.10 and 4.2 hereof; (c) the rights, powers, trusts, duties and immunities of the Trustee including without limitation thereunder Section 7.7, 8.5 and 8.7 hereof and the Company's obligations in connection therewith and (d) the provisions of this Article 8. Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.2 notwithstanding the prior exercise of its option under Section 8.3 hereof. Section 8.3. Covenant Defeasance. Upon the Company's exercise under Section 8.1 hereof of the option applicable to this Section 8.3, the Company and each Subsidiary Guarantor shall, subject to the satisfaction of the conditions set forth in Section 8.4 hereof, be released from its obligations under the covenants contained in Sections 3.9, 4.5, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 5.1 and 11.1 hereof with respect to the outstanding Notes and Note Guarantees on and after the date the conditions set forth below are satisfied (hereinafter, "Covenant Defeasance"), and the Notes and Note Guarantees shall thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder (it being understood that such Notes and Note Guarantees shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and Note Guarantees, the Company or any of its Subsidiaries may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.1 hereof, but, except as specified above, the remainder of this Indenture and such Notes and Note Guarantees shall be unaffected thereby. In addition, upon the Company's exercise under Section 8.1 hereof of the option applicable to this Section 8.3, subject to the satisfaction of the conditions set forth in Section 8.4 hereof, Sections 6.1(iii) through 6.1(v) hereof shall not constitute Events of Default. Section 8.4. Conditions to Legal or Covenant Defeasance. The following shall be the conditions to the application of either Section 8.2 or 8.3 hereof to the outstanding Notes and Note Guarantees: In order to exercise either Legal Defeasance or Covenant Defeasance: (a) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or 66 75 a combination thereof, in such amounts as shall be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium and Liquidated Damages, if any, and interest on the outstanding Notes on the stated maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date; (b) in the case of an election under Section 8.2 hereof, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date hereof, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the Holders of the outstanding Notes shall not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and shall be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; (c) in the case of an election under Section 8.3 hereof, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes shall not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and shall be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (d) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit; (e) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than this Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; (f) the Company shall have delivered to the Trustee an opinion of counsel to the effect that after the 91st day following the deposit, the trust funds shall not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (g) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and 67 76 (h) the Company shall have delivered to the Trustee an Officers' Certificate and an opinion of counsel, each stating that all conditions precedent provided for relating to the Legal Defeasance or the Covenant Defeasance have been complied with. Section 8.5. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions. Subject to Section 8.6 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.5, the "Trustee") pursuant to Section 8.4 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, interest and Liquidated Damages, if any, but such money need not be segregated from other funds except to the extent required by law. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.4 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes. Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the written request of the Company and be relieved of all liability with respect to any money or non-callable Government Securities held by it as provided in Section 8.4 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.4(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. Section 8.6. Repayment to The Company. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, interest or Liquidated Damages, if any, on any Note and remaining unclaimed for one year after such principal, and premium, if any, or interest or Liquidated Damages, if any, has become due and payable shall be paid to the Company on its written request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 68 77 days from the date of such notification or publication, any unclaimed balance of such money then remaining shall be repaid to the Company. Section 8.7. Reinstatement. If the Trustee or Paying Agent is unable to apply any United States dollars or noncallable Government Securities in accordance with Section 8.2 or 8.3 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations of the Company and the Subsidiary Guarantors under this Indenture, the Notes and the Note Guarantees shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.2 or 8.3 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.2 or 8.3 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium, if any, interest or Liquidated Damages, if any, on any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent. ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER Section 9.1. Without Consent of Holders of the Notes. Notwithstanding Section 9.2 of this Indenture, without the consent of any Holder of Notes the Company and the Trustee may amend or supplement this Indenture, the Notes or the Note Guarantees: (a) to cure any ambiguity, defect or inconsistency; (b) to provide for uncertificated Notes in addition to or in place of certificated Notes; (c) to provide for the assumption of the Company's or a Subsidiary Guarantor's obligations to the Holders of the Notes in the case of a merger, or consolidation pursuant to Article 5 or Article 11 hereof, as applicable; (d) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any Holder of the Notes; (e) to comply with requirements of the Commission in order to effect or maintain the qualification of this Indenture under the TIA; (f) to issue additional Notes hereunder; provided that the aggregate principal amount of Notes issued hereunder shall not exceed $200 million; or (g) to allow any Subsidiary to Guarantee the Notes. 69 78 Upon the written request of the Company accompanied by a resolution of its Board of Directors of the Company authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 9.6 hereof, the Trustee shall join with the Company and the Subsidiary Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise. Section 9.2. With Consent of Holders of Notes. Except as provided below in this Section 9.2, or as provided in Section 10.13 or Section 12.13, this Indenture, the Notes or the Note Guarantees may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer, for Notes), and, any existing default or compliance with any provision of this Indenture, the Notes or the Note Guarantees may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including consents obtained in connection with or a tender offer or exchange offer for the Notes). Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.6 hereof, the Trustee shall join with the Company and the Subsidiary Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may, but shall not be obligated to, enter into such amended or supplemental indenture. It shall not be necessary for the consent of the Holders of Notes under this Section 9.2 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment, supplement or waiver under this Section 9.2 becomes effective, the Company shall mail to the Holders of each Note affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver. Subject to Sections 6.2, 6.4, 6.7, 10.13 and 12.13 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding may amend or waive compliance in a particular instance by the Company or the Subsidiary Guarantors with any provision of this Indenture, the Notes or the Note Guarantees. However, without the consent of each Holder affected, an amendment, or waiver may not (with respect to any Note held by a non-consenting Holder): 70 79 (a) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver; (b) reduce the principal of or change the fixed maturity of any Note or alter the provisions with respect to the redemption of the Notes (other than provisions relating to Sections 3.9, 4.10 and 4.14 hereof); (c) reduce the rate of or change the time for payment of interest on any Note; (d) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration); (e) make any Note payable in money other than that stated in the Notes; (f) make any change in Section 6.4 or 6.7 hereof; (g) waive a redemption or repurchase payment with respect to any Note (other than a payment required by Section 4.10 or 4.14 hereof); or (h) make any change in the amendment and waiver provisions of this Article 9. Section 9.3. Compliance with Trust Indenture Act Every amendment or supplement to this Indenture, the Note Guarantees or the Notes shall be set forth in an amended or supplemental indenture that complies with the TIA as then in effect. Section 9.4. Revocation and Effect of Consents. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent is not made on any Note. However, any such Holder or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. When an amendment, supplement or waiver becomes effective in accordance with its terms, it thereafter binds every Holder. The Company may, but shall not be obligated to, fix a record date for determining which Holders of the Notes must consent to such amendment, supplement or waiver. If the Company fixes a record date, the record date shall be fixed at (i) the later of 30 days prior to the first solicitation of such consent or the date of the most recent list of Holders of Notes furnished for the Trustee prior to such solicitation pursuant to Section 2.5 hereof or (ii) such other date as the Company shall designate. 71 80 Section 9.5. Notation on or Exchange of Notes. The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall authenticate new Notes that reflect the amendment, supplement or waiver. Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver. Section 9.6. Trustee to Sign Amendments, etc. The Trustee shall sign any amended or supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company and the Subsidiary Guarantors may not sign an amendment or supplemental indenture until their respective Boards of Directors approve it. In signing or refusing to sign any amended or supplemental indenture the Trustee shall be entitled to receive and (subject to Section 7.1 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 11.4 hereof, an Officers' Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon the Company and the Subsidiary Guarantors in accordance with its terms. ARTICLE 10. SUBORDINATION Section 10.1. Agreement to Subordinate. The Company agrees, and each Holder of Notes by accepting a Note agrees, that the Indebtedness evidenced by the Note is subordinated in right of payment, to the extent and in the manner provided in this Article, to the prior payment in full of all Senior Debt (whether outstanding on the date hereof or hereafter created, incurred, assumed or guaranteed), and that the subordination is for the benefit of the holders of Senior Debt. Section 10.2. Liquidation; Dissolution; Bankruptcy. Upon any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors in any Insolvency or Liquidation Proceeding with respect to the Company, all amounts due or to become due under or with respect to all Senior Debt shall first be paid in full in cash or cash equivalents before any payment is made on account of the Notes and all other Obligations with respect thereto, except that the Holders of Notes may receive Reorganization Securities. Upon any such Insolvency or Liquidation Proceeding, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities (other than Reorganization Securities), to which the Holders of the Notes or the Trustee would be entitled shall be paid by the Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or 72 81 distribution, or by the Holders of the Notes or by the Trustee if received by them, directly to the holders of Senior Debt (pro rata to such holders on the basis of the amounts of Senior Debt held by such holders) or their Representative or Representatives, as their interests may appear, for application to the payment of the Senior Debt remaining unpaid until all such Senior Debt has been paid in full in cash, after giving effect to any concurrent payment, distribution or provision therefor to or for the holders of Senior Debt. Section 10.3. Default on Designated Senior Debt. (a) In the event of and during the continuation of any default in the payment of principal of, interest or premium, if any, on any Senior Debt, or any Obligation owing from time to time under or in respect of Senior Debt, or in the event that any event of default (other than a payment default) with respect to any Senior Debt shall have occurred and be continuing and shall have resulted in such Senior Debt becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, or (b) if any event of default other than as described in clause (a) above with respect to any Designated Senior Debt shall have occurred and be continuing permitting the holders of such Designated Senior Debt (or their Representative or Representatives) to declare such Designated Senior Debt due and payable prior to the date on which it would otherwise have become due and payable, then no payment shall be made by or on behalf of the Company on account of the Notes (other than payments in the form of Reorganization Securities) (x) in case of any payment or nonpayment default specified in (a), unless and until such default shall have been cured or waived in writing in accordance with the instruments governing such Senior Debt or such acceleration shall have been rescinded or annulled, or (y) in case of any nonpayment event of default specified in (b), during the period (a "Payment Blockage Period") commencing on the date the Company and the Trustee receive written notice (a "Payment Notice") of such event of default specifically referring to this Article 10 (which notice shall be binding on the Trustee and the Holders of Notes as to the occurrence of such a payment default or nonpayment event of default) from the Credit Agent (or other holders of Designated Senior Debt or their Representative or Representatives) and ending on the earliest of (A) 179 days after such date, (B) the date, if any, on which the Trustee receives written notice from the Credit Agent (or other holders of Designated Senior Debt or their Representative or Representatives), as the case may be, stating that such Designated Senior Debt to which such default relates is paid in full in cash or such default is cured or waived in writing in accordance with the instruments governing such Designated Senior Debt by the holders of such Designated Senior Debt and (C) the date on which the Trustee receives written notice from the Credit Agent (or other holders of Designated Senior Debt or their Representative or Representatives), as the case may be, terminating the Payment Blockage Period. During any consecutive 360-day period, the aggregate of all Payment Blockage Periods shall not exceed 179 days and there shall be a period of at least 181 consecutive days in each consecutive 360-day period when no Payment Blockage Period is in effect. No event of default which existed or was continuing with respect to the Senior Debt for which notice commencing a Payment Blockage Period was given on the date such Payment Blockage Period commenced shall be or be made the basis for the commencement of any 73 82 subsequent Payment Blockage Period unless such event of default is cured or waived for a period of not less than 90 consecutive days. Section 10.4. Acceleration of Notes. If payment of the Notes is accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Debt of the acceleration. Section 10.5. When Distribution Must Be Paid Over. In the event that the Trustee or any Holder of a Note receives any payment of any Obligations with respect to the Notes at a time when such payment is prohibited by Section 10.3 hereof, such payment shall be held by the Trustee or such Holder, in trust for the benefit of, and shall be paid forthwith over and delivered, upon written request, to, the holders of Senior Debt as their interests may appear or their Representative under the indenture or other agreement (if any) pursuant to which Senior Debt may have been issued, as their respective interests may appear, for application to the payment of all Obligations with respect to Senior Debt remaining unpaid to the extent necessary to pay such Obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt. With respect to the holders of Senior Debt, the Trustee undertakes to perform only such obligations on the part of the Trustee as are specifically set forth in this Article 10, and no implied covenants or obligations with respect to the holders of Senior Debt shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Debt, and shall not be liable to any such holders if the Trustee shall pay over or distribute to or on behalf of Holders of the Notes or the Company or any other Person money or assets to which any holders of Senior Debt shall be entitled by virtue of this Article 10, except if such payment is made as a result of the willful misconduct or gross negligence of the Trustee. Section 10.6. Notice by the Company. The Company shall promptly notify the Trustee and the Paying Agent of any facts known to the Company that would cause a payment of any Obligations with respect to the Notes to violate this Article, which notice shall specifically refer to this Article 10, but failure to give such notice shall not affect the subordination of the Notes to the Senior Debt as provided in this Article. Section 10.7. Subrogation. After all Senior Debt is paid in full and until the Notes are paid in full, Holders of the Notes shall be subrogated (equally and ratably with all other pari passu indebtedness) to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt to the extent that distributions otherwise payable to the Holders of the Notes have been applied to the payment of Senior Debt. A distribution made under this Article to holders of Senior Debt that otherwise would have been made to Holders of the Notes is not, as between the Company and Holders of the Notes, a payment by the Company on the Notes. 74 83 Section 10.8. Relative Rights. This Article defines the relative rights of Holders of the Notes and holders of Senior Debt. Nothing in this Indenture shall: (1) impair, as between the Company and Holders of the Notes, the obligations of the Company, which are absolute and unconditional, to pay principal of and interest on the Notes in accordance with their terms; (2) affect the relative rights of Holders of the Notes and creditors of the Company other than their rights in relation to holders of Senior Debt; or (3) prevent the Trustee or any Holder of the Notes from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders and owners of Senior Debt to receive distributions and payments otherwise payable to Holders of the Notes. If the Company fails because of this Article to pay principal of or interest on a Note on the due date, the failure is still a Default or Event of Default. Section 10.9. Subordination May Not Be Impaired by the Company. No right of any holder of Senior Debt to enforce the subordination of the Indebtedness evidenced by the Notes shall be impaired by any act or failure to act by the Company or any Holder or by the failure of the Company or any Holder to comply with this Indenture. Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Debt, or any of them, may, at any time and from time to time, without the consent of or notice to the Holders of the Notes, without incurring any liabilities to any Holder of any Notes and without impairing or releasing the subordination and other benefits provided in this Indenture or the obligations of the Holders of the Notes to the holders of the Senior Debt, even if any right of reimbursement or subrogation or other right or remedy of any Holder of Notes is affected, impaired or extinguished thereby, do any one or more of the following: (1) change the manner, place or terms of payment or change or extend the time of payment of, or renew, exchange, amend, increase or alter, the terms of any Senior Debt, any security therefor or guaranty thereof or any liability of any obligor thereon (including any guarantor) to such holder, or any liability incurred directly or indirectly in respect thereof or otherwise amend, renew, exchange, extend, modify, increase or supplement in any manner any Senior Debt or any instrument evidencing or guaranteeing or securing the same or any agreement under which Senior Debt is outstanding; (2) sell, exchange, release, surrender, realize upon, enforce or otherwise deal with in any manner and in any order any property pledged, mortgaged or otherwise securing 75 84 Senior Debt or any liability of any obligor thereon, to such holder, or any liability incurred directly or indirectly in respect thereof; (3) settle or compromise any Senior Debt or any other liability of any obligor of the Senior Debt to such holder or any security therefor or any liability incurred directly or indirectly in respect thereof and apply any sums by whomsoever paid and however realized to any liability (including, without limitation, Senior Debt) in any manner or order; and (4) fail to take or to record or to otherwise perfect, for any reason or for no reason, any lien or security interest securing Senior Debt by whomsoever granted, exercise or delay in or refrain from exercising any right or remedy against any obligor or any guarantor or any other person, elect any remedy and otherwise deal freely with any obligor and any security for the Senior Debt or any liability of any obligor to such holder or any liability incurred directly or indirectly in respect thereof. Section 10.10. Distribution or Notice to Representative. Whenever a distribution is to be made or a notice given to holders of Senior Debt, the distribution may be made and the notice given to their Representative. Upon any payment or distribution of assets of the Company referred to in this Article 10, the Trustee and the Holders of the Notes shall be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of such Representative or of the liquidating trustee or agent or other Person making any distribution to the Trustee or to the Holders of the Notes for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Debt and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 10. Section 10.11. Rights of Trustee and Paying Agent. Notwithstanding the provisions of this Article 10 or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Trustee, and the Trustee and the Paying Agent may continue to make payments on the Notes, unless the Trustee shall have received at its Corporate Trust Office at least three Business Days prior to the date of such payment written notice of facts that would cause the payment of any Obligations with respect to the Notes to violate this Article, which notice shall specifically refer to this Article 10. Only the Company or a Representative may give the notice. Nothing in this Article 10 shall impair the claims of, or payments to, the Trustee under or pursuant to Section 7.7 hereof. The Trustee in its individual or any other capacity may hold Senior Debt with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. 76 85 Section 10.12. Authorization to Effect Subordination. Each Holder of a Note by the Holder's acceptance thereof authorizes and directs the Trustee on the Holder's behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article 10, and appoints the Trustee to act as the Holder's attorney-in-fact for any and all such purposes, including without limitation the timely filing of a claim for the unpaid balance of the Notes held by such Holder in the form required in any Insolvency or Liquidation Proceeding and causing such claim to be approved. If the Trustee does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 6.9 hereof at least 30 days before the expiration of the time of such claim, the Representatives of the Designated Senior Debt, including the Credit Agent, are hereby authorized to file an appropriate claim for and on behalf of the Holders of the Notes. Section 10.13. Amendments. Any amendment to the provisions of this Article 10 shall require the consent of the Holders of at least 75% in aggregate amount of Notes then outstanding if such amendment would adversely affect the rights of the Holders of Notes. ARTICLE 11. GUARANTEE OF NOTES Sectiuon 11.1 Note Guarantee. Subject to Section 11.6 hereof, each of the Subsidiary Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes and the Obligations of the Company hereunder and thereunder, that: (a) the principal of, premium, if any, interest and Liquidated Damages, if any, on the Notes will be promptly paid in full when due, subject to any applicable grace period, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal, premium, if any, (to the extent permitted by law) interest on any interest, if any, and Liquidated Damages, if any, on the Notes, and all other payment Obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full and performed, all in accordance with the terms hereof and thereof, and (b) in case of any extension of time of payment or renewal of any Notes or any of such other Obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at stated maturity, by acceleration, redemption or otherwise. Failing payment when so due of any amount so guaranteed for whatever reason the Subsidiary Guarantors will be jointly and severally obligated to pay the same immediately. An Event of Default under this Indenture or the Notes shall constitute an event of default under the Note Guarantees, and shall entitle the Holders to accelerate the Obligations of the Subsidiary Guarantors hereunder in the same manner and to the same extent as the Obligations of the Company. The Subsidiary Guarantors hereby agree that their Obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder 77 86 with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Subsidiary Guarantor. Each Subsidiary Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that this Note Guarantee will not be discharged except by complete performance of the Obligations contained in the Notes and this Indenture. If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Subsidiary Guarantors, or any Note Custodian, Trustee, liquidator or other similar official acting in relation to either the Company or the Subsidiary Guarantors, any amount paid by either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Subsidiary Guarantor agrees that it shall not be entitled to, and hereby waives, any right of subrogation in relation to the Holders in respect of any Obligations guaranteed hereby. Each Subsidiary Guarantor further agrees that, as between the Subsidiary Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the Obligations guaranteed hereby may be accelerated as provided in Article 6 for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such Obligations as provided in Article 6 hereof, such Obligations (whether or not due and payable) shall forthwith become due and payable by the Subsidiary Guarantors for the purpose of this Note Guarantee. The Subsidiary Guarantors shall have the right to seek contribution from any non-paying Subsidiary Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantees. Section 11.2. Execution and Delivery of Note Guarantee. To evidence its Note Guarantee set forth in Section 11.1, each Subsidiary Guarantor hereby agrees that a notation of such Note Guarantee substantially in the form of EXHIBIT D shall be endorsed by an Officer of such Subsidiary Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture shall be executed on behalf of such Subsidiary Guarantor, by manual or facsimile signature, by an Officer of such Subsidiary Guarantor. Each Subsidiary Guarantor hereby agrees that its Note Guarantee set forth in Section 11.1 shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee. If an Officer whose signature is on this Indenture or on the Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid nevertheless. The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the Subsidiary Guarantors. 78 87 Section 11.3. Subsidiary Guarantors May Consolidate, etc., on Certain Terms (a) Except as set forth in Articles 4 and 5 hereof, nothing contained in this Indenture shall prohibit a merger between a Subsidiary Guarantor and another Subsidiary Guarantor or a merger between a Subsidiary Guarantor and the Company. (b) Subject to Section 11.4 hereof, no Subsidiary Guarantor may consolidate with or merge with or into (whether or not such Subsidiary Guarantor is the surviving Person), another corporation, Person or entity whether or not affiliated with such Subsidiary Guarantor unless, subject to the provisions of the following paragraph, (i) the Person formed by or surviving any such consolidation or merger (if other than such Subsidiary Guarantor) assumes all the obligations of such Subsidiary Guarantor pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee, under the Notes and this Indenture; (ii) immediately after giving effect to such transaction, no Default or Event of Default exists; (iii) such Subsidiary Guarantor, or any Person formed by or surviving any such consolidation or merger, would have Consolidated Net Worth (immediately after giving effect to such transaction), equal to or greater than the Consolidated Net Worth of such Subsidiary Guarantor immediately preceding the transaction; and (iv) the Company would be permitted by virtue of its pro forma Fixed Charge Coverage Ratio, immediately after giving effect to such transaction, to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.9. The requirements of clauses (iii) and (iv) of this paragraph will not apply in the case of a consolidation with or merger with or into any other Person if the acquisition of all of the Equity Interests in such Person would have complied with the provisions of Sections 4.7 and 4.9 hereof. (c) In the case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and substantially in the form of EXHIBIT E hereto, of the Note Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Subsidiary Guarantor, such successor Person shall succeed to and be substituted for the Subsidiary Guarantor with the same effect as if it had been named herein as a Subsidiary Guarantor; provided that, solely for purposes of computing Consolidated Net Income for purposes of clause (b) of the first paragraph of Section 4.7 hereof, the Consolidated Net Income of any Person other than the Company and its Restricted Subsidiaries shall only be included for periods subsequent to the effective time of such merger, consolidation, combination or transfer of assets. Such successor Person thereupon may cause to be signed any or all of the Note Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee. All of the Note Guarantees so issued shall in all respects have the same legal rank and benefit under this Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof. 79 88 Section 11.4. Releases Following Sale of Assets, Merger, Sale of Capital Stock Etc. In the event (a) of a sale or other disposition of all of the assets of any Subsidiary Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all of the capital stock of any Subsidiary Guarantor, or (b) that the Company designates a Subsidiary Guarantor to be an Unrestricted Subsidiary, or such Subsidiary Guarantor ceases to be a Subsidiary of the Company, then such Subsidiary Guarantor (in the event of a sale or other disposition, by way of such a merger, consolidation or otherwise, of all of the capital stock of such Subsidiary Guarantor or any such designation) or the entity acquiring the property (in the event of a sale or other disposition of all of the assets of such Subsidiary Guarantor) shall be released and relieved of any obligations under its Note Guarantee; provided that the Net Proceeds of such sale or other disposition are applied in accordance with the provisions of Section 4.10 and, if applicable, Section 4.14 hereof. In the case of a sale, assignment, lease, transfer, conveyance or other disposition of all or substantially all of the assets of a Subsidiary Guarantor, upon the assumption provided for in clause (i) of the Section 11.3(b) hereof, such Subsidiary Guarantor shall be discharged from all further liability and obligation under this Indenture. Upon delivery by the Company to the Trustee of an Officers' Certificate to the effect of the foregoing, the Trustee shall execute any documents reasonably required in order to evidence the release of any Subsidiary Guarantor from its Obligation under its Note Guarantee. Any Subsidiary Guarantor not released from its Obligations under its Note Guarantee shall remain liable for the full amount of principal of, premium, if any, interest and Liquidated Damages, if any, on the Notes and for the other Obligations of such Subsidiary Guarantor under the Indenture as provided in this Article 11. Section 11.5. Additional Subsidiary Guarantors. Any Person that was not a Subsidiary Guarantor on the date of this Indenture may become a Subsidiary Guarantor by executing and delivering to the Trustee (a) a supplemental indenture in substantially the form of EXHIBIT E, and (b) an Opinion of Counsel to the effect that such supplemental indenture has been duly authorized and executed by such Person and constitutes the legal, valid, binding and enforceable obligation of such Person (subject to such customary exceptions concerning creditors rights', fraudulent transfers, public policy and equitable principles as may be acceptable to the Trustee in its discretion). Section 11.6. Limitation on Subsidiary Guarantor Liability. For purposes hereof, each Subsidiary Guarantor's liability shall be limited to the lesser of (i) the aggregate amount of the Obligations of the Company under the Notes and this Indenture and (ii) the amount, if any, which would not have (A) rendered such Subsidiary Guarantor insolvent" (as such term is defined in the United States Bankruptcy Code and in the Debtor and Creditor Law of the State of New York) or (B) left such Subsidiary Guarantor with unreasonably small capital at the time its Note Guarantee of the Notes was entered into; provided that, it will be a presumption in any lawsuit or other proceeding in which a Subsidiary Guarantor is a party that the amount guaranteed pursuant to the Note Guarantee is the amount set forth in clause (i) above unless any creditor, or representative of creditors of such Subsidiary Guarantor, 80 89 or debtor in possession or trustee in bankruptcy of the Subsidiary Guarantor, otherwise proves in such a lawsuit that the aggregate liability of the Subsidiary Guarantor is the amount set forth in clause (ii) above. In making any determination as to solvency or sufficiency of capital of a Subsidiary Guarantor in accordance with the previous sentence, the right of such Subsidiary Guarantor to contribution from other Subsidiary Guarantors, and any other rights such Subsidiary Guarantor may have, contractual or otherwise, shall be taken into account. Section 11.7. "Trustee" to Include Paying Agent. In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article 11 shall in each case (unless the context shall otherwise require) be construed as extending to and including such Paying Agent within its meaning as fully and for all intents and purposes as if such Paying Agent were named in this Article 11 in place of the Trustee. ARTICLE 12. SUBORDINATION OF NOTE GUARANTEE Section 12.1 Agreement to Subordinate The Subsidiary Guarantors agree, and each Holder by accepting a Note agrees, that all Note Guarantee Obligations, shall be subordinated in right of payment, to the extent and in the manner provided in this Article 12, to the prior payment in full of all Guarantor Senior Debt, whether outstanding on the date hereof or thereafter incurred and that the subordination is for the benefit of the holders of Guarantor Senior Debt. Section 12.2. Liquidation; Dissolution; Bankruptcy. Upon any payment or distribution of assets of the Subsidiary Guarantors of any kind or character, whether in cash, property or securities, to creditors in any Insolvency or Liquidation Proceeding with respect to any Subsidiary Guarantor all amounts due or to become due under or with respect to all Guarantor Senior Debt shall first be paid in full in cash or cash equivalents before any payment is made on account of the Note Guarantees and all other Obligations with respect thereto, except that the Holders of Note Guarantees may receive Reorganization Securities. Upon any such Insolvency or Liquidation Proceeding, any payment or distribution of assets of any Subsidiary Guarantor of any kind or character, whether in cash, property or securities (other than Reorganization Securities), to which the Holders of the Note Guarantees or the Trustee would be entitled shall be paid by the Subsidiary Guarantors or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, or by the Holders of the Note Guarantees or by the Trustee if received by them, directly to the holders of Guarantor Senior Debt (0ro rata to such holders on the basis of the amounts of Guarantor Senior Debt held by such holders) or their Representative or Representatives, as their interests may appear, for application to the payment of the Guarantor Senior Debt remaining unpaid until all such Guarantor Senior Debt has been paid in full, after giving effect to any concurrent payment, distribution or provision therefor to or for the holders of Guarantor Senior Debt. 81 90 Section 12.3. Default on Designated Guarantor Senior Debt. (a) In the event of and during the continuation of any default in the payment of principal of, interest or premium, if any, on any Guarantor Senior Debt, or any Obligation owing from time to time under or in respect of Guarantor Senior Debt, or in the event that any event of default (other than a payment default) with respect to any Guarantor Senior Debt shall have occurred and be continuing and shall have resulted in such Guarantor Senior Debt becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, or (b) if any event of default other than as described in clause (a) above with respect to any Designated Senior Debt shall have occurred and be continuing permitting the holders of such Designated Senior Debt (or their Representative or Representatives) to declare such Designated Senior Debt due and payable prior to the date on which it would otherwise have become due and payable, then no payment shall be made by or on behalf of any Subsidiary Guarantor on account of the Note Guarantees (other than payments in the form of Reorganization Securities) (x) in case of any payment or nonpayment default specified in (a), unless and until such default shall have been cured or waived in writing in accordance with the instruments governing such Guarantor Senior Debt or such acceleration shall have been rescinded or annulled, or (y) in case of any nonpayment event of default specified in (b), during the period (a "Payment Blockage Period") commencing on the date the Subsidiary Guarantors and the Trustee receive written notice (a "Payment Notice") of such event of default specifically referring to this Article 12 (which notice shall be binding on the Trustee and the Holders of Note Guarantees as to the occurrence of such a payment default or nonpayment event of default) from the Credit Agent (or other holders of Designated Senior Debt or their Representative or Representatives) and ending on the earliest of (A) 179 days after such date, (B) the date, if any, on which the Trustee receives written notice from the Credit Agent (or other holders of Designated Senior Debt or their Representative or Representatives), as the case may be, stating that such Designated Senior Debt to which such default relates is paid in full or such default is cured or waived in writing in accordance with the instruments governing such Designated Senior Debt by the holders of such Designated Senior Debt and (C) the date on which the Trustee receives written notice from the Credit Agent (or other holders of Designated Senior Debt or their Representative or Representatives), as the case may be, terminating the Payment Blockage Period. During any consecutive 360-day period, the aggregate of all Payment Blockage Periods shall not exceed 179 days and there shall be a period of at least 181 consecutive days in each consecutive 360-day period when no Payment Blockage Period is in effect. No event of default which existed or was continuing with respect to the Guarantor Senior Debt to which notice commencing a Payment Blockage Period was given on the date such Payment Blockage Period commenced shall be or be made the basis for the commencement of any subsequent Payment Blockage Period unless such event of default is cured or waived for a period of not less than 90 consecutive days. Section 12.4. Acceleration of Note Guarantees. If payment of the Note Guarantees is accelerated because of an Event of Default, the Subsidiary Guarantor shall promptly notify such Representatives of Guarantor Senior Debt of the acceleration. 82 91 Section 12.5. When Distribution Must Be Paid Over. In the event that the Trustee or any Holder of a Note Guarantee receives any payment of any Obligations with respect to the Note Guarantees at a time when such payment is prohibited by Section 12.3 hereof, such payment shall be held by the Trustee or such Holder, in trust for the benefit of, and shall be paid forthwith over and delivered, upon written request, to, the holders of Guarantor Senior Debt as their interests may appear or their Representative under the indenture or other agreement (if any) pursuant to which Guarantor Senior Debt may have been issued, as their respective interests may appear, for application to the payment of all Obligations with respect to Guarantor Senior Debt remaining unpaid to the extent necessary to pay such Obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Guarantor Senior Debt. With respect to the holders of Guarantor Senior Debt, the Trustee undertakes to perform only such obligations on the part of the Trustee as are specifically set forth in this Article 12, and no implied covenants or obligations with respect to the holders of Guarantor Senior Debt shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior Debt, and shall not be liable to any such holders if the Trustee shall pay over or distribute to or on behalf of Holders of the Note Guarantees or the Company or any other Person money or assets to which any holders of Guarantor Senior Debt shall be entitled by virtue of this Article 12, except if such payment is made as a result of the willful misconduct or gross negligence of the Trustee. Section 12.6. Notice by Subsidiary Guarantor. The Subsidiary Guarantors shall promptly notify the Trustee and the Paying Agent of any facts known to the Subsidiary Guarantors that would cause a payment of any Obligations with respect to the Note Guarantees to violate this Article, which notice shall specifically refer to this Article 12, but failure to give such notice shall not affect the subordination of the Note Guarantees to the Guarantor Senior Debt as provided in this Article. Section 12.7. Subrogation. After all Guarantor Senior Debt is paid in full and until the Notes are paid in full, Holders of the Note Guarantees shall be subrogated (equally and ratably with all pari passu indebtedness) to the rights of holders of Guarantor Senior Debt to receive distributions applicable to Guarantor Senior Debt to the extent that distributions otherwise payable to the Holders of the Note Guarantees have been applied to the payment of Guarantor Senior Debt. A distribution made under this Article to holders of Guarantor Senior Debt that otherwise would have been made to Holders of the Note Guarantees is not, as between the Subsidiary Guarantors and Holders of the Note Guarantees, a payment by the Subsidiary Guarantors on the Note Guarantees. 83 92 Section 12.8. Relative Rights. This Article defines the relative rights of Holders of the Note Guarantees and holders of Guarantor Senior Debt. Nothing in this Indenture shall: (i) impair, as between the Subsidiary Guarantors and Holders of the Note Guarantees, the obligations of the Subsidiary Guarantors, which are absolute and unconditional, to pay principal of and interest on the Notes in accordance with the terms of the Note Guarantees; (ii) affect the relative rights of Holders of the Note Guarantees and creditors of the Subsidiary Guarantors other than their rights in relation to holders of Guarantor Senior Debt; or (iii) prevent the Trustee or any Holder of the Note Guarantees from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders and owners of Guarantor Senior Debt to receive distributions and payments otherwise payable to Holders of the Note Guarantees. If the Subsidiary Guarantors fail because of this Article to pay principal of or interest on a Note on the due date in accordance with the terms of the Note Guarantees, the failure is still a Default or Event of Default. Section 12.9. Subordination May Not Be Impaired by Subsidiary Guarantor. No right of any holder of Guarantor Senior Debt to enforce the subordination of the Indebtedness evidenced by the Note Guarantees shall be impaired by any act or failure to act by the Subsidiary Guarantors or any Holder or by the failure of the Subsidiary Guarantors or any Holder to comply with this Indenture. Without in any way limiting the generality of the foregoing paragraph, the holders of Guarantor Senior Debt, or any of them, may, at any time and from time to time, without the consent of or notice to the Holders of the Note Guarantees, without incurring any liabilities to any Holder of any Note Guarantees and without impairing or releasing the subordination and other benefits provided in this Indenture or the obligations of the Holders of the Note Guarantees to the holders of the Guarantor Senior Debt, even if any right of reimbursement or subrogation or other right or remedy of any Holder of Note Guarantees is affected, impaired or extinguished thereby, do any one or more of the following: (i) change the manner, place or terms of payment or change or extend the time of payment of, or renew, exchange, amend, increase or alter, the terms of any Guarantor Senior Debt, any security therefor or guaranty thereof or any liability of any obligor thereon (including any guarantor) to such holder, or any liability incurred directly or indirectly in respect thereof or otherwise amend, renew, exchange, extend, modify, increase or supplement in any manner any Guarantor Senior Debt or any instrument evidencing or guaranteeing or securing the same or any agreement under which Guarantor Senior Debt is outstanding; 84 93 (ii) sell, exchange, release, surrender, realize upon, enforce or otherwise deal with in any manner and in any order any property pledged, mortgaged or otherwise securing Guarantor Senior Debt or any liability of any obligor thereon, to such holder, or any liability incurred directly or indirectly in respect thereof; (iii) settle or compromise any Guarantor Senior Debt or any other liability of any obligor of the Guarantor Senior Debt to such holder or any security therefor or any liability incurred directly or indirectly in respect thereof and apply any sums by whomsoever paid and however realized to any liability (including, without limitation, Guarantor Senior Debt) in any manner or order; and (iv) fail to take or to record or to otherwise perfect, for any reason or for no reason, any lien or security interest securing Guarantor Senior Debt by whomsoever granted, exercise or delay in or refrain from exercising any right or remedy against any obligor or any guarantor or any other person, elect any remedy and otherwise deal freely with any obligor and any security for the Guarantor Senior Debt or any liability of any obligor to such holder or any liability incurred directly or indirectly in respect thereof. Section 12.10. Distribution or Notice to Representative. Whenever a distribution is to be made or a notice given to holders of Guarantor Senior Debt, the distribution may be made and the notice given to their Representative. Upon any payment or distribution of assets of any Subsidiary Guarantor referred to in this Article 12, the Trustee and the Holders of the Note Guarantees shall be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of such Representative or of the liquidating trustee or agent or other Person making any distribution to the Trustee or to the Holders of the Note Guarantees for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Guarantor Senior Debt and other Indebtedness of the Company or any Subsidiary Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 12. Section 12.11. Rights of Trustee and Paying Agent. Notwithstanding the provisions of this Article 12 or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Trustee, and the Trustee and the Paying Agent may continue to make payments on the Notes or the Note Guarantees, unless the Trustee shall have received at its Corporate Trust Office at least three Business Days prior to the date of such payment written notice of facts that would cause the payment of any Obligations with respect to the Notes or the Note Guarantees to violate this Article, which notice shall specifically refer to this Article 12. Only the Company, the Subsidiary Guarantors or a Representative may give the notice. Nothing in this Article 12 shall impair the claims of, or payments to, the Trustee under or pursuant to Section 7.7 hereof. 85 94 The Trustee in its individual or any other capacity may hold Guarantor Senior Debt with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. Section 12.12. Authorization to Effect Subordination. Each Holder of a Note Guarantee by the Holder's acceptance thereof authorizes and directs the Trustee on the Holder's behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article 12, and appoints the Trustee to act as the Holder's attorney-in-fact for any and all such purposes, including without limitation the timely filing of a claim for the unpaid balance of the Notes held by such Holder in the form required in any Insolvency or Liquidation Proceeding and causing such claim to be approved. If the Trustee does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 6.9 hereof at least 30 days before the expiration of the time of such claim, the Representatives of the Designated Senior Debt, including the Credit Agent, are hereby authorized to file an appropriate claim for and on behalf of the Holders of the Note Guarantees. Section 12.13. Amendments Any amendment to the provisions of this Article 12 shall require the consent of the Holders of at least 75% in aggregate amount of Notes then outstanding if such amendment would adversely affect the rights of the Holders of Note Guarantees. ARTICLE 13. MISCELLANEOUS Section 13.1 Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA ss.318(c), the imposed duties shall control. Section 13.2. Notices. Any notice or communication by the Company, the Subsidiary Guarantors or the Trustee to the others is duly given if in writing and delivered in Person or mailed by first class mail (registered or certified, return receipt requested), telecopier or overnight air courier guaranteeing next day delivery, to the others' address: If to the Company or the Subsidiary Guarantors: APCOA, Inc. 800 Superior Avenue Cleveland, Ohio Telecopier No.: (216) 523-8080 Attention: President 86 95 With a copy to: Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019-6188 Telecopier No.: (212) 403-2000 Attention: Adam O. Emmerich If to the Trustee: State Street Bank and Trust Company 225 Asylum Street Hartford, Connecticut 06103 Telecopier No.: (860) 244-1897 Attention: Corporate Trust Department The Company, the Subsidiary Guarantors or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications. All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier promising next Business Day delivery. Any notice or communication to a Holder shall be mailed by first class mail or by overnight air courier promising next Business Day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA ss. 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. Section 13.3. Communication by Holders of Notes with Other Holders of Notes. Holders may communicate pursuant to TIA ss. 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA ss. 312(c). 87 96 Section 13.4. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company or the Subsidiary Guarantors to the Trustee to take any action under this Indenture (other than the initial issuance of the Senior Subordinated Notes), the Company or Subsidiary Guarantor shall furnish to the Trustee upon request: (a) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.5 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.5 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. Section 13.5. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA ss. 31 4(a)(4)) shall comply with the provisions of TIA ss. 314(e) and shall include: (a) a statement that the Person making such certificate or opinion has read such covenant or condition; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been satisfied; and (d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied. Section 13.6. Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. Section 13.7. No Personal Liability of Directors, Officers, Employees and Stockholders. No director, officer, employee, incorporator or stockholder of the Company or the Subsidiary Guarantors, as such, shall have any liability for any obligations of the Company or any Subsidiary Guarantor under the Notes, this Indenture, the Note Guarantees or for any claim 88 97 based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Section 13.8. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES. Section 13.9. No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. Section 13.10. Successors. All agreements of the Company and the Subsidiary Guarantors in this Indenture, the Notes and the Note Guarantees shall bind their respective successors and assigns. All agreements of the Trustee in this Indenture shall bind its successors and assigns. Section 13.11. Severability. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 13.12. Counterpart Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Section 13.13. Table of Contents, Headings, etc. The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof. [Signatures on following page] 89 98 SIGNATURES Dated as of March 30, 1998 Very truly yours, APCOA, INC. By: /s/ W. Stuelpe Jr. -------------------------------------- Name: G. Walter Stuelpe, Jr. Title: President TOWER PARKING, INC. By: /s/ W. Stuelpe Jr. -------------------------------------- Name: G. Walter Stuelpe, Jr. Title: President GRAELIC, INC. By: /s/ W. Stuelpe Jr. -------------------------------------- Name: G. Walter Stuelpe, Jr. Title: Vice President 99 APCOA CAPITAL CORPORATION By: /s/ W. Stuelpe Jr. -------------------------------------- Name: G. Walter Stuelpe, Jr. Title: President A-1 AUTO PARK, INC. By: /s/ W. Stuelpe Jr. -------------------------------------- Name: G. Walter Stuelpe, Jr. Title: President METROPOLITAN PARKING SYSTEM, INC. By: /s/ W. Stuelpe Jr. -------------------------------------- Name: G. Walter Stuelpe, Jr. Title: Vice President EVENTS PARKING, INC. By: /s/ W. Stuelpe Jr. -------------------------------------- Name: G. Walter Stuelpe, Jr. Title: Vice President 2 100 STANDARD PARKING, L.P. By: /s/ Myron C. Warshauer -------------------------------------- Name: MYRON C. WARSHAUER Title: PRESIDENT STANDARD PARKING CORPORATION By: /s/ Myron C. Warshauer -------------------------------------- Name: MYRON C. WARSHAUER Title: PRESIDENT STANDARD PARKING CORPORATION, IL By: /s/ Myron C. Warshauer -------------------------------------- Name: MYRON C. WARSHAUER Title: PRESIDENT STANDARD PARKING CORPORATION, MW By: /s/ Myron C. Warshauer -------------------------------------- Name: MYRON C. WARSHAUER Title: PRESIDENT 3 101 STANDARD AUTO PARK By: /s/ Myron C. Warshauer -------------------------------------- Name: MYRON C. WARSHAUER Title: PRESIDENT STANDARD/WABASH PARKING CORPORATION By: /s/ Myron C. Warshauer -------------------------------------- Name: MYRON C. WARSHAUER Title: PRESIDENT STANDARD PARKING OF CANADA, L.P. By: STANDARD PARKING CORPORATION, its Managing Partner By: /s/ Myron C. Warshauer -------------------------------------- Name: MYRON C. WARSHAUER Title: PRESIDENT OF STANDARD PARKING CORPORATION, GENERAL PARTNER OF STANDARD PARKING OF CANADA, L.P. STANDARD PARKING I, L.L.C. By: STANDARD PARKING CORPORATION, its Managing Partner By: /s/ Myron C. Warshauer -------------------------------------- Name: MYRON C. WARSHAUER Title: PRESIDENT OF STANDARD PARKING, MANAGING MEMBER OF STANDARD PARKING I, L.L.C. 4 102 STANDARD PARKING II, L.L.C. By: STANDARD PARKING CORPORATION, its Managing Partner By: /s/ Myron C. Warshauer -------------------------------------- Name: MYRON C. WARSHAUER Title: PRESIDENT OF STANDARD PARKING, MANAGING MEMBER OF STANDARD PARKING II, L.L.C. STATE STREET BANK AND TRUST COMPANY as Trustee By: -------------------------------- Name: MICHAEL M. HOPKINS Title: VICE PRESIDENT 5 103 EXHIBIT A (Face of Senior Subordinated Note) 9 1/4% Senior Subordinated Notes due 2008 No.____ $____________________ CUSIP NO.00185 WAA4 APCOA, Inc. promises to pay to ___________________ or registered assigns, the principal sum of___________ Dollars on March 15, 2008. Interest Payment Dates: March 15 and September 15 Record Dates: March 1 and March 15 APCOA, INC. By: ____________________________ Name: Title: This is one of the Senior Subordinated Notes referred to in the within-mentioned Indenture: Dated: ____________ STATE STREET BANK AND TRUST COMPANY, as Trustee By: __________________________ (Back of Senior Subordinated Note) 9 1/4% Senior Subordinated Notes due 2008 [Unless and until it is exchanged in whole or in part for Senior Subordinated Notes in definitive form, this Senior Subordinated Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. Unless this certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, 104 New York, New York) ("DTC"), to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as may be requested by an authorized representative of DTC (and any payment is made to Cede & Co. or such other entity as may be requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner hereof, Cede & Co., has an interest herein.](1) [THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(l), (2), (3) OR (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR"), THAT PRIOR TO SUCH TRANSFER, FURNISHED THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND, IN THE CASE OF CLAUSE (b), (c), (d) or (e), BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, - ---------- (1) This paragraph should be included only if the Senior Subordinated Note is issued in global form. 2 105 NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.](2) Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 1. INTEREST. APCOA, Inc., a Delaware corporation, or its successor (the "Company"), promises to pay interest on the principal amount of this Senior Subordinated Note at the rate of 9 1/4% per annum and shall pay the Liquidated Damages, if any, payable pursuant to Section 5 of the Registration Rights Agreement referred to below. The Company will pay interest and Liquidated Damages, if any, in United States dollars (except as otherwise provided herein) semi-annually in arrears on March 15 and September 15, commencing on September 15, 1998, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Senior Subordinated Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default or Event of Default in the payment of interest, and if this Senior Subordinated Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date, except in the case of the original issuance of Senior Subordinated Notes, in which case interest shall accrue from the date of authentication. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Senior Subordinated Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages (without regard to any applicable grace period) at the same rate to the extent lawful. Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months. 2. METHOD OF PAYMENT. The Company will pay interest on the Senior Subordinated Notes (except defaulted interest) and Liquidated Damages, if any, on the applicable Interest Payment Date to the Persons who are registered Holders of Senior Subordinated Notes at the close of business on March 1 or September 1 next preceding the Interest Payment Date, even if such Senior Subordinated Notes are cancelled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Senior Subordinated Notes shall be payable as to principal, premium and Liquidated Damages, if any, and interest at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of interest and Liquidated Damages, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds shall be required with respect to principal of, premium and Liquidated Damages, if any, and interest on, all Global Notes and all other Senior Subordinated Notes the Holders of which shall have provided written wire transfer instructions to - ---------- (2) This paragraph should be removed upon the exchange of Senior Subordinated Notes for New Senior Subordinated Notes in the Exchange Offer or upon the registration of the Senior Subordinated Notes pursuant to the terms of the Registration Rights Agreement. 3 106 the Company and the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and Trust Company, the Trustee under the Indenture, shall act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 4. INDENTURE. The Company issued the Senior Subordinated Notes under an Indenture dated as of March 30, 1998 ("Indenture") among the Company, the Subsidiary Guarantors and the Trustee. The terms of the Senior Subordinated Notes include those stated in the Indenture and those made a part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code ____ 77aaa-77bbbb) (the "TIA"). The Senior Subordinated Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. The Senior Subordinated Notes are general unsecured Obligations of the Company limited to $200,000,000 in aggregate principal amount, plus amounts, if any, sufficient to pay premium or Liquidated Damages, if any, and interest on outstanding Senior Subordinated Notes as set forth in Paragraph 2 hereof. 5. OPTIONAL REDEMPTION. Except as set forth in the next paragraph, the Senior Subordinated Notes shall not be redeemable at the Company's option prior to March 15, 2003. Thereafter, the Senior Subordinated Notes shall be subject to redemption at the option of the Company, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below together with accrued and unpaid interest and any Liquidated Damages, if any, thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on March 15 of the years indicated below:
Year Percentage ---- ---------- 2003............................................104.625% 2004............................................103.083% 2005............................................101.542% 2006 and thereafter.............................100.000%
Notwithstanding the foregoing, at any time prior to March 15, 2001, the Company may redeem up to 35% of the original aggregate principal amount of Senior Subordinated Notes at a redemption price of 109.25% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the redemption date, with the net proceeds of a Public Equity Offering; provided that at least 65% of the original aggregate principal amount of Senior Subordinated Notes remains outstanding immediately after the occurrence of such redemption; and provided, further, that such redemption shall occur within 45 days of the date of the closing of such Public Equity Offering. 4 107 6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Senior Subordinated Notes. 7. REPURCHASE AT OPTION OF HOLDER. (a) Upon the occurrence of a Change of Control, each Holder of Senior Subordinated Notes will have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder's Senior Subordinated Notes pursuant to the offer described below (the "Change of Control Offer") at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, thereon, to the date of purchase. Within 30 days following any Change of Control, the Company will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control setting forth the procedures governing the Change of Control Offer required by the Indenture. (b) When the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company shall offer to all Holders of Senior Subordinated Notes (an "Asset Sale Offer") to purchase the maximum principal amount of Senior Subordinated Notes that may be purchased out of the Excess Proceeds at an offer price in cash equal to 100% of principal amount thereof, plus accrued and unpaid interest, and Liquidated Damages thereon, if any, to the date of purchase in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Senior Subordinated Notes tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any general corporate purposes. If the aggregate principal amount of Senior Subordinated Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Senior Subordinated Notes to be purchased on a pro rata basis. Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero. (c) Holders of the Senior Subordinated Notes that are the subject of an offer to purchase will receive a Change of Control Offer or Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Senior Subordinated Notes purchased by completing the form titled "Option of Holder to Elect Purchase" appearing below. 8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Senior Subordinated Notes are to be redeemed at its registered address. Senior Subordinated Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Senior Subordinated Notes held by a Holder are to be redeemed. On and after the redemption date, interest and Liquidated Damages, if any, ceases to accrue on the Senior Subordinated Notes or portions thereof called for redemption. 5 108 9. SUBORDINATION. The Notes are subordinated to Senior Debt, which is all Indebtedness and other Obligations specified below payable directly or indirectly the Company, or any of its Restricted Subsidiaries whether outstanding on the date of the Indenture or thereafter created, incurred or assumed by the Company or any of its Restricted Subsidiaries: (i) the principal of, interest on and all other Obligations related to the New Credit Facility (including without limitation all loans, letters of credit and other extensions of credit under the New Credit Facility, and all expenses, fees, reimbursements, indemnities and other amounts owing pursuant to the New Credit Facility); (ii) amounts payable in respect of any Hedging Obligations; (iii) all Indebtedness not prohibited by Section 4.9 hereof that is not expressly pari passu with or subordinated to the Senior Subordinated Notes; and (iv) all permitted renewals, extensions, refundings or refinancings thereof. All post-petition interest on Senior Debt shall constitute Senior Debt. Notwithstanding anything to the contrary in the foregoing, Senior Debt will not include (i) Indebtedness of the Company or any of its Restricted Subsidiaries to any other Restricted Subsidiaries which is not a Subsidiary Guarantor, (ii) any Indebtedness which by the express terms of the agreement or instrument creating, evidencing or governing the same is junior or subordinate in right of payment to any item of Senior Debt, (iii) any trade payable arising from the purchase of goods or materials or for services obtained in the ordinary course of business, or (iv) Indebtedness incurred in violation of the Indenture. To the extent provided in the Indenture, Senior Debt must be paid before the Notes may be paid. The Company agrees and each Holder of Notes by accepting a Note consents and agrees to the subordination provided in the Indenture and authorizes the Trustee to give it effect. 10. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Subordinated Notes are in registered form without coupons in initial denominations of $1,000 and integral multiples of $1,000. The transfer of the Senior Subordinated Notes may be registered and the Senior Subordinated Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Senior Subordinated Note or portion of a Senior Subordinated Note selected for redemption, except for the unredeemed portion of any Senior Subordinated Note being redeemed in part. Also, it need not exchange or register the transfer of any Senior Subordinated Notes for a period of 15 days before a selection of Senior Subordinated Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date. 11. PERSONS DEEMED OWNERS. The registered Holder of a Senior Subordinated Note may be treated as its owner for all purposes. 12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to the following paragraphs, the Indenture, the Senior Subordinated Notes and the Note Guarantees may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Senior Subordinated Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of or, tender offer or exchange offer for Senior Subordinated Notes), and any existing Default or Event of Default or compliance with any provision of the Indenture, the Senior Subordinated Notes or the Note Guarantees may be waived 6 109 with the consent of the Holders of a majority in principal amount of the then outstanding Senior Subordinated Notes (including consents obtained in connection with a tender offer or exchange offer for Senior Subordinated Notes). Without the consent of any Holder of Senior Subordinated Notes, the Company and the Trustee may amend or supplement the Indenture, the Note Guarantees or the Senior Subordinated Notes to cure any ambiguity, defect or inconsistency, to provide for uncertificated Senior Subordinated Notes in addition to or in place of certificated Senior Subordinated Notes, to provide for the assumption of the Company's or a Subsidiary Guarantor's obligations to Holders of Senior Subordinated Notes in the case of a merger or consolidation, to make any change that would provide any additional rights or benefits to the Holders of Senior Subordinated Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act or to allow any Subsidiary to guarantee the Senior Subordinated Notes. Any amendments with respect to subordination provisions of the Notes or the Note Guarantees would require the consent of the Holders of at least 75% in aggregate amount of Notes then outstanding if such amendment would be adversely affect the rights of the Holders of Notes. 13. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30 days in the payment when due of interest on or Liquidated Damages, if any, with respect to the Senior Subordinated Notes; (ii) default in payment when due of the principal of or premium, if any, on the Senior Subordinated Notes; (iii) failure by the Company or any Restricted Subsidiary to comply with the provisions described in Sections 4.10, 4.14 or 5.1 of the Indenture; (iv) failure by the Company or any Restricted Subsidiary for 30 days after notice from the Trustee or at least 25% in principal amount of the Senior Subordinated Notes to comply with the provisions described in Sections 4.7 and 4.9, of the Indenture; (v) failure by the Company or any Subsidiary for 60 days after notice from the Trustee or the Holders of at least 25% in principal amount of the Senior Subordinated Notes then outstanding to comply with its other agreements in the Indenture or the Senior Subordinated Notes; (vi) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of their its Subsidiaries (or the payment of which is guaranteed by the Company or any of its Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the date of the Indenture, which default (A) (i) is caused by a failure to pay when due at final stated maturity (giving effect to any grace period related thereto) any principal of or premium, if any, or interest on such Indebtedness (a "Payment Default") or (ii) results in the acceleration of such Indebtedness prior to its express maturity and (B) in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $15.0 million or more; (vii) failure by the Company or any of its Subsidiaries to pay final judgments aggregating in excess of $5.0 million, which judgments are not paid discharged or stayed within 60 days after their entry; and (viii) certain events of bankruptcy or insolvency with respect to the Company, any of its Significant Subsidiaries or any group of Subsidiaries that, taken together, would constitute a Significant Subsidiary. 7 110 If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Senior Subordinated Notes may declare all the Senior Subordinated Notes to be due and payable immediately provided, however, that if any Indebtedness or Obligation is outstanding pursuant to the New Credit Facility, upon a declaration of acceleration by the holders of the Senior Subordinated Notes or the Trustee, all principal and interest under the Indenture shall be due and payable upon the earlier of (x) the day five Business Days after the provision to the Company, the Credit Agent and the Trustee of such written notice of acceleration or (y) the date of acceleration of any Indebtedness under the New Credit Facility; and provided, further, that in the event of an acceleration based upon an Event of Default set forth in clause (vi) above, such declaration of acceleration shall be automatically annulled if the holders of Indebtedness which is the subject of such failure to pay at maturity or acceleration have rescinded their declaration of acceleration in respect of such Indebtedness or such failure to pay at maturity shall have been cured or waived within 30 days thereof and no other Event of Default has occurred during such 30-day period which has not been cured, paid or waived. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the Company or any of its Significant Subsidiaries all outstanding Senior Subordinated Notes will become due and payable without further action or notice. Holders of the Senior Subordinated Notes may not enforce the Indenture or the Senior Subordinated Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Senior Subordinated Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Senior Subordinated Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. 14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company, the Subsidiary Guarantors or their respective Affiliates, and may otherwise deal with the Company, the Subsidiary Guarantors or their respective Affiliates, as if it were not the Trustee. 15. NO RECOURSE AGAINST OTHERS. No director, officer, employee, incorporator or stockholder, of the Company or any Subsidiary Guarantor, as such, shall have any liability for any obligations of the Company or any Subsidiary Guarantor under the Senior Subordinated Notes, the Indenture or the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Senior Subordinated Notes by accepting a Senior Subordinated Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Senior Subordinated Notes and any Note Guarantee. 16. AUTHENTICATION. This Senior Subordinated Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the 8 111 entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 18. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In addition to the rights provided to Holders of the Senior Subordinated Notes under the Indenture, Holders of Transferred Restricted Securities (as defined in the Registration Rights Agreement) shall have all the rights set forth in the Registration Rights Agreement, dated as of the date hereof, among the Company, the Subsidiary Guarantors and the Initial Purchaser (the "Registration Rights Agreement"). 19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Senior Subordinated Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to the Holders. No representation is made as to the accuracy of such numbers either as printed on the Senior Subordinated Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: APCOA, Inc. 800 Superior Avenue Cleveland, Ohio Telecopy: (216) 523-8080 Chief Financial Officer 9 112 ASSIGNMENT FORM To assign this Senior Subordinated Note, fill in the form below: (I) or (we) assign and transfer this Senior Subordinated Note to (Insert assignee's soc. sec. or tax I.D. no.) (Print or type assignee's name, address and zip code) and irrevocably appoint to transfer this Senior Subordinated Note on the books of the Company. The agent may substitute another to act for him. Date: Your Signature: (Sign exactly as your name appears on the face of this Senior Subordinated Note) Signature Guarantee: OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Senior Subordinated Note purchased by the Company pursuant to Section 4.10 or 4.14 of the Indenture, check the box below: __Section 4.10 __Section 4.14 If you want to elect to have only part of the Senior Subordinated Note purchased by the Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased: $___________ Date:Your Signature: (Sign exactly as your name appears on the Senior Subordinated Note) Tax Identification No.: Signature Guarantee. 10 113 SCHEDULE OF EXCHANGES OF SENIOR SUBORDINATED NOTES The following exchanges of a part of this Global Note for other Senior Subordinated Notes have been made: Signature of Amount of Principal authorized Amount of increase in Amount of this officer of decrease in Principal Global Note Trustee or Principal Amount of following such Senior Date of Amount of this this Global decrease (or Subordinated Exchange Global Note Note increase) Note Custodian 11 114 EXHIBIT A-2 (Face of Regulation S Temporary Global Note) 9 1/4% Senior Subordinated Notes due 2008 No. ____ $_________________ CIN NO. U00328AA9 APCOA, Inc. promises to pay to __________________ or registered assigns, the principal sum of_________ Dollars on ___________, 2008. Interest Payment Dates: March 15 and September 15 Record Dates: March 1 and September 1 APCOA, INC. By: _______________________________ Name: Title: This is one of the Senior Subordinated Notes referred to in the within-mentioned Indenture: Dated: ____________________________ STATE STREET BANK AND TRUST COMPANY, as Trustee By:________________________________ 12 115 (Back of Regulation S Temporary Global Note) 9__% Senior Subordinated Note due 2008 UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SENIOR SUBORDINATED NOTES IN DEFINITIVE FORM, THIS SENIOR SUBORDINATED NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"),TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. [THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(l), (2), (3) OR (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR"), THAT PRIOR TO SUCH TRANSFER, FURNISHED THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN 116 AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND, IN THE CASE OF CLAUSES (b), (c), (d) or (e), BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE SENIOR SUBORDINATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON PRIOR TO THE EXCHANGE OF THIS SENIOR SUBORDINATED NOTE FOR A REGULATION S TEMPORARY GLOBAL NOTE AS CONTEMPLATED BY THE INDENTURE.]3 Until this Regulation S Temporary Global Note is exchanged for Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to receive payments of interest or Liquidated Damages, if any, hereon although interest and Liquidated Damages, if any, will continue to accrue; until so exchanged in full, this Regulation S Temporary Global Note shall in all other respects be entitled to the same benefits as other Senior Subordinated Notes under the Indenture. This Regulation S Temporary Global Note is exchangeable in whole or in part for one or more Regulation S Permanent Global Notes or Rule 144A Global Notes only (i) on or after the termination of the 40-day restricted period (as defined in Regulation S) and (ii) upon presentation of certificates (accompanied by an Opinion of Counsel, if applicable) required by Article 2 of the Indenture. Upon exchange of this Regulation S Temporary Global Note for one or more Regulation S Permanent Global Notes or Rule 144A Global Notes, the Trustee shall cancel this Regulation S Temporary Global Note. This Regulation S Temporary Global Note shall not become valid or obligatory until the certificate of authentication hereon shall have been duly manually signed by the Trustee in accordance with the Indenture. This Regulation S Temporary Global Note shall be governed by and construed in accordance with the laws of the State of the New York. All references to - ---------- (3) These paragraphs should be removed upon the exchange of Regulation S Temporary Global Notes for Regulation S Permanent Global Notes pursuant to the Indenture. 2 117 "$," "Dollars," "dollars" or "U.S. $" are to such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts therein. Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 1. INTEREST. APCOA, Inc., a Delaware corporation, or its successor (the "Company"), promises to pay interest on the principal amount of this Senior Subordinated Note at the rate of 9 1/4% per annum and shall pay the Liquidated Damages, if any, payable pursuant to Section 5 of the Registration Rights Agreement referred to below. The Company will pay interest and Liquidated Damages, if any, in United States dollars (except as otherwise provided herein) semi-annually in arrears on March 15 and September 15, commencing on September 15, 1998, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Senior Subordinated Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default or Event of Default in the payment of interest, and if this Senior Subordinated Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date, except in the case of the original issuance of Senior Subordinated Notes, in which case interest shall accrue from the date of authentication. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Senior Subordinated Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages (without regard to any applicable grace period) at the same rate to the extent lawful. Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months. 2. METHOD OF PAYMENT. The Company will pay interest on the Senior Subordinated Notes (except defaulted interest) and Liquidated Damages, if any, on the applicable Interest Payment Date to the Persons who are registered Holders of Senior Subordinated Notes at the close of business on the July 1 or January 1 next preceding the Interest Payment Date, even if such Senior Subordinated Notes are cancelled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Senior Subordinated Notes shall be payable as to principal, premium and Liquidated Damages, if any, and interest at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of interest and Liquidated Damages, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds shall be required with respect to principal of, premium and Liquidated Damages, if any, and interest on, all Global Notes and all other Senior Subordinated Notes the Holders of which shall have provided written wire transfer instructions to the Company and the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 3 118 3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and Trust Company, the Trustee under the Indenture, shall act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 4. INDENTURE. The Company issued the Senior Subordinated Notes under an Indenture dated as of July 11, 1997 ("Indenture") among the Company, the Subsidiary Guarantors and the Trustee. The terms of the Senior Subordinated Notes include those stated in the Indenture and those made a part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb) (the "TIA"). The Senior Subordinated Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. The Senior Subordinated Notes are general unsecured Obligations of the Company limited to $200,000,000 in aggregate principal amount, plus amounts, if any, sufficient to pay premium or Liquidated Damages, if any, and interest on outstanding Senior Subordinated Notes as set forth in Paragraph 2 hereof. 5. OPTIONAL REDEMPTION. Except as set forth in the next paragraph, the Senior Subordinated Notes shall not be redeemable at the Company's option prior to March 15, 2003. Thereafter, the Senior Subordinated Notes shall be subject to redemption at the option of the Company, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below together with accrued and unpaid interest and any Liquidated Damages, if any, thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on March 15 of the years indicated below:
Year Percentage ---- ---------- 2003............................................104.625% 2004............................................103.083% 2005............................................101.542% 2006 and thereafter.............................100.000%
Notwithstanding the foregoing, at any time prior to March, 2001, the Company may redeem up to 35% of the original aggregate principal amount of Senior Subordinated Notes at a redemption price of 109.25% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the redemption date, with the net proceeds of a Public Equity Offering; provided that at least 65% of the original aggregate principal amount of Senior Subordinated Notes remains outstanding immediately after the occurrence of such redemption; and provided, further, that such redemption shall occur within 45 days of the date of the closing of such Public Equity Offering. 4 119 6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Senior Subordinated Notes. 7. REPURCHASE AT OPTION OF HOLDER. (a) Upon the occurrence of a Change of Control, each Holder of Senior Subordinated Notes will have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder's Senior Subordinated Notes pursuant to the offer described below (the "Change of Control Offer") at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, thereon, to the date of purchase. Within 30 days following any Change of Control, the Company will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control setting forth the procedures governing the Change of Control Offer required by the Indenture. (b) When the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company shall offer to all Holders of Senior Subordinated Notes (an "Asset Sale Offer") to purchase the maximum principal amount of Senior Subordinated Notes that may be purchased out of the Excess Proceeds at an offer price in cash equal to 100% of principal amount thereof, plus accrued and unpaid interest, and Liquidated Damages thereon, if any, to the date of purchase in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Senior Subordinated Notes tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any general corporate purposes. If the aggregate principal amount of Senior Subordinated Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Senior Subordinated Notes to be purchased on a pro rata basis. Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero. (c) Holders of the Senior Subordinated Notes that are the subject of an offer to purchase will receive a Change of Control Offer or Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Senior Subordinated Notes purchased by completing the form titled "Option of Holder to Elect Purchase" appearing below. 1. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Senior Subordinated Notes are to be redeemed at its registered address. Senior Subordinated Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Senior Subordinated Notes held by a Holder are to be redeemed. On and after the redemption date, interest and Liquidated Damages, if any, ceases to accrue on the Senior Subordinated Notes or portions thereof called for redemption. 5 120 2. SUBORDINATION. The Notes are subordinated to Senior Debt, which is all Indebtedness and other Obligations specified below payable directly or indirectly the Company, or any of its Restricted Subsidiaries whether outstanding on the date of the Indenture or thereafter created, incurred or assumed by the Company or any of its Restricted Subsidiaries: (i) the principal of, interest on and all other Obligations related to the New Credit Facility (including without limitation all loans, letters of credit and other extensions of credit under the New Credit Facility, and all expenses, fees, reimbursements, indemnities and other amounts owing pursuant to the New Credit Facility); (ii) amounts payable in respect of any Hedging Obligations; (iii) all Indebtedness not prohibited by Section 4.9 hereof that is not expressly pari passu with or subordinated to the Senior Subordinated Notes; and (iv) all permitted renewals, extensions, refundings or refinancings thereof. All post-petition interest on Senior Debt shall constitute Senior Debt. Notwithstanding anything to the contrary in the foregoing, Senior Debt will not include (i) Indebtedness of the Company or any of its Restricted Subsidiaries to any other Restricted Subsidiaries which is not a Subsidiary Guarantor, (ii) any Indebtedness which by the express terms of the agreement or instrument creating, evidencing or governing the same is junior or subordinate in right of payment to any item of Senior Debt, (iii) any trade payable arising from the purchase of goods or materials or for services obtained in the ordinary course of business, or (iv) Indebtedness incurred in violation of the Indenture. To the extent provided in the Indenture, Senior Debt must be paid before the Notes may be paid. The Company agrees and each Holder of Notes by accepting a Note consents and agrees to the subordination provided in the Indenture and authorizes the Trustee to give it effect. 3. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Subordinated Notes are in registered form without coupons in initial denominations of $1,000 and integral multiples of $1,000. The transfer of the Senior Subordinated Notes may be registered and the Senior Subordinated Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Senior Subordinated Note or portion of a Senior Subordinated Note selected for redemption, except for the unredeemed portion of any Senior Subordinated Note being redeemed in part. Also, it need not exchange or register the transfer of any Senior Subordinated Notes for a period of 15 days before a selection of Senior Subordinated Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date. 4. PERSONS DEEMED OWNERS. The registered Holder of a Senior Subordinated Note may be treated as its owner for all purposes. 5. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to the following paragraphs, the Indenture, the Senior Subordinated Notes and the Note Guarantees may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Senior Subordinated Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of or, tender offer or exchange offer for Senior Subordinated Notes), and any existing Default or Event of Default or compliance with any provision of the Indenture, the Senior Subordinated Notes or the Note Guarantees may be waived 6 121 with the consent of the Holders of a majority in principal amount of the then outstanding Senior Subordinated Notes (including consents obtained in connection with a tender offer or exchange offer for Senior Subordinated Notes). Without the consent of any Holder of Senior Subordinated Notes, the Company and the Trustee may amend or supplement the Indenture, the Note Guarantees or the Senior Subordinated Notes to cure any ambiguity, defect or inconsistency, to provide for uncertificated Senior Subordinated Notes in addition to or in place of certificated Senior Subordinated Notes, to provide for the assumption of the Company's or a Subsidiary Guarantor's obligations to Holders of Senior Subordinated Notes in the case of a merger or consolidation, to make any change that would provide any additional rights or benefits to the Holders of Senior Subordinated Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act or to allow any Subsidiary to guarantee the Senior Subordinated Notes. Any amendments with respect to subordination provisions of the Notes or the Note Guarantees would require the consent of the Holders of at least 75% in aggregate amount of Notes then outstanding if such amendment would be adversely affect the rights of the Holders of Notes. 6. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30 days in the payment when due of interest on or Liquidated Damages, if any, with respect to the Senior Subordinated Notes; (ii) default in payment when due of the principal of or premium, if any, on the Senior Subordinated Notes; (iii) failure by the Company or any Restricted Subsidiary to comply with the provisions described in Sections 4.10, 4.14 or 5.1 of the Indenture; (iv) failure by the Company or any Restricted Subsidiary for 30 days after notice from the Trustee or at least 25% in principal amount of the Senior Subordinated Notes to comply with the provisions described in Sections 4.7 and 4.9, of the Indenture; (v) failure by the Company or any Subsidiary for 60 days after notice from the Trustee or the Holders of at least 25% in principal amount of the Senior Subordinated Notes then outstanding to comply with its other agreements in the Indenture or the Senior Subordinated Notes; (vi) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of their its Subsidiaries (or the payment of which is guaranteed by the Company or any of its Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the date of the Indenture, which default (A) (i) is caused by a failure to pay when due at final stated maturity (giving effect to any grace period related thereto) any principal of or premium, if any, or interest on such Indebtedness (a "Payment Default") or (ii) results in the acceleration of such Indebtedness prior to its express maturity and (B) in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $15.0 million or more; (vii) failure by the Company or any of its Subsidiaries to pay final judgments aggregating in excess of $5.0 million, which judgments are not paid discharged or stayed within 60 days after their entry; and (viii) certain events of bankruptcy or insolvency with respect to the Company, any of its Significant Subsidiaries or any group of Subsidiaries that, taken together, would constitute a Significant Subsidiary. 7 122 If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Senior Subordinated Notes may declare all the Senior Subordinated Notes to be due and payable immediately provided, however, that if any Indebtedness or Obligation is outstanding pursuant to the New Credit Facility, upon a declaration of acceleration by the holders of the Senior Subordinated Notes or the Trustee, all principal and interest under the Indenture shall be due and payable upon the earlier of (x) the day five Business Days after the provision to the Company, the Credit Agent and the Trustee of such written notice of acceleration or (y) the date of acceleration of any Indebtedness under the New Credit Facility; and provided, further, that in the event of an acceleration based upon an Event of Default set forth in clause (vi) above, such declaration of acceleration shall be automatically annulled if the holders of Indebtedness which is the subject of such failure to pay at maturity or acceleration have rescinded their declaration of acceleration in respect of such Indebtedness or such failure to pay at maturity shall have been cured or waived within 30 days thereof and no other Event of Default has occurred during such 30-day period which has not been cured, paid or waived. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the Company or any of its Significant Subsidiaries all outstanding Senior Subordinated Notes will become due and payable without further action or notice. Holders of the Senior Subordinated Notes may not enforce the Indenture or the Senior Subordinated Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Senior Subordinated Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Senior Subordinated Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. 7. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company, the Subsidiary Guarantors or their respective Affiliates, and may otherwise deal with the Company, the Subsidiary Guarantors or their respective Affiliates, as if it were not the Trustee. 8. NO RECOURSE AGAINST OTHERS. No director, officer, employee, incorporator or stockholder, of the Company or any Subsidiary Guarantor, as such, shall have any liability for any obligations of the Company or any Subsidiary Guarantor under the Senior Subordinated Notes, the Indenture or the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Senior Subordinated Notes by accepting a Senior Subordinated Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Senior Subordinated Notes and any Note Guarantee. 9. AUTHENTICATION. This Senior Subordinated Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 10. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the 8 123 entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 11. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In addition to the rights provided to Holders of the Senior Subordinated Notes under the Indenture, Holders of Transferred Restricted Securities (as defined in the Registration Rights Agreement) shall have all the rights set forth in the Registration Rights Agreement, dated as of the date hereof, among the Company, the Subsidiary Guarantors and the Initial Purchaser (the "Registration Rights Agreement"). 12. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Senior Subordinated Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to the Holders. No representation is made as to the accuracy of such numbers either as printed on the Senior Subordinated Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: APCOA, Inc. 800 Superior Avenue Cleveland, Ohio 44114 Telecopy: (216) 523-8080 Chief Financial Officer 9 124 SCHEDULE OF EXCHANGES FOR GLOBAL NOTES The following exchanges of a part of this Regulation S Temporary Global Note for other Global Notes have been made: Amount of decrease Amount of increase Principal Amount of Signature of Signature of Amount of Principal authorized Amount of increase in Amount of this office of decrease in Principal Global Note Trustee or Principal Amount of following such Senior Amount of this this Global decrease (or Subordinated Date of Exchange Global Note Note increase) Note Custodian - ---------------- --------------- -------------- --------------- -------------- 10 125 EXHIBIT B-1 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM RULE 144A GLOBAL NOTE TO REGULATION S GLOBAL NOTE (Pursuant to Section 2.6(a)(1) of the Indenture) State Street Bank and Trust Company 225 Asylum Street Hartford, Connecticut 06103 Re: 9__% Senior Subordinated Notes due 2008 of APCOA, Inc. Reference is hereby made to the Indenture, dated as of March 30, 1998 (the "Indenture"), among APCOA, Inc., a Delaware corporation (the "Company"), Tower Parking, Inc., an Ohio corporation ("Tower"), Graelic, Inc., and Ohio corporation ("Graelic"), APCOA Capital Corporation, a Delaware corporation ("APCOA Capital"), A-1 Auto Park, Inc., a Georgia corporation ("A-1 Auto"), Metropolitan Parking System, Inc., a Massachusetts corporation ("Metropolitan"), Events Parking Company, Inc., a Massachusetts corporation ("Events Parking"), Standard Parking, L.P., a Delaware limited partnership ("SP"), Standard Parking Corporation, an Illinois corporation ("SPC"), Standard Parking Corporation, IL, an Illinois corporation ("SPC, IL"), Standard Parking Corporation, MW, an Illinois corporation ("SPC, MW"), Standard Auto Park, Inc., an Illinois corporation ("Standard Auto"), Standard/Wabash Parking Corporation, an Illinois corporation ("S/W"), Standard Parking of Canada, L.P., a Illinois limited partnership ("SP Canada"), Standard Parking I, L.L.C., a Delaware limited liability company ("SPI"), Standard Parking II, L.L.C., a Delaware limited liability company ("SPII"), (the "Subsidiary Guarantors") and State Street Bank and Trust Company, as trustee (the "Trustee"). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. This letter relates to $ ________________ principal amount of Senior Subordinated Notes which are evidenced by one or more Rule 144A Global Notes and held with the Depositary in the name of _________________________ (the "Transferor"). The Transferor has requested a transfer of such beneficial interest in the Senior Subordinated Notes to a Person who will take delivery thereof in the form of an equal principal amount of Senior Subordinated Notes evidenced by one or more Regulation S Global Notes, which amount, immediately after such transfer, is to be held with the Depositary through Euroclear or Cedel or both. In connection with such request and in respect of such Senior Subordinated Notes, the Transferor hereby certifies that such transfer has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with Rule 903 or Rule 904 under the United States Securities Act of 1933, as amended (the "Securities Act"), and accordingly the Transferor hereby further certifies that: (1) The offer of the Senior Subordinated Notes was not made to a person in the United States; 11 126 (2) either: (a) at the time the buy order was originated, the transferee was outside the United States or the Transferor and any person acting on its behalf reasonably believed and believes that the transferee was outside the United States; or (b) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither the Transferor nor any person acting on its behalf knows that the transaction was prearranged with a buyer in the United States; (3) no directed selling efforts have been made in contravention of the requirements of Rule 904(b) of Regulation S; (4) the transaction is not part of a plan or scheme to evade the registration provisions of the Securities Act; and (5) upon completion of the transaction, the beneficial interest being transferred as described above is to be held with the Depositary through Euroclear or Cedel or both. Upon giving effect to this request to exchange a beneficial interest in a Rule 144A Global Note for a beneficial interest in a Regulation S Global Note, the resulting beneficial interest shall be subject to the restrictions on transfer applicable to Regulation S Global Notes pursuant to the Indenture and the Securities Act and, if such transfer occurs prior to the end of the 40-day restricted period associated with the initial offering of Senior Subordinated Notes, the additional restrictions applicable to transfers of interest in the Regulation S Temporary Global Note. This certificate and the statements contained herein are made for your benefit and the benefit of the Company, the Subsidiary Guarantors and Donaldson, Lufkin & Jenrette Securities Corporation and First Chicago Capital Markets, Inc., the initial purchasers of such Senior Subordinated Notes being transferred. Terms used in this certificate and not otherwise defined in the Indenture have the meanings set forth in Regulation S under the Securities Act. [Insert Name of Transferor] By:______________________________ Name: Title: Dated: cc: APCOA, Inc. Donaldson, Lufkin & Jenrette Securities Corporation First Chicago Capital Markets, Inc. 12 127 EXHIBIT B-2 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM REGULATION S GLOBAL NOTE TO RULE 144A GLOBAL NOTE (Pursuant to Section 2.6(a)(ii) of the Indenture) State Street Bank and Trust Company 225 Superior Avenue Hartford, Connecticut 06103 Re: 9 1/4% Senior Subordinated Notes due 2008 of APCOA, Inc. Reference is hereby made to the Indenture, dated as of March 30, 1998 (the "Indenture"), among APCOA, Inc., a Delaware corporation (the "Company"), Tower Parking, Inc., an Ohio corporation ("Tower"), Graelic, Inc., and Ohio corporation ("Graelic"), APCOA Capital Corporation, a Delaware corporation ("APCOA Capital"), A-1 Auto Park, Inc., a Georgia corporation ("A-1 Auto"), Metropolitan Parking System, Inc., a Massachusetts corporation ("Metropolitan"), Events Parking Company, Inc., a Massachusetts corporation ("Events Parking"), Standard Parking, L.P., a Delaware limited partnership ("SP"), Standard Parking Corporation, an Illinois corporation ("SPC"), Standard Parking Corporation, IL, an Illinois corporation ("SPC, IL"), Standard Parking Corporation, MW, an Illinois corporation ("SPC, MW"), Standard Auto Park, Inc., an Illinois corporation ("Standard Auto"), Standard/Wabash Parking Corporation, an Illinois corporation ("S/W"), Standard Parking of Canada, L.P., a Illinois limited partnership ("SP Canada"), Standard Parking I, L.L.C., a Delaware limited liability company ("SPI"), Standard Parking II, L.L.C., a Delaware limited liability company ("SPII"), (the "Subsidiary Guarantors") and State Street Bank and Trust Company, as trustee (the "Trustee"). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. This letter relates to $__________ principal amount of Senior Subordinated Notes which are evidenced by one or more Regulation S Global Notes and held with the Depositary through Euroclear or Cedel in the name of ______________________________________ (the "Transferor"). The Transferor has requested a transfer of such beneficial interest in the Senior Subordinated Notes to a Person who will take delivery thereof in the form of an equal principal amount of Senior Subordinated Notes evidenced by one or more Rule 144A Global Notes, to be held with the Depositary. In connection with such request and in respect of such Senior Subordinated Notes, the Transferor hereby certifies that: [CHECK ONE] such transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby further certifies that the Senior Subordinated Notes are being transferred to a 13 128 Person that the Transferor reasonably believes is purchasing the Senior Subordinated Notes for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A; or such transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act, or such transfer is being effected pursuant to an exemption under the Securities Act other than Rule 144A, Rule 144 or Rule 904 and the Transferor further certifies that the Transfer complies with the transfer restrictions applicable to beneficial interests in Global Notes and Definitive Senior Subordinated Notes bearing the Private Placement Legend and the requirements of the exemption claimed, which certification is supported by (x) if such transfer is in respect of a principal amount of Senior Subordinated Notes at the time of Transfer of $250,000 or more, a certificate executed by the Transferee in the form of EXHIBIT C to the Indenture, or (y) if such Transfer is in respect of a principal amount of Senior Subordinated Notes at the time of transfer of less than $250,000, (1) a certificate executed in the form of EXHIBIT C to the Indenture and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that (1) such Transfer is in compliance with the Securities Act and (2) such Transfer complies with any applicable blue sky securities laws of any state of the United States; or such transfer is being effected pursuant to an effective registration statement under the Securities Act; or such transfer is being effected pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A or Rule 144, and the Transferor hereby further certifies that the Senior Subordinated Notes are being transferred in compliance with the transfer restrictions applicable to the Global Notes and in accordance with the requirements of the exemption claimed, which certification is supported by an Opinion of Counsel, provided by the transferor or the transferee (a copy of which the Transferor has attached to this certification) in form reasonably acceptable to the Company and to the Registrar, to the effect that such transfer is in compliance with the Securities Act; and such Senior Subordinated Notes are being transferred in compliance with any applicable blue sky securities laws of any state of the United States. 14 129 Upon giving effect to this request to exchange a beneficial interest in Regulation S Global Notes for a beneficial interest in 144A Global Senior Subordinated Notes, the resulting beneficial interest shall be subject to the restrictions on transfer applicable to Rule 144A Global Notes pursuant to the Indenture and the Securities Act. This certificate and the statements contained herein are made for your benefit and the benefit of the Company, the Subsidiary Guarantors and Donaldson, Lufkin & Jenrette Securities Corporation, and First Chicago Capital Markets, Inc., the initial purchasers of such Senior Subordinated Notes being transferred. Terms used in this certificate and not otherwise defined in the Indenture have the meanings set forth in Regulation S under the Securities Act. [Insert Name of Transferor] By: ______________________________ Name: Title: Dated: cc: APCOA, Inc. Donaldson, Lufkin & Jenrette Securities Corporation First Chicago Capital Markets, Inc. 15 130 EXHIBIT B-3 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER OF DEFINITIVE SENIOR SUBORDINATED NOTES (Pursuant to Section 2.6(b) of the Indenture) State Street Bank and Trust Company 225 Asylum Avenue Hartford, Connecticut 06103 Re: 9__% Senior Subordinated Notes due 2008 of APCOA, Inc. Reference is hereby made to the Indenture, dated as of March 30, 1998 (the "Indenture"), among APCOA, Inc., a Delaware corporation (the "Company"), Tower Parking, Inc., an Ohio corporation ("Tower"), Graelic, Inc., and Ohio corporation ("Graelic"), APCOA Capital Corporation, a Delaware corporation ("APCOA Capital"), A-1 Auto Park, Inc., a Georgia corporation ("A-1 Auto"), Metropolitan Parking System, Inc., a Massachusetts corporation ("Metropolitan"), Events Parking Company, Inc., a Massachusetts corporation ("Events Parking"), Standard Parking, L.P., a Delaware limited partnership ("SP"), Standard Parking Corporation, an Illinois corporation ("SPC"), Standard Parking Corporation, IL, an Illinois corporation ("SPC, IL"), Standard Parking Corporation, MW, an Illinois corporation ("SPC, MW"), Standard Auto Park, Inc., an Illinois corporation ("Standard Auto"), Standard/Wabash Parking Corporation, an Illinois corporation ("S/W"), Standard Parking of Canada, L.P., a Illinois limited partnership ("SP Canada"), Standard Parking I, L.L.C., a Delaware limited liability company ("SPI"), Standard Parking II, L.L.C., a Delaware limited liability company ("SPII"), (the "Subsidiary Guarantors") and State Street Bank and Trust Company, as trustee (the "Trustee"). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. This relates to $ _________ principal amount of Senior Subordinated Notes which are evidenced by one or more Definitive Senior Subordinated Notes in the name of__________ (the "Transferor"). The Transferor has requested an exchange or transfer of such Definitive Senior Subordinated Note(s) in the form of an equal principal amount of Senior Subordinated Notes evidenced by one or more Definitive Senior Subordinated Notes, to be delivered to the Transferor or, in the case of a transfer of such Senior Subordinated Notes, to such Person as the Transferor instructs the Trustee. In connection with such request and in respect of the Senior Subordinated Notes surrendered to the Trustee herewith for exchange (the "Surrendered Senior Subordinated Notes"), the Holder of such Surrendered Senior Subordinated Notes hereby certifies that: [CHECK ONE] 16 131 the Surrendered Senior Subordinated Notes are being acquired for the Transferor's own account, without transfer; or the Surrendered Senior Subordinated Notes are being transferred to the Company; or the Surrendered Senior Subordinated Notes are being transferred pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby further certifies that the Surrendered Senior Subordinated Notes are being transferred to a Person that the Transferor reasonably believes is purchasing the Surrendered Senior Subordinated Notes for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A, in each case in a transaction meeting the requirements of Rule 144A; or the Surrendered Senior Subordinated Notes are being transferred in a transaction permitted by Rule 144 under the Securities Act; or the Surrendered Senior Subordinated Notes are being transferred pursuant to an exemption under the Securities Act other than Rule 144A, Rule 144 or Rule 904 and the Transferor further certifies that the Transfer complies with the transfer restrictions applicable to beneficial interests in Global Notes and Definitive Senior Subordinated Notes bearing the Private Placement Legend and the requirements of the exemption claimed, which certification is supported by (x) if such transfer is in respect of a principal amount of Senior Subordinated Notes at the time of Transfer of $250,000 or more, a certificate executed by the Transferee in the form of EXHIBIT C to the Indenture, or (y) if such Transfer is in respect of a principal amount of Senior Subordinated Notes at the time of transfer of less than $250,000, (1) a certificate executed in the form of EXHIBIT C to the Indenture and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that (I) such Transfer is in compliance with the Securities Act and (2) such Transfer complies with any applicable blue sky securities laws of any state of the United States; or the Surrendered Senior Subordinated Notes are being transferred pursuant to an effective registration statement under the Securities Act; or 17 132 such transfer is being effected pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A or Rule 144, and the Transferor hereby further certifies that the Senior Subordinated Notes are being transferred in compliance with the transfer restrictions applicable to the Global Notes and in accordance with the requirements of the exemption claimed, which certification is supported by an Opinion of Counsel, provided by the transferor or the transferee (a copy of which the Transferor has attached to this certification) in form reasonably acceptable to the Company and to the Registrar, to the effect that such transfer is in compliance with the Securities Act; and the Surrendered Senior Subordinated Notes are being transferred in compliance with any applicable blue sky securities laws of any state of the United States. This certificate and the statements contained herein are made for your benefit and the benefit of the Company, the Subsidiary Guarantors and Donaldson, Lufkin & Jenrette Securities Corporation and First Chicago Capital Markets, Inc., the initial purchasers of such Senior Subordinated Notes being transferred. Terms used in this certificate and not otherwise defined in the Indenture have the meanings set forth in Regulation S under the Securities Act. [Insert Name of Transferor] By: ____________________________ Name: Title: Dated: cc: APCOA, Inc. Donaldson, Lufkin & Jenrette Securities Corporation First Chicago Capital Markets, Inc. EXHIBIT B-4 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM RULE 144A GLOBAL NOTE OR REGULATION S PERMANENT GLOBAL NOTE TO DEFINITIVE SENIOR SUBORDINATED NOTE (Pursuant to Section 2.6(c) of the Indenture) State Street Bank and Trust Company 225 Asylum Street Hartford, Connecticut 06103 Re: 9 1/4% Senior Subordinated Notes due 2008 of APCOA, Inc. Reference is hereby made to the Indenture, dated as of March 30, 1998 (the "Indenture"), among APCOA, Inc., a Delaware corporation (the "Company"), Tower Parking, Inc., an Ohio 18 133 corporation ("Tower"), Graelic, Inc., and Ohio corporation ("Graelic"), APCOA Capital Corporation, a Delaware corporation ("APCOA Capital"), A-1 Auto Park, Inc., a Georgia corporation ("A-1 Auto"), Metropolitan Parking System, Inc., a Massachusetts corporation ("Metropolitan"), Events Parking Company, Inc., a Massachusetts corporation ("Events Parking"), Standard Parking, L.P., a Delaware limited partnership ("SP"), Standard Parking Corporation, an Illinois corporation ("SPC"), Standard Parking Corporation, IL, an Illinois corporation ("SPC, IL"), Standard Parking Corporation, MW, an Illinois corporation ("SPC, MW"), Standard Auto Park, Inc., an Illinois corporation ("Standard Auto"), Standard/Wabash Parking Corporation, an Illinois corporation ("S/W"), Standard Parking of Canada, L.P., a Illinois limited partnership ("SP Canada"), Standard Parking I, L.L.C., a Delaware limited liability company ("SPI"), Standard Parking II, L.L.C., a Delaware limited liability company ("SPII"), (the "Subsidiary Guarantors") and State Street Bank and Trust Company, as trustee (the "Trustee"). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. This letter relates to $___________ principal amount of Senior Subordinated Notes which are evidenced by a beneficial interest in one or more Rule 144A Global Notes or Regulation S Permanent Global Notes in the name of ______________ (the "Transferor"). The Transferor has requested an exchange or transfer of such beneficial interest in the form of an equal principal amount of Senior Subordinated Notes evidenced by one or more Definitive Senior Subordinated Notes, to be delivered to the Transferor or, in the case of a transfer of such Senior Subordinated Notes, to such Person as the Transferor instructs the Trustee. In connection with such request and in respect of the Senior Subordinated Notes surrendered to the Trustee herewith for exchange (the "Surrendered Senior Subordinated Notes"), the Holder of such Surrendered Senior Subordinated Notes hereby certifies that: [CHECK ONE] the Surrendered Senior Subordinated Notes are being transferred to the beneficial owner of such Senior Subordinated Notes; or the Surrendered Senior Subordinated Notes are being transferred pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby further certifies that the Surrendered Senior Subordinated Notes are being transferred to a Person that the Transferor reasonably believes is purchasing the Surrendered Senior Subordinated Notes for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A, in each case in a transaction meeting they requirements of Rule 144A; or 19 134 the Surrendered Senior Subordinated Notes are being transferred in a transaction permitted by Rule 144 under the Securities Act; or the Surrendered Senior Subordinated Notes are being transferred pursuant to an effective registration statement under the Securities Act; or the Surrendered Senior Subordinated Notes are being transferred pursuant to an exemption under the Securities Act other than Rule 144A, Rule 144 or Rule 904 and the Transferor further certifies that the Transfer complies with the transfer restrictions applicable to beneficial interests in Global Notes and Definitive Senior Subordinated Notes bearing the Private Placement Legend and the requirements of the exemption claimed, which certification is supported by (x) if such transfer is in respect of a principal amount of Senior Subordinated Notes at the time of Transfer of $250,000 or more, a certificate executed by the Transferee in the form of EXHIBIT C to the Indenture, or (y) if such Transfer is in respect of a principal amount of Senior Subordinated Notes at the time of transfer of less than $250,000, (1) a certificate executed in the form of EXHIBIT C to the Indenture and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that (1) such Transfer is in compliance with the Securities Act and (2) such Transfer complies with any applicable blue sky securities laws of any state of the United States; or such transfer is being effected pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A or Rule 144, and the Transferor hereby further certifies that the Senior Subordinated Notes are being transferred in compliance with the transfer restrictions applicable to the Global Notes and in accordance with the requirements of the exemption claimed, which certification is supported by an Opinion of Counsel, provided by the transferor or the transferee (a copy of which the Transferor has attached to this certification) in form reasonably acceptable to the Company and to the Registrar, to the effect that such transfer is in compliance with the Securities Act; and the Surrendered Senior Subordinated Notes are being transferred in compliance with any applicable blue sky securities laws of any state of the United States. This certificate and the statements contained herein are made for your benefit and the benefit of the Company, the Subsidiary Guarantors and Donaldson, Lufkin & Jenrette Securities Corporation, the initial purchaser of such Senior Subordinated Notes being transferred. Terms used in this certificate and not otherwise defined in the Indenture have the meanings set forth in Regulation S under the Securities Act. 20 135 [Insert Name of Transferor] By:_____________________________ Name: Title: Dated: cc: APCOA, Inc. Donaldson, Lutkin & Jenrette Securities Corporation First Chicago Capital Markets, Inc. 21 136 EXHIBIT C FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR State Street Bank and Trust Company 225 Asylum Street Hartford, Connecticut 06103 Re: 9__% Senior Subordinated Notes due 2008 of APCOA, Inc. Reference is hereby made to the Indenture, dated as of March 30, 1998 (the "Indenture"), among APCOA, Inc., a Delaware corporation (the "Company"), Tower Parking, Inc., an Ohio corporation ("Tower"), Graelic, Inc., and Ohio corporation ("Graelic"), APCOA Capital Corporation, a Delaware corporation ("APCOA Capital"), A-1 Auto Park, Inc., a Georgia corporation ("A-1 Auto"), Metropolitan Parking System, Inc., a Massachusetts corporation ("Metropolitan"), Events Parking Company, Inc., a Massachusetts corporation ("Events Parking"), Standard Parking, L.P., a Delaware limited partnership ("SP"), Standard Parking Corporation, an Illinois corporation ("SPC"), Standard Parking Corporation, IL, an Illinois corporation ("SPC, IL"), Standard Parking Corporation, MW, an Illinois corporation ("SPC, MW"), Standard Auto Park, Inc., an Illinois corporation ("Standard Auto"), Standard/Wabash Parking Corporation, an Illinois corporation ("S/W"), Standard Parking of Canada, L.P., a Illinois limited partnership ("SP Canada"), Standard Parking I, L.L.C., a Delaware limited liability company ("SPI"), Standard Parking II, L.L.C., a Delaware limited liability company ("SPII"), (the "Subsidiary Guarantors") and State Street Bank and Trust Company, as trustee (the "Trustee"). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. In connection with our proposed purchase of $__________ aggregate principal amount of: (a)__Beneficial interests, or (b)__Definitive Senior Subordinated Notes, we confirm that: 1. We understand that any subsequent transfer of the Senior Subordinated Notes of any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Senior Subordinated Notes or any interest therein except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the "Securities Act"). 22 137 2. We understand that the offer and sale of the Senior Subordinated Notes have not been registered under the Securities Act, and that the Senior Subordinated Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Senior Subordinated Notes or any interest therein, (A) we will do so only (l)(a) to a person who the Seller reasonably believes is a qualified institutional buyer (as defined in Rule 144A under the Securities Act) in a transaction meeting the requirements of 144A, (b) in a transaction meeting the requirements of Rule 144 under the Securities Act, (c) outside the United States to a foreign person in a transaction meeting the requirements of Rule 904 of the Securities Act, or (d) in accordance with another exemption from the registration requirements of the Securities Act (and based upon an opinion of counsel), (2) to the Company or any of its subsidiaries or (3) pursuant to an effective registration statement and, in each case, in accordance with any applicable securities laws of any State of the United States or any other applicable jurisdiction and (B) we will, and each subsequent holder will be required to, notify any purchaser from it of the security evidenced hereby of the resale restrictions set forth in (A) above." 3. We understand that, on any proposed resale of the Senior Subordinated Notes or beneficial interests, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Senior Subordinated Notes purchased by us will bear a legend to the foregoing effect. 4. We are an institutional "accredited investor" (as defined in Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Senior Subordinated Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment. 5. We are acquiring the Senior Subordinated Notes or beneficial interests therein purchased by us for our own account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion. 6. We are not acquiring the Senior Subordinated Notes with a view to any distribution thereof that would violate the Securities Act or the securities laws of any State of the United States. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. [Insert Name of Accredited Investor] By: ______________________________ Name: Title: Dated: 23 138 EXHIBIT D Note Guarantee Subject to Section 11.6 of the Indenture, each Subsidiary Guarantor hereby, jointly and severally, unconditionally guarantees to each Holder of a Senior Subordinated Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Senior Subordinated Notes and the Obligations of the Company under the Senior Subordinated Notes or under the Indenture, that: (a) the principal of, premium, if any, interest and Liquidated Damages, if any, on the Senior Subordinated Notes will be promptly paid in full when due, subject to any applicable grace period, whether at maturity, by acceleration, redemption or otherwise, and interest on overdue principal, premium, if any, (to the extent permitted by law) interest on any interest, if any, and Liquidated Damages, if any, on the Senior Subordinated Notes and all other payment Obligations of the Company to the Holders or the Trustee under the Indenture or under the Senior Subordinated Notes will be promptly paid in full and performed, all in accordance with the terms thereof, and (b) in case of any extension of time of payment or renewal of any Senior Subordinated Notes or any of such other payment Obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at stated maturity, by acceleration, redemption or otherwise. Failing payment when so due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and severally obligated to pay the same immediately. The obligations of the Subsidiary Guarantor to the Holders and to the Trustee pursuant to this Note Guarantee and the Indenture are expressly set forth in Article 11 of the Indenture, and reference is hereby made to such Indenture for the precise terms of this Note Guarantee. The terms of Article 11 of the Indenture are incorporated herein by reference. This Note Guarantee is subject to release as and to the extent provided in Section 11.4 of the Indenture. This is a continuing Guarantee and shall remain in full force and effect and shall be binding upon each Subsidiary Guarantor and its respective successors and assigns to the extent set forth in the Indenture until full and final payment of all of the Company's Obligations under the Senior Subordinated Notes and the Indenture and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. This is a Note Guarantee of payment and not a guarantee of collection. This Note Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Senior Subordinated Note upon which this Note Guarantee is noted shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized officers. 24 139 For purposes hereof, each Subsidiary Guarantor's liability shall be limited to the lesser of (i) the aggregate amount of the Obligations of the Company under the Senior Subordinated Notes and the Indenture and (ii) the amount, if any, which would not have (A) rendered such Subsidiary Guarantor "insolvent" (as such term is defined in the Bankruptcy Law and in the Debtor and Creditor Law of the State of New York) or (B) left such Subsidiary Guarantor with unreasonably small capital at the time its Note Guarantee of the Senior Subordinated Notes was entered into; provided that, it will be a presumption in any lawsuit or other proceeding in which a Subsidiary Guarantor is a party that the amount guaranteed pursuant to the Note Guarantee is the amount set forth in clause (i) above unless any creditor, or representative of creditors of such Subsidiary Guarantor, or debtor in possession or trustee in bankruptcy of such Subsidiary Guarantor, otherwise proves in such a lawsuit that the aggregate liability of the Subsidiary Guarantor is limited to the amount set forth in clause (ii) above. The Indenture provides that, in making any determination as to the solvency or sufficiency of capital of a Subsidiary Guarantor in accordance with the previous sentence, the right of such Subsidiary Guarantors to contribution from other Subsidiary Guarantors and any other rights such Subsidiary Guarantors may have, contractual or otherwise, shall be taken into account. Capitalized terms used herein have the same meanings given in the Indenture unless otherwise indicated. Dated as of___________ 1998 APCOA, INC. By: __________________________ Name: Title: TOWER PARKING, INC. By: __________________________ Name: Title: GRAELIC, INC. By: __________________________ Name: Title: 25 140 APCOA CAPITAL CORPORATION By: __________________________ Name: Title: A-1 AUTO PARK, INC. By: _________________________ Name Title: METROPOLITAN PARKING SYSTEM, INC. By: _________________________ Name: Title: EVENTS PARKING, INC. By: __________________________ Name: Title: STANDARD PARKING, L.P. By: ___________________________ Name: Title: STANDARD PARKING CORPORATION By: ___________________________ Name: Title: 26 141 STANDARD PARKING CORPORATION, IL By: ___________________________ Name: Title: STANDARD PARKING CORPORATION, MW By: ___________________________ Name: Title: STANDARD AUTO PARK, INC. By: ___________________________ Name: Title: STANDARD/WABASH PARKING CORPORATION By: _____________________________ Name: Title: STANDARD PARKING OF CANADA By: _____________________________ Name: Title: STANDARD PARKING I, L.L.C. By: _____________________________ Name: Title: 27 142 STANDARD PARKING II, L.L.C. By: _____________________________ Name:. Title: have been executed by the Trustee under the Indenture by the manual signature of one of its authorized officers. For purposes hereof, each Subsidiary Guarantor's liability shall be limited to the lesser of (i) the aggregate amount of the Obligations of the Company under the Senior Subordinated Notes and the Indenture and (ii) the amount, if any, which would not have (A) rendered such Subsidiary Guarantor "insolvent" (as such term is defined in the Bankruptcy Law and in the Debtor and Creditor Law of the State of New York) or (B) left such Subsidiary Guarantor with unreasonably small capital at the time its Note Guarantee of the Senior Subordinated Notes was entered into; provided that, it will be a presumption in any lawsuit or other proceeding in which a Subsidiary Guarantor is a party that the amount guaranteed pursuant to the Note Guarantee is the amount set forth in clause (i) above unless any creditor, or representative of creditors of such Subsidiary Guarantor, or debtor in possession or trustee in bankruptcy of such Subsidiary Guarantor, otherwise proves in such a lawsuit that the aggregate liability of the Subsidiary Guarantor is limited to the amount set forth in clause (ii) above. The Indenture provides that, in making any determination as to the solvency or sufficiency of capital of a Subsidiary Guarantor in accordance with the previous sentence, the right of such Subsidiary Guarantors to contribution from other Subsidiary Guarantors and any other rights such Subsidiary Guarantors may have, contractual or otherwise, shall be taken into account. Capitalized terms used herein have the same meanings given in the Indenture unless otherwise indicated. Dated as of ___________, 1998 APCOA, INC. By: __________________________ Name: Title: TOWER PARKING, INC. By: __________________________ Name: Title: 28 143 GRAELIC, INC. By: __________________________ Name: Title: APCOA CAPITAL CORPORATION By: __________________________ Name: Title: A-1 AUTO PARK, INC. By: __________________________ Name Title: METROPOLITAN PARKING SYSTEM, INC. By: __________________________ Name: Title: EVENTS PARKING, INC. By: ___________________________ Name: Title: STANDARD PARKING, L.P. By: __________________________ Name: Title: 29 144 STANDARD PARKING CORPORATION By: ___________________________ Name: Title: STANDARD PARKING CORPORATION, IL By: _____________________________ Name: Title: STANDARD PARKING CORPORATION, MW By: _____________________________ Name: Title: STANDARD AUTO PARK, INC By: _____________________________ Name: Title: STANDARD/WABASH PARKING CORPORATION By: _____________________________ Name: Title: STANDARD PARKING OF CANADA By: _____________________________ Name: Title: 30 145 STANDARD PARKING I, L.L.C. By: _____________________________ Name: Title: STANDARD PARKING II, L.L.C. By: _____________________________ Name:. Title: 31 146 Exhibit E FORM OF SUPPLEMENTAL INDENTURE SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of ___________ between Subsidiary Guarantor (the "New Subsidiary Guarantor"), a subsidiary of APCOA, Inc., a Delaware corporation (the "Company"), and State Street Bank and Trust Company, as trustee under the indenture referred to below (the "Trustee"). Capitalized terms used herein and not defined herein shall have the meaning ascribed to them in the Indenture (as defined below). WITNESSETH WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the "Indenture"), dated as of March 30, 1998, providing for the issuance of an aggregate principal amount of $110,000,000 of 9__% Senior Subordinated Notes due 2008 (the "Senior Subordinated Notes"); WHEREAS, Section 11.5 of the Indenture provides that under certain circumstances the Company may cause, and Section 11.3 of the Indenture provides that under certain circumstances the Company must cause, certain of its subsidiaries to execute and deliver to the Trustee a supplemental indenture pursuant to which such subsidiaries shall unconditionally guarantee all of the Company's Obligations under the Senior Subordinated Notes pursuant to a Note Guarantee on the terms and conditions set forth herein; and WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture. NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Senior Subordinated Notes as follows: 1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture. 2. AGREEMENT TO NOTE GUARANTEE. The New Subsidiary Guarantor hereby agrees, jointly and severally with all other Subsidiary Guarantors, to guarantee the Company's Obligations under the Senior Subordinated Notes and the Indenture on the terms and subject to the conditions set forth in Article 11 of the Indenture and to be bound by all other applicable provisions of the Indenture. 3. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator, shareholder or agent of any Subsidiary Guarantor, as such, shall 32 147 have any liability for any obligations of the Company or any Subsidiary Guarantor under the Senior Subordinated Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Senior Subordinated Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Senior Subordinated Notes. 4. NEW YORK LAW TO GOVERN. The internal law of the State of New York shall govern and be used to construe this Supplemental Indenture. 5. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 6. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof. 7. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the correctness of the recitals of fact contained herein, all of which recitals are made solely by the New Subsidiary Guarantor. 33 148 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written. Dated: ___________________ [NAME OF NEW SUBSIDIARY GUARANTOR] By: ______________________ Name: Title: 34 EX-10.1 33 REGISTRATION RIGHTS AGREEMENT 1 Exhibit 10.1 EXECUTION COPY ================================================================================ AP HOLDINGS, INC. ------------------------------------------ $70,000,000 11-1/4% SENIOR DISCOUNT NOTES DUE 2008 -------------------------------------- ---------------------- REGISTRATION RIGHTS AGREEMENT DATED AS OF MARCH 30, 1998 -------------------------- DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION ================================================================================ 2 This Registration Rights Agreement (this "Agreement") is made and entered into as of March 30, 1998, by and between AP Holdings, Inc., a Delaware corporation ("AP Holdings") and Donaldson, Lufkin & Jenrette Securities Corporation (the "Initial Purchaser"), who has agreed to purchase AP Holdings' 11-1/4% Senior Discount Notes due 2008 (the "Senior Discount Notes") pursuant to the Purchase Agreement (as defined below). This Agreement is made pursuant to the Purchase Agreement, dated March 25, 1998 (the "Purchase Agreement"), by and among AP Holdings and the Initial Purchaser. In order to induce the Initial Purchaser to purchase the Senior Discount Notes, AP Holding has agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchaser set forth in the Purchase Agreement. The parties hereby agree as follows: 1. DEFINITIONS As used in this Agreement, the following capitalized terms shall have the following meanings: Act: The Securities Act of 1933, as amended. Business Day: Any day except a Saturday, Sunday or other day in the City of New York, or in the city of the corporate trust office of the Trustee, on which banks are authorized to close. Broker-Dealer: Any broker or dealer registered under the Exchange Act. Broker-Dealer Transfer Restricted Securities: New Senior Discount Notes that are acquired by a Broker-Dealer in the Exchange Offer in exchange for Senior Discount Notes that such Broker-Dealer acquired for its own account as a result of market-making activities or other trading activities (other than Senior Discount Notes acquired directly from AP Holdings or any of its respective affiliates). Certificated Securities: As defined in the Indenture. Closing Date: The date hereof. Commission: The Securities and Exchange Commission. Consummate: An Exchange Offer shall be deemed "Consummated" for purposes of this Agreement upon the occurrence of (a) the filing and effectiveness under the Act of the Exchange Offer Registration Statement relating to the New Senior Discount Notes to be issued in the Exchange Offer, (b) the maintenance of such Registration Statement con- 3 tinuously effective and the keeping of the Exchange Offer open for a period not less than the minimum period required pursuant to Section 3(b) hereof and (c) the delivery by AP Holdings to the Registrar under the Indenture of New Senior Discount Notes in the same aggregate principal amount as the aggregate principal amount of Section Discount Notes tendered by Holders thereof pursuant to the Exchange Offer. Damages Payment Date: With respect to the Transfer Restricted Securities, each Interest Payment Date. Effectiveness Target Date: As defined in Section 5. Exchange Act: The Securities Exchange Act of 1934, as amended. Exchange Offer: The registration by AP Holdings under the Act of the New Senior Discount Notes pursuant to the Exchange Offer Registration Statement pursuant to which AP Holdings shall offer the Holders of all outstanding Transfer Restricted Securities the opportunity to exchange all such outstanding Transfer Restricted Securities for New Senior Discount Notes in an aggregate principal amount equal to the aggregate principal amount of the Transfer Restricted Securities tendered in such exchange offer by such Holders. Exchange Offer Registration Statement: The Registration Statement relating to the Exchange Offer, including the related Prospectus. Exempt Resales: The transactions in which the Initial Purchaser proposes to sell the Senior Discount Notes (i) to certain "qualified institutional buyers," as such term is defined in Rule 144A under the Act or (ii) outside the United States in reliance upon Regulation S under the Securities Act to non-U.S. persons. Global Note Holder: As defined in the Indenture. Holders: As defined in Section 2 hereof. Indemnified Holder: As defined in Section 8(a) hereof. Indenture: The Indenture, dated the Closing Date, among AP Holdings and State Street Bank and Trust Company, as trustee (the "Trustee"), pursuant to which the Notes are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof. Interest Payment Date: As defined in the Indenture and the Notes. NASD: National Association of Securities Dealers, Inc. Offering Memorandum: As defined in the Purchase Agreement. -2- 4 Person: Any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. Prospectus: The prospectus included in a Registration Statement at the time such Registration Statement is declared effective, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus. Record Holder: With respect to any Damages Payment Date, each Person who is a Holder of Notes on the record date with respect to the Interest Payment Date on which such Damages Payment Date shall occur. Registration Default: As defined in Section 5 hereof. Registration Statement: Any registration statement of AP Holdings relating to (a) an offering of New Senior Discount Notes pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Securities held by such holders pursuant to the Shelf Registration Statement, in each case, (i) which is filed pursuant to the provision of this Agreement and (ii) including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibit and material incorporated by reference therein. Restricted Broker-Dealer: Any Broker-Dealer which holds Broker-Dealer Transfer Restricted Securities. Notes: The Senior Discount Notes and the New Senior Discount Notes. New Senior Discount Notes: AP Holdings' 11 1/4% New Senior Discount Notes due 2008 to be issued pursuant to the Indenture (i) in the Exchange Offer or (ii) upon the request of any Holder of Senior Discount Notes covered by a Shelf Registration Statement, in exchange for such Senior Discount Notes. Shelf Registration Statement: As defined in Section 4 hereof. TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in effect on the date of the Indenture. Transfer Restricted Securities: Each Note, until the earliest to occur of (a) the date on which such Note is exchanged in the Exchange Offer and entitled to be resold to the public by the Holder thereof without complying with the prospectus delivery requirements of the Act, (b) the date on which such Note has been disposed of in accordance with a Shelf Registration Statement, (c) the date on which such Note is disposed of by a Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the Exchange Offer -3- 5 Registration Statement (including delivery of Prospectus contained therein) or (d) the date on which such Note is distributed to the public pursuant to Rule 144 under the Act. Underwritten Registration or Underwritten Offering: A registration in which securities of AP Holdings are sold to an underwriter for reoffering to the public. 2. HOLDERS A Person is deemed to be a holder of Transfer Restricted Securities (each, a "Holder") whenever such Person owns Transfer Restricted Securities. 3. REGISTERED EXCHANGE OFFER (a) Unless the Exchange Offer shall not be permitted by applicable federal law (after the procedures set forth in Section 6(a)(i) below have been complied with), AP Holdings shall (i) cause to be filed with the Commission, on or prior to 30 days after the Closing Date, the Exchange Offer Registration Statement, (ii) use their respective best efforts to cause such Exchange Offer Registration Statement to become effective at the earliest possible time, but in no event later than 120 days after the Closing Date, (iii) in connection with the foregoing, (A) file all pre-effective amendments to such Exchange Offer Registration Statement as may be necessary in order to cause such Exchange Offer Registration Statement to become effective, (B) file, if applicable, a post-effective amendment to such Exchange Offer Registration Statement pursuant to Rule 430A under the Act and (C) cause all necessary filings, if any, in connection with the registration and qualification of the New Senior Discount Notes to be made under the Blue Sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer provided that in no event shall AP Holdings be obligated to qualify to do business in any jurisdiction where it is not now so qualified, or take any action which would subject it to the General Service of Process in any jurisdiction where it is not now so subject, and (iv) upon the effectiveness of such Exchange Offer Registration Statement, use its reasonable best efforts to commence and Consummate the Exchange Offer. The Exchange Offer shall be on the appropriate form permitting registration of the New Senior Discount Notes to be offered in exchange for the Senior Discount Notes that are Transfer Restricted Securities and to permit sales of Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers as contemplated by Section 3(c) below. (b) AP Holdings shall use its respective best efforts to cause the Exchange Offer Registration Statement to be effective continuously, and shall keep the Exchange Offer open, for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided, however, that in no event shall such period be less than 20 Business Days. AP Holdings shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Notes shall be included in the Exchange Offer Registration Statement. AP Holdings shall use its best efforts to cause the Exchange Offer to be Con- -4- 6 summated on the earliest practicable date after the Exchange Offer Registration Statement has become effective, but in no event later than 30 Business Days thereafter. (c) AP Holdings shall include a "Plan of Distribution" section in the Prospectus contained in the Exchange Offer Registration Statement and indicate therein that any Restricted Broker-Dealer who holds Senior Discount Notes that are Transfer Restricted Securities and that were acquired for the account of such Broker-Dealer as a result of market-making activities or other trading activities, may exchange such Senior Discount Notes (other than Transfer Restricted Securities acquired directly from AP Holdings or any affiliate of AP Holdings) pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be an "underwriter" within the meaning of the Act and must, therefore, deliver a prospectus meeting the requirements of the Act in connection with the initial sales of the New Senior Discount Notes received by such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer Registration Statement. Such "Plan of Distribution" section shall also contain all other information with respect to such sales of Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers that the Commission may require in order to permit such sales pursuant thereto, but such "Plan of Distribution" shall not name any such Broker-Dealer or disclose the amount of Notes held by any such Broker-Dealer except to the extent required by the Commission. AP Holdings shall use its best efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 6(c) below to the extent necessary to ensure that it is available for sales of Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers, and to ensure that such Registration Statement conforms with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of 120 days from the date on which the Exchange Offer is Consummated. AP Holdings shall provide sufficient copies of the latest version of such Prospectus to such Restricted Broker-Dealers promptly upon request, and in no event later than two days after such request, at any time during such 120-day period in order to facilitate such sales. 4. SHELF REGISTRATION (a) Shelf Registration. If (i) AP Holdings is not required to file an Exchange Offer Registration Statement with respect to the New Senior Discount Notes because the Exchange Offer is not permitted by applicable law (after the procedures set forth in Section 6(a)(i) below have been complied with) or (ii) if any Holder of Transfer Restricted Securities shall notify AP Holdings within 20 Business Days following the Consumma- -5- 7 tion of the Exchange Offer that (A) such Holder is prohibited by law or Commission policy from participating in the Exchange Offer or (B) such Holder may not resell the New Senior Discount Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder or (C) such Holder is a Broker-Dealer and holds Senior Discount Notes acquired directly from AP Holdings or one of its respective affiliates, then AP Holdings shall (x) cause to be filed on or prior to the earlier of (1) 45 days after the date on which AP Holdings is notified by the Commission or otherwise determines that they are not required to file the Exchange Offer Registration Statement pursuant to clause (i) above and (2) 45 days after the date on which AP Holdings receives the notice specified in clause (ii) above, a shelf registration statement pursuant to Rule 415 under the Act (which may be an amendment to the Exchange Offer Registration Statement (in either event, the "Shelf Registration Statement")), relating to all Transfer Restricted Securities the Holders of which shall have provided the information required pursuant to Section 4(b) hereof, and (y) use its best efforts to cause such Shelf Registration Statement to be declared effective by the Commission at the earliest possible time, but in no event later than 120 days after the date on which AP Holdings becomes obligated to file such Shelf Registration Statement. If, after AP Holdings has filed an Exchange Offer Registration Statement which satisfies the requirements of Section 3(a) above, AP Holdings is required to file and make effective a Shelf Registration Statement solely because the Exchange Offer shall not be permitted under applicable federal law, then the filing of the Exchange Offer Registration Statement shall be deemed to satisfy the requirements of clause (x) above. Such an event shall have no effect on the requirements of clause (y) above, or on the Effectiveness Target Date as defined in Section 5 below. AP Holdings shall use its best effort to keep the Shelf Registration Statement discussed in this Section 4(a) continuously effective, supplemented and amended as required by and subject to the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for sales of Transfer Restricted Securities by the Holders thereof entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of at least two years (as extended pursuant to Section 6(c)(i)) following the date on which such Shelf Registration Statement first becomes effective under the Act or such shorter period ending when all of the Transfer Restricted Securities available for sale thereunder have been sold pursuant thereto. (b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to AP Holdings in writing, within 20 days after receipt of a request therefor, such information specified in Item 507 of Regulation S-K under the Act for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. No Holder of Transfer Restricted -6- 8 Securities shall be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until such Holder has provided all such information. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to AP Holdings all information required to be disclosed in order to make the information previously furnished to AP Holdings by such Holder not materially misleading. 5. LIQUIDATED DAMAGES If (i) any Registration Statement required by this Agreement is not filed with the Commission on or prior to the date specified for such filing in this Agreement, (ii) any such Registration Statement has not been declared effective by the Commission on or prior to the date specified for such effectiveness in this Agreement (the "Effectiveness Target Date"), (iii) the Exchange Offer has not been Consummated within 30 Business Days after the Effectiveness Target Date with respect to the Exchange Offer Registration Statement or (iv) any Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded immediately by a post-effective amendment to such Registration Statement that cures such failure and that is itself immediately declared effective (each such event referred to in clauses (i) through (iv), a "Registration Default"), AP Holdings hereby agrees to pay to each Holder of Transfer Restricted Securities, for the first 90-day period immediately following the occurrence of such Registration Default, liquidated damages in an amount equal to $.05 per week per $1,000 principal amount of Notes constituting Transfer Restricted Securities held by such Holder for each week or portion thereof that the Registration Default continues. The amount of the liquidated damages payable to each Holder shall increase by an additional $.05 per week per $1,000 in principal amount of Transfer Restricted Securities with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of liquidated damages of $.50 per week per $1,000 principal amount of Transfer Restricted Securities held by such Holder. Notwithstanding anything to the contrary set forth herein, (1) upon filing of the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement), in the case of (i) above, (2) upon the effectiveness of the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement), in the case of (ii) above, (3) upon Consummation of the Exchange Offer, in the case of (iii) above, or (4) upon the filing of a post-effective amendment to the Registration Statement or an additional Registration Statement that causes the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement) to again be declared effective or made usable in the case of (iv) above, the liquidated damages payable with respect to the Transfer Restricted Securities as a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease. All accrued liquidated damages shall be paid to the Global Note Holder by wire transfer of immediately available funds or by federal funds check and to Holders of Certificated Securities by wire transfer to the accounts specified by them or by mailing checks -7- 9 to their registered addresses if no such accounts have been specified on each Damages Payment Date. Following the cure of all Registration Defaults relating to any particular Transfer Restricted Securities, the accrual of liquidated damages with respect to such Transfer Securities will cease. All obligations of AP Holdings set forth in the preceding paragraph that are outstanding with respect to any Transfer Restricted Security at the time such security ceases to be a Transfer Restricted Security shall survive until such time as all such obligations with respect to such security shall have been satisfied in full. 6. REGISTRATION PROCEDURES (a) Exchange Offer Registration Statement. In connection with the Exchange Offer, AP Holdings shall comply with all applicable provisions of Section 6(c) below, shall use its best efforts to effect such exchange and to permit the sale of Broker-Dealer Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof (which shall be in a manner consistent with the terms of this Agreement), and shall comply with all of the following provisions: (i) If, following the date hereof and prior to Consummation of the Exchange Offer, there has been published a change in Commission policy with respect to exchange offers such as the Exchange Offer, such that in the reasonable judgment of counsel to AP Holdings there is a substantial question as to whether the Exchange Offer is permitted by applicable federal law or Commission policy, AP Holdings hereby agrees to seek a no-action letter or other favorable decision from the Commission allowing AP Holdings to Consummate an Exchange Offer for such Senior Discount Notes. AP Holdings hereby agrees to pursue the issuance of such a decision to the Commission staff level but shall not be required to take commercially unreasonable action to effect a change of Commission policy. In connection with the foregoing, AP Holdings hereby agrees, however, but subject to the proviso set forth above, to take all such other actions as are reasonably requested by the Commission or otherwise required in connection with the issuance of such decision, including without limitation to (A) participate in telephonic conferences with the Commission, (B) deliver to the Commission staff an analysis prepared by counsel to AP Holdings setting forth the legal bases, if any, upon which such counsel has concluded that such an Exchange Offer should be permitted and (C) diligently pursue a resolution (which need not be favorable) by the Commission staff of such submission. (ii) As a condition to its participation in the Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer Restricted Securities shall furnish, upon the request of AP Holdings, prior to the Consummation of the Exchange Offer, a written representation to AP Holdings (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an affiliate of AP Holdings, (B) it is not en- -8- 10 gaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of the New Senior Discount Notes to be issued in the Exchange Offer and (C) it is acquiring the New Senior Discount Notes in its ordinary course of business. In addition, all such holders of Transfer Restricted Securities shall otherwise cooperate in AP Holdings' preparation for the Exchange Offer. Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Exchange Offer to participate in a distribution of the securities to be acquired in the Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the Commission's letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters (including, if applicable, any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Act in connection with a secondary resale transaction and that such a secondary resale transaction must be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K if the resales are of New Senior Discount Notes obtained by such Holder in exchange for Senior Discount Notes acquired by such Holder directly from AP Holdings or an affiliate thereof. (iii) To the extent required by the Commission, prior to effectiveness of the Exchange Offer Registration Statement, AP Holdings shall provide a supplemental letter to the Commission (A) stating that AP Holdings is registering the Exchange Offer in reliance on the position of the Commission enunciated in Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) and, if applicable, any no-action letter obtained pursuant to clause (i) above, (B) including a representation that AP Holdings has not entered into any arrangement or understanding with any Person to distribute the New Senior Discount Notes to be received in the Exchange Offer and that, to the best of AP Holdings' information and belief, each Holder participating in the Exchange Offer is acquiring the New Senior Discount Notes in its ordinary course of business and has no arrangement or understanding with any Person to participate in the distribution of the New Senior Discount Notes received in the Exchange Offer and (C) any other undertaking or representation required by the Commission as set forth in any no-action letter obtained pursuant to clause (i) above. (b) Shelf Registration Statement. In connection with the Shelf Registration Statement AP Holdings shall comply with all the provisions of Section 6(c) below and shall use their respective best efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or -9- 11 methods of distribution thereof (as indicated in the information furnished to AP Holdings pursuant to Section 4(b) hereof), and pursuant thereto AP Holdings will prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof within the time periods and otherwise in accordance with the provisions hereof. (c) General Provisions. In connection with any Registration Statement and any related Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities (including, without limitation, any Exchange Offer Registration Statement and the related Prospectus, to the extent that the same are required to be available to permit sales of Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers), AP Holdings shall: (i) use their respective best efforts to keep such Registration Statement continuously effective and provide all requisite financial statements for the period specified in Section 3 or 4 of this Agreement, as applicable. Upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, AP Holdings shall file promptly an appropriate amendment to such Registration Statement, (1) in the case of clause (A), correcting any such misstatement or omission, and (2) in the case of either clause (A) or (B), use their respective best efforts to cause such amendment to be declared effective and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter. Notwithstanding the foregoing, at any time after Consummation of the Exchange Offer, AP Holdings may allow the Shelf Registration Statement to cease to be effective and usable if (x) the Board of Directors of AP Holdings determines in good faith that it is in the best interests of AP Holdings not to disclose the existence of or facts surrounding any proposed or pending material corporate transaction involving AP Holdings, and AP Holdings notifies the Holders within two business days after the Board makes such determination, or (y) the Prospectus contained in the Shelf Registration Statement contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, or such shorter period as will terminate when all Transfer Restricted Securities covered by such Registration Statement have been sold; cause the Pro- -10- 12 spectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Act, and to comply fully with Rules 424, 430A and 462 as applicable, under the Act in a timely manner; and comply with the provisions of the Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus; (iii) advise the underwriter(s), if any, and selling Holders promptly and, if requested by such Persons, confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities, as applicable, for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement in order to make the statements therein not misleading, or that requires the making of any additions to or changes in the Prospectus in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or Blue Sky laws, AP Holdings shall use its best efforts to obtain the withdrawal or lifting of such order at the earliest possible time; (iv) furnish to the Initial Purchaser, each selling Holder named in any Registration Statement or Prospectus and each of the underwriter(s) in connection with such sale, if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendment or supplements to any such Registration Statement or Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), which documents will be subject to the review and comment of such Holders and underwriter(s) in connection with such sale, if any, for a period of at least five Business Days, and AP Holdings will not file any such Registration Statement or -11- 13 Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by reference) if the selling Holders of the Transfer Restricted Securities covered by such Registration Statement or the underwriter(s) in connection with such sale shall not have had an opportunity to participate in the preparation thereof; (v) prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to the selling Holders and to the underwriter(s) in connection with such sale, if any, make AP Holdings' representatives available for discussion of such document and other customary due diligence matters, and include such information in such document prior to the filing thereof as such selling Holders or uinderwriter(s), if any, reasonably may request; (vi) make available at reasonable times at AP Holdings principal place of business for inspection by the selling Holders of Transfer Restricted Securities, any managing underwriter participating in any disposition pursuant to such Registration Statement and any attorney or accountant retained by such selling Holders or any of such underwriter(s), who shall certify to AP Holdings that they have a current intention to sell Transfer Restricted Securities pursuant to a Shelf Registration Statement, all pertinent financial and other pertinent information of AP Holdings, as reasonably requested, and cause AP Holdings' officers, directors and employees to respond to such inquiries as shall be reasonable necessary; in the reasonable judgment of counsel to such Holders, to conduct a reasonable investigation; provided, however, that each such party shall be required to maintain in confidence and not to disclose to any other person any information or records reasonably designated by AP Holdings in writing as being confidential, until such time as (A) such information becomes a matter of public record (whether by virtue of its inclusion in such Registration Statement or otherwise), or (B) such person shall be required so to disclose such information pursuant to the subpoena or order of any court or other governmental agency or body having jurisdiction over the matter (subject to the requirements of such order, and only after such person shall have given AP Holdings prompt prior written notice of such requirement), or (C) such information is required to be set forth in such Registration Statement or the Prospectus included therein or in an amendment or supplement to such Registration Statement or an amendment or supplement to such Prospectus in order that such Registration Statement, Prospectus, amendment or supplement, as the case may be, does not contain an untrue statement of a material fact or omit to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; (vii) if requested by any selling Holders or the underwriter(s), as applicable, in connection with such sale, if any, promptly include in any Registration -12- 14 Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information that is required by the Act as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after AP Holdings is notified of the matters to be included in such Prospectus supplement or post-effective amendment; (viii) furnish to each selling Holder and each of the underwriter(s) in connection with such sale, if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference); (ix) deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; AP Holdings hereby consents to the use (in accordance with law) of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto. Notwithstanding the foregoing, at any time after Consummation of the Exchange Offer, AP Holdings may allow the Shelf Registration Statement to cease to be effective and usable if (x) the Board of Directors of AP Holdings determines in good faith that it is in the best interests of AP Holdings not to disclose the existence of or facts surrounding any proposed or pending material corporate transaction involving AP Holdings, and AP Holdings notifies the Holders within two business days after the Board makes such determination, or (y) the Prospectus contained in the Shelf Registration Statement contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (x) and take all such other actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any Registration Statement contemplated by this Agreement as may be reasonably requested by any Holder who holds at least 5% in aggregate principal amount of such class of Transfer Restricted Securities or underwriter in connection with any sale or resale pursuant to any Registration Statement contemplated by this Agreement, provided, that, AP Holdings shall not be required to enter into any such agreement more than once with respect to all of the Transfer Restricted Securities, and in the case of a Shelf Registration Statement, may delay entering into such agreement if the Board of Directors of AP Holdings determines in good faith that it is in the best interest of AP Holdings not to disclose the existence of -13- 15 or facts surrounding any proposed or pending corporate transaction involving AP Holdings; and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, AP Holdings shall: (A) furnish to each selling Holder who holds at least 5% in aggregate principal amount of such class of Transfer Restricted Securities and each underwriter, if any, in such substance and scope as they may request and as is customarily made in connection with an offering of debt securities pursuant to a Registration Statement, upon the effectiveness of the Shelf Registration Statement and to each Restricted Broker-Dealer upon Consummation of the Exchange Offer: (1) a certificate, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, signed on behalf of AP Holdings by (x) the President or any Vice President and (y) a principal financial or accounting officer of AP Holdings confirming, as of the date thereof, the matters set forth in paragraphs (a) through (c) of Section 9 of the Purchase Agreement and such other similar matters as the Holders, underwriter(s) and/or Restricted Broker-Dealers may reasonably request; (2) an opinion, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, of counsel for AP Holdings, covering matters customarily covered in opinions requested in Underwritten Offerings and dated the date of effectiveness of the Shelf Registration Statement or the date of Consummation of the Exchange Offer, as the case may be; and (3) customary comfort letters, dated as of the date of effectiveness of the Shelf Registration Statement or the date of Consummation of the Exchange Offer, as the case may be, from AP Holdings' independent accountants, in the customary form and covering matters of the type customarily covered in comfort letters to underwriters in connection with an offering of debt securities pursuant to a Registration Statement, and affirming the matters set forth in the comfort letters delivered pursuant to Section 9(f) of the Purchase Agreement, without exception; (B) set forth in full or incorporated by reference in the underwriting agreement, if any, in connection with any sale or resale pursuant to any Shelf Registration Statement the indemnification provisions and procedures of Section 8 hereof with respect to all parties to be indemnified pursuant to said Section; and (C) deliver such other documents and certificates as may be reasonably requested by the selling Holders, the underwriter(s), if any, and Restricted Broker- -14- 16 Dealers, if any, to evidence compliance with clause (A) above and with any customary conditions contained in the underwriting agreement or other agreement entered into by AP Holdings pursuant to this clause (x). The above shall be done at each closing under such underwriting or similar agreement, as and to the extent required thereunder, and if at any time the representations and warranties of AP Holdings contemplated in (A)(1) above cease to be true and correct, AP Holdings shall so advise the underwriter(s), if any, selling Holders who hold at least 5% in aggregate principal amount of such class of Transfer Restricted Securities and each Restricted Broker-Dealer promptly and if requested by such Persons, shall confirm such advice in writing; (xi) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the selling Holders or underwriter(s), if any, may reasonably request and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the applicable Registration Statement; provided, however, that AP Holdings shall not be required to register or qualify as a foreign corporation where it is not now so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not now so subject; (xii) issue, upon the request of any Holder of Senior Discount Notes covered by any Shelf Registration Statement contemplated by this Agreement, New Senior Discount Notes, having an aggregate principal amount equal to the aggregate principal amount of Senior Discount Notes surrendered to AP Holdings by such Holder in exchange therefor or being sold by such Holder; such New Senior Discount Notes to be registered in the name of such Holder or in the name of the purchaser(s) of such Notes, as the case may be; in return, the Senior Discount Notes held by such Holder shall be surrendered to AP Holdings for cancellation; (xiii)in connection with any sale of Transfer Restricted Securities that will result in such securities no longer being Transfer Restricted Securities, cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and to enable such Transfer Restricted Securities to be in such denominations and registered in such names as such Holders or the underwriter(s), if any, may request at least two Business Days prior to such sale of Transfer Restricted Securities; -15- 17 (xiv) use their respective best efforts to cause the disposition of the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in clause (xi) above; (xv) subject to Section 6(c)(i), if any fact or event contemplated by Section 6(c)(iii)(D) above shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (xvi) provide a CUSIP number for all Transfer Restricted Securities not later than the effective date of a Registration Statement covering such Transfer Restricted Securities and provide the Trustee under the Indenture with printed certificates for the Transfer Restricted Securities which are in a form eligible for deposit with the Depository Trust Company; (xvii)cooperate and assist in any filings required to be made with the NASD and in the performance of any due diligence investigation by any underwriter (including any "qualified independent underwriter") that is required to be retained in accordance with the rules and regulations of the NASD; (xviii) otherwise use their respective best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders with regard to any applicable Registration Statement, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) covering a twelve-month period (A) commencing at the end of any fiscal year in which Transfer Restricted Securities are sold to underwriters in a firm or best efforts underwritten offering or (B) if not sold to underwriters in such an offering, beginning with the first month of AP Holdings' first fiscal quarter commencing after the effective date of the Registration Statement; (xix) cause the Indenture to be qualified under the TIA not later than the effective date of the first Registration Statement required by this Agreement and, in connection therewith, cooperate with the Trustee and the Holders of Notes to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the TIA; and execute and use their re- -16- 18 spective best efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; and (xx) provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of Section 13 or Section 15(d) of the Exchange Act. (d) Restrictions on Holders. Each Holder agrees by acquisition of a Transfer Restricted Security or Broker-Dealer Transfer Restricted Securities, as applicable, that, upon receipt of the notice referred to in Section 6(c)(i) or any notice from AP Holdings of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will immediately discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until such Holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof, or until it is advised in writing by AP Holdings that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus (the "Advice"). If so directed by AP Holdings, each Holder will deliver to AP Holdings (at AP Holdings' expense) all copies, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities that was current at the time of receipt of either such notice. In the event AP Holdings shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 6(c)(i) or Section 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof or shall have received the Advice. AP Holdings may require each Holder of Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities as to which any registration is being effected to furnish to AP Holdings such information regarding such Holder and such Holder's intended method of distribution of the applicable Transfer Restricted Securities as AP Holdings may from time to time reasonably request in writing, but only to the extent that such information is required in order to comply with the Act. Each such Holder agrees to notify AP Holdings as promptly as practicable of (i) any inaccuracy or change in information previously furnished by such Holder to AP Holdings, or (ii) the occurrence of any event, in either case, as a result of which any prospectus relating to such registration contains or would contain an untrue statement of a material fact regarding such Holder or such Holder's intended method of distribution of the applicable Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities or omits to state any material fact re- -17- 19 garding such Holder or such Holder's intended method of distribution of the applicable Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities required to be stated therein or necessary to make the statements therein not misleading and promptly to furnish to AP Holdings any additional information required to correct and update any previously furnished information or required so that such Prospectus shall not contain, with respect to such Holder or the distribution of the applicable Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. 7. REGISTRATION EXPENSES (a) All expenses incident to AP Holdings' performance of or compliance with this Agreement will be borne by AP Holdings regardless of whether a Registration Statement becomes effective, including without limitation: (i) all registration and filing fees and expenses (including filings made by any Initial Purchaser or Holder with the NASD (and, if applicable, the fees and expenses of any "qualified independent underwriter") and its counsel that may be required by the rules and regulations of the NASD); (ii) all fees and expenses of compliance with federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including printing certificates for the New Senior Discount Notes to be issued in the Exchange Offer and printing of Prospectuses); (iv) all fees and disbursements of counsel for AP Holdings and, in accordance with Section 7(b) below, the Holders of Transfer Restricted Securities; (v) all messenger and delivery services and telephone expenses of AP Holdings; (vi) all application and filing fees in connection with listing the Notes on a national securities exchange or automated quotation system pursuant to the requirements hereof and (vii) all fees and disbursements of independent certified public accountants of AP Holdings (including the expenses of any special audit and comfort letters required by or incident to such performance). (b) AP Holdings will, in any event, bear its internal expenses (including, without limitation, all salaries and expenses of any of their respective officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by AP Holdings. (c) In connection with any Registration Statement required by this Agreement, as applicable (including, without limitation, the Exchange Offer Registration Statement and the Shelf Registration Statement), AP Holdings will reimburse the Initial Purchaser and the Holders of Transfer Restricted Securities being tendered in the Exchange Offer and/or pursuant to the "Plan of Distribution" contained in the Exchange Offer Registration Statement or registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared. -18- 20 8. INDEMNIFICATION (a) AP Holdings agrees to indemnify and hold harmless the Initial Purchaser, its directors, its officers and each person, if any, who controls the Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages, liabilities or judgments (including, without limitation, any legal or other expenses reasonably incurred in connection with investigating or defending any matter, including any action, that could give rise to any such losses, claims, damages, liabilities or judgments) caused by any untrue statement or alleged untrue statement of a material fact contained in the Offering Memorandum (or any amendment or supplement thereto), the Preliminary Offering Memorandum or any Rule 144A Information provided by AP Holdings to any holder or prospective purchaser of Senior Discount Notes pursuant to Section 5(n) of the Purchase Agreement or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages, liabilities or judgments are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to the Initial Purchaser furnished in writing to AP Holdings by the Initial Purchaser; provided, however, that the foregoing indemnity agreement with respect to any Preliminary Offering Memorandum shall not inure to the benefit of the Initial Purchaser who failed to deliver a Final Offering Memorandum (as then amended or supplemented, provided by AP Holdings to the Initial Purchasers in the requisite quantity and on a timely basis to permit proper delivery on or prior to the Closing Date) to the person asserting any losses, claims, damages and liabilities and judgments caused by any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Offering Memorandum, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such material misstatement or omission or alleged material misstatement or omission was cured in the Final Offering Memorandum. (b) The Initial Purchaser agrees to indemnify and hold harmless AP Holdings, and its respective directors and officers and each person, if any, who controls (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act) AP Holdings, to the same extent as the foregoing indemnity from AP Holdings to the Initial Purchaser but only with reference to information relating to the Initial Purchaser furnished in writing to AP Holdings by the Initial Purchaser expressly for use in the Preliminary Offering Memorandum or the Offering Memorandum. (c) In case any action shall be commenced involving any person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the "indemnified party"), the indemnified party shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party -19- 21 shall assume the defense of such action, including the employment of counsel reasonably satisfactory to the indemnified party and the payment of all fees and expenses of such counsel, as incurred (except that in the case of any action in respect of which indemnity may be sought pursuant to both Sections 8(a) and 8(b), the Initial Purchaser shall not be required to assume the defense of such action pursuant to this Section 8(c), but may employ separate counsel and participate in the defense thereof, but the fees and expenses of such counsel, except as provided below, shall be at the expense of the Initial Purchaser). Any indemnified party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the indemnified party unless (i) the employment of such counsel shall have been specifically authorized in writing by the indemnifying party, (ii) the indemnifying party shall have failed to assume the defense of such action or employ counsel reasonably satisfactory to the indemnified party or (iii) the named parties to any such action (including any impleaded parties) include both the indemnified party and the indemnifying party, and the indemnified party shall have been advised by such counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the indemnifying party (in which case the indemnifying party shall not have the right to assume the defense of such action on behalf of the indemnified party). In any such case, the indemnifying party shall not, in connection with any one action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all indemnified parties and all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by Donaldson, Lufkin & Jenrette Securities Corporation, in the case of the parties indemnified pursuant to Section 8(a), and by AP Holdings, in the case of parties indemnified pursuant to Section 8(b). The indemnifying party shall indemnify and hold harmless the indemnified party from and against any and all losses, claims, damages, liabilities and judgments by reason of any settlement of any action (i) effected with its written consent or (ii) effected without its written consent if the settlement is entered into more than thirty business days after the indemnifying party shall have received a request from the indemnified party for reimbursement for the fees and expenses of counsel (in any case where such fees and expenses are at the expense of the indemnifying party) and, prior to the date of such settlement, the indemnifying party shall have failed to comply with such reimbursement request. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement or compromise of, or consent to the entry of judgment with respect to, any pending or threatened action in respect of which the indemnified party is or could have been a party and indemnity or contribution may be or could have been sought hereunder by the indemnified party, unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability on claims that are or could have been the subject matter of such action and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of the indemnified party. -20- 22 (d) To the extent the indemnification provided for in this Section 8 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages, liabilities or judgments referred to herein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities and judgments (i) in such proportion as is appropriate to reflect the relative benefits received by AP Holdings, on the one hand, and the Initial Purchaser on the other hand from the offering of the Senior Discount Notes or (ii) if the allocation provided by clause 8(d)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 8(d)(i) above but also the relative fault of AP Holdings, on the one hand, and the Initial Purchaser, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or judgments, as well as any other relevant equitable considerations. The relative benefits received by AP Holdings, on the one hand and the Initial Purchaser, on the other hand, shall be deemed to be in the same proportion as the total net proceeds from the offering of the Senior Discount Notes (after underwriting discounts and commissions, but before deducting expenses) received by AP Holdings, and the total discounts and commissions received by the Initial Purchaser bear to the total price to investors of the Senior Discount Notes, in each case as set forth in the table on the cover page of the Offering Memorandum. The relative fault of AP Holdings, on the one hand, and the Initial Purchaser, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by AP Holdings, on the one hand, or the Initial Purchaser, on the other hand, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. AP Holdings and the Initial Purchaser agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or judgments referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any matter, including any action, that could have given rise to such losses, claims, damages, liabilities or judgments. Notwithstanding the provisions of this Section 8, the Initial Purchaser shall not be required to contribute any amount in excess of the amount by which the total discounts and commissions received by the Initial Purchaser exceeds the amount of any damages which the Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. -21- 23 (e) The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. 9. RULE 144A AP Holdings hereby agrees with each Holder, for so long as any Transfer Restricted Securities remain outstanding and during any period in which AP Holdings is not subject to Section 13 or 15(d) of the Securities Exchange Act, to make available, upon request of any Holder of Transfer Restricted Securities, to any Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities designated by such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A. 10. UNDERWRITTEN REGISTRATIONS No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder's Transfer Restricted Securities on the basis provided in customary underwriting arrangements entered into in connection therewith and (b) completes and executes all reasonable questionnaires, powers of attorney, lock-up letters and other documents required under the terms of such underwriting arrangements. 11. SELECTION OF UNDERWRITERS For any Underwritten Offering of Notes, the investment banker or investment bankers and manager or managers for any Underwritten Offering of Notes, that will administer such offering will be selected by the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included in such offering provided, however, that such investment bankers and managers must be reasonably satisfactory to AP Holdings. Such investment bankers and managers are referred to herein as the "underwriters." 12. MISCELLANEOUS (a) Remedies. AP Holdings agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by them of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate. (b) No Inconsistent Agreements. AP Holdings will not on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Except as disclosed in the Offering Memorandum, AP Holdings has not previously entered into any agreement granting any registration rights with respect to -22- 24 its securities to any Person. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of AP Holdings' securities under any agreement in effect on the date hereof. (c) Adjustments Affecting the Notes. AP Holdings will not take any action, or voluntarily permit any change to occur, with respect to the Notes that would materially and adversely affect the ability of the Holders to Consummate any Exchange Offer. (d) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless (i) in the case of Section 5 hereof and this Section 12(d)(i), AP Holdings has obtained the written consent of the Holders of all outstanding Transfer Restricted Securities and (ii) in the case of all other provisions hereof, AP Holdings has obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities subject to such Exchange Offer. (e) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery: (i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; With a copy to: Latham & Watkins 885 Third Avenue New York, New York 10022 Telecopier No.: (212) 751-4864 Attention: Philip E. Coviello, Jr. (ii) if to AP Holdings: AP Holdings, Inc. 800 Superior Avenue Cleveland, Ohio 44114 Telecopier No.: (216) 523-8080 -23- 25 Attention: Robert N. Sacks With a copy to: Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 Telecopier No.: (212) 403-2000 Attention: Adam O. Emmerich All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and on the next business day, if timely delivered to an air courier guaranteeing overnight delivery. Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture. (f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, subsequent Holders of Transfer Restricted Securities; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted Securities directly from such Holder at a time when such Holder could not transfer such Transfer Restricted Securities pursuant to a Shelf Registration Statement. Each Holder of Transfer Restricted Securities agrees to be bound by and comply with the terms and provisions of this Agreement. (g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW RULES. -24- 26 (j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (k) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted with respect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings among the parties with respect to such subject matter. [SIGNATURE PAGE FOLLOWS] -25- 27 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. AP HOLDINGS, INC. By: /s/ Michael J. Celebrezze ----------------------------- Name: Michael J. Celebrezze Title: Treasurer -26- 28 The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written. DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION By: /s/ Timothy White --------------------- Name: Timothy White Title: Vice President -27- EX-10.2 34 CREDIT AGREEMENT 1 Exhibit 10.2 APCOA, INC. ------------------------------------------------------------------ CREDIT AGREEMENT dated as of March 30, 1998 ------------------------------------------------------------------ THE FIRST NATIONAL BANK OF CHICAGO, as Agent 2 TABLE OF CONTENTS Section Page - ------- ---- INTRODUCTION.................................................................1 ARTICLE I DEFINITIONS......................................................1 1.1 Certain Definitions...............................................1 1.2 Other Definitions; Rules of Construction.........................16 1.3 Accounting Terms and Determinations..............................16 ARTICLE II THE COMMITMENTS AND THE ADVANCES................................17 2.1 Commitments of the Lenders.......................................17 2.2 Termination and Reduction of Commitments.........................19 2.3 Fees.............................................................19 2.4 Disbursement of Advances.........................................20 2.5 Conditions for First Disbursement................................21 2.6 Further Conditions for Disbursement..............................23 2.7 Subsequent Elections as to Borrowings............................24 2.8 Limitation of Requests and Elections.............................24 2.9 Minimum Amounts; Limitation on Number of Borrowings..............24 2.10 Security and Collateral..........................................25 ARTICLE III PAYMENTS AND PREPAYMENTS OF ADVANCES............................25 3.1 Principal Payments...............................................25 3.2 Interest Payments................................................25 3.3 Letter of Credit Reimbursement Payments..........................26 3.4 Payment Method...................................................29 3.5 No Setoff or Deduction...........................................29 3.6 Payment on Non-Business Day; Payment Computations................29 3.7 Additional Costs.................................................30 3.8 Illegality and Impossibility.....................................31 3.9 Indemnification..................................................31 3.10 Substitution of Lender...........................................31 ARTICLE IV REPRESENTATIONS AND WARRANTIES..................................32 4.1 Corporate Existence and Power....................................32 4.2 Corporate Authority..............................................32 4.3 Binding Effect...................................................33 4.4 Subsidiaries.....................................................33 4.5 Litigation.......................................................33 4.6 Financial Condition..............................................33 4.7 Use of Advances..................................................33 4.8 Consents, Etc....................................................34 4.9 Taxes............................................................34 4.10 Title to Properties..............................................34 3 Section Page - ------- ---- 4.11 ERISA............................................................34 4.12 Disclosure.......................................................34 4.13 Environmental and Safety Matters.................................35 4.14 No Default.......................................................36 4.15 Intellectual Property............................................36 4.16 No Burdensome Restrictions.......................................36 4.17 Labor Matters....................................................37 4.18 Solvency.........................................................37 4.19 Not an Investment Company; Other Regulations.....................37 4.20 Subordinated Debt Documents......................................37 4.21 Preferred Stock Documents........................................38 4.22 Standard Acquisition.............................................38 4.23 Bank Accounts....................................................38 4.24 Facility Leases and Facility Management Agreements...............38 ARTICLE V COVENANTS.......................................................38 5.1 Affirmative Covenants............................................38 5.2 Negative Covenants...............................................41 5.3 Additional Covenants.............................................49 ARTICLE VI DEFAULT.........................................................49 6.1 Events of Default................................................49 6.2 Remedies.........................................................51 6.3 Distribution of Proceeds of Collateral...........................52 6.4 Letter of Credit Liabilities.....................................53 ARTICLE VII THE AGENT AND THE LENDERS.......................................54 7.1 Appointment; Nature of Relationship..............................54 7.2 Powers...........................................................54 7.3 General Immunity.................................................54 7.4 No Responsibility for Loans, Recitals, etc.......................54 7.5 Action on Instructions of Lenders................................55 7.6 Employment of Agents and Counsel.................................55 7.7 Reliance on Documents; Counsel...................................55 7.8 Agent's Reimbursement and Indemnification........................55 7.9 Notice of Default................................................55 7.10 Rights as a Lender...............................................56 7.11 Lender Credit Decision...........................................56 7.12 Successor Agent..................................................56 7.13 Collateral Management............................................56 7.14 Right to Indemnity...............................................57 7.15 Sharing of Payments..............................................57 7.16 Withholding Tax Exemption........................................58 ARTICLE VIII MISCELLANEOUS..................................................58 8.1 Amendments, Etc..................................................58 8.2 Notices..........................................................59 CREDIT AGREEMENT Page ii 4 Section Page - ------- ---- 8.3 No Waiver By Conduct; Remedies Cumulative........................59 8.4 Reliance on and Survival of Various Provisions...................59 8.5 Expenses; Indemnification........................................59 8.6 Successors and Assigns...........................................61 8.7 Counterparts.....................................................63 8.8 Governing Law....................................................63 8.9 Table of Contents and Headings...................................63 8.10 Construction of Certain Provisions...............................63 8.11 Integration and Severability.....................................63 8.12 Independence of Covenants........................................64 8.13 Interest Rate Limitation.........................................64 8.14 Judgment and Payment.............................................64 8.15 Year 2000 Problem................................................65 8.16 Submission To Jurisdiction; Waivers..............................65 8.17 Acknowledgments..................................................65 8.18 Confidentiality..................................................65 8.19 WAIVER OF JURY TRIAL.............................................66 EXHIBITS Exhibit A........................... Guaranty Exhibit B-1 and B-2................. Pledge Agreement Exhibit C........................... Revolving Credit Note Exhibit D-1, D-2, D-3, D-4 and D-5.. Security Agreements Exhibit E........................... Swingline Note Exhibit F........................... Request for Advance Exhibit G........................... Opinion of Counsel Exhibit H........................... Request for Continuation or Conversion of Advance Exhibit I........................... Assignment and Acceptance SCHEDULES Schedule 1.1-A......................Preferred Stock Schedule 1.1-B......................Subordinated Note Documents Schedule 4.4........................Subsidiaries and Joint Ventures Schedule 4.5........................Litigation Schedule 4.7........................Application of Funds Schedule 4.13.......................Environmental Matters Schedule 4.15.......................Intellectual Property Schedule 4.23.......................Bank Accounts Schedule 4.24.......................Facility Leases and Management Agreements Schedule 5.2(d).....................Indebtedness Schedule 5.2(e).....................Liens Schedule 5.2(f).....................Certain Permitted Acquisition Schedule 5.2(j).....................Investments, Loans and Advances CREDIT AGREEMENT Page iii 5 THIS CREDIT AGREEMENT, dated as of March 30, 1998 (this "Agreement"), is by and among APCOA, INC., a Delaware corporation (the "Company"), the lenders party hereto from time to time (collectively, the "Lenders" and individually, a "Lender"), and THE FIRST NATIONAL BANK OF CHICAGO, a national banking association, as agent for the Lenders (in such capacity, the "Agent"). INTRODUCTION The Company desires to obtain a $40,000,000 six year secured revolving credit facility, including letters of credit, in order to refinance existing indebtedness, to provide for certain acquisitions and to provide funds and other financial accommodations for its corporate purposes, and the Lenders are willing to make such credit facility in favor of the Company on the terms and conditions herein set forth. In consideration of the premises and of the mutual agreements herein contained, the parties hereto agree as follows: ARTICLE I DEFINITIONS 1.1 Certain Definitions. As used herein the following terms shall have the following respective meanings: "Acquisition" means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which the Company or any of its Subsidiaries (i) acquires any going business or all or substantially all of the assets of any firm, corporation, partnership, limited liability company or other business entity, or division thereof, whether through purchase of assets, merger or otherwise or (ii) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the Capital Stock of any Person. "Adjusted Corporate Base Rate" shall mean the per annum rate equal to the sum of (a) the Applicable Margin, plus (b) the greater of the Corporate Base Rate or the Federal Funds Rate plus 1.0%, in each case as in effect from time to time, which Adjusted Corporate Base Rate shall change simultaneously with any change in such Corporate Base Rate or Federal Funds Rate, as the case may be. "Adjusted Corporate Base Rate Loan" shall mean any Loan which bears interest at the Adjusted Corporate Base Rate. "Adjusted EBITDA" shall mean without duplication, for any Calculation Period, the sum of (I) Net Income for such period, exclude to the extent reflected in determining such Net Income: (i) the income of any Person accrued prior to the date it becomes a Subsidiary of the Company or is merged into or consolidated with the Company or any of its Subsidiaries or that Person's assets are acquired by the Company or any of its Subsidiaries, (ii) the proceeds of any 6 insurance policy, (iii) gains (but not losses) from the sale, exchange, transfer or other disposition of property or assets not in the ordinary course of business of the Company and its Subsidiaries, and related tax effects in accordance with Generally Accepted Accounting Principles, (iv) any other extraordinary or non-recurring gains or other gains not from continuing operations of the Company or its Subsidiaries, and related tax effects in accordance with Generally Accepted Accounting Principles, (v) the income of any Person (including with out limitation any Subsidiary or Joint Venture, but excluding any Wholly Owned Subsidiary) in which any Person other than the Company or any of its Subsidiaries has a joint interest or partnership interest or other ownership interest, to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary or Joint Venture not at the time permitted by operation of the terms of its charter or of any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary, except to the extent of the amount of dividends or other distributions are actually paid in cash to the Company during such period, (vi) extraordinary non-cash losses and non-recurring non-cash charges (including non-cash losses resulting from disposition of Facility Leases and Facility Management Agreements and the write off of intangible assets during such period), (vii) income taxes, (viii) minority interests, (ix) interest income, (x) Net Interest Expense, (xi) depreciation and amortization expense, and (xii) restructuring charges included in operating expenses taken in connection with or related to Permitted Acquisitions, provided that such restructuring charges (A) in connection with the Standard Acquisition and the Acquisitions described on Schedule 5.2(f) shall be consistent with the restructuring charges identified in the Pro Forma Financial Statements and (B) for any other Permitted Acquisition shall have been reviewed and reasonably approved by the Agent, plus (II) the sum of (i) the Pro Forma EBITDA and Adjusted EBITDA as calculated herein of any Person related to any Permitted Acquisition consummated during such period as if such Acquisition had occurred on the first day of the relevant period and (ii) the Standard Cost Savings for such period, and the identifiable annualized cost savings and synergies in connection with or related to Permitted Acquisitions, provided that such cost savings and synergies exceeding $500,000 in any consecutive twelve month period shall have been reviewed and reasonably approved by the Agent, including without limitation the reasonable approval by the Agent of the manner in which such cost savings and synergies are calculated and included in Adjusted EBITDA. It is acknowledged and agreed that if the Permitted Acquisitions described on Schedule 5.2(f) are not completed as anticipated then Adjusted EBITDA will be adjusted in a manner acceptable to the Agent. "Adjusted Total Debt" as of any date, shall mean the difference of (a) the sum of (i) the other consolidated Indebtedness of the Company and its Subsidiaries as of such date, plus (ii) the aggregate liquidation preference of the Preferred Stock and any other preferred Capital Stock of the Company on which dividends, redemptions or other distributions are mandatorily payable in cash or cash equivalents and all accrued and unpaid dividends, redemptions and other distributions on any of the foregoing, provided that, for purposes of calculating the covenant as of any date contained in Section 5.2(a) only, the amount of the preferred Stock and preferred Capital Stock of the Company shall include only such Preferred Stock and preferred Capital Stock upon which dividends, redemptions or distributions in cash or cash equivalents are or will become mandatorily payable thereon within one year of such date, plus (iii) amounts which have been earned under Earnouts, minus (b) the sum of (i) all Cash Equivalents of the Company and its Subsidiaries at such date plus (ii) all contingent reimbursement obligations of the Company in respect of outstanding letters of credit, bankers acceptances or similar instruments, other than CREDIT AGREEMENT Page 2 7 letters of credit, bankers acceptances or similar instruments which support or are otherwise payable with respect to any obligations of the type (without regard to the Person liable on the primary obligation) described in clauses (a)(i), (ii) or (iii) of this definition. "Adjusted Total Debt to Adjusted EBITDA Ratio" shall mean, at any time, the ratio of (a) Adjusted Total Debt at such time to (b) Adjusted EBITDA, as calculated as of the four most recently completed fiscal quarters of the Company, all as determined in accordance with Generally Accepted Accounting Principles. "Advance" shall mean any Loan and any Letter of Credit Advance. "Affiliate", when used with respect to any Person, shall mean any other Person which, directly or indirectly, controls or is controlled by or is under common control with such Person. For purposes of this definition "control" (including the correlative meanings of the terms "controlled by" and "under common control with"), with respect to any Person, shall mean possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise. Without limiting the foregoing definition of Affiliate, any Person shall be deemed to control another Person if the controlling Person owns or controls 10% or more of any class of voting securities (or other ownership interest of any kind) of the controlled Person. "Applicable Lending Office" shall mean, with respect to any Advance made by any Lender or with respect to such Lender's Commitment, the office of such Lender or of any Affiliate of such Lender located at the address specified as the applicable lending office for such Lender set forth next to the name of such Lender in the signature pages hereof or any other office or Affiliate of such Lender or of any Affiliate of such Lender hereafter selected and notified to the Company and the Agent by such Lender. "Applicable Margin" shall mean, with respect to any Adjusted Corporate Base Rate Loan, LIBOR Loan, Letter of Credit fee under Section 2.3(b) and commitment fees under Section 2.3(a), the applicable percentage set forth in the table below based upon the Adjusted Total Debt to Adjusted EBITDA Ratio, as adjusted on the sixtieth day after the end of each of the first three fiscal quarters of each fiscal year of the Company and on the one hundred fifth day after the end of the last fiscal quarter of each fiscal year of the Company, and shall remain in effect until the next change to be effected pursuant to this definition, based upon the Adjusted Total Debt to Adjusted EBITDA Ratio as of the last day of such fiscal quarter, provided that (a) any change in the Applicable Margin with respect to any LIBOR Loan during a LIBOR Interest Period with respect to such LIBOR Loan shall not be effective until after the end of such LIBOR Interest Period, (b) as of the Effective Date the Applicable Margin shall be based on an Adjusted Total Debt to Adjusted EBITDA Ratio of greater than or equal to 6.0:1.0 until adjusted for the first time and (c) if any Event of Default has occurred and is continuing the Adjusted Total Debt to Adjusted EBITDA Ratio as of the end of the most recently ended fiscal quarter shall, for the purposes of this definition, be deemed to be greater than or equal to 6.0:1.0: CREDIT AGREEMENT Page 3 8
================================================================================ Applicable Margin for all Advances and Fees - -------------------------------------------------------------------------------- Adjusted LIBOR Loan and Adjusted Total Debt to Corporate Base Letter of Credit Commitment Adjusted EBITDA Ratio Rate Loan Fees Fees - -------------------------------------------------------------------------------- >6.0:1.0 125 bps 250 bps 50 bps - -------------------------------------------------------------------------------- >5.5:1.0 but <6.0:1.0 100 bps 225 bps 50 bps - -------------------------------------------------------------------------------- >5.0:1.0 but <5.5:1.0 75 bps 200 bps 50 bps - -------------------------------------------------------------------------------- >4.5:1.0 but <5.0:1.0 50 bps 175 bps 37.5 bps - -------------------------------------------------------------------------------- <4.5:1.0 25 bps 150 bps 37.5 bps - --------------------------------------------------------------------------------
"Assignment and Acceptance" is defined in Section 8.6(c). "Board of Directors" means the board of directors of the Company, or any authorized committee of such board of directors. "Borrowing" shall mean the aggregation of Advances, including each Letter of Credit issuance, of the Lenders to be made to the Company, or continuations and conversions of such Loans, made pursuant to Article II on a single date and, in the case of any Loans, for a single LIBOR Interest Period, which Borrowings may be classified for purposes of this Agreement by reference to the type of Loans or the type of Advances comprising the related Borrowing, e.g., a "LIBOR Borrowing" is a Borrowing comprised of LIBOR Loans and a "Letter of Credit Borrowing" is an Advance comprised of a single Letter of Credit. "Business Day" shall mean a day other than a Saturday, Sunday or other day on which banks in New York, Detroit or Chicago are not open to the public for carrying on substantially all of their banking functions. "Calculation Period" shall mean any consecutive four fiscal quarter period, provided however, for the periods ending on June 30, 1998, September 30, 1998 and December 31, 1998, the Calculation Period shall start on April 1, 1998. "Capital Expenditures" shall mean, for any period, the additions to property, plant and equipment and other capital expenditures of the Company and its Subsidiaries for such period, as the same are (or should be) set forth, in accordance with Generally Accepted Accounting Principles, in consolidated financial statements of the Company and its Subsidiaries for such period. "Capital Lease" of any Person shall mean any lease which, in accordance with Generally Accepted Accounting Principles, is or should be capitalized on the books of such Person. "Capital Stock" shall mean (i) in the case of any corporation, all capital stock and any securities exchangeable for or convertible into capital stock and any warrants, rights or other options to purchase or otherwise acquire capital stock or such securities or any other form of equity securities, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited) and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distribution of assets of, the issuing Person. CREDIT AGREEMENT Page 4 9 "Cash Equivalent" shall mean (i) cash in Dollars, (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof having maturities of not more than six months from the date of acquisition, (iii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody's, (iv) certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any Lender or with any domestic commercial bank having capital and surplus in excess of $250,000,000 and a Keefe Bank Watch Rating of "B" or better, (v) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (ii), (iii) and (iv) above entered into with any financial institution meeting the qualifications specified in clause (iv) above, (vi) commercial paper having one of the two highest ratings obtained from Moody's or S&P and in each case maturing within six months after the date of acquisition and (vii) investments in money market funds which invest substantially all their assets in securities of the type described in clauses (i) through (vi) above. "Change of Control" shall mean the occurrence of any of the following: (i) the sale, lease, transfer, conveyance or other disposition (other than in a transaction described in clause (vii) below), in one or a series of related transactions, of all or substantially all of the assets of Parent and its Subsidiaries or of the Company and its Subsidiaries, in each case, taken as a whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange Act) other than the Principals or their Related Parties, (ii) the adoption of a plan relating to the liquidation or dissolution of Parent or the Company, (iii) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as defined above), other than the Principals and their Related Parties, becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that a person shall be deemed to have "beneficial ownership" of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition), directly or indirectly, or more than 20% of the Voting Stock of Parent or the Company (measured by voting power rather than number of shares), and the Principals or their Related Parties shall fail to own a higher percentage of the Voting Stock of Holdings or the Company (measured by voting power rather than number of shares), as the case may be, (iv) the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors, (v) the occurrence of any "Change of Control" as defined in the Subordinated Note Indenture or any change of control or similar provision in any other Subordinated Debt, the Preferred Stock or any other preferred Capital Stock of the Company, (vi) prior to an IPO, either (A) less than 51% of the outstanding Voting Stock of the Company shall be owned, directly or indirectly, beneficially and of record by the Parent and free and clear of any Liens, or (B) Holberg shall at any time legally or beneficially own less than 51% of the Voting Stock of the Parent, free and clear of any Lien, (vii) the Parent or the Company consolidates with, or merges with or into, any Person or sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of its assets to any Person, or any Person consolidates with, or merges with or into, the Parent or the Company, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of the Parent or the Company is converted into or exchanged for cash, securities or other property, other than any such transaction where the CREDIT AGREEMENT Page 5 10 Voting Stock of the Parent or the Company outstanding immediately prior to such transaction is converted into or exchanged for Voting Stock (other than Disqualified Stock) of the surviving or transferee Person constituting a majority of the outstanding shares of such Voting Stock of such surviving or transferee Person (immediately after giving effect to such issuance), or (viii) the owners of Holberg as of the Effective Date shall at any time legally or beneficially own less than 51% of the Voting Stock of Holberg, free and clear of any Lien. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder. "C/L/C" shall mean any commercial letter of credit issued hereunder. "Commitments" shall mean, with respect to each Lender, the commitment of each such Lender to make Revolving Credit Loans, and to participate in Letter of Credit Advances, in amounts not exceeding in the aggregate principal or face amount outstanding at any time the Commitment amount for such Lender set forth next to the name of such Lender on the signature pages hereof, or, as to any Lender becoming a party hereto after the Effective Date, as set forth in the applicable Assignment and Acceptance, in each case as reduced pursuant to Section 2.2 or modified pursuant to Section 8.6. "Consolidated" or "consolidated" shall mean, when used with reference to any financial term in this Agreement, the aggregate for two or more Persons of the amounts signified by such term for all such Persons determined on a consolidated basis in accordance with Generally Accepted Accounting Principles. "Contingent Liabilities" shall mean as to any Person any obligation of such Person guaranteeing or intended to guarantee any Indebtedness, dividends or other obligations ("primary obligations") of any Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligator, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (d) otherwise to assure or hold harmless the owner of such primary obligation against loss in respect thereof, provided however, that the term Contingent Liabilities shall not include endorsements of instruments for deposit or collection in the ordinary course of business; provided further, that, for purposes of calculating the financial covenants contained in Sections 5.2(a) through (c), Contingent Liabilities shall be only those Contingent Liabilities that are or should be noted in the financial statements of such Person or the notes thereto as required under Generally Accepted Accounting Principles or otherwise described in the definition of Adjusted Total Debt. The amount of any Contingent Liability shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Liability is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. CREDIT AGREEMENT Page 6 11 "Continuing Directors" shall mean, as of any date of determination, any member of the Board of Directors of the Company who (i) was a member of such Board of Directors on the Effective Date or (ii) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election. "Contractual Obligation" shall mean, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. "Corporate Base Rate" shall mean the per annum rate announced by the Agent from time to time as its corporate base rate of interest, which Corporate Base Rate shall change simultaneously with any change in such announced rate. "Defaulting Lender" shall mean any Lender that fails to make available to the Agent such Lender's Loans required to be made hereunder or shall have not made a payment required to be made to the Agent hereunder. Once a Lender becomes a Defaulting Lender, such Lender shall continue as a Defaulting Lender until such time as such Defaulting Lender makes available to the Agent the amount of such Defaulting Lender's Loans and all other amounts required to be paid to the Agent pursuant to this Agreement. "Disqualified Stock" shall mean any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, or otherwise has any distributions or other payments which are mandatory or otherwise required at any time on or prior to the date that is one year after the Termination Date, provided that any payment that is required solely due to a customary change of control provision not more restrictive than the Change of Control default in this Agreement shall not cause such Capital Stock to be deemed Disqualified Stock. "Dollars" and "$" shall mean the lawful money of the United States of America. "Domestic Subsidiary" shall mean each present and future Subsidiary of the Company which is not a Foreign Subsidiary. "Earnouts" shall mean any payment which may be owing by the Company in connection with any Acquisition, which payment is contingent upon the earnings or other financial performance of the assets being acquired pursuant to such Acquisition. "Effective Date" shall mean the effective date specified in the final paragraph of this Agreement. "Environmental Laws" at any date shall mean all provisions of law, statutes, ordinances, rules, regulations, judgments, writs, injunctions, decrees, orders, awards and standards promulgated by the government of the United States of America or any foreign government or by any state, province, municipality or other political subdivision thereof or therein or by any court, CREDIT AGREEMENT Page 7 12 agency, instrumentality, regulatory authority or commission of any of the foregoing concerning the protection of, or regulating the discharge of hazardous substances into, the environment. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations thereunder. "ERISA Affiliate" shall mean any trade or business (whether or not incorporated) which, together with the Company or any Subsidiary of the Company, would be treated as a single employer under Section 414 of the Code. "Event of Default" shall mean any of the events or conditions described in Section 6.1. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Facility Leases" shall mean agreements for the lease by the Company or any of its Subsidiaries of real estate utilized as a vehicle parking facility. "Facility Management Agreements" shall mean agreements (other than Facility Leases), for the provision by the Company or any of its Subsidiaries of services for the management or operation of a vehicle parking facility, including without limitation any such agreement designated as a management agreement, parking enforcement agreement, operating agreement or license agreement. "Federal Funds Rate" shall mean, for any day, an interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago time) on such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by the Agent in its discretion. "First Chicago" shall mean The First National Bank of Chicago, a national banking association, including any of its branches and affiliates. "Fixed Charge Coverage Ratio" shall mean, as of the last day of any fiscal quarter of the Company, the ratio of (a) Adjusted EBITDA, to (b) Fixed Charges, in each case as calculated for the four consecutive fiscal quarters then ending, provided that Fixed Charges as calculated for the fiscal quarter ending June 30, 1998 shall be deemed equal to product of Fixed Charges for such fiscal quarter times four, as calculated for the fiscal quarter ending September 30, 1998 shall be deemed equal to the product of Fixed Charges for the two consecutive fiscal quarters then ending times two and as calculated for the fiscal quarter ending December 31, 1998 shall be deemed equal to product of Fixed Charges for the three consecutive fiscal quarters then ending times four thirds, all as determined in accordance with Generally Accepted Accounting Principles. "Fixed Charges" shall mean, for any period, the sum, without duplication, of (a) Net Interest Expense, plus (b) all payments of principal and other sums required to be paid during such period by the Company or its Subsidiaries with respect to Indebtedness of the Company or CREDIT AGREEMENT Page 8 13 its Subsidiaries, plus (c) Net Capital Expenditures during such period by the Company and its Subsidiaries, plus (d) all dividends, distributions and other obligations paid with cash or cash equivalents with respect to any class of the Company's or any of its Subsidiary's Capital Stock or any dividend, payment or distribution paid in cash or cash equivalents in connection with the redemption, purchase, retirement or other acquisition, directly or indirectly, of any shares of the Company's or any of its Subsidiary's Capital Stock, other than the portion of such dividends, distributions or other payments made by any Subsidiary to the Company, plus (e) all payments pursuant to any Earnouts, unless such amount has been previously deducted from Net Income, plus (f) all accrued income taxes paid or payable in cash for such period for the Company or its Subsidiaries. "Foreign Subsidiary" shall mean any present or future Subsidiary of the Company incorporated or formed in any jurisdiction other than any State of the United States of America or any other political subdivision thereof. "Generally Accepted Accounting Principles" shall mean generally accepted accounting principles as in effect from time to time, applied on a basis consistent (except for changes concurred in by the Company's independent public accountants) with the most recent audited consolidated financial statements of the Company and its Subsidiaries delivered to the Lenders. "Guaranties" shall mean the guaranties entered into by each of the Guarantors for the benefit of the Agent and the Lenders pursuant to this Agreement in substantially the form of Exhibit A hereto, as amended or modified from time to time. "Guarantor" shall mean the Parent, each present and future Domestic Subsidiary which is a Wholly Owned Subsidiary of the Company (other than Atrium Parking, Inc.), each other present and future Subsidiary or Joint Venture of the Company which is not prohibited from becoming a Guarantor or any other Person executing a Guaranty at any time. "Hazardous Material" is defined in Section 4.13. "Holberg" shall mean Holberg Industries, Inc., a Delaware corporation. "Indebtedness" of any Person shall mean, as of any date, without duplication, (a) all obligations of such Person for borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or bankers' acceptances, (b) all obligations of such Person as lessee under any Capital Lease, (c) all obligations which are secured by any Lien existing on any asset or property of such Person whether or not the obligation secured thereby shall have been assumed by such Person, provided that if such Person shall not have assumed such obligation, then the amount of such obligation determined pursuant to this clause (c) shall not exceed the value of such encumbered asset or property, (d) the unpaid purchase price for goods, property or services acquired by such Person, except for trade accounts and accrued expenses payable arising in the ordinary course of business which are not past due within customary payment terms, (e) all obligations of such Person in respect of any Swap (valued in an amount equal to the highest termination payment, if any, that would be payable by such Person upon termination for any reason on the date of determination), and (f) all Contingent Liabilities of such Person with respect to or relating to indebtedness, CREDIT AGREEMENT Page 9 14 obligations and liabilities of others similar in character to those described in clauses (a) through (e) of this definition. "Interest Coverage Ratio" shall mean, as of the end of any fiscal quarter, the ratio of (a) Adjusted EBITDA to (b) Net Interest Expense, in each case as calculated for the four consecutive fiscal quarters then ending, provided that Net Interest Expense as calculated for the fiscal quarter ending June 30, 1998 shall be deemed equal to the product of Net Interest Expense for such fiscal quarter times four, as calculated for the fiscal quarter ending September 30, 1998 shall be deemed equal to the product of Net Interest Expense for the two consecutive fiscal quarters then ending times two and as calculated for the fiscal quarter ending December 31, 1998 shall be deemed equal to product of Net Interest Expense for the three consecutive fiscal quarters then ending times four thirds, all as determined in accordance with Generally Accepted Accounting Principles. "Interest Payment Date" shall mean (a) with respect to any LIBOR Loan, the last day of each LIBOR Interest Period with respect to such LIBOR Loan, and, in the case of any LIBOR Interest Period exceeding three months, those days that occur during such LIBOR Interest Period at intervals of three months after the first day of such LIBOR Interest Period and (b) in all other cases, the last Business Day of each March, June, September and December occurring after the date hereof, commencing with the first such Business Day occurring after the date of this Agreement. "IPO" shall mean the sale of Capital Stock (other than Disqualified Stock) of the Company or the Parent pursuant to (a) a registration statement under the Securities Act that has been declared effective by the SEC or (b) a public offering outside the United States and which results, in either case, in an active trading market for such shares. An active trading market shall be deemed to exist if such shares are listed on the New York Stock Exchange, the American Stock Exchange or the Nasdaq National Market System or any major international trading market exchange. "Joint Venture" shall mean any corporation, association, trust or other business entity of which the Company or one or more of its Subsidiaries owns beneficially at least 25% but less than 100% of the Capital Stock. "Lender Indebtedness" shall mean (a) the Advances and all other indebtedness, obligations and liabilities of the Company and of each Guarantor to the Agent or the Lenders under any Loan Document, and (b) all indebtedness, obligations and liabilities of the Company and of each Guarantor to any Lender in respect of any Swaps, in all cases whether now outstanding or hereafter arising. "Letter of Credit" shall mean a C/L/C or S/L/C having a stated expiry date or a date upon which the draft must be reimbursed not later than twelve months (provided that Letters of Credit which are automatically renewable annually but may be cancelled by the Agent annually are permissible) after the date of issuance and not later than one month before the Termination Date, issued by the Agent on behalf of the Lenders for the account of the Company or a Subsidiary pursuant to Section 2.1(a) under an application and related documentation acceptable to the Agent requiring, among other things, immediate reimbursement by the Company or a Subsidiary CREDIT AGREEMENT Page 10 15 to the Agent in respect of all drafts or other demand for payment honored thereunder and all expenses paid or incurred by the Agent relative thereto. "Letter of Credit Advance" shall mean any issuance of a Letter of Credit under Section 2.4 made pursuant to Section 2.1(a) in which each Lender acquires a pro rata risk participation. "Letter of Credit Documents" shall have the meaning ascribed thereto in Section 3.3(b). "LIBOR" shall mean, with respect to any LIBOR Loan and the related LIBOR Interest Period, the per annum rate that is equal to the sum of: (a) the Applicable Margin, plus (b) the rate per annum obtained by dividing (i) the per annum rate of interest at which deposits in Dollars for such LIBOR Interest Period and in an aggregate amount comparable to the amount of such LIBOR Loan to be made by the Agent in its capacity as a Lender hereunder are offered to the Agent by other prime banks in the London interbank market at approximately 11:00 a.m. local time in London on the second LIBOR Business Day prior to the first day of such LIBOR Interest Period by (ii) an amount equal to one minus the stated maximum rate (expressed as a decimal) of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves) that is specified on the first day of such LIBOR Interest Period by the Board of Governors of the Federal Reserve System (or any successor agency thereto) for determining the maximum reserve requirement with respect to eurocurrency funding (currently referred to as "Eurocurrency liabilities" in Regulation D of such Board) maintained by a member bank of such System; all as conclusively determined by the Agent, such sum to be rounded up, if necessary, to the nearest whole multiple of one one-hundredth of one percent (1/100 of 1%). "LIBOR Business Day" shall mean, with respect to any LIBOR Loan, a day which is both a Business Day and a day on which dealings in Dollar deposits are carried out in the London interbank market with respect to such LIBOR Loan. "LIBOR Interest Period" shall mean, with respect to any LIBOR Loan, the period commencing on the day such LIBOR Loan is made or converted to a LIBOR Loan and ending on the date one, two, three or six months thereafter, as the Company may elect under Section 2.4 or 2.7, and each subsequent period commencing on the last day of the immediately preceding LIBOR Interest Period and ending on the date one, two, three or six months thereafter, as the Company may elect under Section 2.4 or 2.7, provided, however, that (a) any LIBOR Interest Period which commences on the last LIBOR Business Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last LIBOR Business Day of the appropriate subsequent calendar month, (b) each LIBOR Interest Period which would otherwise end on a day which is not a LIBOR Business Day shall end on the next succeeding LIBOR Business Day or, if such next succeeding LIBOR Business Day falls in the next succeeding calendar month, on the next preceding LIBOR Business Day, and (c) no LIBOR Interest Period which would end after the Termination Date shall be permitted. CREDIT AGREEMENT Page 11 16 "LIBOR Loan" shall mean any Loan which bears interest at LIBOR. "Lien" shall mean any pledge, assignment, hypothecation, mortgage, security interest deposit arrangement, option, conditional sale or title retaining contract, sale and leaseback transaction, financing statement filing, lessor's or lessee's interest under any capital lease, subordination of any claim or right, or any other type of lien, charge or encumbrance. "Loan" shall mean any Revolving Credit Loan and any Swingline Loan. Any such Loan or portion thereof may also be denominated as an Adjusted Corporate Base Rate Loan or a LIBOR Loan and such Adjusted Corporate Base Rate Loans and LIBOR Loans are referred to herein as "types" of Loans. "Loan Documents" shall mean, collectively, this Agreement, the Notes, the Security Documents and any other agreement, instrument or document executed in connection with any of the foregoing at any time. "Material Adverse Effect" shall mean (i) a material adverse effect on the property, business, operations, financial condition, liabilities, prospects or capitalization of the Company and its Subsidiaries, taken as a whole, (ii) a material adverse effect on the ability of the Company and the Guarantors to perform their collective obligations under the Loan Documents taken as a whole or (iii) a material adverse effect on the rights and remedies of the Agent or the Lenders under the Loan Documents. "Moody's" means Moody's Investors Service, Inc. "Multiemployer Plan" shall mean any "multiemployer plan" as defined in Section 4001(a)(3) of ERISA or Section 414(f) of the Code. "Net Capital Expenditures" shall mean Capital Expenditures exclusive of any such Capital Expenditures financed on a non-recourse basis (i.e., on customary non-recourse terms and with recourse solely to the asset being financed with such non-recourse debt) by third parties which are not Affiliates and any Capital Expenditures to complete an Acquisition. "Net Cash Proceeds" shall mean, (a) in connection with any sale or other disposition of any asset or any settlement by, or receipt of payment in respect of, any property insurance claim or condemnation award, the cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received) of such sale, settlement or payment, net of reasonable and documented attorneys' fees, accountants' fees, investment banking fees, amounts required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset which is the subject of such sale, insurance claim or condemnation award (other than any Lien in favor of the Agent for the benefit of the Agent and the Lenders) and other customary fees actually incurred in connection therewith and net of taxes paid or reasonably estimated to be payable as a result thereof and (b) in connection with any issuance or sale of any equity securities or debt securities or instruments or the incurrence of loans, the cash proceeds received from such issuance or incurrence, net of investment banking fees, reasonable and documented attorneys' fees, accountants' fees, underwriting discounts and CREDIT AGREEMENT Page 12 17 commissions and other reasonable and customary fees and expenses actually incurred in connection therewith. "Net Income" shall mean, for any period, the net income (or loss) of the Company and its Subsidiaries on a consolidated basis for such period taken as a single accounting period, determined in accordance with Generally Accepted Accounting Principles. "Net Interest Expense" shall mean, for any period, total interest and related expense and payments in cash or cash equivalents with respect to the Preferred Stock (including, without limitation, that portion of any Capitalized Lease obligation attributable to interest expense in conformity with Generally Accepted Accounting Principles, all dividends, redemptions and other distributions or other cash payments of any kind due, paid or payable on the Preferred Stock in cash or cash equivalents, amortization of debt discount, all capitalized interest, the interest portion of any deferred payment obligations, all commissions, discounts and other fees and charges owed with respect to letter of credit and bankers acceptance financing, the net costs and net payments under any interest rate hedging, cap or similar agreement or arrangement, prepayment charges, agency fees, administrative fees, commitment fees and capitalized transaction costs allocated to interest expense) paid, payable or accrued during such period, without duplication for any other period, with respect to all outstanding Indebtedness and/or Preferred Stock of the Company and its Subsidiaries, net of any cash interest income of the Company and its Subsidiaries, all as determined for the Company and its Subsidiaries on a consolidated basis for such period in accordance with Generally Accepted Accounting Principles. "Note" shall mean any Revolving Credit Note or the Swingline Note. "Overdue Rate" shall mean (a) in respect of principal of Adjusted Corporate Base Rate Loans, a rate per annum that is equal to the sum of two percent (2%) per annum plus the Adjusted Corporate Base Rate, (b) in respect of principal of LIBOR Loans, a rate per annum that is equal to the sum of two percent (2%) per annum plus the per annum rate in effect thereon until the end of the then current LIBOR Interest Period for such Loan and, thereafter, a rate per annum that is equal to the sum of two percent (2%) per annum plus the Adjusted Corporate Base Rate, and (c) in respect of other amounts payable by the Company hereunder (other than interest), a per annum rate that is equal to the sum of two percent (2%) per annum plus the Adjusted Corporate Base Rate. "Parent" shall mean AP Holdings, Inc., a Delaware corporation. "PBGC" shall mean the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA. "Permitted Acquisition" shall mean an Acquisition by the Company or a Guarantor of all of the assets of a Person which meets the requirements set forth in Section 5.2(f) of this Agreement. "Permitted Acquisition Documents" shall mean all purchase agreements and all other agreements and documents executed or delivered pursuant to a Permitted Acquisitions. "Permitted Liens" shall mean Liens permitted by Section 5.2(e) hereof. CREDIT AGREEMENT Page 13 18 "Preferred Stock" shall mean the preferred stock of the Company to be issued on the Effective Date and described on Schedule 1.1-A hereto. "Preferred Stock Documents" shall mean all of the agreements, documents and instruments relating in any way to the Preferred Stock. "Person" shall include an individual, a corporation, a limited liability company, an association, a partnership, a trust or estate, a joint stock company, an unincorporated organization, a joint venture, a trade or business (whether or not incorporated), a government (foreign or domestic) and any agency or political subdivision thereof, or any other entity. "Plan" shall mean any pension plan (other than a Multiemployer Plan) subject to Title IV of ERISA or to the minimum funding standards of Section 412 of the Code which has been established or maintained by the Company, any Subsidiary of the Company or any ERISA Affiliate, or by any other Person if the Company, any Subsidiary of the Company or any ERISA Affiliate could have liability with respect to such pension plan. "Pledge Agreements" shall mean each Pledge Agreement entered into by the Company or any Guarantor for the benefit of the Agent and the Lenders pursuant to this Agreement substantially in the form attached hereto as Exhibits B-1 and B-2, as amended or modified from time to time. "Principals" shall mean Holberg Industries, Inc., John V. Holten or, in the case of the Company, the Parent. "Pro Forma EBITDA" shall mean the historical financial results of (i) the Company and its Subsidiaries, (ii) the entities acquired (net of assets excluded from such acquisition) by the Company pursuant to the Standard Acquisition Documents, and (iii) the entities acquired by the Company as identified on Schedule 5.2(f). For purposes of calculating and determining compliance with the financial covenants in Section 5.2 (a), (b) and (c) or the Applicable Margin, Pro Forma EBITDA shall be $11,420,000 for the period ending June 30, 1998, $7,614,000 for the period ending September 30, 1998, $3,807,000 for the period ending December 31, 1998 and $0 for any period thereafter. "Pro Forma Financial Statements" shall mean the pro forma financial statements and projections prepared by the Company dated March 28, 1998, and delivered to the Agent prior to the Effective Date. "Prohibited Transaction" shall mean any transaction involving any Plan which is proscribed by Section 406 of ERISA or Section 4975 of the Code. "Real Estate" shall mean all real property at any time owned or leased (as lessee or sublessee) or managed by the Company or any of its Subsidiaries. "Reimbursement Agreements" shall mean the letter of credit applications and reimbursement agreements executed in connection with any Letter of Credit, as amended or modified from time to time. CREDIT AGREEMENT Page 14 19 "Related Party" with respect to any Principal shall mean (a) any controlling stockholder, 80% (or more) owned Subsidiary, or spouse or immediate family member (in the case of an individual) of such Principal or (b) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 80% or more controlling interest of which consist of such Principal and/or such other Persons referred to in the immediately preceding clause (a). "Reportable Event" shall mean a reportable event as described in Section 4043(b) of ERISA including without limitation those events as to which the thirty (30) day notice period is waived under Part 2615 of the regulations promulgated by the PBGC under ERISA. "Required Lenders" shall mean Lenders holding not less than 51% of the Commitments (or 51% of the Advances if the Commitments have been terminated). "Requirement of Law" shall mean as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other governmental authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. "Revolving Credit Advance" shall mean any Revolving Credit Loan and any Letter of Credit Advance. "Revolving Credit Loan" shall mean any borrowing under Section 2.4 evidenced by the Revolving Credit Notes and made pursuant to Section 2.1(a). "Revolving Credit Notes" shall mean the promissory notes of the Company evidencing the Revolving Credit Loans, in substantially the form annexed hereto as Exhibit C, respectively, as amended or modified from time to time and together with any promissory note or notes issued in exchange or replacement therefor, and "Revolving Credit Note" shall mean any one of such Revolving Credit Notes. "S&P" means Standard & Poor's Rating Services, a division of The McGraw Hill Companies, Inc. "SEC" shall mean the Securities and Exchange Commission. "Securities Act" shall mean the Securities Act of 1933, as amended. "Security Agreements" shall mean each security agreement entered into by the Company or any Guarantor for the benefit of the Agent and the Lenders pursuant to this Agreement substantially in the forms attached hereto as Exhibits D-1, D-2, D-3, D-4 and D-5, as amended or modified from time to time, and any other agreement executed by the Company granting a Lien for the benefit of the Agent and the Lenders in form or substance satisfactory to the Agent, as amended or modified from time to time. "Security Documents" shall mean the Pledge Agreements, the Security Agreements, the Guaranties, the Reimbursement Agreements, and all other agreements and documents delivered CREDIT AGREEMENT Page 15 20 pursuant to this Agreement or otherwise entered into by any Person to secure or guaranty the obligations of the Company under this Agreement. "Seller Note" shall mean any promissory note or other instrument issued by, or obligation of, the Company or any Guarantor as full or partial payment of the purchase price for a Permitted Acquisition, provided that the obligations under all Seller Notes shall be unsecured, other than up to $150,000 aggregate principal amount of Seller Notes at any time outstanding which may be secured by a security interest in the assets acquired thereby. "Senior Discount Notes" shall mean the $70,000,000 11 1/4 Senior Discount Notes due 2008 issued by the Parent. "Significant Subsidiaries" shall mean at any date any one or more Subsidiaries which, if considered in the aggregate and with their Subsidiaries, (a) for the most recent fiscal quarter of the Company accounted for more than 5% of the consolidated revenues of the Company and its Subsidiaries or (b) as of the end of such fiscal quarter, was the owner of more than 5% of the Total Assets. For purposes of this Agreement, a type of event shall not be deemed to have occurred with respect to Significant Subsidiaries unless such type of event has occurred with respect to each of the Subsidiaries required to be included to constitute "Significant Subsidiaries" as defined in the preceding sentence. "S/L/C" shall mean any standby letter of credit issued hereunder. "Standard Acquisition" shall mean the acquisition by the Company pursuant to the Standard Acquisition Documents. "Standard Acquisition Documents" shall mean the Combination Agreement by and among the standard owners party thereto and the Company dated as of January 15, 1999 and all agreements, instruments and documents executed or delivered pursuant thereto. "Standard Cost Savings" shall mean the identifiable annualized cost savings and synergies in connection with the Standard Acquisition and the Acquisitions identified on Schedule 5.2(f), which shall be consistent with the annualized cost savings and synergies identified on the Pro Forma Financial Statements. For purposes of calculating and determining compliance with the financial covenants in Section 5.2 (a), (b) and (c) or the Applicable Margin, Standard Cost Savings shall be $8,930,000 for the period ending June 30, 1998, $7,144,000 for the period ending September 30, 1998, $5,358,000 for the period ending December 31, 1998, $3,572,000 for the period ending March 31, 1999, $1,786,00 for the period ending June 30, 1999 and $0 for any period thereafter. "Subordinated Debt" shall mean, for any Person, any Indebtedness of such Person which is fully subordinated to all Indebtedness of such Person owing to the Agent and the Lenders, by written agreements and documents in form and substance satisfactory to the Required Lenders and which is governed by terms and provisions, including without limitation maturities, covenants, defaults, rates and fees, acceptable to the Agent, and shall include, without limitation, all Indebtedness owing pursuant to the Subordinated Notes. CREDIT AGREEMENT Page 16 21 "Subordinated Debt Documents" shall mean the Subordinated Note Documents, and any other agreement or document evidencing or relating to any Subordinated Debt, whether under the Subordinated Notes or any other Subordinated Debt. "Subordinated Note Documents" shall mean the Subordinated Note Indenture, the Subordinated Notes and all agreements, instruments and documents executed in connection therewith at any time, including without limitation those agreements, instruments and documents listed on Schedule 1.1-B hereto. "Subordinated Notes" shall mean the subordinated notes issued by the Company in the aggregate principal amount of $140,000,000 due 2008 issued pursuant to the Subordinated Note Indenture. "Subordinated Note Indenture" shall mean the Senior Subordinated Note Indenture among the Company and State Street Bank & Trust, as trustee, dated as of March 30, 1998, as amended or modified from time to time. "Subsidiary" of any Person shall mean any other Person (whether now existing or hereafter organized or acquired) in which (other than directors, qualifying shares required by law) at least a majority of the securities or other ownership interests of each class having ordinary voting power or analogous right (other than securities or other ownership interests which have such power or right only by reason of the happening of a contingency), at the time as of which any determination is being made, are owned, beneficially and of record, by such Person or by one or more of the other Subsidiaries of such Person or by any combination thereof. "Swaps" means an agreement, device or arrangement providing for payments which are related to fluctuations of interest rates, exchange rates or forward rates, including, but not limited to, dollar-denominated or cross-currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts and warrants. "Swingline Loan" shall mean any loan under Section 2.4 evidenced by the Swingline Note and made by the Agent to the Company pursuant to Section 2.1(b). "Swingline Note" shall mean any promissory note of the Company evidencing the Swingline Loans in substantially the form of Exhibit E hereto, as amended or modified from time to time and together with any promissory note or notes issued in exchange or replacement therefor. "Termination Date" shall mean the earlier to occur of (a) March 30, 2004, and (b) the date on which the Commitments shall be terminated pursuant to Section 2.2 or 6.2. "Total Assets" shall mean, at any time, the consolidated assets of the Company and its Subsidiaries. "Unfunded Benefit Liabilities" shall mean, with respect to any Plan as of any date, the amount of the unfunded benefit liabilities determined in accordance with Generally Accepted Accounting Principles. CREDIT AGREEMENT Page 17 22 "Unmatured Event" shall mean any event or condition which might become an Event of Default with notice or lapse of time or both. "Voting Stock" shall mean any Capital Stock, the holders of which are at the time entitled, as such holders, to vote for the election of a majority of the directors (or persons performing similar functions) of the corporation, association, trust or other business entity involved, whether or not the right so to vote exists by reasoning of the happening of a contignency. "Wholly Owned Subsidiary" shall mean any Subsidiary of the Company of which 100% of the Voting Stock, exclusive of directors' qualifying shares, is owned by the Company or by another Wholly Owned Subsidiary of the Company. 1.2 Other Definitions; Rules of Construction. As used herein, the terms "Agent", "Lenders", "Company", and "this Agreement" shall have the respective meanings ascribed thereto in the introductory paragraph of this Agreement. Such terms, together with the other terms defined in Section 1.1, shall include both the singular and the plural forms thereof and shall be construed accordingly. Use of the terms "herein", "hereof", and "hereunder" shall be deemed references to this Agreement in its entirety and not to the Section or clause in which such term appears. References to "Sections" and "subsections" shall be to Sections and subsections, respectively, of this Agreement unless otherwise specifically provided. 1.3 Accounting Terms and Determinations. (a) Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Lenders hereunder shall (unless otherwise disclosed to the Lenders in writing at the time of delivery thereof in the manner described in subsection (b) below) be prepared in accordance with Generally Accepted Accounting Principles; provided that, if the Company notifies the Agent that it wishes to amend any covenant in Article V to eliminate the effect of any change in Generally Accepted Accounting Principles (or if the Agent notifies the Company that the Required Lenders wish to amend Article V for such purpose), then the Company's compliance with such covenants shall be determined on the basis of Generally Accepted Accounting Principles in effect immediately before the relevant change in Generally Accepted Accounting Principles became effective until either such notice is withdrawn or such covenant or any such defined term is amended in a manner satisfactory to the Company and the Required Lenders. Except as otherwise expressly provided herein, all references to a time of day shall be references to Chicago, Illinois time. (b) The Company shall deliver to the Lenders at the same time as the delivery of any annual or quarterly financial statement under Section 5.1(d) hereof (i) a description in reasonable detail of any material variation between the application or other modification of accounting principles employed in the preparation of such statement and the application or other modification of accounting principles employed in the preparation of the immediately prior annual or quarterly financial statements as to which no objection has been made in accordance with the last sentence of subsection (a) above and (ii) reasonable estimates of the difference between such statements arising as a consequence thereof. CREDIT AGREEMENT Page 18 23 (c) To enable the ready and consistent determination of compliance with the covenants set forth in Section 5.2 hereof, the Company will not change the last day of its fiscal year from December 31 of each year, or the last days of the first three fiscal quarters in each of its fiscal years from March 31, June 30, and September 30 of each year, respectively. ARTICLE II THE COMMITMENTS AND THE ADVANCES 2.1 Commitments of the Lenders. (a) Revolving Credit Advances. Each Lender agrees, for itself only, subject to the terms and conditions of this Agreement, to make Revolving Credit Loans to the Company pursuant to Section 2.4 and to participate in Letter of Credit Advances to the Company pursuant to Section 3.3, from time to time from and including the Effective Date to but excluding the Termination Date, not to exceed in aggregate principal amount at any time outstanding the amount determined pursuant to Section 2.1(c). (b) Swingline Loans. (i) The Company may request the Agent to make, and the Agent may, in its sole discretion, make Swingline Loans to the Company from time to time on any Business Day during the period from the Effective Date until the Termination Date in an aggregate principal amount not to exceed at any time the lesser of (A) $5,000,000 (the "Swingline Facility") and (B) the aggregate amount of Revolving Credit Advances that could be but is not borrowed as of such date. Each Lender's Commitment shall be deemed utilized by an amount equal to such Lender's pro rata share (based on such Lender's Commitment) of each Swingline Loan for purposes of determining the amount of Revolving Credit Advances required to be made by such Lender, but no Lender's Commitment, including First Chicago's, shall be deemed utilized for purposes of determining commitment fees under Section 2.3(a). Swingline Loans shall bear interest at the Adjusted Corporate Base Rate. Within the limits of the Swingline Facility, so long as the Agent, in its sole discretion, elects to make Swingline Loans, the Company may borrow and reborrow under this Section 2.1(b)(i). (ii) The Agent may at any time in its sole and absolute discretion require that any Swingline Loan be refunded by a Revolving Credit Loan which is an Adjusted Corporate Base Rate Borrowing from the Revolving Lenders, and upon written notice thereof by the Agent to the Lenders and the Company, the Company shall be deemed to have requested a Revolving Credit Loan which is an Adjusted Corporate Base Rate Borrowing in an amount equal to the amount of such Swingline Loan, and such Adjusted Corporate Base Rate Borrowing shall be made to refund such Swing Line Loan. Each Lender shall be absolutely and unconditionally obligated to fund its pro rata share (based on such Lender's Commitment) of such Adjusted Corporate Base Rate Borrowing or, if applicable, purchase a participating interest in the Swingline Loans pursuant to Section 2.1(b)(iii) and such obligation shall not be affected by any circumstance, including, without limitation, (A) any set-off, counterclaim, recoupment, defense or other right which such Lender has or may have against the Agent or the Company or any if its Subsidiaries or anyone else for any reason whatsoever; (B) the occurrence or continuance of an Unmatured Event or an Event of Default, subject to Section 2.1(b)(iii); (C) any adverse change in the condition (financial or otherwise) of the Company or any of its Subsidiaries; (D) any breach CREDIT AGREEMENT Page 19 24 of this Agreement or any other agreement by any other Lender, the Company or any Guarantor; or (E) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing (including without limitation the Company's failure to satisfy any conditions contained in Article II or any other provision of this Agreement). (iii) If, due to any Event of Default (including without limitation as a result of the occurrence of an Event of Default with respect to the Company or any of its Subsidiaries pursuant to Section 6.1(h)) Adjusted Corporate Base Rate Loans may not be made by the Lenders as described in Section 2.1(b)(ii), then (A) the Company agrees that each Swingline Loan not paid pursuant to Section 2.1(b)(ii) shall bear interest, payable on demand by the Agent, at the Overdue Rate, and (B) effective on the date each such Adjusted Corporate Base Rate Loan would otherwise have been made, each Lender severally agrees that it shall unconditionally and irrevocably, without regard to the occurrence of any Unmatured Event or Event of Default or any other circumstances, in lieu of deemed disbursement of loans, to the extent of such Lender's Commitment, purchase a participating interest in the Swingline Loans by paying its participation percentage thereof. Each Lender will immediately transfer to the Agent, in same day funds, the amount of its participation. After such payment to the Agent, each Lender shall share on a pro rata basis (calculated by reference to its Commitment) in any interest which accrues thereon and in all repayments thereof. If and to the extent that any Lender shall not have so made the amount of such participating interest available to the Agent, such Lender and the Company severally agree to pay to the Agent forthwith on demand such amount together with interest thereon, for each day from the date of demand by the Agent until the date such amount is paid to the Agent, at (x) in the case of the Company, the interest rate specified above and (y) in the case of such Lender, the Federal Funds Rate for the first five days after the date of demand by the Agent and thereafter at the interest rate specified above. (c) Limitation on Amount of Advances. Notwithstanding anything in this Agreement to the contrary, (i) the aggregate principal amount of the Advances at any time outstanding to the Company shall not exceed the aggregate amount of the Commitments at such time and (ii) the aggregate principal amount of Letter of Credit Advances outstanding at any time shall not exceed $10,000,000. 2.2 Termination and Reduction of Commitments. (a) The Company shall have the right to terminate or reduce the Commitments at any time and from time to time, provided that (i) the Company shall give notice of such termination or reduction to the Agent specifying the amount and effective date thereof, (ii) each partial reduction thereof shall be in a minimum amount of $5,000,000 and in an integral multiple of $1,000,000 and shall reduce such Commitments of all of the Lenders proportionately in accordance with the respective Commitment amounts for each such Lender, (iii) no such termination or reduction shall be permitted with respect to any portion of any such Commitments as to which a request for an Advance pursuant to Section 2.4 is then pending, and (iv) the Commitments may not be terminated if any Advances are then outstanding and may not be reduced below the principal amount of Advances then outstanding. The Commitments or any portion thereof terminated or reduced pursuant to this Section 2.2 may not be reinstated. (b) For purposes of this Agreement, a Letter of Credit Advance (i) shall be deemed outstanding in an amount equal to the sum of the maximum amount available to be drawn under CREDIT AGREEMENT Page 20 25 the related Letter of Credit on or after the date of determination and on or before the stated expiry date thereof plus the amount of any draws under such Letter of Credit that have not been reimbursed as provided in Section 3.3 and (ii) shall be deemed outstanding at all times on and before such stated expiry date or such earlier date on which all amounts available to be drawn under such Letter of Credit have been fully drawn, and thereafter until all related reimbursement obligations have been paid pursuant to Section 3.3. As provided in Section 3.3, upon each payment made by the Agent in respect of any draft or other demand for payment under any Letter of Credit, the amount of any Letter of Credit outstanding immediately prior to such payment shall be automatically reduced by the amount of each Revolving Credit Loan deemed advanced in respect of the related reimbursement obligation of the Company. 2.3 Fees (a) The Company agrees to pay the Agent, for the pro rata benefit of the Lenders, a commitment fee on the daily average unused amount of the Commitments, for the period from the Effective Date to but excluding the Termination Date, at a rate equal to the Applicable Margin. For purposes of this Section 2.3(a), all Letters of Credit shall be considered usage of the Commitments, and Swingline Loans shall not be considered usage of the Commitments. Such accrued commitment fees shall be payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing on June 30, 1998, and on the Termination Date. (b) The Company agrees to pay to the Agent, with respect to Letters of Credit, a fee computed at the Applicable Margin calculated on the maximum amount available to be drawn from time to time under a Letter of Credit, which fee shall be paid annually in advance at the time such Letter of Credit is issued for the period from and including the date of issuance of such Letter of Credit to and including the stated expiry date of such Letter of Credit, which fees shall be for the pro rata benefit of the Lenders; provided that a fee computed at the rate of 0.25% per annum calculated on the face amount of each Letter of Credit shall be retained from such fee solely for the account of the Agent. Such fees are nonrefundable and the Company shall not be entitled to any rebate of any portion thereof if such Letter of Credit does not remain outstanding through its stated expiry date or for any other reason. The Company further agrees to pay to the Agent, on demand, such other customary administrative fees, charges and expenses of the Agent in respect of the issuance, negotiation, acceptance, amendment, transfer and payment of such Letter of Credit or otherwise payable pursuant to the application and related documentation under which such Letter of Credit is issued. (c) The Company agrees to pay to the Agent agency fees for its services as Agent under this Agreement and for other services in such amounts as may from time to time be agreed to in writing between the Company and the Agent. 2.4 Disbursement of Advances. (a) The Company shall give the Agent notice of its request for each Advance in substantially the form of Exhibit F hereto not later than noon Chicago time (i) three LIBOR Business Days prior to the date such Advance is requested to be made if such Advance is to be made as a LIBOR Borrowing, (ii) five Business Days prior to the date any Letter of Credit Advance is requested to be made, or such earlier date as reasonably determined by the Agent, (iii) on the Business Day such Advance is requested to be made in the case of any Swingline Loan, and (iv) on the Business Day such Advance is requested to be made in all other cases, which notice shall specify whether a LIBOR Borrowing, an Adjusted CREDIT AGREEMENT Page 21 26 Corporate Base Rate Borrowing, a Swingline Loan or a Letter of Credit Advance is requested and, in the case of each requested LIBOR Borrowing, the LIBOR Interest Period to be initially applicable to such Borrowing and, in the case of each Letter of Credit Advance, such information as may be necessary for the issuance thereof by the Agent. The Agent, reasonably promptly on the same Business Day such notice is given, shall provide notice of such requested Advance (other than Swingline Loan) to the relevant Lenders. Subject to the terms and conditions of this Agreement, the proceeds of each such requested Advance shall be made available to the Company by depositing the proceeds thereof, in immediately available funds, in an account maintained and designated by the Company at the principal office of the Agent. Subject to the terms and conditions of this Agreement, the Agent shall, on the date such Letter of Credit Advance is requested to be made, issue the related Letter of Credit on behalf of the Lenders for the account of the Company. Notwithstanding anything herein to the contrary, the Agent may decline to issue any requested Letter of Credit on the basis that the beneficiary, the purpose of issuance or the terms or the conditions of drawing are unacceptable to it in it reasonable discretion, provided that the Agent shall not unreasonably decline to issue a Letter of Credit pursuant to this sentence. (b) Each Lender, not later than 2:00 p.m. Chicago time on the date any Borrowing in the form of a Loan for which such Lender has a Commitment is required to be made, shall make its pro rata share of such Borrowing available in immediately available funds at the principal office of the Agent for disbursement to the Company. Unless the Agent shall have received notice from any Lender prior to the date such Borrowing is requested to be made under this Section 2.4 that such Lender will not make available to the Agent such Lender's pro rata portion of such Borrowing, the Agent may assume that such Lender has made such portion available to the Agent on the date such Borrowing is requested to be made in accordance with this Section 2.4. If and to the extent such Lender shall not have so made such pro rata portion available to the Agent, the Agent may (but shall not be obligated to) make such amount available to the Company, and such Lender and the Company severally agree to pay to the Agent forthwith on demand such amount together with interest thereon, for each day from the date such amount is made available to the Company by the Agent until the date such amount is repaid to the Agent, at a rate per annum equal to, in the case of the Company, the interest rate applicable to such Borrowing during such period and, in the case of any Lender, at the Federal Funds Rate for the first five days and at the interest rate applicable to such borrowing thereafter. If such Lender shall pay such amount to the Agent together with interest, such amount so paid shall constitute a Loan by such Lender as a part of such Borrowing for purposes of this Agreement. The failure of any Lender to make its pro rata portion of any such Borrowing available to the Agent shall not relieve any other Lender of its obligations to make available its pro rata portion of such Borrowing on the date such Borrowing is requested to be made, but no Lender shall be responsible for failure of any other Lender to make such pro rata portion available to the Agent on the date of any such Borrowing. (c) All Revolving Credit Loans shall be evidenced by the Revolving Credit Notes and the Swingline Loans shall be evidenced by the Swingline Note and all such Loans shall be due and payable and bear interest as provided in Article III. Each Lender and the Agent is hereby authorized by the Company to record on the schedule attached to the Notes, or in its books and records, the date, and amount and type of each Loan and the duration of the related LIBOR Interest Period (if applicable), the amount of each payment or prepayment of principal CREDIT AGREEMENT Page 22 27 thereon, and the other information provided for on such schedule, which schedule or books and records, as the case may be, shall constitute prima facie evidence of the information so recorded, provided, however, that failure of any Lender or the Agent to record, or any error in recording, any such information shall not relieve the Company of its obligation to repay the outstanding principal amount of the Loans, all accrued interest thereon and other amounts payable with respect thereto in accordance with the terms of the Notes and this Agreement. Subject to the terms and conditions of this Agreement, the Company may borrow Revolving Credit Advances and under this Section 2.4 and under Section 3.3, prepay Revolving Credit Advances pursuant to Section 3.1 and reborrow Revolving Credit Advances under this Section 2.4. (d) Nothing in this Agreement shall be construed to require or authorize any Lender to issue any Letter of Credit, it being recognized that the Agent has the sole obligation under this Agreement to issue Letters of Credit for the risk of the Lenders. Upon issuance of a Letter of Credit by the Agent, each Lender shall automatically acquire a pro rata risk participation interest in such Letter of Credit Advance based on its respective Commitment. If the Agent shall honor a draft or other demand for payment presented or made under any Letter of Credit, the Agent shall provide notice thereof to each Lender on the date such draft or demand is honored unless the Company or any of its Subsidiaries shall have satisfied its reimbursement obligation under Section 3.3 by payment to the Agent on such date. Each Lender, on such date, shall make its pro rata share of the amount paid by the Agent available in immediately available funds at the principal office of the Agent for the account of the Agent. If and to the extent such Lender shall not have made any required pro rata portion available to the Agent, such Lender and the Company, unconditionally and irrevocably, severally agree to pay to the Agent forthwith on demand such amount together with interest thereon, for each day from the date such amount was paid by the Agent until such amount is so made available to the Agent at a per annum rate equal to the interest rate applicable during such period to the related Loan disbursed under Section 3.3 in respect of the reimbursement obligation of the Company. If such Lender shall pay such amount to the Agent together with such interest, if any, accrued, such amount so paid shall constitute a Revolving Credit Loan by such Lender as part of the Revolving Credit Borrowing disbursed in respect of the reimbursement obligation of the Company under Section 3.3 for purposes of this Agreement. The failure of any Lender to make its pro rata portion of any such amount paid by the Agent available to the Agent shall not relieve any other Lender of its obligation to make available its pro rata portion of such amount, but no Lender shall be responsible for failure of any other Lender to make such pro rata portion available to the Agent. Notwithstanding anything herein to the contrary, it is acknowledged and agreed that Letters of Credit hereunder may be issued for the account of any of the Subsidiaries of the Company, provided that for all purposes of this Agreement both the Company and such Subsidiary shall be deemed the account party thereon and shall be jointly and severally liable for all obligations in connection therewith and the Company shall have obtained an agreement from such Subsidiary that such Subsidiary shall be bound by all of the terms and provisions of this Agreement with respect to Letters of Credit, such agreement to be in form of substance satisfactory to the Agent. 2.5 Conditions for First Disbursement. The obligation of the Lenders to make the first Advance hereunder is subject to receipt by each Lender and the Agent of the following documents and completion of the following matters, in form and substance satisfactory to each Lender and the Agent: CREDIT AGREEMENT Page 23 28 (a) Charter Documents. Certificates of recent date of the appropriate authority or official of the Company's and each Guarantor's respective jurisdiction of organization listing all charter documents of the Company or each Guarantor, respectively, on file in that office and certifying as to the good standing and corporate existence of the Company or each Guarantor, respectively, together with copies of such charter documents of the Company or each Guarantor certified as of a recent date by such authority or official and certified as true and correct as of the Effective Date by a duly authorized officer of the Company or each Guarantor, respectively; (b) By-Laws and Corporate Authorizations. Copies of the by-laws of the Company and operating agreement of each Guarantor together with all authorizing resolutions and evidence of other corporate action taken by the Company and each Guarantor to authorize the execution, delivery and performance by the Company and each Guarantor of this Agreement, the Notes and the Security Documents to which the Company or such Guarantor, respectively, is a party and the consummation by the Company or such Guarantor, respectively, of the transactions contemplated hereby, certified as true and correct as of the Effective Date by a duly authorized officer of the Company or each Guarantor, respectively; (c) Incumbency Certificate. Certificates of incumbency of the Company and each Guarantor containing, and attesting to the genuineness of, the signatures of those officers or members, as the case may be, authorized to act on behalf of the Company or each Guarantor in connection with this Agreement, the Notes and the Security Documents to which the Company and such Guarantor is a party and the consummation by the Company or such Guarantor of the transactions contemplated hereby, certified as true and correct as of the Effective Date by a duly authorized officer of the Company and each Guarantor; (d) Notes. The Notes duly executed on behalf of the Company for each Lender; (e) Security Documents. The Security Documents duly executed on behalf of the Company and the Guarantors, as the case may be, granting to the Lenders and the Agent the collateral and security intended to be provided pursuant to Section 2.10, together with: (i) Recording, Filing, Etc. Recordation, filing and other action (including payment of any applicable taxes or fees) in such jurisdictions as the Lenders or the Agent may deem necessary or appropriate with respect to the Security Documents, including the filing of financing statements and similar documents which the Lenders or the Agent may deem necessary or appropriate to create, preserve or perfect the liens, security interests and other rights intended to be granted to the Lenders or the Agent thereunder, together with Uniform Commercial Code record searches in such offices as the Lenders or the Agent may request; (ii) Casualty and Other Insurance. Evidence that the casualty and other insurance required pursuant to Section 5.1(c), hereof or the Security Documents is in full force and effect; (f) Legal Opinions. The favorable written opinion of counsel for the Company and each Guarantor, substantially in the form of Exhibit G attached hereto; (g) Consents, Approvals, Etc. Copies of all governmental and nongovernmental consents, approvals, authorizations, declarations, registrations or filings, if any, required on the CREDIT AGREEMENT Page 24 29 part of the Company or any Guarantor in connection with the execution, delivery and performance of the Loan Documents or the transactions contemplated hereby or as a condition to the legality, validity or enforceability of the Loan Documents, certified as true and correct and in full force and effect as of the Effective Date by a duly authorized officer of the Company, or if none are required, a certificate of such officer to that effect; (h) Subordinated Debt and Preferred Stock. Evidence satisfactory to the Agent that the Company has incurred Subordinated Debt and issued Preferred Stock in an aggregate amount equal to or greater than $180,000,000, all in accordance with the Subordinated Debt Documents and Preferred Stock Documents, all Subordinated Debt Documents and Preferred Stock Documents shall have been delivered to the Agent and approved by the Agent and all transactions contemplated pursuant to the Subordinated Debt Documents and Preferred Stock Documents shall have been completed; (i) Standard Acquisition. Evidence satisfactory to the Agent that the Company is completing the Standard Acquisition simultaneously with the first Advance hereunder, all in accordance with all laws and regulations and with the Standard Acquisition Documents, and the Company shall acquire, free and clear of all Liens (other than Liens permitted by this Agreement), good and marketable title to all assets being acquired pursuant to the Standard Acquisition; (j) Payments. Evidence satisfactory to the Agent that all transfers of funds and payments described on Schedule 4.7 are being accomplished simultaneously, or at such other time as noted on Schedule 4.7, with the first Advance hereunder, including without limitation the payment in full of all indebtedness and other liabilities, and the termination of all commitments to lend and all Liens relating thereto, as described on Schedule 4.7; (k) Due Diligence. The Agent shall have received and be satisfied with all litigation searches, a review of all material contracts and Contingent Liabilities, and all other due diligence and investigation required by the Agent; (l) Certificates. The Agent shall have received, in form and substance satisfactory to the Agent, a pro forma covenant compliance certificate as of the Effective Date and as of the end of each of the first four quarters after the Effective Date; and (m) Other Conditions. Such other documents and completion of such other matters as the Agent may reasonably request, including without limitation copies of all final projections and financial statements and a solvency certificate executed by the chief financial officer of the Company. 2.6 Further Conditions for Disbursement. The obligation of the Lenders to make any Advance (including the first Advance), or any continuation or conversion under Section 2.7, is further subject to the satisfaction of the following conditions precedent: (a) The representations and warranties contained in Article IV hereof and in the Security Documents shall be true and correct in all material respects on and as of the date such Advance is made (both before and after such Advance is made) as if such representations and warranties were made on and as of such date; CREDIT AGREEMENT Page 25 30 (b) No Event of Default or Unmatured Event shall exist or shall have occurred and be continuing on the date such Advance is made and the making of such Advance shall not cause an Event of Default or Unmatured Event; and (c) In addition to all other applicable conditions, in the case of any Letter of Credit Advance, the Company shall have delivered to the Agent issuing the related Letter of Credit an application for such Letter of Credit and other related documentation requested by and acceptable to the Agent appropriately completed and duly executed on behalf of the Company. 2.7 Subsequent Elections as to Borrowings. The Company may elect (a) to continue a LIBOR Borrowing of one type, or a portion thereof, as a LIBOR Borrowing of the then existing type or (b) may elect to convert a LIBOR Borrowing of one type, or a portion thereof, to a Borrowing of another type or (c) elect to convert an Adjusted Corporate Base Rate Borrowing, or a portion thereof, to a LIBOR Borrowing, in each case by giving notice thereof to the Agent in substantially the form of Exhibit H hereto not later than 11:00 a.m. Chicago time three LIBOR Business Days prior to the date any such continuation of or conversion to a LIBOR Borrowing is to be effective and not later than noon Chicago time on the Business Day date such continuation or conversion is to be effective in all other cases, provided that an outstanding LIBOR Borrowing may only be converted on the last day of the then current LIBOR Interest Period with respect to such Borrowing, and provided, further, if a continuation of a Borrowing as, or a conversion of a Borrowing to, a LIBOR Borrowing is requested, such notice shall also specify the LIBOR Interest Period to be applicable thereto upon such continuation or conversion. The Agent, reasonably promptly on the Business Day such notice is given, shall provide notice of such election to the relevant Lenders. If the Company shall not timely deliver such a notice with respect to any outstanding LIBOR Borrowing, the Company shall be deemed to have elected to convert such LIBOR Borrowing to an Adjusted Corporate Base Rate Borrowing on the last day of the then current LIBOR Interest Period with respect to such Borrowing. 2.8 Limitation of Requests and Elections. Notwithstanding any other provision of this Agreement to the contrary, if, upon receiving a request for a LIBOR Borrowing pursuant to Section 2.4, or a request for a continuation of a LIBOR Borrowing, or a request for a conversion of an Adjusted Corporate Base Rate Borrowing to a LIBOR Borrowing pursuant to Section 2.7, (a) in the case of any LIBOR Borrowing, deposits in Dollars for periods comparable to the LIBOR Interest Period elected are not available to any Lender in the relevant interbank or market, or (b) applicable interest rate will not adequately and fairly reflect the cost to any Lender of making, funding or maintaining the related LIBOR Borrowing or (c) by reason of national or international financial, political or economic conditions or by reason of any applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect, or the interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof, or compliance by any Lender with any guideline, request or directive of such authority (whether or not having the force of law), including without limitation exchange controls, it is impracticable, unlawful or impossible for any Lender (i) to make or fund the relevant LIBOR Borrowing or (ii) to continue such LIBOR Borrowing or (iii) to convert a Borrowing to such a LIBOR Borrowing, then the Company shall not be entitled, so long as such circumstances continue, to request a LIBOR Borrowing pursuant to Section 2.4 or a continuation of or conversion to a LIBOR Borrowing pursuant to Section 2.7. In the event that such circumstances no longer exist, the Lenders shall again, subject to the terms and conditions CREDIT AGREEMENT Page 26 31 hereof, provide LIBOR Borrowings pursuant to Section 2.4, and requests for continuations of and conversions to LIBOR Borrowings of the affected type pursuant to Section 2.7. 2.9 Minimum Amounts; Limitation on Number of Borrowings. Except for (a) Advances and conversions thereof which exhaust the entire remaining amount of the Commitments and (b) payments required pursuant to Section 3.8, each Borrowing and each continuation or conversion pursuant to Section 2.7 and each prepayment thereof shall be in a minimum amount of, in the case of LIBOR Borrowings, $2,000,000 and in integral multiples of $500,000, and in the case of Adjusted Corporate Base Rate Borrowings, $250,000 and in integral multiples of $50,000. No more than five LIBOR Interest Periods shall be permitted to exist at any one time with respect to all Advances outstanding hereunder from time to time. 2.10 Security and Collateral. To secure the payment when due of the Notes and all other obligations of the Company under this Agreement to the Lenders and the Agent, the Company shall execute and deliver, or cause to be executed and delivered, to the Lenders and the Agent Security Documents granting the following: (a) Security interests in all present and future accounts, inventory, equipment, fixtures and all other personal property of the Company and each Guarantor; (b) Mortgage liens on all real property and fixtures of the Company and each Guarantor; (c) Pledges of all Capital Stock owned by the Company or any Guarantor, provided that (i) the amount of Capital Stock of any Foreign Subsidiary pledged to the Agent shall not exceed 65% of the aggregate Capital Stock of such Foreign Subsidiary and (ii) the Company shall not be required to pledge the Capital Stock of APCOA Australia Pty. Ltd. or APCOA Pacific Holding Pty. Ltd. so long as those entities do not have any material assets or operations; (d) Guaranties of all Guarantors; and (e) All other security and collateral described in the Security Documents. Notwithstanding the foregoing, it is acknowledged and agreed that the Company and the Guarantors shall not be required to grant a lien or security interest on any assets to the extent such assets are specifically excluded from the collateral pursuant to the terms of the Security Agreements. ARTICLE III PAYMENTS AND PREPAYMENTS OF ADVANCES 3.1 Principal Payments. (a) Unless earlier payment is required under this Agreement, the Company shall pay to the Lenders on the Termination Date the entire outstanding principal amount of the Advances outstanding to it. If the Advances at any time exceed the amount allowed pursuant to CREDIT AGREEMENT Page 27 32 Section 2.1(c), the Company shall prepay the Advances by an amount equal to or, at its option, greater than such excess. (b) The Company may at any time and from time to time prepay all or a portion of the Loans, without premium or penalty, provided that (i) the Company may not prepay any portion of any Loan as to which an election of or a conversion to a LIBOR Loan is pending pursuant to Section 2.7, and (ii) the Company shall comply with all requirements of Section 3.9 in connection with any payment of any LIBOR Loan; 3.2 Interest Payments. The Company shall pay interest to the Lenders on the unpaid principal amount of each Loan, for the period commencing on the date such Loan is made until such Loan is paid in full, on each Interest Payment Date and at maturity (whether at stated maturity, by acceleration or otherwise), and thereafter on demand, at the following rates per annum: (a) During such periods that such Loan is an Adjusted Corporate Base Rate Loan, the Adjusted Corporate Base Rate ____ ; (b) During such periods that such Loan is a LIBOR Loan, the LIBOR applicable to such Loan for each related LIBOR Interest Period; Notwithstanding the foregoing paragraphs (a) and (b), the Company shall pay interest on demand at the Overdue Rate on the outstanding principal amount of any Loan and any other amount payable by the Company hereunder (other than interest) upon and during the continuance of any Event of Default if required by the Required Lenders, provided that the Company shall automatically pay interest on demand at the Overdue Rate on the outstanding principal amount of any Loan and any other amount payable by the Company hereunder (other than interest) if the Advances are accelerated at any time for any reason. 3.3 Letter of Credit Reimbursement Payments. (a) (i) The Company agrees to pay to the Agent, not later than 1:00 p.m. Chicago time on the date on which the Agent shall honor a draft or other demand for payment presented or made under such Letter of Credit, an amount equal to the amount paid by the Agent in respect of such draft or other demand under such Letter of Credit and all reasonable expenses paid or incurred by the Agent relative thereto (the "Reimbursement Amount"). The Agent shall, on the date of each demand for payment under any Letter of Credit issued by the Agent, give the Company notice thereof and of the amount of the Company's reimbursement obligation and liability for expenses relative thereto; provided that the failure of the Agent to give such notice shall not affect the reimbursement and other obligations of the Company under this Section 3.3. Unless the Company shall have made such payment to the Agent on such day, upon each such payment by the Agent, the Company shall be deemed to have elected to satisfy its reimbursement obligation by an Adjusted Corporate Base Rate Borrowing in an amount equal to the amount so paid by the Agent in respect of such draft or other demand under such Letter of Credit, and the Agent shall be deemed to have disbursed to the Company, for the account of the Lenders, the Adjusted Corporate Base Rate Loans comprising such Adjusted Corporate Base Rate Borrowing, and each Lender shall make its share of each such Adjusted Corporate Base Rate Borrowing available to the Agent in accordance with this Agreement. Such Adjusted Corporate Base Rate Loans shall be deemed disbursed notwithstanding any failure to satisfy any conditions for disbursement of any Loan and, to the CREDIT AGREEMENT Page 28 33 extent of the Adjusted Corporate Base Rate Loans so disbursed, the reimbursement obligation of the Company with respect to such Letter of Credit under this subsection (a)(i) shall be deemed satisfied. (ii) If, for any reason (including without limitation as a result of the occurrence of an Event of Default with respect to the Company pursuant to Section 6.1(h)), Adjusted Corporate Base Rate Loans may not be made by the Lenders as described in subsection (a)(i) of this Section 3.3, (A) the Company agrees that each Reimbursement Amount not paid pursuant to the first sentence of subsection (a)(i) of this Section 3.3 shall bear interest, payable on demand by the Agent, at the interest rate then applicable to Adjusted Corporate Base Rate Loans, and (B) effective on the date each such Adjusted Corporate Base Rate Loan would otherwise have been made with respect to any Letter of Credit, each Lender severally agrees that it shall unconditionally and irrevocably, without regard to the occurrence of any Event of Default or Unmatured Event to the extent of such Lender's pro rata share (based on the percentage of the aggregate Commitments of all Lenders then constituted by such Lender's Commitment) purchase a participating interest in each Reimbursement Amount. Each such Lender will immediately transfer to the Agent, in same day funds, the amount of its participation. Each such Lender shall share on a pro rata basis in any interest which accrues thereon and in all repayments thereof. If and to the extent that any Lender shall not have so made the amount of such participating interest available to the Agent, such Lender agrees to pay to the Agent forthwith on demand such amount together with interest thereon, for each day from the date of demand by the Agent until the date such amount is paid to the Agent, at the Federal Funds Rate for the first five days after such demand and at the Overdue Rate thereafter. (iii) Each Lender shall be obligated, absolutely and unconditionally, to make Adjusted Corporate Base Rate Loans pursuant to Section 3.3(a)(i) to purchase and fund participation interests in Letters of Credit pursuant to Section 2.4(d) and 3.3(a)(ii) and the obligation shall not be affected by any circumstance whatsoever, including, without limitation, (i) any set off, counterclaim, recoupment, defense or other right which such Lender or the Company may have against the Agent, the Company or anyone else for any reason whatsoever, (ii) the occurrence of any Event of Default or Unmatured Event, (iii) any adverse change in the condition (financial or otherwise) of the Company or any of their Subsidiaries, (iv) any breach of this Agreement by the Company, any of its Subsidiaries, the Agent, or any other Lender, or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing, including without limitation any termination or other limitation on the Commitments or any failure to satisfy any conditions precedent to any Advance contained herein or any other provision of this Agreement. (b) The reimbursement obligation of the Company under this Section 3.3 shall be absolute, unconditional and irrevocable and shall remain in full force and effect until all reimbursement obligations of the Company to the Lenders hereunder shall have been satisfied, and such obligations of the Company shall not be affected, modified or impaired upon the happening of any event, including without limitation, any of the following, whether or not with notice to, or the consent of, the Company: CREDIT AGREEMENT Page 29 34 (i) Any lack of validity or enforceability of any Letter of Credit or any documentation relating to any Letter of Credit or to any transaction related in any way to such Letter of Credit (the "Letter of Credit Documents"); (ii) Any amendment, modification, waiver, consent, or any substitution, exchange or release of or failure to perfect any interest in collateral or security, with respect to any of the Letter of Credit Documents; (iii) The existence of any claim, setoff, defense or other right which the Company may have at any time against any beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or any such transferee may be acting), the Agent or any Lender or any other Person or entity, whether in connection with any of the Letter of Credit Documents, the transactions contemplated herein or therein or any unrelated transactions; (iv) Any draft or other statement or document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (v) Payment by the Agent to the beneficiary under any Letter of Credit against presentation of documents which do not comply with the terms of the Letter of Credit, including failure of any documents to bear any reference or adequate reference to such Letter of Credit; (vi) Any failure, omission, delay or lack on the part of the Agent or any Lender or any party to any of the Letter of Credit Documents to enforce, assert or exercise any right, power or remedy conferred upon the Agent, any Lender or any such party under this Agreement or any of the Letter of Credit Documents, or any other acts or omissions on the part of the Agent, any Lender or any such party; or (vii) Any other event or circumstance that would, in the absence of this clause, result in the release or discharge by operation of law or otherwise of the Company from the performance or observance of any obligation, covenant or agreement contained in this Section 3.3. No setoff, counterclaim, reduction or diminution of any obligation or any defense of any kind or nature which the Company has or may have against the beneficiary of any Letter of Credit shall be available hereunder to the Company against the Agent or any Lender. Nothing in this Section 3.3 shall limit the liability, if any, of the Lenders to the Company pursuant to Section 3.3(c). (c) The Company hereby indemnifies and agrees to hold harmless the Lenders, the Agent and their respective officers, directors, employees and agents, harmless from and against any and all claims, damages, losses, liabilities, costs or expenses of any kind or nature whatsoever which the Lenders, the Agent or any such Person may incur or which may be claimed against any of them by reason of or in connection with any Letter of Credit, and neither any Lender, the Agent nor any of their respective officers, directors, employees or agents shall be liable or responsible for: (i) the use which may be made of any Letter of Credit or for any acts or omissions of any beneficiary in connection therewith; (ii) the validity, sufficiency or genuineness of documents or of any endorsement thereon, even if such documents should in fact prove to be CREDIT AGREEMENT Page 30 35 in any or all respects invalid, insufficient, fraudulent or forged; (iii) payment by the Agent to the beneficiary under any Letter of Credit against presentation of documents which do not comply with the terms of any Letter of Credit, including failure of any documents to bear any reference or adequate reference to such Letter of Credit; (iv) any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit; or (v) any other event or circumstance whatsoever arising in connection with any Letter of Credit; provided, however, that the Company shall not be required to indemnify the Lenders, the Agent and such other Persons, and the Agent and the Lenders shall be severally liable to the Company to the extent, but only to the extent, of any direct, as opposed to consequential or incidental, damages suffered by the Company which were caused by (A) the Agent's wrongful dishonor of any Letter of Credit after the presentation to it by the beneficiary thereunder of a draft or other demand for payment and other documentation strictly complying with the terms and conditions of such Letter of Credit, or (B) the payment by the Agent to the beneficiary under any Letter of Credit against presentation of documents which do not comply with the terms of the Letter of Credit to the extent, but only to the extent, that such payment constitutes gross negligence or wilful misconduct of the Agent; provided that none of the Agent, any Lender or any such Person shall have the right to be indemnified hereunder for its own gross negligence or wilful misconduct as determined by a court of competent jurisdiction. It is understood that in making any payment under a Letter of Credit the Agent will rely on documents presented to it under such Letter of Credit as to any and all matters set forth therein without further investigation and regardless of any notice or information to the contrary, and such reliance and payment against documents presented under a Letter of Credit substantially complying with the terms thereof shall not be deemed gross negligence or wilful misconduct of the Agent in connection with such payment. It is further acknowledged and agreed that the Company may have rights against the beneficiary or others in connection with any Letter of Credit with respect to which the Lenders or the Agent are alleged to be liable and it shall be a precondition of the assertion of any liability of the Lenders or the Agent under this Section that the Company shall first have exhausted all remedies in respect of the alleged loss against such beneficiary and any other parties obligated or liable in connection with such Letter of Credit and any related transactions. 3.4 Payment Method. (a) All payments to be made by the Company hereunder will be made in Dollars and in immediately available funds to the Agent for the account of the Lenders at its address set forth on the signature pages not later than 1:00 p.m. Chicago time on the date on which such payment shall become due. Payments received after 1:00 p.m. Chicago time shall be deemed to be payments made prior to 1:00 p.m. Chicago time on the next succeeding Business Day. The Company hereby authorizes the Agent to charge its account with the Agent in order to cause timely payment of principal, interest and fees due under Section 2.3 to be made (subject to sufficient funds being available in such account for that purpose). (b) At the time of making each such payment, the Company shall, subject to the other terms and conditions of this Agreement, specify to the Agent that Advance or other obligation of the Company hereunder to which such payment is to be applied. In the event that the Company fails to so specify the relevant obligation or if an Event of Default shall have occurred and be continuing, the Agent may apply such payments as it may determine. CREDIT AGREEMENT Page 31 36 (c) On the day such payments are deemed received, the Agent shall remit to the Lenders their pro rata shares of such payments in immediately available funds, (i) in the case of payments of principal and interest on any Borrowing, determined with respect to each such Lender by the ratio which the outstanding principal balance of its Loan included in such Borrowing bears to the outstanding principal balance of the Loans of all the Lenders included in such Borrowing and (ii) in the case of fees paid pursuant to Section 2.3 and other amounts payable hereunder (other than the Agent's fees payable pursuant to Section 2.3(e) and amounts payable to any Lender under Section 3.7) determined with respect to each such Lender by the ratio which the Commitment of such Lender bears to the Commitments of all the Lenders. 3.5 No Setoff or Deduction. All payments of principal and interest on the Loans and other amounts payable by the Company hereunder shall be made by the Company without setoff or counterclaim, and free and clear of, and without deduction or withholding for, or on account of, any present or future taxes, levies, imposts, duties, fees, assessments, or other charges of whatever nature, imposed by any governmental authority, or by any department, agency or other political subdivision or taxing authority. 3.6 Payment on Non-Business Day; Payment Computations. Except as otherwise provided in this Agreement to the contrary, whenever any installment of principal of, or interest on, any Loan or any other amount due hereunder becomes due and payable on a day which is not a Business Day, the maturity thereof shall be extended to the next succeeding Business Day and, in the case of any installment of principal, interest shall be payable thereon at the rate per annum determined in accordance with this Agreement during such extension. Computations of interest and other amounts due under this Agreement shall be made on the basis of a year of 360 days for the actual number of days elapsed, including the first day but excluding the last day of the relevant period 3.7 Additional Costs. (a) In the event that on or after the date hereof, the adoption of or any change in any applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect and whether or not presently applicable to any Lender or the Agent, or any interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof, or compliance by any Lender or the Agent with any guideline, request or directive of any such authority (whether or not having the force of law), shall (i) directly affect the basis of taxation of payments to any Lender or the Agent of any amounts payable by the Company under this Agreement (other than taxes imposed on the overall net income of any Lender or the Agent, by the jurisdiction, or by any political subdivision or taxing authority of any such jurisdiction, in which any Lender or the Agent, as the case may be, has its principal office), or (ii) shall impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by any Lender or the Agent, or (iii) shall impose any other condition with respect to this Agreement, the Commitments, the Notes or the Loans or any Letter of Credit, and the result of any of the foregoing (i.e., (i), (ii) or (iii)) is to increase the cost to any Lender or the Agent, as the case may be, of making, funding or maintaining any LIBOR Loan or any Letter of Credit or to reduce the amount of any sum receivable by any Lender or the Agent, as the case may be, thereon, then the Company shall pay to such Lender or the Agent, as the case may be, from time to time, upon request by such Lender (with a copy of such request to be provided to the Agent) or the Agent, additional amounts sufficient to compensate such Lender or the Agent, as the case CREDIT AGREEMENT Page 32 37 may be, for such increased cost or reduced sum receivable to the extent, in the case of any LIBOR Loan, such Lender or the Agent is not compensated therefor in the computation of the interest rate applicable to such LIBOR Loan. A statement as to the amount of such increased cost or reduced sum receivable, prepared in good faith and in reasonable detail by such Lender or the Agent, as the case may be, and submitted by such Lender or the Agent, as the case may be, to the Company, shall be conclusive and binding for all purposes absent manifest error in computation. (b) In the event that on or after the date hereof, the adoption of or any change in any applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect and whether or not presently applicable to any Lender or the Agent, or any interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof, or compliance by any Lender or the Agent with any guideline, request or directive of any such authority (whether or not having the force of law), including any risk-based capital guidelines, affects or would affect the amount of capital required or expected to be maintained by such Lender or the Agent (or any corporation controlling such Lender or the Agent) and such Lender or the Agent, as the case may be, determines that the amount of such capital is increased by or based upon the existence of such Lender's or the Agent's obligations hereunder and such increase has the effect of reducing the rate of return on such Lender's or the Agent's (or such controlling corporation's) capital as a consequence of such obligations hereunder to a level below that which such Lender or the Agent (or such controlling corporation) could have achieved but for such circumstances (taking into consideration its policies with respect to capital adequacy) by an amount deemed by such Lender or the Agent to be material, then the Company shall pay to such Lender or the Agent, as the case may be, from time to time, upon request by such Lender (with a copy of such request to be provided to the Agent) or the Agent, additional amounts sufficient to compensate such Lender or the Agent (or such controlling corporation) for any increase in the amount of capital and reduced rate of return which such Lender or the Agent reasonably determines to be allocable to the existence of such Lender's or the Agent's obligations hereunder. A statement as to the amount of such compensation, prepared in good faith and in reasonable detail by such Lender or the Agent, as the case may be, and submitted by such Lender or the Agent to the Company, shall be conclusive and binding for all purposes absent manifest error in computation. (c) Each Lender will promptly notify the Company and the Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this Section and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not in the judgment of such Lender be otherwise disadvantageous to such Lender or contrary to its policies. 3.8 Illegality and Impossibility. In the event that on or after the date hereof, the adoption of or any change in any applicable law, treaty, rule or regulation (whether domestic or foreign) or any change in any interpretation or administration of any applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect and whether or not presently applicable to any Lender or the Agent, by any governmental authority charged with the interpretation or administration thereof, or compliance by any Lender with any guideline, request or directive or such authority (whether or not having the force of law), including without CREDIT AGREEMENT Page 33 38 limitation exchange controls, shall make it unlawful or impossible for any Lender to maintain any LIBOR Loan under this Agreement, such Lender's outstanding LIBOR Loans, if any, shall be converted automatically to Adjusted Corporate Base Loans on the respective last days of the then current LIBOR Interest Periods with respect to such LIBOR Loans or within such earlier period as required by law. If any such conversion of a LIBOR Loan occurs on a day which is not the last day of the then current LIBOR Interest Period with respect thereto, the Company shall pay to such Lender such amounts, if any, as may be required pursuant to Section 3.9 as if such conversion were a prepayment. 3.9 Indemnification. If the Company makes any payment of principal with respect to any LIBOR Loan on any other date than the last day of a LIBOR Interest Period applicable thereto (whether pursuant to Section 3.8, Section 6.2 or otherwise), or if the Company fails to borrow any LIBOR Loan after notice has been given to the Lenders in accordance with Section 2.4, or if the Company fails to make any payment of principal or interest in respect of a LIBOR Loan when due, the Company shall reimburse each Lender on demand for any resulting loss or expense incurred by each such Lender, including without limitation any loss incurred in obtaining, liquidating or employing deposits from third parties, whether or not such Lender shall have funded or committed to fund such Loan. A statement as to the amount of such loss or expense, prepared in good faith and in reasonable detail by such Lender and submitted by such Lender to the Company, shall be conclusive and binding for all purposes absent manifest error in computation. Calculation of all amounts payable to such Lender under this Section 3.9 shall be made as though such Lender shall have actually funded or committed to fund the relevant LIBOR Loan through the purchase of an underlying deposit in an amount equal to the amount of such Loan and having a maturity comparable to the related LIBOR Interest Period and through the transfer of such deposit from an offshore office of such Lender to a domestic office of such Lender in the United States of America; provided, however, that such Lender may fund any LIBOR Loan in any manner it sees fit and the foregoing assumption shall be utilized only for the purpose of calculation of amounts payable under this Section 3.9. 3.10 Substitution of Lender. If (i) the obligation of any Lender to make or maintain LIBOR Loans has been suspended pursuant to Section 3.8 when not all Lender's obligations have been suspended, (ii) any Lender has demanded compensation under Section 3.7 or (iii) any Lender is a Defaulting Lender, the Company shall have the right, if no Unmatured Event or Event of Default then exists, to replace such Lender (a "Replaced Lender") with one or more other lenders (collectively, the "Replacement Lender") acceptable to the Agent, provided that (x) at the time of any replacement pursuant to this Section 3.10, the Replacement Lender shall enter into one or more Assignment and Acceptances, pursuant to which the Replacement Lender shall acquire the Commitments and outstanding Advances and other obligations of the Replaced Lender and, in connection therewith, shall pay to the Replaced Lender in respect thereof an amount equal to the sum of (A) the amount of principal of, and all accrued interest on, all outstanding Loans of the Replaced Lender, (B) the amount of all accrued, but theretofore unpaid, fees owing to the Replaced Lender under Section 2.3 and (C) the amount which would be payable by the Company to the Replaced Lender pursuant to Section 3.9 if the Company prepaid at the time of such replacement all of the Loans of such Replaced Lender outstanding at such time and (y) all obligations of the Company then owing to the Replaced Lender (other than those specifically described in clause (x) above in respect of which the assignment purchase price has been, or is concurrently being, deemed paid) shall be paid in full to such Replaced Lender CREDIT AGREEMENT Page 34 39 concurrently with such replacement. Upon the execution of the respective Assignment and Acceptances, the payment of amounts referred to in clauses (x) and (y) above and, if so requested by the Replacement Lender, delivery to the Replacement Lender of the appropriate Note or Notes executed by the Company, the Replacement Lender shall become a Lender hereunder and the Replaced Lender shall cease to constitute a Lender hereunder. The provisions of this Agreement (including without limitation Sections 3.9 and 8.5) shall continue to govern the rights and obligations of a Replaced Lender with respect to any Loans made or any other actions taken by such lender while it was a Lender. Nothing herein shall release any Defaulting Lender from any obligation it may have to the Company, the Agent or any other Lender. ARTICLE IV REPRESENTATIONS AND WARRANTIES The Company represents and warrants that: 4.1 Corporate Existence and Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of incorporation or organization, and is duly qualified to do business, and is in good standing, in all additional jurisdictions where such qualification is necessary under applicable law, except for those jurisdictions where the failure to so qualify or be in good standing is not reasonably expected to result in any Material Adverse Effect. The Company has all requisite corporate power to own or lease the properties used in its business and to carry on its business as now being conducted and as proposed to be conducted except where the failure to have such power is not reasonably expected to result in a Material Adverse Effect, and to execute and deliver the Loan Documents to which it is a party and to engage in the transactions contemplated by the Loan Documents. 4.2 Corporate Authority. The execution, delivery and performance by the Company and the Guarantors of the Loan Documents to which it is a party have been duly authorized by all necessary corporate action and are not in contravention of any law, rule or regulation, or any judgment, decree, writ, injunction, order or award of any arbitrator, court or governmental authority, or of the terms of the Company's or any Guarantor's charter or by-laws, or of any contract or undertaking to which the Company or any Guarantor is a party or by which the Company or any Guarantor or their respective property may be bound or affected or result in the imposition of any Lien except for Permitted Liens. 4.3 Binding Effect. The Loan Documents to which the Company or any Guarantor is a party are the legal, valid and binding obligations of the Company and the Guarantors, respectively, enforceable against the Company and the Guarantors in accordance with their respective terms, subject to the effect of bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the rights of creditors generally and by general principles of equity. 4.4 Subsidiaries. Schedule 4.4 hereto correctly sets forth the legal name, jurisdiction of organization and ownership of each Subsidiary and Joint Venture of the Company. Each such Subsidiary and Joint Venture and each Person becoming a Subsidiary or Joint Venture of the Company after the date hereof is and will be a corporation, partnership or limited liability company duly organized, validly existing and in good standing under the laws of its jurisdiction CREDIT AGREEMENT Page 35 40 of incorporation or organization and is and will be duly qualified to do business in each additional jurisdiction where such qualification is or may be necessary under applicable law, except for those jurisdictions where the failure to so qualify or be in good standing is not reasonably likely to result in any Material Adverse Effect. Each Subsidiary and Joint Venture of the Company has and will have all requisite power to own or lease the properties used in its business and to carry on its business as now being conducted and as proposed to be conducted, except where the failure to have such power is not reasonably likely to result in a Material Adverse Effect. All outstanding shares of Capital Stock of each class of each Subsidiary and Joint Venture of the Company have been and will be validly issued and are and will be fully paid and nonassessable and, except as otherwise indicated in Schedule 4.4 hereto, are and will be owned, beneficially and of record, by the Company or another Subsidiary of the Company free and clear of any Liens other than as permitted under this Agreement. 4.5 Litigation. Except as set forth in Schedule 4.5 hereto, there is no action, suit or proceeding pending or, to the best of the Company's knowledge, threatened against or affecting the Company or any of its Subsidiaries or any Guarantor before or by any court, governmental authority or arbitrator, which if adversely decided is reasonably expected to result, either individually or collectively, in any Material Adverse Effect and, to the best of the Company's knowledge, there is no basis for any such action, suit or proceeding. 4.6 Financial Condition. The consolidated balance sheet of the Company and its Subsidiaries and the consolidated statements of income, retained earnings and cash flows of the Company and its Subsidiaries for the fiscal year ended December 31, 1997 and reported on by Ernst & Young, independent certified public accountants, copies of which have been furnished to the Lenders, fairly present, and the financial statements of the Company and its Subsidiaries delivered pursuant to Section 5.1(d) will fairly present, the consolidated financial position of the Company and its Subsidiaries as at the respective dates thereof, and the consolidated results of operations of the Company and its Subsidiaries for the respective periods indicated, all in accordance with Generally Accepted Accounting Principles (subject, in the case of said interim statements, to year-end audit adjustments). The pro forma projections of consolidated financial results of the Company and its Subsidiaries for each of the fiscal years ending December 31, 1998 through December 31, 2003 are based on appropriate assumptions and the best information available. There has been no Material Adverse Effect since December 31, 1997. There is no material Contingent Liability of the Company that is not reflected in such financial statements or in the notes thereto. 4.7 Use of Advances. The Company will use the proceeds of the initial Advances hereunder as described in Schedule 4.7, and will use all other Advances for general corporate purposes. Neither the Company nor any of its Subsidiaries extends or maintains, in the ordinary course of business, credit for the purpose, whether immediate, incidental, or ultimate, of buying or carrying margin stock (within the meaning of Regulation G, T, U or X of the Board of Governors of the Federal Reserve System), and no part of the proceeds of any Advance will be used for the purpose, whether immediate, incidental, or ultimate, of buying or carrying any such margin stock or maintaining or extending credit to others for such purpose. 4.8 Consents, Etc. Except for such consents, approvals, authorizations, declarations, registrations or filings delivered by the Company pursuant to Section 2.5(g), if any, each of CREDIT AGREEMENT Page 36 41 which is in full force and effect, no consent, approval or authorization of or declaration, registration or filing with any governmental authority or any nongovernmental Person or entity, which, if not obtained, received or made, is reasonably expected to result in a Material Adverse Effect including without limitation any creditor, lessor or stockholder of the Company or any of its Subsidiaries, is required on the part of the Company or any Guarantor in connection with the execution, delivery and performance of any Loan Document or the transactions contemplated hereby or as a condition to the legality, validity or enforceability of any Loan Document. 4.9 Taxes. The Company and its Subsidiaries have filed all tax returns (federal, state and local) required to be filed and have paid all taxes shown thereon to be due and required to be paid including interest and penalties, or have established adequate financial reserves on their respective books and records for payment thereof except where the failure to so timely file is not reasonably likely to result in a Material Adverse Effect. Neither the Company nor any of its Subsidiaries knows of any actual or proposed tax assessment or any basis therefor, and no extension of time for the assessment of deficiencies in any federal or state tax has been granted by the Company or any Subsidiary. 4.10 Title to Properties. Except as otherwise disclosed in the latest balance sheet delivered pursuant to Section 4.6 or 5.1(d) of this Agreement, the Company or one or more of its Subsidiaries have a valid and indefeasible ownership interest in all of the properties and assets reflected in said balance sheet or subsequently acquired by the Company or any Subsidiary. All of such properties and assets are free and clear of any Lien except for Permitted Liens. The Security Documents grant a first priority, enforceable and perfected lien and security interest which is not void or voidable in all assets of the Company and each Guarantor subject thereto, subject only to Permitted Liens. 4.11 ERISA. The Company, its Subsidiaries, the ERISA Affiliates and the Plans are in compliance in all material respects with those provisions of ERISA and of the Code which are applicable with respect to any Plan. No Prohibited Transaction and no Reportable Event has occurred with respect to any Plan which could have a Material Adverse Effect. The Company, its Subsidiaries and the ERISA Affiliates have met the minimum funding requirements under ERISA and the Code with respect to each of their respective Plans, other than obligations in the ordinary course of business to make Plan contributions and pay PBGC premiums which have been paid when due. Assuming the funds provided by each Lender do not constitute the plan assets of any pension plan, the execution, delivery and performance of this Loan Documents does not constitute a Prohibited Transaction. There is no material Unfunded Benefit Liability with respect to any Plan. 4.12 Disclosure. No report or other information furnished in writing by the Company or any Subsidiary or Guarantor to any Lender or the Agent in connection with the negotiation or administration of this Agreement contains to the best of its knowledge any material misstatement of fact or omits to state any material fact or any fact necessary to make the statements contained therein not misleading. No Loan Document nor any other document, certificate, or report or statement or other information furnished to any Lender or the Agent by or on behalf of the Company or any Subsidiary or Guarantor in connection with the transactions contemplated hereby contains any untrue statement of a material fact or omits to state a material fact in order to make the statements contained herein and therein not misleading. There is no fact known to the CREDIT AGREEMENT Page 37 42 Company which materially and adversely affects, or which may reasonably be expected in the future may materially and adversely affect, the business, properties, operations or condition, financial or otherwise, of the Company or any Subsidiary, which has not been set forth in this Agreement or in the other documents, certificates, statements, reports and other information furnished in writing to the Lenders by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated hereby taken as a whole, including without limitation the offering memorandum for the Subordinated Notes. 4.13 Environmental and Safety Matters. (a) None of the Company, its Subsidiaries, its Joint Ventures nor (to the Company's best knowledge (without independent investigation or inquiry) as to any operator other than the Company and any of its Subsidiaries and Joint Ventures) any operator of the Real Estate or any operations thereon is or, during the last three (3) years, has been in violation, or alleged violation, of any Environmental Laws, which violation would have a Material Adverse Effect; (b) Except as set forth on Schedule 4.13, neither the Company nor any of its Subsidiaries or its Joint Ventures has received notice from any third party including, without limitation: any federal, state or local governmental authority, (i) that any one of them has been identified by the United States Environmental Protection Agency ("EPA") as a potentially responsible party under CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B (1986); (ii) that any hazardous waste, as defined by 42 U.S.C. ss.9601(5), any hazardous substances as defined by 42 U.S.C. ss.9601(14), any pollutant or contaminant as defined by 42 U.S.C. ss.9601(33) and any toxic substances, oil or hazardous materials or other chemicals or substances regulated by any Environmental Laws ("Hazardous Materials") which any one of them has generated, transported or disposed of has been found at any site at which a federal, state or local agency or other third party has conducted or has ordered that the Company or any of its Subsidiaries or its Joint Ventures conduct a remedial investigation, removal or other response action pursuant to any Environmental Law; or (iii) that it is or shall be a named party to any claim, action, cause of action, complaint, or legal or administrative proceeding (in each case, contingent or otherwise) arising out of any third party's incurrence of costs, expenses, losses or damages of any kind whatsoever in connection with the release of Hazardous Materials; (c) Except as set forth on Schedule 4.13 attached hereto, and to the best knowledge (without independent investigation or inquiry) of the Company as to any actions, events or circumstances occurring or created prior to the ownership, lease or management of any of the Real Estate by the Company or any of its Subsidiaries or Joint Ventures, and as to any operations conducted on any of the Real Estate by parties other than the Company or any of its Subsidiaries or Joint Ventures: (i) no portion of the Real Estate has been used, except in accordance with applicable Environmental Laws, for the handling, processing, storage (including without limitation the storage of petroleum products in vehicles parked on any of the Real Estate and storage of petroleum products in connection with the operation of vehicle rental agencies on any of the Real Estate) or disposal of Hazardous Materials; and no underground tank or other underground storage receptacle for Hazardous Materials is located on any portion of the Real Estate (including without limitation in connection with the operation of vehicle rental agencies) CREDIT AGREEMENT Page 38 43 which are not covered by third-party indemnification obligations in favor of the Company, its Subsidiaries or its Joint Ventures; (ii) in the course of any activities conducted by the Company, its Subsidiaries or its Joint Ventures or operators of its properties, no Hazardous Materials have been generated or are being used on the Real Estate except in accordance with applicable Environmental Laws, (iii) there have been no releases (i.e. any past or present releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, disposing or dumping) or (to the Company's best knowledge) threatened releases of Hazardous Materials on, upon, into or from the properties of the Company, its Subsidiaries or its Joint Ventures, which releases would have a material adverse effect on the value of any of the Real Estate or adjacent properties or the environment, (iv) without independent investigation or inquiry, there have been no releases on, upon, from or into any real property in the vicinity of any of the Real Estate which, through soil or groundwater contamination, may have come to be located on, and which would have a material adverse effect on the value of, the Real Estate; and (v) in addition, any Hazardous Materials that have been generated on any of the Real Estate have been transported offsite only by carriers having an identification number issued by the EPA, treated or disposed of only by treatment or disposal facilities maintaining valid permits as required under applicable Environmental Laws, which transporters and facilities have been and are, to the best of the Company's knowledge, operating in compliance with such permits and applicable Environmental Laws; and (d) None of the Company, its Subsidiaries, its Joint Ventures nor any of the other Real Estate is subject to any applicable environmental law requiring the performance of Hazardous Materials site assessments, or the removal or remediation of Hazardous Materials, or the giving of notice to any governmental agency or the recording or delivery to other Persons of an environmental disclosure document or statement by virtue of the transactions set forth herein and contemplated hereby, or as a condition to the recording of any Security Document or to the effectiveness of any other transactions contemplated hereby. 4.14 No Default. Neither the Company nor any Subsidiary or Guarantor is in default or has received any written notice of default under or with respect to any of its Contractual Obligations in any respect which is reasonably likely to result in a Material Adverse Effect. No Unmatured Event or Event of Default has occurred and is continuing. 4.15 Intellectual Property. Set forth on Schedule 4.15 is a complete and accurate list of all registered patents, trademarks, trade names, service marks and copyrights, and all applications therefor and licenses thereof, of the Company and each of its Subsidiaries showing as of the Effective Date the jurisdiction in which registered, the registration number and the date of registration. The Company and each of its Subsidiaries owns, or is licensed to use, all trademarks, trade names, service marks, copyrights, technology, know-how and processes necessary for the conduct of its business as currently conducted (the "Intellectual Property") except for those the failure to own or license which could not reasonably be expected to have a Material Adverse Effect. No claim has been asserted and is pending by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does the Company or any of its Subsidiaries know of any valid basis for any such claim, the use of such Intellectual Property by the Company and each of its Subsidiaries does not infringe on the rights of any Person, and, to the knowledge of the Company, no Intellectual Property has been infringed, misappropriated or diluted by any other CREDIT AGREEMENT Page 39 44 Person except for such claims, infringements, misappropriation and dilutions that, in the aggregate, could not have a Material Adverse Effect. 4.16 No Burdensome Restrictions. No Requirement of Law or Contractual Obligation applicable to the Company or any Subsidiary or Guarantor could reasonably be expected to have a Material Adverse Effect in the absence of a default thereunder. 4.17 Labor Matters. There are no strikes or other labor disputes against the Company or any Subsidiary pending or, to the knowledge of the Company, threatened that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect. Hours worked by and payment made to employees of the Company and its Subsidiaries have not been in violation of the Fair Labor Standards Act, if applicable, or any other applicable Requirement of Law dealing with such matters that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect. All payments due from the Company and each of its Subsidiaries on account of employee health and welfare insurance that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect if not paid have been paid or accrued as a liability on the books of the Company and its Subsidiaries. 4.18 Solvency. (a) After giving effect to the transactions described herein and to the incurrence or assumption of all Indebtedness (including without limitation the Subordinated Debt, all Advances in connection with the Standard Acquisition and otherwise incurred or assumed on or about the Effective Date and all other obligations being incurred or assumed) (i) the fair value of the assets of the Company and its Subsidiaries on a consolidated basis, at a fair valuation, will exceed the debts and liabilities, subordinated, contingent or otherwise, of the Company and its Subsidiaries on a consolidated basis; (ii) the present fair saleable value of the property of the Company and its Subsidiaries on a consolidated basis will be greater than the amount that will be required to pay the probable liability of the Company and its Subsidiaries on a consolidated basis on their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) the Company and its Subsidiaries on a consolidated basis will be able to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) the Company and its Subsidiaries on a consolidated basis will not have unreasonably small capital with which to conduct the businesses in which they are engaged as such businesses are now conducted and are proposed to be conducted after the date hereof. (b) The Company does not intend to, or to permit any of its Subsidiaries to, and does not believe that it or any of its Subsidiaries will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such Subsidiary. 4.19 Not an Investment Company; Other Regulations. Neither the Company nor any of its Subsidiaries is an "investment company" within the meaning of the Investment Company Act of 1940, as amended. Neither the Company nor any of its Subsidiaries is subject to any regulation under any federal or state statute or regulation which limits its ability to incur Indebtedness. CREDIT AGREEMENT Page 40 45 4.20 Subordinated Debt Documents. All representations and warranties of the Company contained in any Subordinated Debt Document are true and correct in all material respects. The Company will be issuing the Subordinated Notes in the principal amount of $140,000,000 on the Effective Date, and all Subordinated Note Documents are described on Schedule 1.1-B hereto. All Lender Indebtedness is "Senior Debt" and "Designated Senior Debt" as defined in the Subordinated Debt Documents and entitled to the benefits of all subordination provisions contained in the Subordinated Debt Documents. There is no event of default or event or condition which could become an event of default with notice or lapse of time or both, under the Subordinated Debt Documents and each of the Subordinated Debt Documents is in full force and effect. Other than pursuant to the Subordinated Notes, there is no obligation pursuant to any Subordinated Debt Document or other document or agreement evidencing or relating to any Subordinated Debt outstanding or to be outstanding on the Effective Date which obligates the Company to pay any principal or interest or redeem any of its Capital Stock or incur any other monetary obligation. 4.21 Preferred Stock Documents. The Company will be receiving net proceeds in the approximate amount of $40,000,000 on the Effective Date from its issuance of the Preferred Stock, and all Preferred Stock Documents, and all payments and other obligations of the Company with respect to the Preferred Stock, are described on Schedule 1.1-A hereto. 4.22 Standard Acquisition. Simultaneously with the first Advance hereunder, the Company will complete the Standard Acquisition in accordance with the Standard Acquisition Documents and in accordance with all laws and regulations and will acquire, free and clear of all Liens (other than Permitted Liens), good and marketable title to all assets being acquired pursuant to the Standard Acquisition. True and correct copies of all Standard Acquisition Documents have been delivered to the Agent on or prior to the Effective Date. 4.23 Bank Accounts. Schedule 4.23 sets forth, as of the date of this Credit Agreement, the account numbers and location of all concentration bank accounts of the Company or any of its Subsidiaries. 4.24 Facility Leases and Facility Management Agreements. Schedule 4.24 hereto sets forth each Facility Lease and each Facility Management Agreement to which the Company or one of its Subsidiaries is a party as lessee or manager and specifies the city and state where the parking facility subject to such lease or management agreement is located. ARTICLE V COVENANTS 5.1 Affirmative Covenants. The Company covenants and agrees that, until the Termination Date and thereafter until payment in full of the Lender Indebtedness and the performance of all other obligations of the Company under this Agreement, unless the requisite Lenders pursuant to Section 8.1 shall otherwise consent in writing, it shall, and, shall cause each of its Subsidiaries to: CREDIT AGREEMENT Page 41 46 (a) Preservation of Corporate Existence, Etc. To the extent the failure to do so is reasonably expected to have a Material Adverse Effect, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and its qualification as a foreign corporation or limited liability company, as the case may be (other than any merger permitted pursuant to Section 5.2(f) and other than any dissolution or liquidations of any Subsidiary if the assets of such Subsidiary are transferred to the Company or any Guarantor in connection with such dissolution or liquidation), in good standing in each jurisdiction in which such qualification is necessary under applicable law and the rights, licenses, permits (including those required under applicable Environmental Laws), franchises, patents, copyrights, trademarks and trade names material to the conduct of its businesses; provided, however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Subsidiaries, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Agent or the Lenders; and defend all of the foregoing against all claims, actions, demands, suits or proceedings at law or in equity or by or before any governmental instrumentality or other agency or regulatory authority. (b) Compliance with Laws, Etc. Comply in all material respects with all applicable laws, rules, regulations and orders of any governmental authority whether federal, state, local or foreign (including without limitation ERISA, the Code and Environmental Laws), in effect from time to time, to the extent the failure to so comply could reasonably be expected to have a Material Adverse Effect; and pay and discharge, before any interest or penalty for nonpayment thereof becomes payable, all taxes, assessments and governmental charges or levies imposed upon it or upon its income, revenues or property, before the same shall become delinquent or in default, as well as all lawful claims for labor, materials and supplies or otherwise, which, if unpaid, might give rise to Liens (other than Permitted Liens) upon such properties or any portion thereof, except to the extent that payment of any of the foregoing is then being contested in good faith by appropriate legal proceedings and with respect to which adequate financial reserves have been established on the books and records of the Company or such Subsidiary. (c) Maintenance of Properties; Insurance. Maintain, preserve and protect all property that is material to the conduct of the business of the Company or any of its Subsidiaries and keep such property in good repair, working order and condition (ordinary wear and tear and casualty covered by insurance excepted) and from time to time make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times in accordance with customary and prudent business practices for similar businesses; and maintain in full force and effect insurance with responsible and reputable insurance companies or associations in such amounts, on such terms and covering such risks, including fire and other risks insured against by extended coverage, as is usually carried by companies engaged in similar businesses and owning similar properties similarly situated and maintain in full force and effect public liability insurance, insurance against claims for personal injury or death or property damage occurring in connection with any of its activities or any of any properties owned, occupied or controlled by it, in such amount as it shall reasonably deem CREDIT AGREEMENT Page 42 47 necessary, and maintain such other insurance as may be required by law or as may reasonably be requested by the Required Lenders for purposes of assuring compliance with this Section 5.1(c). (d) Reporting Requirements. Furnish to the Lenders and the Agent the following: (i) Promptly and in any event within five Business Days after becoming aware of the occurrence of (A) any Unmatured Event or Event of Default, (B) the commencement of any litigation against, by or affecting the Company or any of its Subsidiaries, which could reasonably be expected to have a Material Adverse Effect, and any material developments therein, or (C) entering into any material contract or undertaking that is not entered into in the ordinary course of business or (D) any development in the business or affairs of the Company or any of its Subsidiaries which has resulted in or which is likely in the reasonable judgment of the Company, to result in a Material Adverse Effect, a statement of the chief financial officer of the Company setting forth details of such occurrence and the action which the Company or such Subsidiary, as the case may be, has taken and proposes to take with respect thereto; (ii) As soon as available and in any event within 45 days after the end of each fiscal quarter of the Company, the consolidated balance sheet of the Company and its Subsidiaries as of the end of such quarter, and the related consolidated statements of income and cash flows for such quarter and for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding fiscal year and duly certified (subject to year-end audit adjustments) by the chief financial officer of the Company as having been prepared in accordance with Generally Accepted Accounting Principles, together with a certificate of the chief financial officer of the Company stating (A) that no Unmatured Event or Event of Default has occurred and is continuing or, if an Unmatured Event or Event of Default has occurred and is continuing, a statement setting forth the details thereof and the action which the Company has taken and proposes to take with respect thereto, and (B) beginning with the certificate delivered for the quarter ending June 30, 1998 that a computation (which computation shall accompany such certificate and shall be in detail satisfactory to the Agent) showing compliance with Section 5.2 (a), (b) and (c) hereof is in conformity with the terms of this Agreement; (iii) As soon as available and in any event within 90 days after the end of each fiscal year of the Company, a copy of the consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal year and the related consolidated statements of income and cash flows for such fiscal year, with a customary audit report of Ernst & Young LLP, or any of the six largest independent certified public accounting firms in the United States, without qualifications unacceptable to the Agent, together with, a certificate of the chief financial officer of the Company stating (A) that no Unmatured Event or Event of Default has occurred and is continuing, a statement setting forth the details thereof and the action which the Company has taken and proposes to take with respect thereto, and (B) beginning with the certificate delivered for the quarter ending June 30, 1998 that a computation (which computation shall accompany such certificate and shall be in reasonable detail) showing compliance with Section 5.2 (a), (b) and (c) hereof is in conformity with the terms of this Agreement; CREDIT AGREEMENT Page 43 48 (iv) Promptly after the sending or filing thereof, copies of all reports, proxy statements and financial statements which the Company or any of its Subsidiaries sends to or files with any of their respective security holders or any securities exchange or the SEC; (v) Promptly and in any event within 10 Business Days after receipt, a copy of any management letter or comparable analysis prepared by the auditors for the Company or any of its Subsidiaries; (vi) Not later than January 31 of each year of the Company, a budget and forecast prepared by the Company for the following fiscal year; and (vii) Promptly, such other information respecting the business, properties, operations or condition, financial or otherwise, of the Company or any of their respective Subsidiaries as any Lender or the Agent may from time to time reasonably request. (e) Accounting, Access to Records, Books, Etc. Maintain a system of accounting established and administered in accordance with sound business practices to permit preparation of financial statements in accordance with Generally Accepted Accounting Principles and to comply with the requirements of this Agreement and, upon reasonable prior notice, at any reasonable time and from time to time, (i) permit any Lender or the Agent, or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, the Company and its Subsidiaries, and to discuss the affairs, finances and accounts of the Company and its Subsidiaries with their respective directors, officers and independent auditors, and by this provision the Company does hereby authorize such Persons to discuss such affairs, finances and accounts with any Lender or the Agent, (ii) at the expense of the Agent (unless an Event of Default has occurred and is continuing), permit the Agent or any of its agents or representatives to conduct a comprehensive field audit of its books, records, properties and assets, including without limitation all collateral subject to the Security Documents and site access. (f) Additional Security and Collateral. Promptly (i) execute and deliver and cause each Guarantor to execute and deliver, additional Security Documents, within 30 days after request therefor by the Agent, sufficient to grant to the Agent for the benefit of the Lenders and the Agent liens and security interests in any after acquired property, to the extent required under Section 2.10, and (ii) cause each Person becoming a Domestic Subsidiary and which meets the definition of a Guarantor from time to time to execute and deliver to the Lenders and the Agent, within 30 days after such Person becomes a Subsidiary, a Guaranty and a Security Agreement, sufficient to grant to the Agent for the benefit of the Lenders and the Agent liens and security interests in all collateral of the type described in Section 2.10. The Company shall notify the Lenders and the Agent, within 10 days after the occurrence thereof, of the acquisition of any property by the Company or any Guarantor that is not subject to the existing Security Documents, any Person becoming a Subsidiary and any other event or condition, other than the passage of time, that may require additional action of any nature in order to preserve the effectiveness and perfected status of the liens and security interests of the Lenders and the Agent with respect to such property pursuant to the Security Documents, including without limitation delivering the originals of all promissory notes and other instruments payable to the Company or any Guarantor to the Agent and delivering the originals of all stock certificates or other certificates evidencing any Capital Stock owned by the Company or any Guarantor at any time. CREDIT AGREEMENT Page 44 49 (g) Further Assurances. Execute and deliver within 30 days after request therefor by the Agent, all further instruments and documents and take all further action that the Agent may reasonably request, in order to give effect to the intent of, and to aid in the exercise and enforcement of the rights and remedies of the Lenders under, the Loan Documents. 5.2 Negative Covenants. Until the Termination Date and thereafter until payment in full of the Lender Indebtedness and the performance of all other obligations of the Company under this Agreement, the Company agrees that, unless the requisite Lenders pursuant to Section 8.1 shall otherwise consent in writing, it shall not, and shall not permit any of its Subsidiaries, to: (a) Adjusted Total Debt to Adjusted EBITDA Ratio. Permit or suffer the Adjusted Total Debt to Adjusted EBITDA Ratio to be greater than (i) 6.95 to 1.0 at any time from and including the Effective Date to and including June 29, 1999, (ii) 6.50 to 1.0 at any time from and including June 30, 1999 to and including June 29, 2000 or (iii) 6.00 to 1.0 at any time from and including June 30, 2000 to and including June 29, 2001, or (iv) 5.50 to 1.0 at any time thereafter. (b) Interest Coverage Ratio. Permit or suffer the Interest Coverage Ratio to be less than (i) 1.1 to 1.0 as of the end of any fiscal quarter of the Company ending on or before March 31, 1999, (ii) 1.25 to 1.0 as of the end of any fiscal quarter ending on or after June 30, 1999 but on or before March 31, 2000, (iii) 1.50 to 1.0 as of the end of any fiscal quarter of the Company ending on or after June 30, 2000 but on or before March 31, 2002, or (iv) 1.75 to 1.0 as of the end of any fiscal quarter of the Company ending thereafter. (c) Fixed Charge Coverage Ratio. Permit or suffer the Fixed Charge Coverage Ratio to be less than (i) 0.9 to 1.0 as of the end of any fiscal quarter of the Company ending on or before March 31, 1999, (ii) 1.0 to 1.0 as of the end of any fiscal quarter ending on or after June 30, 1999 but on or before March 31, 2000, (iii) 1.05 to 1.0 as of the end of any fiscal quarter of the Company ending on or after June 30, 2000 but on or before March 31, 2002, or (iv) 1.10 to 1.0 as of the end of any fiscal quarter of the Company thereafter. (d) Indebtedness. Create, incur, assume or in any manner become liable in respect of, or suffer to exist, or permit or suffer any Subsidiary to create, incur, assume or in any manner become liable in respect of, or suffer to exist, any Indebtedness other than: (i) The Lender Indebtedness; (ii) The Indebtedness described in Schedule 5.2(d) hereto and renewals, extensions and refinancings thereof, but no increase in the amount thereof (as such amount is reduced from time to time) and no modifications of the terms thereof which is less favorable to the Company or more restrictive on the Company in any material manner shall be permitted; (iii) Indebtedness of any Guarantor owing to the Company or to any other Guarantor; (iv) Subordinated Debt, including the related subordinated guarantees, pursuant to the Subordinated Debt Documents, provided that (A) immediately before and after (on a pro forma basis acceptable to the Agent and supported by such certificates required by the Agent) the incurrence of any such Subordinated Debt, no Unmatured Event or Event of Default shall exist or CREDIT AGREEMENT Page 45 50 shall have occurred and be continuing and the Company shall be in pro forma compliance with all financial and other covenants contained herein as of the date of incurrence of such Subordinated Debt and for the following year and (B) all agreements, documents and instruments relating to such Subordinated Debt shall have been delivered to the Agent prior to the incurrence of such Subordinated Debt; (v) Trade accounts payable and accrued expenses arising in the ordinary course which are past due in an amount which is not material in the aggregate for the Company and its Subsidiaries on a consolidated basis or which are being contested in good faith by appropriate proceedings and for which adequate reserves are maintained on the books of the Company; (vi) Earnouts with respect to Permitted Acquisitions made by the Company; (vii) Indebtedness which is non recourse to the Company or its Subsidiaries other than a Subsidiary formed specifically for such financing and owning only the assets acquired with such non recourse financing, provided that the aggregate amount of such non recourse Indebtedness does not exceed $15,000,000 and such non recourse terms and the other terms of such financing are acceptable to the Agent; (viii) Indebtedness incurred to finance insurance premiums in the ordinary course of business consistent with past practices of the Company; (ix) Indebtedness of Subsidiaries which are not Guarantors owing to the Company or a Guarantor not exceeding an aggregate amount equal to the book value of 3% of Total Assets; and (x) Indebtedness other than as described in clauses (i) through (ix) above not exceeding an aggregate amount equal to the book value of 14% of Total Assets, provided that not more than 50% of the Indebtedness incurred or otherwise outstanding pursuant to this clause (ix) may be secured by Liens on any assets. (e) Liens. Create, incur or suffer to exist any Lien on any of the assets, rights, revenues or property, real, personal or mixed, tangible or intangible, whether now owned or hereafter acquired, of the Company or any of its Subsidiaries, other than: (i) liens in favor of the Agent for the benefit of the Lenders and the Agent; (ii) liens imposed by law, carriers', warehousemen's or mechanic's liens, operators' or drillers' liens and liens to secure claims for labor, material or supplies arising in the ordinary course of business, but only to the extent that payment thereof shall not at time be due or shall be contested in good faith by appropriate proceedings diligently conducted, with respect to which appropriate reserves have been set aside and as to which there has been no seizure of or foreclosure upon assets subject to such liens; (iii) deposits or pledges to secure payment of workmen's compensation, unemployment insurance, old age pensions or other social security, or to secure the performance of bids, tenders, contracts (other than those relating to borrowed money) or leases or to secure statutory obligations or surety or appeal bonds, or to secure indemnity, performance or other CREDIT AGREEMENT Page 46 51 similar bonds in the ordinary course of business, or in connection with contests, to the extent that payment thereof shall not at the time be due or shall be contested in good faith by appropriate proceedings diligently conducted and there have been set aside on its books appropriate reserves with respect thereto; (iv) liens securing taxes, assessments, levies or other governmental charges which are not overdue or which, in an amount not exceeding $1,000,000 in the aggregate, are being contested in good faith by appropriate proceedings diligently conducted, with respect to which reasonable reserves have been set aside and as to which there has been no seizure of or foreclosure upon assets subject to the liens; (v) liens consisting of encumbrances, easements or reservations of, or rights of others for, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, zoning restrictions, restrictions on the use of real property and minor defects and irregularities in the title thereto, and other similar encumbrances, none of which in the opinion of the Agent interferes with the use of the property subject thereto by the Company or such Subsidiary in the ordinary conduct of its business; (vi) liens existing on the date hereof and listed on Schedule 5.2(e) hereto (including without limitation the existing liens in favor of existing creditors required to be discharged on the Effective Date (the "Discharge Liens"), which shall be identified as such on Schedule 5.2(e)), provided that (A) neither the Indebtedness secured by any such existing liens nor the property subject thereto shall increase, and (B) the Discharge Liens shall be discharged and terminated on or before the Effective Date; (vii) liens on the daily revenues in favor of Persons other than the Company or its Affiliates who are parties to the Facility Leases and Facility Management Agreements for the amounts due to them pursuant thereto; (viii) purported liens in the ordinary course of business on fixtures to the extent applicable law permits a mortgagee to claim an interest therein, provided that such purported liens do not secure any Indebtedness of the Company of any of its Affiliates; (ix) any Lien created to secure payment of a portion of the purchase price of, or existing at the time of acquisition of, any tangible fixed asset acquired by the Company or any of its Subsidiaries may be created or suffer to exist upon such tangible fixed asset if the outstanding principal amount of the Indebtedness secured by such Lien does not exceed the purchase price paid by the Company or such Subsidiary for such tangible fixed asset provided that (A) such Lien does not encumber any other asset at any time owned by the Company or such Subsidiary, (B) not more than one such Lien shall encumber such tangible fixed asset at any one time and (C) the aggregate amount of Indebtedness secured by all such Liens is permitted under the terms of this Agreement; (x) liens on unearned insurance premiums to secure Indebtedness referred to in Section 5.2(d)(viii); (xi) liens arising by applicable law in respect of employees' wages, salaries or commissions not overdue; CREDIT AGREEMENT Page 47 52 (xii) liens arising out of judgments or awards not exceeding $1,000,000 in the aggregate against the Borrower or its Subsidiaries with respect to which the Borrower or such Subsidiary shall be in good faith prosecuting an appeal or a proceeding or review and the enforcement of such lien is stayed pending such appeal or review; and (xiii) liens securing obligations under Seller Notes in an aggregate principal amount not exceeding $150,000 at any time outstanding, on capital stock or assets of any business acquired in Permitted Acquisitions for which such Seller Notes represented full or partial consideration. (f) Merger; Acquisitions; Etc. Make any Acquisition; nor merge or consolidate or amalgamate with any other Person or take any other action having a similar effect, nor enter into any joint venture or similar arrangement with any other Person, provided, however, that this Section 5.2(f) shall not prohibit (i) any merger of any Subsidiary with or into another Subsidiary or any merger of any Subsidiary into the Company, provided that (A) there is no Unmatured Event or Event of Default either before or after such merger, (B) if any such merger involves the Company or a Guarantor, the Company shall be the surviving corporation and (C) any such merger involves the Company or any Guarantor, the net worth of the Company or such Guarantor involved in such merger immediately after the merger would be equal to or greater than its net worth immediately preceding such merger, (ii) any Acquisition identified on Schedule 5.2(f) hereto, provided that such Acquisition is completed on substantially the terms described on such Schedule, there is no Unmatured Event or Event of Default either before or after any such Acquisition and the Agent shall complete a satisfactory review of final projections (including opening balance sheet and sources and uses of funds statement) and such other due diligence with respect to any such Acquisition, or (iii) any other Acquisition if (A) immediately before and after (on a pro forma basis acceptable to the Agent and supported by such certificates or opinions as may be reasonably required by the Agent) such Acquisition: (w) no Unmatured Event or Event of Default shall exist or shall have occurred and be continuing, (x) the representations and warranties contained in the Loan Documents shall be true and correct in all material respects as if made on the date such Acquisition is consummated, (y) the aggregate amount of Cash Equivalents on hand of the Company plus the amount that the Company is able to borrow in Revolving Credit Loans after giving effect to such Acquisition is and will be at least $5,000,000 above the amount of working capital required for the Company over such twelve month period of time, as demonstrated to the Agent's reasonable satisfaction by such pro forma financial statements and projections as required by the Agent, and (z) the Adjusted Total Debt to Adjusted EBITDA Ratio is at least 0.25 below the level required under this Agreement or, if the Adjusted Total Debt to Adjusted EBITDA Ratio is not at least 0.25 below the level then required under this Agreement at the time of such Acquisition, the Acquisition on such a pro forma basis does not increase the Adjusted Total Debt to Adjusted EBITDA Ratio, (B) prior to the consummation of such Acquisition, the Company shall have provided to the Lenders a certificate of the chief financial officer of the Company (attaching pro forma financial statements and projections including computations to demonstrate compliance and projected compliance with all covenants and conditions hereunder), stating that such Acquisition complies with this Section 5.2(f), customary legal opinions reasonably acceptable to the Agent if requested by the Agent, evidence that such Acquisition is in material compliance with all applicable laws and regulations (other than such non-compliance which could not reasonably be expected to have a Material Adverse Effect) and that any other conditions under this Agreement relating to such transaction CREDIT AGREEMENT Page 48 53 have been satisfied, all in form and substance satisfactory to the Agent, (C) the target of such Acquisition is in the same line of business as the Company, (D) such Acquisition is not hostile and shall have been approved by the board of directors or similar governing body of the target of such Acquisition and (E) prior to the consummation of any such Acquisition, other than such Acquisitions for which the total consideration paid or payable is less than $3,000,000 and which do not result in any identifiable cost savings and synergies in excess of $500,000 in any fiscal year of the Company, the Agent shall have completed such reasonable due diligence and reviewed such agreements and documents with respect to such Acquisition as reasonably required by the Agent, and the Agent shall be satisfied with such due diligence and such review. (g) Disposition of Assets; Etc. Sell, lease, license, transfer, assign or otherwise dispose of all or any portion of its business, assets, rights, revenues or property, real, personal or mixed, tangible or intangible, whether in one or a series of transactions, other than inventory sold in the ordinary course of business upon customary credit terms and sales of scrap or obsolete material or equipment which are not material in the aggregate, and shall not permit or suffer any Subsidiary to do any of the foregoing; provided, however, that this Section 5.2(g) shall not prohibit any such sale, lease, license, transfer, assignment or other disposition if (i) the aggregate book value (disregarding any write-downs of such book value other than ordinary depreciation and amortization) of all of the business, assets, rights, revenues and property disposed of after the Effective Date of this Agreement (other than in reliance on clauses (ii) through (vi) below) shall be less than 10% of the Total Assets at such time and if, immediately before and after such transaction, no Unmatured Event or Event of Default shall exist or shall have occurred and be continuing, (ii) sales of equipment as to which proceeds are used within 180 days to purchase equipment of at least equivalent value to those sold and if, immediately after such transaction, no Unmatured Event or Event of Default shall exist or shall have occurred and be continuing, (iii) sales as to which proceeds are used to make optional prepayments on Advances, provided that such prepayments on the Advances shall also permanently reduce the Commitments by the amount of such payments, (iv) transfers of assets, including without limitation Capital Stock, between Guarantors or between the Company and Guarantors, or (v) investments which consist of transfers of assets instead of cash and which are permitted by Section 5.2(j) or (vi) such transfer of assets as pursuant to a loan or advance permitted pursuant to Section 5.2(j); provided, however, in the case of any of the foregoing permitted sales, leases, licenses, transfers, assignments or other dispositions (each an "Asset Sale") described in clauses (i)-(iv) the Company shall not, and shall not permit any of its Subsidiaries to, consummate an Asset Sale unless (A) the Company (or the Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value (evidenced by a resolution of the Board of Directors set forth in an officer's certificate delivered to the Agent) of the assets and (B) at least 80% of the consideration therefor received by the Company or such Subsidiary is in the form of cash; provided that the amount of (x) any liabilities (as shown on the Company's or such Subsidiary's most recent balance sheet) of the Company or any Subsidiary that are assumed by the transferee of any such assets such that the Company or such Subsidiary have no further liability and (y) any securities, notes or other obligations received by the Company or any such Subsidiary from such transferee that are converted by the Company or such Subsidiary into cash (to the extent of the cash received), shall be deemed to be cash for purposes of this provision and the definition of Net Cash Proceeds, and the Agent promptly shall obtain a first priority security interest in any non cash consideration for any Asset Sale. CREDIT AGREEMENT Page 49 54 (h) Nature of Business. Make or suffer any substantial change in the nature of its business from that engaged in on the Effective Date or engage in any other businesses other than those in which it is engaged on the Effective Date. (i) Dividends and Other Restricted Payments. Make, pay, declare or authorize any dividend, payment or other distribution in respect of any class of its Capital Stock or any dividend, payment or distribution in connection with the redemption, purchase, retirement or other acquisition, directly or indirectly, of any shares of its Capital Stock other than such dividends, payments or other distributions (i) to the extent payable solely in shares of Capital Stock (other than Disqualified Stock) of the Company, (ii) payable on or before the Effective Date in an amount not to exceed $8,000,000 to redeem preferred stock of the Company held by Holberg; (iii) payable upon the exercise of put rights granted to the sellers in the Standard Acquisition, provided that both before and after such transaction (on a pro forma basis acceptable to the Agent and supported by such certificates as may be reasonably required by the Agent), no Unmatured Event or Event of Default shall exist or shall have occurred and be continuing or caused thereby, the representations and warranties contained in the Loan Documents shall be true and correct in all material respects and the Company shall be in compliance and projected compliance with all covenants and conditions in this Agreement; and (iv) commencing not less than five and one-half years after the Effective Date, paid in cash on account of the Preferred Stock in an aggregate amount not to exceed $8,500,000 per year or the amount required by the Parent to make mandatory, scheduled payments (but not any payments pursuant to any acceleration or other modification of the payments scheduled to be due on the Senior Discount Notes) on the Senior Discount Notes, provided that both before and after such payment (on a pro forma basis acceptable to the Agent and supported by such certificates as may be reasonably required by the Agent), no Unmatured Event or Event of Default shall exist or shall have occurred and be continuing or caused thereby, the representations and warranties contained in the Loan Documents shall be true and correct in all material respects and the Company shall be in compliance and projected compliance with all covenants and conditions in this Agreement. The Company will not issue Disqualified Stock, other than the Preferred Stock. (j) Investments, Loans and Advances. Purchase or otherwise acquire any Capital Stock of or other ownership interest in, or debt securities of or other evidences of Indebtedness of, any other Person; nor make any loan or advance of any of its funds or property or make any other extension of credit to, or make any other investment or contribution or acquire any interest whatsoever in, any other Person; nor incur any Contingent Liability except to the extent permitted under Section 5.2(d); nor permit any Subsidiary to do any of the foregoing; other than (i) extensions of trade credit made in the ordinary course of business on customary credit terms and commission, travel and similar advances made to officers and employees in the ordinary course of business, provided that advances to officers and employees for purposes other than commission, relocation and travel shall not exceed $250,000 in aggregate amount (ii) investments in Cash Equivalents, (iii) Acquisitions permitted pursuant to Section 5.2(f), (iv) investments, loans and advances in and to any Guarantor, or any person becoming a Guarantor as a result thereof, (v) those investments, loans, advances and other transactions described in Schedule 5.2(j) hereto, having the same terms as existing on the date of this Agreement, but no extension or renewal thereof shall be permitted, (vi) loans and advances to Holberg Industries, Inc. in an aggregate outstanding amount at any time not to exceed $10,000,000, provided that immediately before and after such loan or advance: (A) no Unmatured Event or Event of Default CREDIT AGREEMENT Page 50 55 shall exist or shall have occurred and be continuing, (B) the representations and warranties contained in the Loan Documents shall be true and correct in all material respects as if made on the date such loan or advance is made, (C) the aggregate amount of Cash Equivalents on hand of the Company plus the amount that the Company is able to borrow in Revolving Credit Loans after giving effect to such loan or advance is and will be at least $5,000,000 above the amount of working capital required for the Company over such twelve month period of time, as demonstrated to the Agent's reasonable satisfaction by such pro forma financial statements and projections as required by the Agent, and (D) the Adjusted Total Debt to Adjusted EBITDA Ratio is at least 0.25 below the level required under this Agreement, and provided, further, such loan or advance shall be evidenced by a promissory note and that all such loans and advances shall be immediately due and payable upon the occurrence of any Event of Default, (vii) acquire and own stock, obligations or securities received in settlement of debts owing to the Company or its Subsidiaries or as consideration for Asset Sales otherwise permitted under Section 5.2(g); (viii) make or permit to remain outstanding travel and other like advances to officers and employees of the Company or a Subsidiary in the ordinary course of business and consistent with past practices, (ix) investments, loans and advances to Joint Ventures in an aggregate amount not to exceed three percent (3%) of Total Assets, and (x) other loans, advances or investments in an aggregate amount not to exceed three percent (3%) of Total Assets. (k) Transactions with Affiliates. Make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliates (each of the foregoing, an "Affiliate Transaction") unless (i) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Subsidiary with an unrelated Person and (ii) the Company delivers to the Agent (x) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $1,000,000, a resolution of the Board of Directors set forth in an officers' certificate certifying that such Affiliate Transaction complies with clause (i) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors and (y) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $5,000,000, an opinion as to the fairness to the Lenders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing, provided that (A) any loan, advance or investment permitted by Section 5.2 (j) shall not be subject to clause (ii) above and (B) the following do not constitute Affiliate Transactions: (1) transactions between or among the Company and/or the Guarantors, (2) any management fee permitted to be paid under Section 5.2(p), (3) payments to Holberg from time to time of customary investment banking and advisory fees consistent with past practice in connection with the Standard Acquisition and other financing and corporate transactions, provided that such fees paid to Holberg do not exceed the usual and customary fees for similar services and do not exceed the amounts set forth in the Pro Forma Financial Statements in the case of the Standard Acquisition and the other Acquisition and the other Acquisitions described on Schedule 5.2(f), (4) the Company's lease on behalf of Holberg of a plane under arrangements consistent with past practices, (5) on or about the Effective Date, the Company's cancellation and forgiveness of an approximately $4,600,000 advance previously made to Holberg, (6) reimbursement to Holberg of expenses Holberg has paid on behalf of the Company, (7) the CREDIT AGREEMENT Page 51 56 Company's payment of the fees and expenses associated with the Parent's issuance of the Senior Discount Notes, (8) the insurance arrangements between the Company and its Subsidiaries than those that are in effect on the date hereof provided such arrangements are conducted in the ordinary course of business consistent with past practices and (9) payments under the tax sharing agreement among Holberg and other members of the affiliated group of corporations of which it is the common parent consistent with past practices and in compliance with the Code. (l) Inconsistent Agreements. Enter into any agreement or permit or suffer any Subsidiary to enter into any agreement containing any provision which would be violated or breached by this Agreement or any of the transactions contemplated hereby or by performance by the Company or any of its Subsidiaries of its obligations in connection therewith. (m) Negative Pledge Limitation. Enter into any agreement (other than the Subordinated Note Indenture, the terms of the Security Documents and any other agreement entered into in connection with any Joint Venture in the ordinary course of the Company's business prohibiting liens or security interests on the Capital Stock of such Joint Venture and the assets of such Joint Venture consistent with the terms of the Security Documents), including without limitation any amendments to existing agreements, with any Person other than the Lenders pursuant hereto which prohibits or limits the ability of the Company or any Subsidiary to create, incur, assume or suffer to exist any Lien upon any of its assets, rights, revenues or property, real, personal or mixed, tangible or intangible, whether now owned or hereafter acquired. (n) Subsidiary Dividends. Permit any of its Wholly-Owned Subsidiaries directly or indirectly to create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction which by its terms materially restricts the ability of any such Subsidiary to (i) pay dividends or make any other distributions on such Subsidiary's capital stock, (ii) pay any Indebtedness owed to the Company or any of its other Subsidiaries, (iii) make any loans or advances to the Company or any of such other Subsidiaries or (iv) transfer any material portion of its assets to the Company or any of such other Subsidiaries. (o) Payments and Modification of Debt. Make, or permit any Subsidiary to make, any optional payment, defeasance (whether a covenant defeasance, legal defeasance or other defeasance), prepayment or redemption of any of its or any of its Subsidiaries' Subordinated Debt or other Indebtedness or amend or modify, or consent or agree to any amendment or modification of, any instrument or agreement under which any of its Subordinated Debt is issued or created or otherwise related thereto, or enter into any agreement or arrangement providing for any defeasance of any kind of any of its Subordinated Debt, or designate any Indebtedness (other than the Lender Indebtedness) as Designated Senior Debt under the Subordinated Debt Documents, provided that the Company may prepay Seller Notes if immediately before and after (on a pro form basis acceptable to the Agent and supported by such certificates or opinions as may be reasonably required by the Agent) such prepayment: (i) no Unmatured Event or Event of Default shall exist or shall have occurred and be continuing, (ii) the representations and warranties contained in the Loan Documents shall be true and correct in all material respects as if made on the date such prepayment is made, (iii) the aggregate amount of Cash Equivalents on hand of the Company plus the amount that the Company is able to borrow in Revolving Credit Loans after giving effect to such prepayment is and will be at least $5,000,000 above the amount CREDIT AGREEMENT Page 52 57 of working capital required for the Company over such twelve month period of time, as demonstrated to the Agent's reasonable satisfaction by such pro forma financial statements and projections as required by the Agent, and (iv) the Adjusted Total Debt to Adjusted EBITDA Ratio is at least 0.25 below the level required under this Agreement. (p) Management Fees. Pay, or permit any Subsidiary to pay, directly or indirectly, any management, consulting, investment banking, advisory or other fees or payments under any leases or any other payments (including, without limitation, any amounts paid or payable by the Company or any of its Subsidiaries to the Parent in respect of overhead expense allocations among members of the affiliate corporate group) to the Parent or any Affiliates thereof, except that the Company or any Subsidiary may pay such amounts which in the aggregate do not exceed in any fiscal year an amount equal to the lesser of $2,000,000 or an amount equal to 50% of the amount of Adjusted EBITDA in excess of the amount of Adjusted EBITDA required to comply with Sections 5.2(a), (b) and (c), provided that (i) such payments do not violate any other terms and provisions of this Agreement (other than Section 5.2(k)), (ii) the aggregate amount of Cash Equivalents on hand of the Company plus the amount that the Company is able to borrow in Revolving Credit Loans after giving effect to such payment is and will be at least $5,000,000 above the amount of working capital required for the Company over such twelve month period of time, as demonstrated to the Agent's reasonable satisfaction by such pro forma financial statements and projections as required by the Agent, (iii) the pro forma Adjusted Total Debt to Adjusted EBITDA Ratio is at least 0.25 below the level required under this Agreement after giving effect to such payment and (iv) no Unmatured Event or Event of Default exists or would be caused by such payment. (q) Net Capital Expenditures. Make, or permit any Subsidiary to make, Net Capital Expenditures that exceed in the aggregate for the Company and its Subsidiaries (a) $5,000,000 in any fiscal year or (b) $8,000,000 in any consecutive two fiscal years, plus, in each case, the amount by which the allowed Net Capital Expenditures for the most recently ended fiscal year exceeded the actual Net Capital Expenditures for such fiscal year. 5.3 Additional Covenants. If at any time the Company shall enter into or be a party to any instrument or agreement with respect to any Indebtedness which in the aggregate, together with any related Indebtedness, exceeds $250,000, including all such instruments or agreements in existence as of the date hereof and all such instruments or agreements entered into after the date hereof, relating to or amending any terms or conditions applicable to any of such Indebtedness which includes covenants, terms, conditions or defaults not substantially provided for in this Agreement or more favorable to the lender or lenders thereunder than those provided for in this Agreement, then the Company shall promptly so advise the Agent and the Lenders. Thereupon, if the Agent shall request, upon notice to the Company, the Agent and the Lenders shall enter into an amendment to this Agreement or an additional agreement (as the Agent may request), providing for substantially the same covenants, terms, conditions and defaults as those provided for in such instrument or agreement to the extent required and as may be selected by the Agent. In addition to the foregoing, any covenants, terms, conditions or defaults in the Subordinated Debt Documents not substantially provided for in this Agreement or more favorable to the holders of Subordinated Debt issued in connection therewith are hereby incorporated by reference into this Agreement to the same extent as if set forth fully herein, and no subsequent CREDIT AGREEMENT Page 53 58 amendment, waiver, termination or modification thereof shall effect any such covenants, terms, conditions or defaults as incorporated herein. ARTICLE VI DEFAULT 6.1 Events of Default. The occurrence of any one of the following events or conditions shall be deemed an "Event of Default" hereunder unless waived by the requisite Lenders pursuant to Section 8.1: (a) Nonpayment. The Company shall fail to pay when due any principal of the Notes, or any reimbursement obligation under Section 3.3 (whether by deemed disbursement of a Revolving Credit Loan or otherwise), or, within 5 days after becoming due, any interest on the Notes or any fees or any other amount payable hereunder; (b) Misrepresentation. Any representation or warranty made by the Company or any Guarantor in any Loan Document or any other certificate, report, financial statement or other document furnished by or on behalf of the Company or any Guarantor in connection with this Agreement, shall prove to have been incorrect in any material respect when made or deemed made; (c) Certain Covenants. The Company or any Guarantor shall fail to perform r observe any term, covenant or agreement contained in Section 5.2 or 5.3 hereof; (d) Other Defaults. The Company or any Guarantor shall fail to perform or observe any other term, covenant or agreement contained in any Loan Document (other than those described in Sections 6.1(a) or 6.1(c), and any such failure shall remain unremedied for 20 calendar days after written notice thereof shall have been given to the Company by the Agent (or such longer or shorter period of time as may be specified in such Loan Document); (e) Other Indebtedness. The Company or any of its Subsidiaries or any Guarantor shall fail to pay any part of the principal of, the premium, if any, or the interest on, or any other payment of money due under any of its Indebtedness (other than Indebtedness hereunder), beyond any period of grace provided with respect thereto, which individually or together with other such Indebtedness as to which any such failure exists has an aggregate outstanding principal amount in excess of $1,000,000; or the Company or any of its Subsidiaries or any Guarantor shall fail to perform or observe any other term, covenant or agreement contained in any agreement, document or instrument evidencing or securing any such Indebtedness having such aggregate outstanding principal amount, or under which any such Indebtedness was issued or created, beyond any period of grace, if any, provided with respect thereto if the effect of such failure is either (i) to cause, or permit the holders of such Indebtedness (or a trustee on behalf of such holders) to cause, any payment in respect of such Indebtedness to become due prior to its due date or (ii) to permit the holders of such Indebtedness (or a trustee on behalf of such holders) to elect a majority of the board of directors of the Company or Holdings; CREDIT AGREEMENT Page 54 59 (f) Judgments. One or more judgments or orders for the payment of money (not fully paid or covered without dispute by insurance) in an aggregate amount of $1,000,000 in any fiscal year shall be rendered against the Company or any of its Subsidiaries or any Guarantor, or any other judgment or order (whether or not for the payment of money) shall be rendered against or shall affect the Company or any of its Subsidiaries or any Guarantor which causes or could reasonably be expected to cause a Material Adverse Effect, and either (i) such judgment or order shall have remained unsatisfied and the Company or such Subsidiary or Guarantor shall not have taken action necessary to stay enforcement thereof by reason of pending appeal or otherwise, prior to the expiration of the applicable period of limitations for taking such action or, if such action shall have been taken, a final order denying such stay shall have been rendered, or (ii) enforcement proceedings shall have been commenced by any creditor upon any such judgment or order; (g) ERISA. The occurrence of a Reportable Event that results in liability of the Company, any Subsidiary or Guarantor or any ERISA Affiliate to the PBGC or to any Plan and such Reportable Event is not corrected within thirty (30) days after the occurrence thereof; or the occurrence of any Reportable Event which could constitute grounds for termination of any Plan by the PBGC or for the appointment by the appropriate United States District Court of a trustee to administer any Plan and such Reportable Event is not corrected within thirty (30) days after the occurrence thereof; or the filing by the Company, any Subsidiary or Guarantor or any ERISA Affiliate of a notice of intent to terminate a Plan or the institution of other proceedings to terminate a Plan; or the Company, any Subsidiary or Guarantor or any ERISA Affiliate shall fail to pay when due any liability to the PBGC or to a Plan; or the PBGC shall have instituted proceedings to terminate, or to cause a trustee to be appointed to administer, any Plan; or any Person engages in a Prohibited Transaction with respect to any Plan which results in liability of the Company, any Subsidiary or Guarantor, or any ERISA Affiliate there shall occur a complete or partial withdrawal from, or a default within the meaning of Section 4219(c)(5) of ERISA with respect to one or more Multiemployer Plans which could cause the Company, any Subsidiary or Guarantor or any ERISA Affiliate to incur a current payment obligation; the Company, any Subsidiary or Guarantor or any ERISA Affiliate shall fail to make a required installment or other payment to any Plan within the meaning of Section 302(f) of ERISA or Section 412(n) of the Code that results in or could result in liability of the Company, any Subsidiary of the Company or any ERISA Affiliate to the PBGC or any Plan; or the withdrawal of the Company, any of its Subsidiaries or any ERISA Affiliate from a Plan during a plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA; or the Company, any of its Subsidiaries or any ERISA Affiliate becomes an employer with respect to any Multiemployer Plan without the prior written consent of the Required Lenders; provided, however, that the aggregate liability caused by any of the foregoing exceeds $1,000,000; (h) Insolvency, Etc. The Company, Significant Subsidiaries or any Guarantor shall be dissolved or liquidated or any judgment, order or decree therefor shall be entered (other than dissolutions or liquidations of Subsidiaries permitted by Section 5.1(a)), or shall generally not pay its debts as they become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors, or shall institute, or there shall be instituted against the Company, Significant Subsidiaries or any Guarantor, any proceeding or case seeking to adjudicate it a bankrupt or insolvent or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its CREDIT AGREEMENT Page 55 60 debts under any law relating to bankruptcy, insolvency or reorganization or relief or protection of debtors or seeking the entry of an order for relief, or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its assets, rights, revenues or property, and, if such proceeding is instituted against the Company or such Significant Subsidiaries or such Guarantor and is being contested by the Company or such Significant Subsidiaries or such Guarantor, as the case may be, in good faith by appropriate proceedings, such proceeding shall remain undismissed or unstayed for a period of 60 days; or the Company or such Significant Subsidiaries or such Guarantor shall take any action (corporate or other) to authorize or further any of the actions described above in this subsection; (i) Other Documents. Any material provision of any Loan Document or any Subordinated Debt Document shall at any time for any reason cease to be valid and binding and enforceable against any obligor thereunder, or the validity, binding effect or enforceability thereof shall be contested by any Person or any obligor, shall deny that it has any or further liability or obligation thereunder, or any Loan Document or any Subordinated Debt Document shall be terminated, invalidated or set aside, or be declared ineffective or inoperative or in any way cease to give or provide to the Lenders and the Agent the benefits purported to be created thereby in any material manner; (j) Orders, Permits, Etc. The Company or any of its Subsidiaries shall be enjoined, restrained or any way prevented by the order of any court or any administrative or regulatory agency from conducting any material part of its business and such order shall continue in effect for more than thirty (30) days, or there shall occur the loss, suspension or revocation of, or failure to renew, any license or permit now held or hereafter acquired by the Company or any of its Subsidiaries if such loss, suspension, revocation or failure to renew would have a Material Adverse Effect; or (k) Control. Any Change of Control shall occur. 6.2 Remedies. (a) Upon the occurrence and during the continuance of any Event of Default, by notice to the Company (i) the Agent may, and upon being directed to do so by the Required Lenders shall, terminate the Commitments or (ii) the Agent may, and upon being directed to do so by the Required Lenders, shall declare the outstanding principal of, and accrued interest on, the Notes, all unpaid reimbursement obligations in respect of drawings under Letters of Credit and all other amounts owing under this Agreement to be immediately due and payable, or (iii) the Agent may, and upon being directed to do so by the Required Lenders, shall demand immediate delivery of cash collateral, and the Company agrees to deliver such cash collateral upon demand, in an amount equal to the maximum amount that may be available to be drawn at any time prior to the stated expiry of all outstanding Letters of Credit, or any one or more of the foregoing, whereupon the Commitments shall terminate forthwith and all such amounts, including such cash collateral, shall become immediately due and payable, as the case may be, provided that in the case of any event or condition described in Section 6.1(h), the Commitments shall automatically terminate forthwith and all such amounts, including such cash collateral, shall automatically become immediately due and payable without notice; in all cases without demand, presentment, protest, diligence, notice of dishonor or other formality, all of which are hereby expressly waived. Such cash collateral delivered in respect of outstanding Letters of Credit shall CREDIT AGREEMENT Page 56 61 be deposited in a special cash collateral account to be held by the Agent as collateral security for the payment and performance of the Company's obligations under this Agreement to the Lenders and the Agent. (b) The Agent may and, upon being directed to do so by the Required Lenders, shall, in addition to the remedies provided in Section 6.2(a), exercise and enforce any and all other rights and remedies available to it or the Lenders, whether arising under this Agreement or any other Loan Document or under applicable law, in any manner deemed appropriate by the Agent, including suit in equity, action at law, or other appropriate proceedings, whether for the specific performance (to the extent permitted by law) of any covenant or agreement contained in any other Loan Document or in aid of the exercise of any power granted in any other Loan Document. (c) Upon the occurrence and during the continuance of any Event of Default, each Lender may, subject to Section 7.10, at any time and from time to time, without notice to the Company (any requirement for such notice being expressly waived by the Company) set off and apply against any and all of the obligations of the Company now or hereafter existing under this Agreement, whether owing to such Lender or any other Lender or the Agent, any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender or any Affiliate of such Lender to or for the credit or the account of the Company and any property of the Company from time to time in possession of such Lender, irrespective of whether or not such Lender shall have made any demand hereunder and although such obligations may be contingent and unmatured The Company hereby grants to the Lenders and the Agent a lien on and security interest in all such deposits, indebtedness and property as collateral security for the payment and performance of the obligations of the Company under this Agreement. The rights of such Lender under this Section 6.2(c) are in addition to other rights and remedies (including, without limitation, other rights of setoff) which such Lender may have. 6.3 Distribution of Proceeds of Collateral. All proceeds of any realization on the collateral pursuant to the Security Documents and any payments received by the Agent or any Lender pursuant to the Guaranties subsequent to and during the continuance of any Event of Default, shall be allocated and distributed by the Agent as follows: (a) First, to the payment of all reasonable costs and expenses, including without limitation all reasonable attorneys' fees, of the Agent in connection with the enforcement of the Security Documents and otherwise administering this Agreement; (b) Second, to the payment of all fees required to be paid under any Loan Document including commitment fees, owing to the Lenders and Agent pursuant to the Lender Indebtedness on a pro rata basis in accordance with the Lender Indebtedness consisting of fees owing to the Lenders and Agent under the Lender Indebtedness, for application to payment of such liabilities; (c) Third, to the Lenders and Agent on a pro rata basis in accordance with the Lender Indebtedness consisting of interest owing to the Lenders and Agent under the Lender Indebtedness, and obligations and liabilities relating to Swaps owing to the Lenders and the Agent under the Lender Indebtedness for application to payment of such liabilities; CREDIT AGREEMENT Page 57 62 (d) Fourth, to the Lenders and the Agent on a pro rata basis in accordance with the Lender Indebtedness consisting of principal (including without limitation any cash collateral for any outstanding letters of credit), for application to payment of such liabilities; (e) Fifth, to the payment of any and all other amounts owing to the Lenders and the Agent on a pro rata basis in accordance with the total amount of such Indebtedness owing to each of the Lenders and the Agent, for application to payment of such liabilities; and (f) Sixth, to the Company, its Subsidiaries or such other Person as may be legally entitled thereto. Notwithstanding the foregoing, no payments of principal, interest or fees delivered to the Agent for the account of any Defaulting Lender shall be delivered by the Agent to such Defaulting Lender. Instead, such payments shall, for so long as such Defaulting Lender shall be a Defaulting Lender, be held by the Agent, and the Agent is hereby authorized and directed by all parties hereto to hold such funds in escrow and apply such funds as follows: (i) First, if applicable to any payments due from such Defaulting Lender to the Agent, and (ii) Second, to Loans required to be made by such Defaulting Lender on any borrowing date to the extent such Defaulting Lender fails to make such Loans. Notwithstanding the foregoing, upon the termination of all Commitments and the payment and performance of all of the Advances and other obligations owing hereunder (other than those owing to a Defaulting Lender), any funds then held in escrow by the Agent pursuant to the preceding sentence shall be distributed to each Defaulting Lender, pro rata in proportion to amounts that would be due to each Defaulting Lender but for the fact that it is a Defaulting Lender. 6.4 Letter of Credit Liabilities. For the purposes of payments and distributions under Section 6.3, the full amount of Lender Indebtedness on account of any letter of credit then outstanding but not drawn upon shall be deemed to be then due and owing. Amounts distributable to the Lenders or Agent on account of such Lender Indebtedness under such letters of credit shall be deposited in a separate collateral account in the name of and under the control of the Agent and held by the Agent first as security for such letter of credit Lender Indebtedness and then as security for all other Lender Indebtedness and the amount so deposited shall be applied to the letter of credit Lender Indebtedness at such times and to the extent that such letter of credit Lender Indebtedness become absolute liabilities and if and to the extent that the letter of credit Lender Indebtedness fail to become absolute Lender Indebtedness because of the expiration or termination of the underlying letters of credit without being drawn upon then such amounts shall be applied to the remaining Lender Indebtedness in the order provided in Section 6.3. The Company hereby grants to the Agent, for the benefit of the Lenders and Agent, a lien and security interest in all such funds deposited in such separate collateral account, as security for all the Lender Indebtedness as set forth above. CREDIT AGREEMENT Page 58 63 ARTICLE VII THE AGENT AND THE LENDERS 7.1 Appointment; Nature of Relationship. First Chicago is hereby appointed by the Lenders as the Agent hereunder and under each other Loan Document, and each of the Lenders irrevocably authorizes the Agent to act as the contractual representative of such Lender with the rights and duties expressly set forth herein and in the other Loan Documents. The Agent agrees to act as such contractual representative upon the express conditions contained in this Article VII. Notwithstanding the use of the defined term "Agent," it is expressly understood and agreed that the Agent shall not have any fiduciary responsibilities to any Lender by reason of this Agreement or any other Loan Document and that the Agent is merely acting as the representative of the Lenders with only those duties as are expressly set forth in this Agreement and the other Loan Documents. In its capacity as the Lenders' contractual representative, the Agent (i) does not hereby assume any fiduciary duties to any of the Lenders, (ii) is a "representative" of the Lenders within the meaning of Section 9-105 of the Uniform Commercial Code and (iii) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Loan Documents. Each of the Lenders hereby agrees to assert no claim against the Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender hereby waives. 7.2 Powers. The Agent shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Agent shall have no implied duties to the Lenders, or any obligation to the Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Agent. 7.3 General Immunity. Neither the Agent nor any of its directors, officers, agents or employees shall be liable to the Company or any of its Subsidiaries, the Lenders or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith except for its or their own gross negligence or willful misconduct. 7.4 No Responsibility for Loans, Recitals, etc. Neither the Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (i) any statement, warranty or representation made in connection with any Loan Document or any borrowing hereunder; (ii) the performance or observance of any of the covenants or agreements of any obligor under any Loan Document, including, without limitation, any agreement by an obligor to furnish information directly to each Lender; (iii) the satisfaction of any condition specified in Article II, except receipt of items required to be delivered to the Agent; (iv) the validity, enforceability, effectiveness, sufficiency or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith; or (v) the value, sufficiency, creation, perfection or priority of any interest in any collateral security. The Agent shall have no duty to disclose to the Lenders information that is not required to be furnished by the Company or any Subsidiary to the Agent at such time, but is voluntarily furnished by the Company or any Subsidiary to the Agent (either in its capacity as Agent or in its individual capacity). CREDIT AGREEMENT Page 59 64 7.5 Action on Instructions of Lenders. The Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Loan Document in accordance with written instructions signed by the Required Lenders or the Required Lenders, as the case may be, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders and on all holders of Notes. The Lenders hereby acknowledge that the Agent shall be under no duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement or any other Loan Document unless it shall be requested in writing to do so by the Required Lenders or the Required Lenders, as the case may be. The Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Loan Document unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action. 7.6 Employment of Agents and Counsel. The Agent may execute any of its duties as Agent hereunder and under any other Loan Document by or through employees, agents, and attorneys-in-fact and shall not be answerable to the Lenders, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Agent shall be entitled to advice of counsel concerning all matters pertaining to the agency hereby created and its duties hereunder and under any other Loan Document. 7.7 Reliance on Documents; Counsel. The Agent shall be entitled to rely upon any Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and, in respect to legal matters, upon the opinion of counsel selected by the Agent, which counsel may be employees of the Agent. 7.8 Agent's Reimbursement and Indemnification. The Lenders agree to reimburse and indemnify the Agent ratably in proportion to their respective Commitments (or, if the Commitments have been terminated, in proportion to their Commitments immediately prior to such termination) (i) for any amounts not reimbursed by the Company for which the Agent is entitled to reimbursement by the Company under the Loan Documents, (ii) for any other expenses incurred by the Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents and (iii) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of the Loan Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents, provided that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the Agent. The obligations of the Lenders under this Section 7.8 shall survive payment of the Lender Indebtedness and termination of this Agreement. 7.9 Notice of Default. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Unmatured Event or Event of Default hereunder unless the Agent has received written notice from a Lender or the Company referring to this Agreement describing such Default or Unmatured Default and stating that such notice is a "notice of default". In the CREDIT AGREEMENT Page 60 65 event that the Agent receives such a notice, the Agent shall give prompt notice thereof to the Lenders. 7.10 Rights as a Lender. In the event the Agent is a Lender, the Agent shall have the same rights and powers hereunder and under any other Loan Document as any Lender and may exercise the same as though it were not the Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is a Lender, unless the context otherwise indicates, include the Agent in its individual capacity. The Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Company or any of its Subsidiaries in which the Company or such Subsidiary is not restricted hereby from engaging with any other Person. The Agent, in its individual capacity, is not, subject to Section 8.6, obligated to remain a Lender. 7.11 Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Agent or any other Lender and based on the financial statements prepared by the Company and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Loan Documents. Each Lender also acknowledges that it will, independently and without reliance upon the Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents. 7.12 Successor Agent. The Agent may resign at any time by giving written notice thereof to the Lenders and the Company, such resignation to be effective upon the appointment of a successor Agent or, if no successor Agent has been appointed, forty-five days after the retiring Agent gives notice of its intention to resign. Upon any such resignation, the Required Lenders shall have the right to appoint, on behalf of the Company and the Lenders, a successor Agent. If no successor Agent shall have been so appointed by the Required Lenders within thirty days after the resigning Agent's giving notice of its intention to resign, then the resigning Agent may appoint, on behalf of the Company and the Lenders, a successor Agent. If the Agent has resigned and no successor Agent has been appointed, the Lenders may perform all the duties of the Agent hereunder and the Company shall make all payments in respect of the Lender Indebtedness to the applicable Lender and for all other purposes shall deal directly with the Lenders. No successor Agent shall be deemed to be appointed hereunder until such successor Agent has accepted the appointment. Any such successor Agent shall be a commercial bank having capital and retained earnings of at least $50,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the resigning Agent. Upon the effectiveness of the resignation of the Agent, the resigning Agent shall be discharged from its duties and obligations hereunder and under the Loan Documents. After the effectiveness of the resignation of an Agent, the provisions of this Article VII shall continue in effect for the benefit of such Agent in respect of any actions taken or omitted to be taken by it while it was acting as the Agent hereunder and under the other Loan Documents. 7.13 Collateral Management. The Agent is hereby authorized on behalf of all of the Lenders, without the necessity of any further consent from any Lender, from time to time prior to CREDIT AGREEMENT Page 61 66 an Event of Default, to take any action with respect to the collateral or the Security Documents which may be necessary (i) to perfect and maintain perfected the security interest in and liens upon the collateral granted pursuant to the Security Documents; and (ii) to release portions of the collateral from the security interests and liens imposed by the Security Documents in connection with any dispositions of such portions of the collateral permitted hereby. In the event that the Company or the Guarantors desire to sell or otherwise dispose of any assets and such sale or disposition is permitted hereby, the Agent shall, upon timely notice from the Company, release such portions of the collateral from the security interests and liens imposed by the Security Documents as may be specified by the Company or the Guarantors in order for the Borrower or the Guarantors to consummate such proposed sale or disposition, provided that at or prior to the time of such proposed sale or disposition no Unmatured Event or Event of Default shall have occurred and be continuing, including, without limitation, any Unmatured Event or Event of Default that would arise upon consummation of such sale or disposition. For purposes of the preceding sentence, the Company shall give timely notice if, not less than two Business Days prior to the date of such proposed sale or disposition, it shall furnish to the Agent an officers' certificate setting forth in reasonable detail the circumstances of such proposed sale or disposition. 7.14 Right to Indemnity. The Agent shall be fully justified in failing or refusing to take any action hereunder unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. 7.15 Sharing of Payments. The Lenders agree among themselves that, in the event that any Lender shall obtain payment in respect of any Advance or any other obligation owing to the Lenders under this Agreement through the exercise of a right of set-off, banker's lien, counterclaim or otherwise in excess of its ratable share of payments received by all of the Lenders on account of the Advances and other obligations (or if no Advances are outstanding, ratably according to the respective amounts of the Commitments), such Lender shall promptly purchase from the other Lenders participations in such Advances and other obligations in such amounts, and make such other adjustments from time to time, as shall be equitable to the end that all of the Lenders share such payment in accordance with such ratable shares. The Lenders further agree among themselves that if payment to a Lender obtained by such Lender through the exercise of a right of set-off, banker's lien, counterclaim or otherwise as aforesaid shall be rescinded or must otherwise be restored, each Lender which shall have shared the benefit of such payment shall, by repurchase of participations theretofore sold, return its share of that benefit to each Lender whose payment shall have been rescinded or otherwise restored. The Company agrees that any Lender so purchasing such a participation may, to the fullest extent permitted by law, exercise all rights of payment, including set-off, banker's lien or counterclaim, with respect to such participation as fully as if such Lender were a holder of such Advance or other obligation in the amount of such participation. The Lenders further agree among themselves that, in the event that amounts received by the Lenders and the Agent hereunder are insufficient to pay all such obligations or insufficient to pay all such obligations when due, the fees and other amounts owing to the Agent in such capacity shall be paid therefrom before payment of obligations owing to the Lenders under this Agreement. Except as otherwise expressly provided in this Agreement, if any Lender or Agent shall fail to remit to the Agent or any other Lender an amount payable by such Lender or Agent to the Agent or such other Lender pursuant to this Agreement on the date CREDIT AGREEMENT Page 62 67 when such amount is due, such payments shall be made together with interest thereon for each date from the date such amount is due until the date such amount is paid to the Agent or such other Lender at a rate per annum equal to the rate at which borrowings are available to the payee in its overnight federal funds market. It is further understood and agreed among the Lenders and the Agent that if the Agent shall engage in any other transactions with the Company and shall have the benefit of any collateral or security therefor which does not expressly secure the obligations arising under this Agreement except by virtue of a so-called dragnet clause or comparable provision, the Agent shall be entitled to apply any proceeds of such collateral or security first in respect of the obligations arising in connection with such other transaction before application to the obligations arising under this Agreement. 7.16 Withholding Tax Exemption. Each Lender that is not organized and incorporated under the laws of the United States or any State thereof agrees to file with the Agent and the Company, in duplicate, (a) on or before the later of (i) the Effective Date and (ii) the date such Lender becomes a Lender under this Agreement and (b) thereafter, for each taxable year of such Lender (in the case of a Form 4224) or for each third taxable year of such Lender (in the case of any other form) during which interest or fees arising under this Agreement and the Notes are received, unless not legally able to do so as a result of a change in United States income tax enacted, or treaty promulgated, after the date specified in the preceding clause (a), on or prior to the immediately following due date of any payment by the Company hereunder, a properly completed and executed copy of either Internal Revenue Service Form 4224 or Internal Revenue Service Form 1001 and Internal Revenue Service Form W-8 or Internal Revenue Service Form W-9 and any additional form necessary for claiming complete exemption from United States withholding taxes (or such other form as is required to claim complete exemption from Unites States withholding taxes), if and as provided by the Code or other pronouncements of the United States Internal Revenue Service, and such Lender warrants to the Company that the form so filed will be true and complete; provided that such Lender's failure to complete and execute such Form 4224 or Form 1001, or Form W-8 or Form W-9, as the case may be, and any such additional form (or any successor form or forms) shall not relieve the Company of any of its obligations under this Agreement, except as otherwise provided in this Section 7.16. ARTICLE VIII MISCELLANEOUS 8.1 Amendments, Etc. (a) No amendment, modification, termination or waiver of any provision of this Agreement nor any consent to any departure therefrom shall be effective unless the same shall be in writing and signed by the Required Lenders and, to the extent any rights, obligations or duties of the Agent may be affected thereby, the Agent, provided, however, that no such amendment, modification, termination, waiver or consent shall, without the consent of the Agent and all of the Lenders, (i) authorize or permit the extension of time for, or any reduction of the amount of, any payment of the principal of, or interest on, the Notes or any Letter of Credit reimbursement obligation, or any fees or other amount payable hereunder, (ii) amend or terminate the respective Commitments of any Lender set forth on the signature pages hereof or modify the provisions of this Section regarding the taking of any action under this Section or the CREDIT AGREEMENT Page 63 68 provisions of Section 7.10 or the definition of Required Lenders, or (iii) release all or substantially all of the collateral or release any material Guarantor. (b) Any such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. (c) Notwithstanding anything herein to the contrary, no Defaulting Lender shall be entitled to vote (whether to consent or to withhold its consent) with respect to any amendment, modification, termination or waiver of any provision of this Agreement or any departure therefrom or any direction from the Lenders to the Agent, and, for purposes of determining the Required Lenders at any time, the Commitments and the Advances of each Defaulting Lenders shall be disregarded. 8.2 Notices. (a) Except as otherwise provided in Section 8.2(c) hereof, all notices and other communications hereunder shall be in writing and shall be delivered or sent to the Company, the Agent and the Lenders at the respective addresses and numbers for notices set forth on the signature pages hereof, or to such other address as may be designated by the Company, the Agent or any Lender by notice to the other parties hereto. All notices and other communications shall be deemed to have been given at the time of actual delivery thereof to such address, or if sent by certified or registered mail, postage prepaid, to such address, on the third day after the date of mailing, or in the case of telex notice, upon receipt of the appropriate answerback, or, in the case of facsimile notice, upon receipt of a confirmation mechanically produced by the facsimile machine, provided, however, that notices to the Agent shall not be effective until received. (b) Notices by the Company to the Agent with respect to terminations or reductions of the Commitments pursuant to Section 2.2, requests for Advances pursuant to Section 2.4, requests for continuations or conversions of Loans pursuant to Section 2.7 and notices of prepayment pursuant to Section 3.1 shall be irrevocable and binding on the Company. (c) Any notice to be given by the Company to the Agent pursuant to Sections 2.4, 2.7 or 3.1 and any notice to be given by the Agent or any Lender hereunder, may be given by telephone, and all such notices given by the Company must be immediately confirmed in writing in the manner provided in Section 8.2(a). Any such notice given by telephone shall be deemed effective upon receipt thereof by the party to whom such telephonic notice is to be given. 8.3 No Waiver By Conduct; Remedies Cumulative. No course of dealing on the part of the Agent or any Lender, nor any delay or failure on the part of the Agent or any Lender in exercising any right, power or privilege hereunder shall operate as a waiver of such right, power or privilege or otherwise prejudice the Agent's or such Lender's rights and remedies hereunder; nor shall any single or partial exercise thereof preclude any further exercise thereof or the exercise of any other right, power or privilege. No right or remedy conferred upon or reserved to the Agent or any Lender under any Loan Document is intended to be exclusive of any other right or remedy, and every right and remedy shall be cumulative and in addition to every other right or remedy granted thereunder or now or hereafter existing under any applicable law. Every right and remedy granted by any Loan Document or by applicable law to the Agent or any Lender may be exercised from time to time and as often as may be deemed expedient by the Agent or any Lender. CREDIT AGREEMENT Page 64 69 8.4 Reliance on and Survival of Various Provisions. All terms, covenants, agreements, representations and warranties of the Company and any Guarantor made herein or in any other Loan Document or in any certificate, report, financial statement or other document furnished by or on behalf of the Company and any Guarantor in connection with the negotiation and modification of this Agreement shall be deemed to have been relied upon by the Lenders, notwithstanding any investigation heretofore or hereafter made by any Lender or on such Lender's behalf, and those covenants and agreements of the Company set forth in Section 3.7, 3.9 and 8.5 hereof shall survive the repayment in full of the Advances and the termination of the Commitments. 8.5 Expenses; Indemnification. (a) The Company agrees to pay, or reimburse the Agent for the payment of, on demand, (i) the reasonable fees and expenses of counsel to the Agent, including without limitation the fees and expenses of Dickinson Wright PLLC and any other counsel retained by the Agent in connection with the preparation, execution, delivery and administration of the Loan Documents and the consummation of the transactions contemplated hereby, and in connection with advising the Agent as to its rights and responsibilities with respect thereto, and in connection with any amendments, waivers or consents in connection therewith, and (ii) all stamp and other taxes and fees payable or determined to be payable in connection with the execution, delivery, filing or recording of the Loan Security Documents and the consummation of the transactions contemplated hereby, and any and all liabilities with respect to or resulting from any delay in paying or omitting to pay such taxes or fees, and (iii) all reasonable costs and expenses of the Agent (including reasonable fees and expenses of counsel and whether incurred through negotiations, legal proceedings or otherwise) in connection with any Unmatured Event or Event of Default or the enforcement of, or the exercise or preservation of any rights under, any Loan Document or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement and (iv) all reasonable costs and expenses of the Agent (including reasonable fees and expenses of counsel) in connection with any action or proceeding relating to a court order, injunction or other process or decree restraining or seeking to restrain the Agent from paying any amount under, or otherwise relating in any way to, any Letter of Credit and any and all costs and expenses which any of them may incur relative to any payment under any Letter of Credit. (b) The Company agrees to indemnify each Lender, the Agent and each of their respective officers, directors, employees and agents (collectively, the "Indemnified Parties") and hold each Indemnified Party harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel, which may be incurred by any Indemnified Party in connection with any investigative, administrative or judicial proceeding (whether or not such Indemnified Party shall be designated a party thereto) (collectively, the "Indemnified Liabilities") at any time relating to (whether before or after the execution of this Agreement) any of the following: (i) any actual or proposed use of the Advances hereunder by the Company or any of its Subsidiaries or any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of any Advance; CREDIT AGREEMENT Page 65 70 (ii) the entering into and performance of this Agreement and any other Loan Document by any of the Indemnified Parties (including any action brought by or on behalf of the Company as the result of any determination by any Lender not to make any Advance); (iii) any investigation, litigation or proceeding related to any other Acquisition or proposed Acquisition by the Company or any of its Subsidiaries of all or any portion of the stock or assets of any Person or to the issuance of, or any other matter relating to, any Subordinated Debt, whether or not any Indemnified Party is a party thereto; (iv) any investigation, litigation or proceeding related to any environmental cleanup, audit, compliance or other matter relating to any release by the Company or any of its Subsidiaries of any Hazardous Material or any violations of Environmental Laws; or (v) the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission, discharging or releases from, any real property owned or operated by the Company or any Subsidiary thereof of any Hazardous Material (including any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under any Environmental Law), regardless of whether caused by, or within the control of, the Company or such Subsidiary, except for any such Indemnified Liabilities arising for the account of a particular Indemnified Party by reason of the activities of the Indemnified Party on the property of the Company conducted subsequent to a foreclosure on such property by any Indemnified Party or by reason of the relevant Indemnified Party's gross negligence or willful misconduct or breach of this Agreement, and if and to the extent that the foregoing undertaking may be unenforceable for any reason, the Company hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. The Company shall be obligated to indemnify the Indemnified Parties for all Indemnified Liabilities subject to and pursuant to the foregoing provisions, regardless of whether the Company or any of its Subsidiaries had knowledge of the facts and circumstances giving rise to such Indemnified Liability. Provided that no Indemnified Party shall have the right to be indemnified hereunder for its own gross negligence or willful misconduct as determined by a court of competent jurisdiction. 8.6 Successors and Assigns. (a) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided that the Company may not, without the prior consent of all the Lenders, assign its rights or obligations under any Loan Document and the Lenders shall not be obligated to make any Advance hereunder to any entity other than the Company. (b) Any Lender may sell a participation interest to any financial institution or institutions, and such financial institution or institutions may further sell, a participation interest (undivided or divided) in, the Advances and such Lender's rights and benefits under the Loan Documents, and to the extent of that participation, such participant or participants shall have the same rights and benefits against the Company under Section 6.2(c) as it or they would have had if participation of such participant or participants were the Lender making the Advances to the Company hereunder, provided, however, that (i) such Lender's obligations under this Agreement shall remain unmodified and fully effective and enforceable against such Lender, (ii) such CREDIT AGREEMENT Page 66 71 Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender shall remain the holder of its Notes for all purposes of this Agreement, (iv) the Company, the Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement, (v) such Lender shall not grant to its participant any rights to consent or withhold consent to any action taken by such Lender or the Agent under this Agreement other than action requiring the consent of all of the Lenders hereunder and (iv) such participation shall in no event be less than $5,000,000. The Agent from time to time in its sole discretion may appoint agents for the purpose of servicing and administering this Agreement and the transactions contemplated hereby and enforcing or exercising any rights or remedies of the Agent provided under the Loan Documents or otherwise. In furtherance of such agency, the Agent may from time to time direct that the Company provide notices, reports and other documents contemplated by this Agreement (or duplicates thereof) to such agent. The Company hereby consents to the appointment of such agent and agrees to provide all such notices, reports and other documents and to otherwise deal with such agent acting on behalf of the Agent in the same manner as would be required if dealing with the Agent itself. (c) Each Lender may, with the prior written consent of the Company, which consent from the Company shall not be unreasonably withheld and may not be withheld if any Event of Default has occurred and is continuing or if such assignment is to an Affiliate of a Lender, or to another Lender, and the prior written consent of the Agent, assign to one or more banks or other entities all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Advances owing to it and the Note or Notes held by it); provided, however, that (i) each such assignment shall be of a uniform, and not a varying, percentage of all rights and obligations, (ii) except in the case of an assignment of all of a Lender's rights and obligations under this Agreement, (A) unless such assignment is to another Lender, the amount of the Commitment of the assigning Lender being assigned pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $5,000,000, and in integral multiples of $1,000,000 thereafter, or such lesser amount as the Company and the Agent may consent to and (B) after giving effect to each such assignment, the amount of the Commitment of the assigning Lender shall in no event be less than $5,000,000, and (iii) the parties to each such assignment shall execute and deliver to the Agent, for its acceptance and recording in the Register, an Assignment and Acceptance in the form of Exhibit I hereto (an "Assignment and Acceptance"), together with any Note or Notes subject to such assignment and a processing and recordation fee of $3,500. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in such Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender hereunder and (y) the Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the remaining portion of an assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto). CREDIT AGREEMENT Page 67 72 (d) By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Company or the performance or observance by the Company of any of its obligations under this Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 4.6 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance under the Agent, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement as are delegated to the Agent by the terms hereof, together with such powers and discretion as are reasonably incidental thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as a Lender. (e) The Agent shall maintain at its address designated on the signature pages hereof a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Advances owing to, each Lender from time to time (the "Register"). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Company, the Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Company or any Lender at any reasonable time and from time to time upon reasonable prior notice. (f) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an assignee, together with any Note or Notes subject to such assignment, the Agent shall, if such Assignment and Acceptance has been completed, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Company. Within five Business Days after its receipt of such notice, the Company, at its own expense, shall execute and deliver to the Agent in exchange for the surrendered Note or Notes a new Note or Notes to the order of such assignee in an amount equal to the Commitment assumed by it pursuant to such Assignment and Acceptance and, if the assigning Lender has retained a Commitment hereunder, a new Note to the order of the assigning Lender in an amount equal to the Commitment retained by it hereunder. Such new Note or Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Note or Notes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of Exhibit I hereto. CREDIT AGREEMENT Page 68 73 (g) The Lenders may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 8.6, disclose to the assignee or participant or proposed assignee or participant, any information relating to the Company, provided that assignee or participant agrees to keep all non public information confidential to the same extent required by this Agreement. (h) Notwithstanding any other provision set forth in this Agreement, any Lender may at any time create a security interest in, or assign, all or any portion of its rights under this Agreement (including, without limitation, the Loans owing to it and the Note or Notes held by it) in favor of any Federal Reserve Lender in accordance with Regulation A of the Board of Governors of the Federal Reserve System; provided that such creation of a security interest or assignment shall not release such Lender from its obligations under this Agreement. 8.7 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. 8.8 Governing Law. This Agreement is a contract made under, and shall be governed by and construed in accordance with, the law of the State of Illinois in the same manner applicable to contracts made and to be performed entirely within such State and without giving effect to choice of law principles of such State. 8.9 Table of Contents and Headings. The table of contents and the headings of the various subdivisions hereof are for the convenience of reference only and shall in no way modify any of the terms or provisions hereof. 8.10 Construction of Certain Provisions. If any provision of this Agreement refers to any action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person, whether or not expressly specified in such provision. 8.11 Integration and Severability. This Agreement embodies the entire agreement and understanding between the Company and the Agent and the Lenders, and supersedes all prior agreements and understandings, relating to the subject matter hereof. In case any one or more of the obligations of the Company under any Loan Document shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining obligations of the Company shall not in any way be affected or impaired thereby, and such invalidity, illegality or unenforceability in one jurisdiction shall not affect the validity, legality or enforceability of the obligations of the Company under any Loan Document in any other jurisdiction. 8.12 Independence of Covenants. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any such covenant, the fact that it would be permitted by an exception to, or would be otherwise within the limitations of, another covenant shall not avoid the occurrence of an Unmatured Event or an Event of Default or any event or condition which with notice or lapse of time, or both, could become such an Unmatured Event or an Event of Default if such action is taken or such condition exists. CREDIT AGREEMENT Page 69 74 8.13 Interest Rate Limitation. Notwithstanding any provision of any Loan Document, in no event shall the amount of interest paid or agreed to be paid by the Company exceed an amount computed at the highest rate of interest permissible under applicable law. If, from any circumstances whatsoever, fulfillment of any provision of any Loan Document at the time performance of such provision shall be due, shall involve exceeding the interest rate limitation validly prescribed by law which a court of competent jurisdiction may deem applicable hereto, then, ipso facto, the obligations to be fulfilled shall be reduced to an amount computed at the highest rate of interest permissible under applicable law, and if for any reason whatsoever the Lender shall ever receive as interest an amount which would be deemed unlawful under such applicable law such interest shall be automatically applied to the payment of principal of the Advances outstanding hereunder (whether or not then due and payable) and not to the payment of interest, or shall be refunded to the Company if such principal and all other obligations of the Company to the Lenders have been paid in full. 8.14 Judgment and Payment. (a) If, for the purpose of obtaining judgment in any court, it is necessary to convert a sum owing hereunder by the Company in one currency into another currency, the Company agrees, to the fullest extent that it may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures in the relevant jurisdiction the relevant Lender could purchase the first currency with such other currency for the first currency on the Business Day immediately preceding the day on which the final judgment is given. (b) The obligations of the Company in respect of any sum due in Dollars to any party hereto or any holder of the obligations owing hereunder (the "Applicable Creditor") shall, notwithstanding any payment obligation or judgment in a currency (the "Payment Currency") other than Dollars, be discharged only to the extent that, on the Business Day following receipt by the Applicable Creditor of any sum adjudged to be so due in the Payment Currency, the Applicable Creditor may in accordance with normal banking procedures in the relevant jurisdiction purchase Dollars with the Payment Currency; if the amount of Dollars so purchased is less than the sum originally due to the Applicable Creditor in Dollars, the Company agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Applicable Creditor against such loss. The obligations of the Company contained in this Section 8.14 shall survive the termination of this Agreement and the payment of all other amounts owing hereunder. 8.15 Year 2000 Problem. The Company and its Subsidiaries have reviewed the areas within their business and operations which could be adversely affected by, and have developed or are developing a program to address on a timely basis, the "Year 2000 Problem" (that is, the risk that computer applications used by the Company and its Subsidiaries may be unable to recognize and perform properly date-sensitive functions involving certain dates prior to and any date after December 31, 1999). Based on such review and program, the Company reasonably believes that the "Year 2000 Problem" will not have a Material Adverse Effect. 8.16 Submission To Jurisdiction; Waivers. The Company hereby irrevocably and unconditionally: (a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and CREDIT AGREEMENT Page 70 75 enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of any United States federal or Illinois state court sitting in Chicago, Illinois and appellate courts from any thereof; (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Company at the address specified in Section 8.2, or at such other address of which the Agent shall have been notified pursuant thereto; (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this subsection any special, exemplary, punitive or consequential damages. 8.17 Acknowledgments. The Company hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents; (b) none of the Agent or any Lender has any fiduciary relationship with or duty to the Company arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Agent and the Lenders, on the one hand, and the Company, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Company and the Lenders. 8.18 Confidentiality. Each Lender agrees to hold any non public confidential information which it may receive from the Company pursuant to this Agreement in confidence except for disclosure: (i) to its Affiliates and to other Lenders and their respective Affiliates, (ii) to legal counsel, accountants, and other professional advisors to that Lender or to a potential participant or assignee, (iii) to regulatory officials, (iv) to any Person as requested pursuant to or as required by law, regulation, or legal process, (v) to any Person in connection with any legal proceeding to which that Lender is a party, and (vi) permitted by this Agreement. 8.19 WAIVER OF JURY TRIAL. THE LENDERS AND THE AGENT AND THE COMPANY, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY CREDIT AGREEMENT Page 71 76 LITIGATION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF EITHER OF THEM. NEITHER ANY LENDER, THE AGENT NOR THE COMPANY SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY ANY PARTY HERETO EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY SUCH PARTY. CREDIT AGREEMENT Page 72 77 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered on the 30th day of March, 1998, which shall be the Effective Date of this Agreement. Address for Notices: APCOA, INC. 800 Superior Avenue Cleveland, Ohio 44114 Attention: General Counsel By: /s/ Michael J. Celebrezze Facsimile No.: 212-765-8214 ------------------------------- Its: ---------------------------- CREDIT AGREEMENT Page 73 78 Address for Notices: THE FIRST NATIONAL BANK OF CHICAGO, 611 Woodward Avenue as Agent and as a Lender Detroit, Michigan 48226 Attention: _____________ By: /s/ Facsimile No.: (313) _____ ---------------------------------- Its: AUTHORIZED AGENT Commitment: $40,000,000 ------------------------------- CREDIT AGREEMENT Page 74 79 [OTHER LENDERS] CHICAGO 7-3134 327282 CREDIT AGREEMENT Page 75 EX-10.3 35 STOCKHOLDERS AGREEMENT 1 STOCKHOLDERS' AGREEMENT By and Among AP HOLDINGS, INC., HOLBERG INDUSTRIES, INC., DELAWARE NORTH COMPANIES, INC. And THE MANAGEMENT INVESTORS Of APCOA, INC. Dated as of April 14, 1989 2 TABLE OF CONTENTS PAGE STOCKHOLDERS' AGREEMENT ................................................... 1 1. Corporate Governance ................................................ 3 1.1 Board of Directors ........................................ 3 1.2 Action by Stockholders .................................... 8 2. Transfers of Common Stock ........................................... 9 2.1 Legends; Shares of Common Stock Subject to this Agreement ................................................. 9 2.2 Certain Restrictions ...................................... 10 2.3 Transfer to Other Stockholders or to Transferees; Right of First Offer ...................................... 14 2.4 Sales of Control .......................................... 19 2.5 Merger Transactions ....................................... 23 2.6 Repurchase of Common Stock Held by Management Investors ... 23 2.7 Certain Registration Rights ............................... 24 3. Transfer Of Shares Upon Death Or Disability ......................... 29 3.1 Put to AP in Event of Death, Retirement or Disability ................................................ 29 3.2 Call in Event of Death, Retirement or Disability .............................................. 30 3.3 Purchase Price ............................................ 31 3.4 Certain Definitions ....................................... 32 4. Transfer Upon Termination Of Employment ............................. 39 4.1 Put to AP in Event of Termination ......................... 39 3 PAGE 4.2 Call in Event of Termination .............................. 40 4.3 Purchase Price ............................................ 42 4.4 Sale of the Company ....................................... 45 4.5 Continuation of Employment ................................ 46 5. Residual Rights of Management Investors to Purchase Shares .................................................... 46 6. Involuntary Transfer Of Shares ...................................... 51 6.1 Certain Involuntary Transfers; Seller's Notice ............ 51 6.2 Right to Repurchase ....................................... 51 6.3 Terms of Purchase ......................................... 52 7. Reservation Of Shares Purchased By AP ............................... 52 8. Closing ............................................................. 52 8.1 Closing ................................................... 52 8.2 Deliveries at Closing; Method of Payment of Purchase Price ............................................ 53 9. Miscellaneous ....................................................... 54 9.1 Endorsement of Stock Certificates ................................... 54 9.2 Term ...................................................... 55 9.3 Injunctive Relief ......................................... 56 9.4 Notices ................................................... 56 9.5 Administration ............................................ 57 9.6 Successors and Assigns .................................... 57 9.7 Governing Law ............................................. 58 9.8 Headings .................................................. 58 -ii- 4 PAGE 9.9 Entire Agreement; Amendment ............................... 58 9.10 Inspection ................................................ 61 9.11 Counterparts .............................................. 61 9.12 Gender; Number ............................................ 61 9.13 Further Assurances ........................................ 62 -iii- 5 STOCKHOLDERS' AGREEMENT AGREEMENT dated as of April 14, 1989 by and among AP Holdings, Inc., a Delaware corporation ("AP"), Holberg Industries, Inc., a Delaware corporation ("Holberg"), Delaware North Companies, Inc., a Delaware corporation ("DNC") and each of the individuals listed on Schedule A hereto (each such individual is hereinafter referred to as a "Management Investor" and all such individuals are sometimes hereinafter collectively referred to as the "Management Investors"). Each of the parties hereto (other than AP) and any other person who shall hereafter become a party to or agree to be bound by the terms of this Agreement is sometimes hereinafter referred to as a "Stockholder" and all of such parties are sometimes hereinafter referred to as the "Stockholders." Any Management Investor and his or her transferees hereunder are sometimes referred to as "Management Stockholder(s)." This Agreement shall become effective (the "Effective Date") on the date of, and simultaneously with, the Closing of the transactions under the Subscription Agreement (as hereinafter defined). As of the Effective Date, AP will have an authorized capital stock consisting of 20,000 shares of Common 6 Stock, $.01 par value ("AP Common Stock") and 10,000 shares of Preferred Stock, $.0l par value ("AP Preferred Stock"). AP and each of the Stockholders who are parties to this Agreement have entered into a Subscription Agreement, dated as of the date hereof (the "Subscription Agreement"), pursuant to which such Stockholders have subscribed for shares of AP Common Stock. As of the closing of the transactions contemplated in the Subscription Agreement, the holdings of Holberg, DNC and the Management Investors as a group will be substantially as follows:
Number Stockholder of Shares Percentage - ----------- --------- ---------- Holberg 7,326 83.25 DNC 880 10.0 Management Investors 594 6.75 ------ ------ 8,800 100.0% ====== ======
AP, APA Acquisition, Inc., a Delaware corporation ("Acquisition") and wholly owned subsidiary of AP, DNC and APCOA, Inc., a Delaware corporation ("APCOA") and wholly owned subsidiary of DNC, have entered into a Stock Purchase Agreement dated as of January 27, 1989 (the "Purchase Agreement") providing for the acquisition (the "Purchase") of the common stock of APCOA from DNC by Acquisition and AP. APCOA will be owned 97% by Acquisition and 3% by AP after the Purchase. - 2 - 7 The parties hereto deem it in their best interests and in the best interests of AP and APCOA to provide consistent and uniform management for AP and APCOA and desire to enter into this Agreement in order to effectuate that purpose. The parties hereto also desire to restrict the sale, assignment, transfer, encumbrance or other disposition of the AP Common Stock, including issued and outstanding shares of AP Common Stock as well as shares of AP Common Stock which may be issued hereafter, or which may become issuable pursuant to the exercise of options granted hereafter, and to provide for certain rights and obligations in respect thereto as hereinafter provided. Accordingly, in consideration of the premises and of the terms and conditions herein contained, the parties hereto mutually agree as follows: 1. Corporate Governance. 1.1. Board of Directors. (a) Number of Directors. AP shall be governed by a Board of Directors initially consisting of four members. Such number may be increased or decreased by Holberg - 3 - 8 as provided herein and in AP's Certificate of Incorporation and By-laws. (b) Nomination of Directors. The following procedures shall govern the nomination of directors of AP: (i) The Management Investors shall be entitled to nominate one director (the "Management Director"). (ii) DNC shall be entitled to nominate one director (the "DNC Director") so long as it and any of its Permitted Transferees (as hereinafter defined) continue to hold in the aggregate at least 50% of the shares of AP Common Stock as it owns on the date hereof. (iii) Holberg shall be entitled to nominate three directors (the "Holberg Directors") as well as any additional directors to fill directorships created by an increase in the size of the Board of Directors. (c) Initial Board of Directors. The initial Board of Directors of AP shall consist of the following members. - 4 - 9
Name of Director Type of Nominee ---------------- --------------- G. Walter Stuelpe Management John V. Holten Holberg Gunnar E. Klintberg Holberg Clifford Kaeser DNC
each of whom shall hold his office until his successor shall have been elected and qualified. (d) Removal of Directors. Except as otherwise provided in this Section 1.1(d) or in Section 1.1(e), each Stockholder agrees not to take any action to remove, with or without cause, any director of AP. Notwithstanding the foregoing, (i) if any director would no longer be entitled to be nominated as a director pursuant to Section 1.1(b), such director shall immediately resign or be subject to removal by a vote of the Stockholders, and (ii) Holberg, DNC and the Management Investors shall at all times have the right to recommend the removal, with or without cause, of the Holberg Directors, the DNC Director and the Management Director, respectively. - 5 - 10 If a director shall fail to resign as required by clause (i) above or if any of Holberg, DNC or the Management Investors shall determine to recommend the removal of any directors as provided by clause (ii) above, then the Stockholders shall immediately cause a special meeting of stockholders to be called, or shall act by written consent without a meeting, for the purpose of removing such director, and each Stockholder agrees to vote all his shares entitled to vote at such meeting, or to execute a written consent in respect of all shares, as the case may be, in favor of such removal. (e) Vacancies. At any time a vacancy is created on the Board of Directors by the death, removal or resignation of any one of the directors, no action shall be taken (except as provided in this Section 1.1(e)) by the Board of Directors until such time as the Board is reconstituted with the appropriate number of directors. If a vacancy is created on the Board of Directors by reason of the death, removal (in accordance with Section 1.1(d) above) or resignation of any one of the directors, the remaining directors shall meet within 30 days after the date such vacancy occurs for the purpose of electing a director to fill such vacancy in accordance with the nomination procedures set forth in Section 1.1(b) above. If the remaining directors fail to - 6 - 11 nominate a director to fill any such vacancy within such 30-day period or if the remaining directors fill such vacancy otherwise than in accordance with the nomination procedures set forth in Section 1.1(b) above, the Stockholders shall immediately cause a special meeting of stockholders to be called, or shall act by written consent without a meeting, for the purpose of filling such vacancy and each Stockholder agrees to vote all his shares entitled to vote at such meeting, or to execute a written consent in respect of all such shares, as the case may be, in favor of removing, if necessary, any director elected to fill such vacancy otherwise than in accordance with Section 1.1(b) above and filling such vacancy in accordance with the nomination procedures in Section 1.1(b) above. If the party entitled to nominate a director to fill any such vacancy shall fail to nominate a director, such vacancy shall be filled by the vote of a majority of the shares of AP Common Stock then outstanding. (f) Covenant to Vote. Each of the Stockholders agrees to vote, in person or by proxy, all of the shares of AP Common Stock owned by such Stockholder, at any annual or special meeting of stockholders of AP called for the purpose of voting on the election of directors or by consensual action of stockholders without a meeting with respect to the election of directors, in favor of the election of the di- - 7 - 12 rectors nominated in accordance with Section 1.1(b) above. Each Stockholder shall vote the shares of AP Common Stock owned by such Stockholder and shall take all other actions necessary to ensure that AP's Certificate of Incorporation and By-laws do not at any time conflict with the provisions of this Agreement. (g) Management Investors Governance Procedures. Except as otherwise provided hereby, any actions to be taken or recommendations to be made hereunder by the Management Investors as a group shall be determined by the majority vote of the shares of AP Common Stock owned by the Management Investors as of the time of such action or recommendation, with each share having one vote. For this purpose, each Management Investor will be deemed to own shares of AP Common Stock owned by his Permitted Transferees and shall be deemed not to own any shares of AP Common Stock which he may acquire upon exercise of any option. 1.2. Action by Stockholders. The Stockholders, by their execution of this Agreement, hereby approve and adopt the AP Holdings, Inc. Management Stock Option Plan (effective April 15, 1989), a copy of which is attached hereto as Exhibit A. - 8 - 13 2. Transfers of Common Stock. 2.1. Legends; Shares of Common Stock Subject to this Agreement. Unless otherwise expressly provided herein, no Stockholder shall sell, assign, pledge, encumber or otherwise transfer any shares of AP Common Stock to any person (regardless of the manner in which such Stockholder initially acquired such shares of AP Common Stock) nor shall AP issue, sell or otherwise transfer any shares of AP Common Stock to any person (all persons acquiring shares from a Stockholder or from AP, regardless of the method of transfer, shall be referred to collectively as "Transferees" and individually as a "Transferee") unless (i) such shares bear legends as provided in Section 9.1 and (ii) such Transferee shall have executed and delivered to AP, as a condition precedent to any acquisition of shares of AP Common Stock, an instrument in form and substance satisfactory to AP confirming that such Transferee takes such shares subject to all the terms and conditions of this Agreement; provided that the provisions of this Section 2.1 shall not apply in respect of a sale of shares included in a registered public offering under the Securities Act of 1933, as amended (the "Securities Act"), and the rules and regulations promulgated thereunder. AP shall not transfer upon its books any shares - 9 - 14 of AP Common Stock to any person except in accordance with this Agreement. 2.2. Certain Restrictions. (a) Notwithstanding anything to the contrary set forth herein: (i) no Stockholder or Stockholder's Transferee shall directly or indirectly sell, assign, pledge, encumber or otherwise transfer any shares of AP Common Stock, unless any such sale, assignment, pledge, encumbrance or other transfer shall have been effected in accordance with the terms of this Agreement; and (ii) no Management Investor or Management Investor's Transferee shall, except as provided in Sections 2.2(d) and (e), 2.4, 2.6, 2.7, 3, 4 and 5, directly or indirectly sell, assign, pledge, encumber or otherwise transfer any shares of AP Common Stock for a period of five years following the date of consummation of the Purchase. (b) No Stockholder shall sell, assign, pledge, encumber or otherwise transfer any shares of AP Common Stock at any time if such action would constitute a violation of any state securities or blue sky laws or a breach of the conditions to any exemption from registration of the AP Common Stock under any such laws or a breach of any undertaking or agreement of such Stockholder entered into pursuant to such laws or in connection with obtaining an exemption - 10 - 15 thereunder. Each Stockholder agrees that any shares of AP Common Stock to be purchased by such Stockholder shall bear appropriate legends restricting the sale or other transfer of such stock in accordance with applicable state securities or blue sky laws. (c) No Stockholder shall grant any proxy or enter into or agree to be bound by any voting trust with respect to the AP Common Stock nor shall any Stockholder enter into any stockholder agreements or arrangements of any kind with any person with respect to the AP Common Stock inconsistent with the provisions of this Agreement (whether or not such agreements and arrangements are with other Stockholders or holders of AP Common Stock who are not parties to this Agreement), including but not limited to, agreements or arrangements with respect to the acquisition, disposition or voting of shares of AP Common Stock, nor shall any Stockholder act, for any reason, as a member of a group or in concert with any other persons in connection with the acquisition, disposition or voting of shares of AP Common Stock in any manner which is inconsistent with the provisions of this Agreement. Actions taken by the Board of Directors or any Stockholder in connection with the possible acquisition of AP as contemplated by this Agreement shall not be deemed prohibited hereunder. - 11 - 16 (d) None of the restrictions contained in this Agreement with respect to transfers of shares of AP Common Stock (other than those set forth in Sections 2.1, 2.2(a)(i), 2.2(b) and 2.4) shall apply: (i) to any transfer or assignment for nominal consideration or to any gift by (x) any Management Investor to any spouse, child, parent or grandchild of such Management Investor or (y) by any of such relatives to such Management Investor or to any one or more of such relatives, or by any Management Investor or any such relatives to a trust of which there are no principal beneficiaries other than one or more of such relatives; (ii) to any transfer to a legal representative in the event any Stockholder becomes mentally incompetent; (iii) to any transfer by will or the laws of descent; and (iv) with respect to a corporate or partnership Stockholder, to any affiliate (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) thereof (it being understood with respect to any affiliate that the later sale or other disposition of such affiliate would constitute an indirect transfer of AP Common Stock by such affiliate's controlling person, which transfer may only be made pursuant to the terms of this Agreement); provided that in each of cases (i) through (iv) each Transferee, donee or distributee (a "Permitted Transferee") - 12 - 17 agrees to take subject to and to comply with the provisions of Section 2.1 and, in the case of a transfer of AP Common Stock by a corporate or partnership Stockholder to an affiliate, or by one affiliate to another affiliate of the same controlling person, such affiliate shall agree to have its shares of common stock or instrument reflecting its partnership interest legended to note the restrictions on transfer contained in this Agreement as if they were shares of AP Common Stock. (e) A Stockholder shall be entitled to pledge such Stockholder's shares of AP Common Stock to a commercial bank, savings and loan institution or any other lending institution as security for any indebtedness of such Stockholder or AP to such lender; provided that, prior to any such pledge, the pledgee shall deliver to the Company its written agreement, in form and substance satisfactory to the Company, that such pledgee shall assume and be bound by all the terms of this Agreement. (f) No Management Stockholder shall sell, assign, pledge, encumber or otherwise transfer any shares of AP Common Stock at any time to any person or entity directly or indirectly engaged in (or affiliated with any entity directly or indirectly engaged in) the business of owning or - 13 - 18 operating parking lots or garages, unless such sale would result in a change of control subject to Section 2.4, in which event such a sale may be effected only in accordance with Section 2.4; provided that any such transfer to any institutional investor holding securities of such an entity as a passive investment therein and any such transfers pursuant to a registered public offering under the Securities Act shall not be prohibited by this Section 2.2(f). (g) The provisions of Section 2.3 of this Agreement shall not apply to transfers of shares by any Transferee unaffiliated with any Stockholder, which shares were acquired pursuant to the terms of this Agreement from a Stockholder or from a subsequent Transferee of such Stockholder; provided that any such Transferee agrees to take such shares, and any transfer of such shares by such Transferee shall be, subject to all the other provisions of this Agreement. 2.3. Transfer to Other Stockholders or to Transferees; Right of First Offer. (a) Subject to Section 2.2(a) hereof, except as provided in Sections 2.2(d), (e) and (g), any Management Stockholder (the "Selling Stockholder") who desires to sell or otherwise transfer any shares of AP Common Stock shall first give written notice (a - 14 - 19 "Seller's Notice") to AP, Holberg and the remaining Management Investors stating the Selling Stockholder's desire to make such transfer, the number of shares of AP Common Stock to be transferred (the "Offered Shares") and the price and terms pursuant to which the Selling Stockholder proposes to sell the Offered Shares (the "First Offer Terms"). (b) Upon receipt of the Seller's Notice (the "First Offer"), AP shall have the irrevocable and exclusive option to buy up to all of the Offered Shares upon the First Offer Terms; provided that AP shall not have the right to purchase any of the Offered Shares unless either: (i) AP purchases all such Offered Shares; or (ii) if AP elects to purchase less than all the Offered Shares, Holberg elects to purchase all the remaining Offered Shares pursuant to Section 2.3(c); or (iii) the Selling Stockholder consents to the purchase of less than all of the Offered Shares. AP's option under this Section 2.3(b) shall be exercisable by a written notice to the Selling Stockholder, with copies to Holberg and the remaining Management Investors, given within 15 days from the date of the Seller's Notice. (c) If AP does not exercise its option to purchase Offered Shares or if AP elects to purchase less than all the Offered Shares, then Holberg shall have the irrevo- - 15 - 20 cable and exclusive option, subject to Section 2.4, to purchase all but not less than all the Offered Shares not purchased by AP. The option of Holberg under this Section 2.3(c) shall be exercisable by written notice to the Selling Stockholder, with copies to AP and the remaining Management Investors, given within 30 days from the date of the Seller's Notice. (d) If AP and Holberg shall not exercise their options to purchase the Offered Shares upon the First Offer Terms or do not purchase all shares offered by the Selling Stockholder, then the remaining Management Investors shall have the irrevocable and exclusive option to buy all but not less than all of the Offered Shares upon the First Offer Terms. The option of the remaining Management Investors under this Section 2.3(d) shall be exercisable by a written notice to the Selling Stockholder given within 45 days from the date of the Seller's Notice. The remaining Management Investors shall be free to reallocate among themselves the right to purchase the Offered Shares described in this Section 2.3(d). In the event that the remaining Management Investors cannot agree on such allocation, the Offered Shares shall be purchased, if at all, by the remaining Management Investors, pro rata in proportion to their respective owner- - 16 - 21 ship interests (including the interests of their Permitted Transferees) in AP at the time of the Seller's Notice. (e) If the Seller's Notice shall be duly given, and if AP, Holberg and the remaining Management Investors shall not exercise their options to purchase the Offered Shares upon the First Offer Terms or do not purchase all shares offered by the Selling Stockholder, then the Selling Stockholder shall be free, for a period of 90 days from the earlier of (i) the 30th day following the date of the Seller's Notice or (ii) the date the Selling Stockholder shall have received written notice from AP, Holberg and the remaining Management Investors stating their intention not to exercise the options granted under Section 2.3(b), (c) and (d), to sell the Offered Shares to any third party Transferee upon terms equal or superior to the First Offer Terms; provided that the Transferee complies with the provisions of Section 2.1 of this Agreement. (f) If a Transferee's proposed terms of purchase for the Offered Shares are not equal or superior to the First Offer Terms, the Selling Stockholder shall not sell or otherwise transfer any of the Offered Shares unless the Selling Stockholder shall first reoffer the Offered Shares at such lesser price and/or upon such inferior terms to AP, - 17 - 22 Holberg and the remaining Management Investors by giving written notice (the "Reoffer Notice") thereto, stating the Selling Stockholder's intention to make such transfer upon such terms (the "Reoffer Terms"). AP, Holberg and the remaining Management Investors shall then have the irrevocable and exclusive option to purchase up to all of the Offered Shares upon the Reoffer Terms, exercisable in the same order of priority, proportions and manner as provided in Sections 2.3(b), (c) and (d). If AP, Holberg or the remaining Management Investors do not then purchase all the Offered Shares, such Offered Shares may be sold by the Selling Stockholder within 30 days following the earlier of (i) the 30th day from the date of the Reoffer Notice or (ii) the date on which the Selling Stockholder shall have received written notice from AP, Holberg and the remaining Management Investors stating their intention not to exercise the option granted in this Section 2.3(f), upon terms equal or superior to the Reoffer Terms; provided that the Transferee complies with the provisions of Section 2.1 of this Agreement. (g) If AP, Holberg or the remaining Management Investors do not exercise their option to purchase the Offered Shares upon the First Offer Terms or upon the Reoffer Terms, and the Selling Stockholder shall not have sold the Offered Shares to any Transferee for any reason before the - 18 - 23 expiration of the 30-day period described in Section 2.3(f)in the event of a Reoffer or, if no Reoffer Notice is given, the 90-day period described in Section 2.3(e), then the Selling Stockholder shall not sell any shares of AP Common Stock for a period of three months from the last day of such 30- or 90-day period, as the case may be and any such sale shall once again be subject to the provisions of this Section 2.3. 2.4. Sales of Control. (a) If any person or group of persons, as defined in Section 13(d)(3) of the Exchange Act, including for the purposes of this Section 2.4 as part of such person's group, Transferees pursuant to Sections 2.2(d) and (e), would become the beneficial owner, directly or indirectly, of 50% or more of the outstanding shares of AP Common Stock (such person or group of persons, but not to include Holberg or its affiliates or associates, being referred to herein as a "Control Person") as the result of a sale or other transfer of AP Common Stock by any Stockholder or Stockholders or by AP (based on one or more pending transfers or offers to purchase or to sell shares, whether or not the transfers will close or the offers will expire concurrently), including a sale or transfer of shares of AP Common Stock to AP which would result in any person or group of persons becoming a Control Person after such sale - 19 - 24 or transfer, no shares of AP Common Stock shall be sold or otherwise transferred, notwithstanding compliance by the Selling Stockholder or Stockholders with the other provisions of this Agreement and notwithstanding the fact that a particular sale or transfer may not be the sale or transfer that would make a person or group of persons a Control Person, unless the Control Person shall offer, in writing to each Stockholder (other than DNC and its transferees), to purchase all shares of AP Common Stock from all Stockholders who desire to sell, upon the same terms as such Control Person has offered to purchase shares to be sold by the Selling Stockholder or Stockholders or upon the same terms as such proposed sale or transfer of shares to AP (the "Offering Terms"); provided that two or more Stockholders owning in the aggregate 50% or more of the outstanding shares of AP Common Stock shall not be deemed to be a group of persons for the purposes of this Section 2.4 solely because such Stockholders are parties to this Agreement. (b) The Selling Stockholder or Stockholders or AP, as the case may be, shall promptly notify the Control Person that the proposed sale or transfer will be subject to the provisions of this Section 2.4. Within 30 days thereafter, the Control Person shall give written notice to each Stockholder (other than DNC and its transferees) of its of- - 20 - 25 fer to purchase all the shares of AP Common Stock each Stockholder desires to sell, such offer being referred to herein as the "Control Offer." Each Stockholder (other than DNC or its transferees) shall have 30 days from the receipt of such Control Offer in which to accept such Control Offer. No Stockholder shall sell his shares to a Control Person or to AP and AP shall not sell any shares to a Control Person or purchase any shares from any person or group of persons if such sale or purchase would result in any person or group of persons becoming a Control Person (based on one or more pending transfers or offers to purchase or to sell shares, whether or not the transfers will close or the offers expire concurrently), except in response to an offer made in compliance with this Section 2.4. (c) If, during the 30-day period specified in the second sentence of paragraph 2.4(b) above, AP or any Stockholder shall receive any offer from any person or group of persons other than the Control Person, or from the Control Person, to purchase all of the shares of AP Common Stock held by Stockholders desiring to sell shares on terms superior to the Offering Terms offered to all Stockholders by the Control Person pursuant to its initial (or any subsequent) Control Offer or by any offeror other than the Control Person which makes an offer subsequent to that of the - 21 - 26 Control Person, such offer shall be transmitted to all Stockholders (other than DNC and its transferees) and, to be valid hereunder, must state that it is open until the 30th day from the date of the Control Offer (or if there are less than five business days remaining in such period, for five business days). Unless all the Stockholders (other than DNC and its transferees) desiring to sell their shares otherwise agree, no shares may be sold or otherwise transferred to any offeror (or purchased by AP if such purchase would result in any person or group of persons becoming a Control Person) upon terms not equal or superior to the best terms offered by an offeror (including the Control Person); and no shares may be sold or otherwise transferred to any such offeror (or purchased by AP if such purchase would result in any person or group of persons becoming a Control Person) unless all shares desired to be sold are accepted in writing for purchase. (d) If any offer hereunder is made less than five business days prior to the end of the 30th day after the date of the Control Offer, such period shall be deemed extended until the expiration of five business days from the date such offer is made. If, after the expiration of all offers made under this Section 2.4 in response to a Control Offer, no sale or transfer has occurred as a result of which - 22 - 27 any person or group of persons has become a Control Person, then, if any subsequent sale or transfer is proposed and such sale or transfer would result in any person or group of persons becoming a Control Person (based on one or more pending transfers or offers to sell shares, whether or not the transfers will close or the offers expire concurrently), the provisions of this Section 2.4 shall again apply. 2.5. Merger Transactions. Notwithstanding anything contained herein to the contrary, AP may enter into any agreement to consolidate with or merge with or into any other corporation if such agreement is approved by the vote of both the Board of Directors and the holders of at least 66-2/3% of the outstanding shares of AP Common Stock; and, in such event, Sections 2.2, 2.3 and 2.4 of this Agreement shall not be applicable and all shares of AP Common Stock may be transferred for such consideration as approved by such vote of the Board of Directors and the Stockholders, provided that the AP Common Stock owned by DNC may be so transferred only in accordance with the provisions of a Put/Call Agreement, dated as of the date hereof, between DNC and AP (the "Put/Call Agreement"). 2.6. Repurchase of Common Stock Held by Management Investors. Notwithstanding any other provision of this - 23 - 28 Agreement, a Management Investor and/or such Management Investor's Permitted Transferees may (but shall not be obligated to) sell to AP, and AP may (but shall not be obligated to) purchase from a Management Investor and/or such Management Investor's Permitted Transferees, shares of AP Common Stock held by such Management Investor and/or such Management Investor's Permitted Transferees upon such terms (including price) as they may mutually agree in writing. 2.7. Certain Registration Rights. (a) In the event that AP shall file a registration statement under the Securities Act in connection with the proposed offer and sale for cash of shares of AP Common Stock (i) by it, in the case of a primary registration, or (ii) by any party to this Agreement, in the case of a secondary registration, other than in each case a registration on Form S-4 or Form S-8 promulgated under the Securities Act or any successor or similar form, AP will give written notice of its determination to DNC and each Management Investor and each of their Permitted Transferees (each one individually, a "Holder", and collectively, the "Holders"). Upon the written request of a Holder given to AP within 30 days after the mailing of any such notice by AP, AP will cause all shares of AP Common Stock which such Holder has requested to have registered to be included in such registration statement; provided, that - 24 - 29 if the managing underwriter, in the case of any underwritten public offering, determines and advises in writing that in its opinion the number of shares of AP Common Stock to be registered by AP in a primary registration, or on behalf of either any other party to this Agreement or all other Holders in a permitted secondary registration exceeds the number of shares of AP Common Stock which can be sold in such offering (the "Salable Shares"), then AP will include in such registration (i) first, the shares of AP Common Stock AP proposes to sell, in the case of a primary registration, and (ii) second, the shares of AP Common Stock to be sold by any person other than AP (including shares requested to be included in such registration pursuant to this Section 2.7(a)), reduced pro rata among such persons so that the total number of shares of AP Common Stock registered for sale will not exceed the Salable Shares. (b) In the event any Holder requests that shares of AP Common Stock be registered and sold pursuant to Section 2.7(a) above, AP and the other parties to this Agreement shall use their respective best efforts to cause such shares of AP Common Stock to be registered and sold as part of the offering which AP notified such holders of pursuant to Section 2.7(a) above, including, without limitation, filing all documents which are necessary or appropriate with - 25 - 30 the Securities and Exchange Commission and with any state securities commissions or authorities. AP shall select the underwriter of any such offering. All costs and expenses of registering any Holder's shares for sale pursuant to Section 2.7(a) above shall be borne by AP. (c) AP will indemnify and hold harmless each Holder participating in a registration pursuant to this Section 2.7 from and against any and all loss, damage, liability, cost and expense to which such Holder may become subject under the Securities Act or otherwise, insofar as such losses, damages, liabilities, costs or expenses are caused by any untrue statement or alleged untrue statement of any material fact contained in such registration statement, any prospectus contained therein or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; provided, however, that AP will not be liable in any such case to the extent that any such loss, damage, liability, cost or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in strict conformity - 26 - 31 with written information furnished by such Holder specifically for use in the preparation thereof. (d) Each Holder participating in a registration pursuant to this Section 2.7 will indemnify and hold harmless the other Holders, AP, and AP's officers, directors and each person, if any, who controls AP within the meaning of the Securities Act, from and against any and all loss, damage, liability, cost or expense to which such other Holders or AP or such officer, director or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, damages, liabilities, costs or expenses are caused by any untrue statement or alleged untrue statement of any material fact contained therein or any amendment or supplement thereto, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was so made in reliance upon and in strict conformity with written information furnished by such Holder specifically for use in the preparation thereof. - 27 - 32 (e) Promptly after receipt by an indemnified party pursuant to the provisions of Section 2.7(c) or (d) of notice of the commencement of any action involving the subject matter of the foregoing indemnity provision, such indemnified party will, if a claim therefor is to be made against the indemnifying party pursuant to the provisions of Section 2.7(c) or (d), promptly notify the indemnifying party of the commencement thereof; but the omission to so notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than hereunder. In the event such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party shall have the right to participate in, and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party; provided, however, that if the defendants in any action include both the indemnified party and the indemnifying party and there is a conflict of interest which would prevent counsel for the indemnifying party from also representing the indemnified party, the indemnified party shall have the right to select separate counsel to participate in the defense of such action on behalf of such indemnified party. After no- - 28 - 33 tice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party pursuant to the provisions of Section 2.7(c) or (d) for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation, unless (i) the indemnified party shall have employed counsel in accordance with the provisions of the preceding sentence, (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after the notice of the commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. 3. Transfer Of Shares Upon Death Or Disability. 3.1. Put to AP in Event of Death, Retirement or Disability. Subject to any financing agreements entered into in connection with the Purchase or any other instruments or agreements of APCOA or AP from time to time in effect restricting (including indirectly through restrictions of dividend payments by APCOA) or otherwise governing the repurchase or retirement of shares of AP's capital stock (the "Loan Agreements") and to applicable law, unless a call - 29 - 34 pursuant to Section 3.2 shall have been exercised by AP, upon the death, Retirement or Complete Disability of any Management Investor, at the option of such Management Investor, such Management Investor's estate, heirs or personal representative, and/or such Management Investor's Permitted Transferees (collectively, the "Holders" of such Management Investor's shares) and within 30 days of receipt by AP of a Seller's Notice from such Holders, which notice must be given within twelve months from the appointment of a personal representative or three months from the date of such Management Investor's Retirement or six months from the date of his Complete Disability, AP shall purchase from such Holders all the shares of AP Common Stock held by such Holders specified in such Seller's Notice at a purchase price determined in accordance with Section 3.3. AP shall be under no obligation to purchase such shares unless it shall have received a Seller's Notice from such Holders in accordance with this Section 3.1. 3.2. Call in Event of Death, Retirement or Disability. Unless a put granted in Section 3.1 shall have been exercised with respect to all the shares of AP Common Stock held by the Holders of any Management Investor's shares, AP shall have an exclusive and irrevocable option, for a period of three months following the appointment of a - 30 - 35 personal representative or from the date of any such Management Investor's Retirement or Complete Disability, to purchase up to all the shares of AP Common Stock held by such Holders at the price determined in accordance with Section 3.3; provided that AP may not, without the consent of any such Holder, purchase less than all the shares held by any such Holder. 3.3. Purchase Price. (a) The purchase price per share for the shares of AP Common Stock purchased pursuant to Section 3.1 or 3.2 above shall be the greatest of (i) Investment Price, (ii) Adjusted Book Value and (iii) CCO Value (as such terms are hereinafter defined). Adjusted Book Value and CCO Value shall be determined by AP using accounting principles then in effect and as applied by AP and shall be accompanied by a letter from AP's independent accountants stating that the calculations made by AP have been made in accordance with the applicable provisions of this Agreement. AP may satisfy its obligations to purchase shares upon the exercise of any put or call granted pursuant to Section 3.1 or 3.2 hereof with cash in an amount not less than the Investment Price and with Notes (as hereinafter defined) for any amount in excess of the Investment Price; provided, however, that if any portion of the cash purchase price payable for any shares purchased pursuant to Section 3.1 or 3.2 - 31 - 36 above may not be paid as a result of direct or indirect restrictions imposed by the Loan Agreements or by applicable law, such portion shall, subject to the Loan Agreements and to applicable law, be payable by the delivery of Notes in the principal amount of such portion; provided, however, that, notwithstanding any direct or indirect restrictions imposed by the Loan Agreements or by applicable law, AP and the other parties to this Agreement shall use their respective best efforts to enable AP to pay the full amount of the cash purchase price payable for any shares purchased pursuant to Section 3.1 or 3.2 above, including, without limitation, taking necessary measures to create sufficient surplus and/or to obtain the consent of any parties to the Loan Agreements, and, in any event, AP shall pay that portion of the cash purchase price payable for any shares purchased pursuant to Section 3.1 or 3.2 above which was not paid as a result of direct or indirect restrictions imposed by the Loan Agreements or by applicable law as soon as AP may pay such amount in cash without violating the terms of any Loan Agreements or any applicable law. 3.4. Certain Definitions. As used in Sections 3 and 4 of this Agreement, the following terms shall have the meanings set forth below: - 32 - 37 (a) "CCO" shall mean the cash contribution from operations for the four fiscal quarters (for which financial statements are then available) immediately preceding the date of exercise of any put or call pursuant to Section 3 or 4 of this Agreement, as certified by AP's independent public accountants for the four fiscal year quarters which constitute any fiscal year and as determined for any other period in a manner consistent with that used in making such determination for AP's most recently ended fiscal year. (b) "CCO Value" shall mean CCO times 6.84, minus the amount of debt reflected in AP's most recent quarterly or year-end consolidated financial statements, divided by the number of fully diluted shares. "Debt" referred to in the preceding sentence shall mean all indebtedness of any kind, and shall include, without limitation, (i) current maturities, any outstanding preferred stock and accrued dividends (excluding current year) thereon and any outstanding subordinated debt, but shall exclude (ii) trade payables, accrued current expenses, accrued current taxes, and accrued current interest charges, all of which are in the ordinary course of business, and shall also exclude indebtedness incurred in connection with the purchase of real - 33 - 38 estate if such purchase is unrelated to the business currently conducted by APCOA. Also for purposes of the preceding calculation, fully diluted shares shall be equal to the weighted average number of shares of AP Common Stock outstanding plus common share equivalents, computed in accordance with the methodology prescribed in Accounting Principles Board Opinion No. 15 plus vested management options to purchase AP Common Stock, plus the AP Common Stock that DNC will have the right to purchase under its warrant (the "DNC Warrant"), provided that such warrant shall only be considered outstanding if the fair market value of the AP Common Stock subject thereto exceeds the exercise price thereof. In addition, fully diluted shares as referred to in the preceding sentence shall exclude any shares of AP Common Stock which would otherwise be included under Accounting Principles Board Opinion No. 15 but which were purchased by AP either pursuant to the terms of this Agreement or from DNC but only if and to the extent indebtedness was incurred by AP in connection with the purchase of such AP Common Stock. (c) "Note" shall mean a subordinated promissory note of AP substantially in the form of Exhibit B to this Agreement. - 34 - 39 (d) "Investment Price" shall mean the price per share of AP Common Stock that such Management Investor paid for such shares. (e) "Adjusted Book Value" shall mean the book value per share of AP Common Stock, calculated by dividing (A) the sum of (x) stockholders' equity reflected in AP's most recent quarterly or year-end consolidated financial statements, plus (y) the amount, if any, of the adjustment to stockholders' equity required to reflect aggregate projected losses set forth on Schedule B to this Agreement through the date of the most recently completed fiscal year for which financial statements are available, plus (z) the total proceeds to be realized by AP upon the exercise of all outstanding dilutive stock options were such options exercised on the date of valuation and the DNC Warrant by (B) shares of AP Common Stock outstanding plus the AP Common Stock subject to the DNC Warrant (provided that such warrant shall only be considered outstanding if the fair market value of the AP Common Stock subject thereto exceeds the exercise price thereof), plus total outstanding dilutive stock options. For purposes of this calculation, stock options shall be considered dilutive if the exercise price per share is less than per - 35 - 40 share Adjusted Book Value calculated without regard to outstanding stock options. (f) "Retirement" shall mean the earlier of either (i) a Management Investor's attainment of "early retirement age" or "normal retirement age," as such terms are defined in any tax-qualified retirement plan sponsored by AP or any affiliate (as such term is defined for this purpose only in Section 414(b) of the Code) or AP in which the Management Investor participates, or (ii) the Management Investor's attainment of age 65. (g) "Complete Disability" shall mean any physical or mental impairment or disability which prevents a Management Investor from performing the duties of his occupation for a period of at least 120 days and which is expected to be of permanent duration. A determination of whether a Management Investor is disabled shall be made by two licensed physicians, one appointed by the Board of Directors of AP and one appointed by the Management Investor. In the event the two physicians are unable to agree with respect to whether the Management Investor is disabled, the determination of whether the Management Investor is disabled shall be made by a - 36 - 41 third duly licensed physician chosen by the two physicians previously appointed. (h) "Cause" shall mean either (i) a material failure by a Management Investor for some reason other than illness, injury or disability to perform his obligations as an employee of AP (including any obligations under any written employment agreement to which the Management Investor is a party), provided that the Management Investor shall have first received written notice from APCOA or AP stating with specificity the nature of such failure and the Management Investor shall not have corrected the failure cited in such notice within 30 days after his receipt thereof; or (ii) the Management Investor's commission of either any felony involving moral turpitude or any crime in the conduct of his official duties as an employee of APCOA or AP which is materially adverse to the welfare of APCOA or AP; or (iii) the Management Investor's commission of any material act of fraud against APCOA or AP or material misuse of his position for personal gain or that of any third party; or (iv) the Management Investor's taking any action (other than an error in judgment made in the ordinary course of his duties as an employee of APCOA or AP) which is materially adverse to the welfare - 37 - 42 of APCOA or AP, including, but not limited to, any material breach of any covenants in any written employment agreement to which the Management Investor is a party which concern noncompetition and nondisclosure of confidential information. (i) "Good Reason" shall mean, without the Management Investor's express written consent, the occurrence of either or both of the following: 1. a change in the duties and responsibilities of his position such that a substantial reduction occurs from the duties and responsibilities that were in effect either as of the date of this Agreement or, if later, immediately prior to the change in responsibilities; and 2. a reduction by the Company, of 15% or more, in his base salary as in effect on the date hereof, or as the same shall be increased from time to time, except a reduction consistent with salary reductions of all personnel on the exempt payroll. (j) "Termination" shall mean, when used to refer to the employment of a Management Investor, such Inves- - 38 - 43 tor's ceasing to be regularly employed by AP or a subsidiary or affiliate of AP. 4. Transfer Upon Termination Of Employment. 4.1. Put to AP in Event of Termination. Subject to the direct or indirect restrictions imposed by the Loan Agreements and to applicable law, unless a call granted pursuant to Section 4.2 shall have been exercised by AP, upon the termination of employment of any Management Investor for any reason other than death, Retirement or Complete Disability, at the option of any terminated Management Investor and/or such Management Investor's Permitted Transferees, and within three months of receipt by AP of a Seller's Notice from such Management Investor and/or such Management Investor's Permitted Transferees, AP shall purchase up to all the shares of AP Common Stock held by such Management Investor and/or such Management Investor's Permitted Transferees, at a purchase price determined in accordance with Section 4.3(a), in the event of a Termination by AP or its affiliates without Cause, or a voluntary Termination by such Management Investor with Good Reason, or a voluntary Termination by such Management Investor without Good Reason (but only on or after the third anniversary of the date of this Agreement), or in accordance with Section 4.3(b), in the event of a Termination by AP or its affiliates with Cause or - 39 - 44 a voluntary Termination by the Management Investor without Good Reason (but only if such Termination occurs prior to the third anniversary of the of this Agreement). AP shall be under no obligation to purchase such shares unless it shall have received a Seller's Notice in accordance with this Section 4.1, which Notice must be sent within 30 days from the date of termination. 4.2. Call in Event of Termination. Unless a put granted under Section 4.1 shall have been exercised with respect to all the shares of AP Common Stock held by any terminated Management Investor and/or such Management Investor's Permitted Transferees, AP shall have an exclusive and irrevocable option, for a period of 30 days following the termination of employment of any Management Investor as set forth in Section 4.1, to purchase up to all of the shares of AP Common Stock owned by such terminated Management Investor and/or such Management Investor's Permitted Transferees, at a purchase price determined in accordance with Section 4.3(a), in the event of a Termination by AP or its affiliates without Cause, or a voluntary Termination by such Management Investor with Good Reason, or a voluntary Termination by such Management Investor without Good Reason (but only or after the third anniversary of the date of this Agreement), or in accordance with Section 4.3(b), in the - 40 - 45 event of a Termination by AP or its affiliates with Cause, or a voluntary Termination by the Management Investor without Good Reason (but only if such Termination occurs prior to the third anniversary of the date of this Agreement); provided that AP may not, without the consent of such Management Investor and/or such Management Investor's Permitted Transferees, purchase less than all of the shares of AP Common Stock owned by such Management Investor and/or such Management Investor's Permitted Transferees; provided further, that, in the event a Management Investor's employment is terminated, if by AP or the Company, without Cause, or if by the Management Investor, for Good Reason, then if the purchase price for any share of AP Common Stock (assuming such share was sold to AP pursuant to this Section 4.2), determined in accordance with Section 4.3 at the end of the four calendar quarters which immediately follow the date any shares of AP Common Stock are actually sold to AP pursuant to this Section 4.2, would exceed the purchase price paid for any share actually sold to AP pursuant to this Section 4.3, the purchase price for any such share shall be increased by the amount of such excess, and such increase shall be paid to the seller of any such shares as soon as practicable following the end of such twelve-month period in the same manner as provided in Section 4.3. - 41 - 46 4.3 Purchase Price. (a) The purchase price per share for any shares of AP Common Stock shall be equal to the greater of (i) Investment Price, (ii) Adjusted Book Value and (iii) CCO Value. (b) The purchase price per share for any shares of AP Common Stock shall be, in the event of a termination with Cause, equal to the lowest of (i) Investment Price, (ii) Adjusted Book Value, and (iii) CCO Value, and, in the event of a voluntary Termination without Good Reason, Investment Price. (c) For purposes of Section 4.3(a) and 4.3(b), Adjusted Book Value and CCO Value shall be determined by AP using accounting principles then in effect and as applied by AP and shall be accompanied by a letter from AP's independent accountants stating that the calculations made by AP have been made in accordance with the applicable provisions of this Agreement. AP may satisfy its obligations to purchase shares upon the exercise of any put or call granted pursuant to Section 4.1 or 4.2 hereof with cash in an amount not less than the Investment Price and with Notes for any amount in excess of the Investment Price; provided, however, that, in the event of a Management Investor's involuntary termination of employment, if by AP or APCOA, without Cause, - 42 - 47 or if by the Management Investor, with Good Reason, AP shall satisfy its obligations to purchase shares upon the exercise of any put or call granted pursuant to Section 4.1 or Section 4.2 hereof with cash except to the extent that cash may not be paid as a result of restrictions imposed by the Loan Agreements or by applicable law. Notwithstanding any other provision of this Section 4.3, if any portion of the cash purchase price payable for any shares purchased pursuant to Section 4.1 or 4.2 may not be paid as a result of restrictions imposed by the Loan Agreements or by applicable law, such portion shall, subject to the Loan Agreements and to applicable law, be payable by the delivery of Notes in the principal amount of such portion; provided, however, that, notwithstanding any restrictions imposed by the Loan Agreements or by applicable law, AP and the other parties to this Agreement shall use their respective best efforts to enable AP to pay the full amount of the cash purchase price payable for any shares purchased pursuant to Section 4.1 or 4.2 above, including, without limitation, taking necessary measures to create sufficient surplus and/or to obtain the consent of any parties to the Loan Agreement, and, in any event, AP shall pay that portion of the cash purchase price payable for any shares purchased pursuant to Section 4.1 or 4.2 above which was not paid as a result of restrictions im- - 43 - 48 posed by the Loan Agreements or by applicable law as soon as AP may pay such amount in cash without violating the terms of any Loan Agreements or any applicable law. Notwithstanding anything in the foregoing to the contrary, in the event that a Management Investor voluntarily terminates his employment with AP or an AP affiliate without Good Reason and is paid the purchase price specified in Section 4.3(a) hereof, and a Sale of the Company or a merger involving AP or an AP affiliate occurs within three months after such termination of employment, and the Board of Directors of AP determines in good faith that such Termination was in anticipation of such Sale of the Company or merger, then the per share purchase price paid to such Management Investor for his shares of AP Common Stock, if greater than the per share consideration (as determined by the Board of Directors in good faith) paid to stockholders in such Sale of the Company or merger, shall be reduced to be equal to the per share consideration paid in such Sale of the Company or merger, and any documents or instruments (including, without limitation, any Note) which were executed in connection with the prior sale of shares of AP Common Stock by such Management Investor shall be deemed amended to give effect to the decision of the Board of Directors in such regard. - 44 - 49 4.4. Sale of the Company. (a) Each of the parties to this Agreement acknowledges that, at the time of a sale by a Management Investor and/or his Permitted Transferees of shares of AP Common Stock pursuant to Section 3 or 4 of this Agreement, there may be proposed or pending a transaction or series of transactions involving the sale of 50% or more of the outstanding shares of AP Common Stock (either to an entity, person or group of persons acting in concert or pursuant to a public offering registered under the Securities Act) or the redemption or repurchase of all the shares of AP Common Stock in connection with a sale of all or substantially all the assets of AP, or the winding up, dissolution or liquidation of AP (any such transaction or series of transactions being hereinafter referred to as a "Sale of the Company"), and that AP may have valid business reasons not to, and in any event may not be required to, disclose any such proposed or pending Sale of the Company to such Management Investor and/or his Permitted Transferees at the time of any such sale. (b) If, within 270 days from the date of a sale of shares of AP Common Stock to AP by a Management Investor and/or his Permitted Transferees pursuant to Section 3 or 4, other than such a sale from a Management Investor whose employment was terminated for Cause or who voluntarily re- - 45 - 50 signed without Good Reason, a transaction involving a Sale of the Company is effected then AP and/or the purchaser of such shares of AP Common Stock shall pay to such Management Investor and/or his Permitted Transferees the excess, if any, of the amount per share realized by AP's stockholders (other than DNC) upon such Sale of the Company over the purchase price per share paid by AP to such Management Investor and/or his Permitted Transferees pursuant to Section 3 or 4, less the interest paid on any Notes paid as consideration for such shares for the period from the date of purchase pursuant to Section 3 or 4 to the date of such Sale of the Company, for each share purchased by AP pursuant to Section 3 or 4 from such Management Investor and/or such Permitted Transferees. 4.5. Continuation of Employment. Neither this Agreement nor the ownership of AP Common Stock by a Management Investor shall confer upon any Management Investor any right to continue in the employ of APCOA or limit in any respect the right of APCOA to terminate his employment at any time. 5. Residual Rights of Management Investors to Purchase Shares. 5.1. (a) With respect to - 46 - 51 (i) any issuance by AP of AP Common Stock (the "Shares to be Issued"), other than pursuant to management stock options or pursuant to exercise of the DNC Warrant; or (ii) any issuance by AP of any security (the Securities") convertible into AP Common Stock but only if any part of the new issue is to be purchased by Holberg or any affiliate of Holberg; to any individual, corporation, partnership, association, trust or other entity or organization, including any government or political subdivision or an agency or instrumentality thereof (a "Person"), AP shall notify each Management Investor in writing of the proposed issuance, the number of Shares to be Issued or amount of Securities to be issued, the date on or about which such issuance is to be consummated and the price and other terms and conditions thereof, at least 45 days prior to the proposed date for such issuance. For a period of 30 days after a Management Investor's receipt of the notice referred to in the preceding sentence, such Management Investor shall have the option to purchase, upon the same price, terms and conditions as such Shares to be Issued or Securities are proposed to be issued to any Person, that number of such Shares to be Issued or amount of Securities as may be necessary to increase the number of shares of AP Common Stock owned by such Management Investor on a fully-diluted basis (assuming that all management op- - 47 - 52 tions were fully vested and exercised, that DNC's warrants to purchase AP Common Stock were exercised and, in the case of Securities, assuming conversion of such Securities into AP Common Stock) to provide that the percentage of all of the fully-diluted shares of AP Common Stock owned by such Management Investor immediately after the date of issuance to such Person is not less than the percentage of all of the fully-diluted shares of AP Common Stock owned by such Management Investor immediately prior to the date of issuance to such Person. If a Management Investor exercises his purchase option under this Section 5, he shall purchase such Shares to be Issued or Securities at the time of consummation of the issuance of Shares to be Issued or Securities to such Person. (b) In the event that, pursuant to Section 2 or 3 or 4 hereof, AP and/or Holberg shall purchase any shares of AP Common Stock from any Management Investor or such Management Investor's Permitted Transferees ("Reacquired Shares"), AP shall make such shares available for purchase within the twelve-month period following the date AP and/or Holberg shall have purchased such shares and on the terms set forth below to new or promoted AP or APCOA management employees (other than the Chief Executive Officer of APCOA) who are selected by the Chief Executive Officers of APCOA - 48 - 53 after consultation with the Board of Directors of AP. In addition, Holberg shall make available for purchase by an APCOA management employee 66 shares (the "Extra Shares") of AP Common Stock purchased by it pursuant to the Subscription Agreement within the twelve-month period following the initial subscription of shares thereunder. Holberg shall transfer to AP as a capital contribution such number of shares of AP Common Stock as shall be necessary to give effect to the provisions of this Section 5.1(b). Such Reacquired Shares may be purchased by any such AP or APCOA management employee at the same price and upon the same terms (including any later adjustment to the price required by Section 4.2 or 4.4 hereof) as the prior purchase by AP and/or Holberg pursuant to Section 2 or 3 or 4 hereof. Such Extra Shares may be purchased by any such AP or APCOA management employee at the same per share price paid by Holberg for such shares pursuant to the Subscription Agreement. (c) To the extent that any Reacquired Shares or Extra Shares are not sold, within the periods and to the persons required by Section 5.1(b) above, the remaining Management Investors shall have the option to purchase any such shares from AP for a period of 30 days following the expiration of such twelve--month period. The option to purchase such shares granted to the remaining Management Investors - 49 - 54 pursuant to this Section 5.1(c) shall be exercisable (i) as to Reacquired Shares, at the same price and upon the same terms as the prior purchase (including any later adjustment to the price required by Section 4.2 or 4.4 hereof) by AP and/or Holberg pursuant to Section 2 or 3 or 4 hereof and (ii) as to Extra Shares, at the same per share price paid by Holberg for such shares pursuant to the Subscription Agreement, and shall be allocated among the remaining Management Investors in such manner as they may determine. In the event that the remaining Management Investors cannot agree on such allocation, the option to purchase such shares granted by this Section 5.1(c) shall be allocated among the remaining Management Investors pro rata in accordance with their respective ownership interests (including the interests of their Permitted Transferees) in AP at the expiration of such twelve-month period. Holberg shall transfer to AP as a capital contribution such number of shares of AP Common Stock as shall be necessary to give effect to the provisions of this Section 5.1(b). The option may be exercised by the delivery of written notice to AP at any time within the 30-day period described above. - 50 - 55 6. Involuntary Transfer Of Shares. 6.1. Certain Involuntary Transfers; Seller's Notice. If a Stockholder shall involuntarily transfer directly or indirectly any or all of his shares, for any reason other than as a result of those events specified in Section 3 or 4, such Stockholder shall give written notice within 30 days of such involuntary transfer to AP and the other Stockholders, with a copy to the Transferee, stating the fact that the involuntary transfer occurred, the reason therefor, the date of the transfer, the name and address of the Transferee and the number of Shares acquired by the Transferee. 6.2. Right to Repurchase. For a period of 60 days from the date of receipt of the Seller's Notice or, failing receipt of such notice, 60 days from the date AP sends written notice to the Transferee that the transfer is deemed to be an involuntary transfer subject to repurchase under this Agreement, AP and Holberg shall have the irrevocable and exclusive option to buy all of the Offered Shares, exercisable in the same order of priority, proportion and manner as provided in Sections 2.3(a), (b) and (c), and the provisions of Sections 2.3(a), (b) and (c) shall be followed - 51 - 56 in their entirety except that the terms of purchase shall be as provided in Section 6.3. 6.3. Terms of Purchase. The terms of purchase for shares purchased pursuant to Section 6.2 shall be determined pursuant to Section 4.3 as though such shares were being purchased pursuant to Section 4.1 or 4.2. 7. Reservation Of Shares Purchased By AP. Subject to Section 5 hereof, any shares of AP Common Stock purchased by AP from a Management Investor or such Management Investor's personal representative, estate or heirs or Permitted Transferees pursuant to this Agreement shall be retired and cancelled. 8. Closing. 8.1. Closing. Any Selling Stockholder and the parties hereto who are purchasing any of the Offered Shares pursuant to this Agreement shall mutually determine a closing date (the "Closing Date") which shall not be more than five business days, subject to any applicable regulatory waiting periods, after the date upon which a purchaser shall have the right to purchase shares in accordance with this Agreement. The closing shall be held at 11:00 a.m., local - 52 - 57 time, at the offices of AP, or at such other time or place as the parties may agree. 8.2. Deliveries at Closing; Method of Payment of Purchase Price. On the Closing Date, any Selling Stockholder shall deliver certificates with appropriate transfer tax stamps affixed and with stock powers endorsed in blank, representing the shares of AP Common Stock to be purchased by the persons exercising their options hereunder each of whom shall deliver to such Stockholder, by means of certified check payable in New York Clearing House funds, his portion of the purchase price which is payable in cash and his portion of the other consideration, if any, to be paid in exchange for such shares. In addition, if the person selling shares is the personal representative of a deceased Stockholder, the personal representative shall also deliver to the purchaser or purchasers (i) copies of letters testamentary or letters of administration evidencing his appointment and qualification, (ii) a certificate issued by the Internal Revenue Service pursuant to Section 6325 of the Internal Revenue Code of 1986, as amended (the "Code"), discharging the shares being sold from liens imposed by the Code and (iii) an estate tax waiver issued by the state of the decedent's domicile. - 53 - 58 9. Miscellaneous. 9.1. Endorsement of Stock Certificates. A copy of this Agreement shall be filed with the Secretary of AP and kept with the records of AP. Each of the Stockholders hereby agrees that each outstanding certificate representing shares of AP Common Stock (other than those shares which, following the termination of this Agreement pursuant to Section 9.2 below, have not been registered under the Securities Act, which shares shall bear only the endorsement set forth in paragraph (a) below) shall bear endorsements reading substantially as followings: (a) "The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be transferred, sold or otherwise disposed of except pursuant to an effective registration statement or pursuant to an exemption from registration, under the Act." (b) "The shares represented by this certificate are subject to certain rights of the Corporation and the Stockholders of the Corporation to repurchase such shares and certain rights of the registered holder to sell such shares to the Corporation on the terms and conditions set forth in a Stockholders' Agreement dated as of April 14, 1989, a copy of which may be obtained from the Corporation or from the holder of this certificate. No transfer of such shares will be made on the books of the Corporation unless accompanied by evidence of compliance with the terms of such Agreement." - 54 - 59 Such certificate shall bear any additional endorsement which may be required for compliance with state securities or blue sky laws or as may be required under the Subscription Agreement. If, for any reason, any shares of AP Common Stock are no longer subject to the restrictions and provisions of this Agreement, AP shall promptly issue a new certificate for such shares without the restrictive endorsement set forth in paragraph (b) above upon the request of the record owner of the shares and the surrender to AP of a certificate bearing such endorsement. 9.2. Term. The provisions of this Agreement, other than Article 1, shall terminate on the date of the first to occur of any of the following events: (i) the closing of the sale of 25% or more of the shares of AP Common Stock to the public in an underwritten initial public offering pursuant to a Registration Statement under the Securities Act of 1933; or (ii) the closing of the sale of shares of AP Common Stock to any person or group of persons as a result of which any person or group of persons (other than Holberg) owns, beneficially or of record, 50% or more of the outstanding shares of AP Common Stock; or (ii) 10 years from the date of this Agreement. - 55 - 60 9.3. Injunctive Relief. It is hereby agreed and acknowledged that it will be impossible to measure in money the damages that would be suffered if the parties fail to comply with any of the obligations herein imposed on them and that in the event of any such failure, an aggrieved person will be irreparably damaged and will not have an adequate remedy at law. Any such person shall, therefore, be entitled to injunctive relief, including specific performance, to enforce such obligations, and if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law. 9.4. Notices. All notices, statements, instructions or other documents required to be given hereunder, shall be in writing and shall be given either personally, or by mailing the same in a sealed envelope, first-class mail, postage prepaid and either certified or registered, return receipt requested, addressed to AP at its principal offices and to the other parties at their addresses reflected in the stock records of AP, except that such notices to DNC shall be given to Delaware North Companies, Incorporated, 700 Delaware Avenue, Buffalo, New York 14209, attention: Law Department. Each Stockholder, by written notice given to AP in accordance with this Section 9.4 may change the address - 56 - 61 to which notices, statements, instructions or other documents are to be sent to such Stockholder. All notices, statements, instructions and other documents hereunder that are mailed shall be deemed to have been given on the date of mailing. Whenever pursuant to this Agreement any notice is required to be given by any Stockholder to any other Stockholder, such Stockholder may request from AP a list of addresses of all Stockholders of AP, which list shall be promptly furnished to such Stockholder. 9.5. Administration. In the event of any First Offer, Reoffer, or Control Offer, or the occurrence of any event with entitles any Stockholder to exercise any put or call granted herein, AP shall administer and coordinate the exercise of such put or call, including the determination, where applicable, of each participating Stockholder's proportionate share. 9.6. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties, and their respective successors and assigns. If any Transferee of any Stockholder shall acquire any shares of AP Common Stock in any manner, whether by operation of law or otherwise, such shares shall be held subject to all of the terms of this Agreement, and by taking and holding - 57 - 62 such shares such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement. 9.7. Governing Law. Regardless of the place of execution, this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be wholly performed in such State. 9.8. Headings. Paragraph headings inserted herein for convenience only and do not form a part of this Agreement. 9.9. Entire Agreement; Amendment. This Agreement contains the entire agreement among the parties hereto with respect to the transactions contemplated herein, supersedes all prior written agreements and negotiations and oral understandings, if any, and may not be amended, supplemented or discharged except by performance or by an instrument in writing signed by AP, DNC, Holberg and the Chief Executive Officer of APCOA, as authorized representative of the Management Investors, or such other authorized representative as the Management Investor shall designate in writing, and by any Stockholder or Transferee holding at least 5% of the outstanding shares of AP Common Stock. In the event of the - 58 - 63 amendment or modification of this Agreement in accordance with its terms, the Stockholders shall cause the Board of Directors of AP to meet within 30 days following such amendment, modification or termination or as soon thereafter as is practicable for the purpose of amending the Certificate of Incorporation and By-Laws of AP, as may be required as a result of such amendment or modification, and proposing such amendments to the stockholders of AP entitled to vote thereon, and such action shall be the first action to be taken at such meeting. In the event that any Stockholder or AP shall be required, as a result of the enactment, amendment or modification, subsequent to the date hereof, of any applicable law or regulation, or by the order of any governmental authority, to take any action which is inconsistent with or which would constitute a violation or breach of any terms of this Agreement, then the Stockholders and AP shall use their best efforts to negotiate an appropriate amendment or modification of, or waiver of compliance with, such terms. 9.10. Inspection. So long as this Agreement shall be in effect, this Agreement shall be made available for inspection by any stockholder of AP at the principal offices of AP. - 59 - 64 9.11. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 9.12. Gender; Number. The use of the feminine, masculine or neuter pronoun herein shall not be restrictive as to gender and shall be interpreted in all cases as the context may require. The use of the singular or plural herein shall not be restrictive as to number and shall be interpreted in all cases as the context may require. 9.13. Further Assurances. The parties to this Agreement shall execute and deliver to the appropriate persons any other documents and instruments in addition to those provided for herein that may be necessary or appropriate to give effect to the provisions of this Agreement. - 60 - 65 IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly executed on the date first written above. AP HOLDINGS, INC. By /s/ John V. Holten --------------------------- John V. Holten HOLBERG INDUSTRIES, INC. By /s/ John V. Holten --------------------------- John V. Holten By /s/ G. Walter Stuelpe, Jr. --------------------------- G. Walter Stuelpe, Jr. By /s/ James v. LaRocco --------------------------- James V. LaRocco By /s/ Michael J. Machi --------------------------- Michael J. Machi By /s/ John F. Becka --------------------------- John F. Becka By /s/ Ronald A. Kinney --------------------------- Ronald A. Kinney By /s/ Robert J. Hill --------------------------- Robert J. Hill By /s/ Kenneth J. Levine --------------------------- Kenneth J. Levine By /s/ Robert N. Sacks --------------------------- Robert N. Sacks By /s/ William J. Girgash --------------------------- William J. Girgash - 61 - 66 By /s/ Michael J. Celebrezze --------------------------- Michael J. Celebrezze DELAWARE NORTH COMPANIES, INC. By /s/ --------------------------- - 62 - EX-10.4 36 STOCKHOLDERS AGREEMENT 1 STOCKHOLDERS' AGREEMENT AGREEMENT dated as of April 14, 1989 by and among AP Holdings, Inc., a Delaware corporation ("AP"), Holberg Industries, Inc., a Delaware corporation ("Holberg"), Delaware North Companies, Inc., a Delaware corporation ("DNC") and each of the individuals listed on Schedule A hereto (each such individual is hereinafter referred to as a "Management Investor" and all such individuals are sometimes hereinafter collectively referred to as the "Management Investors"). Each of the parties hereto (other than AP) and any other person who shall hereafter become a party to or agree to be bound by the terms of this Agreement is sometimes hereinafter referred to as a "Stockholder" and all of such parties are sometimes hereinafter referred to as the "Stockholders." Any Management Investor and his or her transferees hereunder are sometimes referred to as "Management Stockholder(s)." This Agreement shall become effective (the "Effective Date") on the date of, and simultaneously with, the Closing of the transactions under the Subscription Agreement (as hereinafter defined). As of the Effective Date, AP will have an authorized capital stock consisting of 20,000 shares of Common 2 Stock, $.01 par value ("AP Common Stock") and 10,000 shares of Preferred Stock, $.0l par value ("AP Preferred Stock"). AP and each of the Stockholders who are parties to this Agreement have entered into a Subscription Agreement, dated as of the date hereof (the "Subscription Agreement"), pursuant to which such Stockholders have subscribed for shares of AP Common Stock. As of the closing of the transactions contemplated in the Subscription Agreement, the holdings of Holberg, DNC and the Management Investors as a group will be substantially as follows:
Number Stockholder of Shares Percentage - ----------- --------- ---------- Holberg 7,326 83.25 DNC 880 10.0 Management Investors 594 6.75 ------ ------ 8,800 100.0% ====== ======
AP, APA Acquisition, Inc., a Delaware corporation ("Acquisition") and wholly owned subsidiary of AP, DNC and APCOA, Inc., a Delaware corporation ("APCOA") and wholly owned subsidiary of DNC, have entered into a Stock Purchase Agreement dated as of January 27, 1989 (the "Purchase Agreement") providing for the acquisition (the "Purchase") of the common stock of APCOA from DNC by Acquisition and AP. APCOA will be owned 97% by Acquisition and 3% by AP after the Purchase. - 2 - 3 The parties hereto deem it in their best interests and in the best interests of AP and APCOA to provide consistent and uniform management for AP and APCOA and desire to enter into this Agreement in order to effectuate that purpose. The parties hereto also desire to restrict the sale, assignment, transfer, encumbrance or other disposition of the AP Common Stock, including issued and outstanding shares of AP Common Stock as well as shares of AP Common Stock which may be issued hereafter, or which may become issuable pursuant to the exercise of options granted hereafter, and to provide for certain rights and obligations in respect thereto as hereinafter provided. Accordingly, in consideration of the premises and of the terms and conditions herein contained, the parties hereto mutually agree as follows: 1. Corporate Governance. 1.1. Board of Directors. (a) Number of Directors. AP shall be governed by a Board of Directors initially consisting of four members. Such number may be increased or decreased by Holberg - 3 - 4 as provided herein and in AP's Certificate of Incorporation and By-laws. (b) Nomination of Directors. The following procedures shall govern the nomination of directors of AP: (i) The Management Investors shall be entitled to nominate one director (the "Management Director"). (ii) DNC shall be entitled to nominate one director (the "DNC Director") so long as it and any of its Permitted Transferees (as hereinafter defined) continue to hold in the aggregate at least 50% of the shares of AP Common Stock as it owns on the date hereof. (iii) Holberg shall be entitled to nominate three directors (the "Holberg Directors") as well as any additional directors to fill directorships created by an increase in the size of the Board of Directors. (c) Initial Board of Directors. The initial Board of Directors of AP shall consist of the following members. - 4 - 5
Name of Director Type of Nominee ---------------- --------------- G. Walter Stuelpe Management John V. Holten Holberg Gunnar E. Klintberg Holberg Clifford Kaeser DNC
each of whom shall hold his office until his successor shall have been elected and qualified. (d) Removal of Directors. Except as otherwise provided in this Section 1.1(d) or in Section 1.1(e), each Stockholder agrees not to take any action to remove, with or without cause, any director of AP. Notwithstanding the foregoing, (i) if any director would no longer be entitled to be nominated as a director pursuant to Section 1.1(b), such director shall immediately resign or be subject to removal by a vote of the Stockholders, and (ii) Holberg, DNC and the Management Investors shall at all times have the right to recommend the removal, with or without cause, of the Holberg Directors, the DNC Director and the Management Director, respectively. - 5 - 6 If a director shall fail to resign as required by clause (i) above or if any of Holberg, DNC or the Management Investors shall determine to recommend the removal of any directors as provided by clause (ii) above, then the Stockholders shall immediately cause a special meeting of stockholders to be called, or shall act by written consent without a meeting, for the purpose of removing such director, and each Stockholder agrees to vote all his shares entitled to vote at such meeting, or to execute a written consent in respect of all shares, as the case may be, in favor of such removal. (e) Vacancies. At any time a vacancy is created on the Board of Directors by the death, removal or resignation of any one of the directors, no action shall be taken (except as provided in this Section 1.1(e)) by the Board of Directors until such time as the Board is reconstituted with the appropriate number of directors. If a vacancy is created on the Board of Directors by reason of the death, removal (in accordance with Section 1.1(d) above) or resignation of any one of the directors, the remaining directors shall meet within 30 days after the date such vacancy occurs for the purpose of electing a director to fill such vacancy in accordance with the nomination procedures set forth in Section 1.1(b) above. If the remaining directors fail to - 6 - 7 nominate a director to fill any such vacancy within such 30-day period or if the remaining directors fill such vacancy otherwise than in accordance with the nomination procedures set forth in Section 1.1(b) above, the Stockholders shall immediately cause a special meeting of stockholders to be called, or shall act by written consent without a meeting, for the purpose of filling such vacancy and each Stockholder agrees to vote all his shares entitled to vote at such meeting, or to execute a written consent in respect of all such shares, as the case may be, in favor of removing, if necessary, any director elected to fill such vacancy otherwise than in accordance with Section 1.1(b) above and filling such vacancy in accordance with the nomination procedures in Section 1.1(b) above. If the party entitled to nominate a director to fill any such vacancy shall fail to nominate a director, such vacancy shall be filled by the vote of a majority of the shares of AP Common Stock then outstanding. (f) Covenant to Vote. Each of the Stockholders agrees to vote, in person or by proxy, all of the shares of AP Common Stock owned by such Stockholder, at any annual or special meeting of stockholders of AP called for the purpose of voting on the election of directors or by consensual action of stockholders without a meeting with respect to the election of directors, in favor of the election of the di- - 7 - 8 rectors nominated in accordance with Section 1.1(b) above. Each Stockholder shall vote the shares of AP Common Stock owned by such Stockholder and shall take all other actions necessary to ensure that AP's Certificate of Incorporation and By-laws do not at any time conflict with the provisions of this Agreement. (g) Management Investors Governance Procedures. Except as otherwise provided hereby, any actions to be taken or recommendations to be made hereunder by the Management Investors as a group shall be determined by the majority vote of the shares of AP Common Stock owned by the Management Investors as of the time of such action or recommendation, with each share having one vote. For this purpose, each Management Investor will be deemed to own shares of AP Common Stock owned by his Permitted Transferees and shall be deemed not to own any shares of AP Common Stock which he may acquire upon exercise of any option. 1.2. Action by Stockholders. The Stockholders, by their execution of this Agreement, hereby approve and adopt the AP Holdings, Inc. Management Stock Option Plan (effective April 15, 1989), a copy of which is attached hereto as Exhibit A. - 8 - 9 2. Transfers of Common Stock. 2.1. Legends; Shares of Common Stock Subject to this Agreement. Unless otherwise expressly provided herein, no Stockholder shall sell, assign, pledge, encumber or otherwise transfer any shares of AP Common Stock to any person (regardless of the manner in which such Stockholder initially acquired such shares of AP Common Stock) nor shall AP issue, sell or otherwise transfer any shares of AP Common Stock to any person (all persons acquiring shares from a Stockholder or from AP, regardless of the method of transfer, shall be referred to collectively as "Transferees" and individually as a "Transferee") unless (i) such shares bear legends as provided in Section 9.1 and (ii) such Transferee shall have executed and delivered to AP, as a condition precedent to any acquisition of shares of AP Common Stock, an instrument in form and substance satisfactory to AP confirming that such Transferee takes such shares subject to all the terms and conditions of this Agreement; provided that the provisions of this Section 2.1 shall not apply in respect of a sale of shares included in a registered public offering under the Securities Act of 1933, as amended (the "Securities Act"), and the rules and regulations promulgated thereunder. AP shall not transfer upon its books any shares - 9 - 10 of AP Common Stock to any person except in accordance with this Agreement. 2.2. Certain Restrictions. (a) Notwithstanding anything to the contrary set forth herein: (i) no Stockholder or Stockholder's Transferee shall directly or indirectly sell, assign, pledge, encumber or otherwise transfer any shares of AP Common Stock, unless any such sale, assignment, pledge, encumbrance or other transfer shall have been effected in accordance with the terms of this Agreement; and (ii) no Management Investor or Management Investor's Transferee shall, except as provided in Sections 2.2(d) and (e), 2.4, 2.6, 2.7, 3, 4 and 5, directly or indirectly sell, assign, pledge, encumber or otherwise transfer any shares of AP Common Stock for a period of five years following the date of consummation of the Purchase. (b) No Stockholder shall sell, assign, pledge, encumber or otherwise transfer any shares of AP Common Stock at any time if such action would constitute a violation of any state securities or blue sky laws or a breach of the conditions to any exemption from registration of the AP Common Stock under any such laws or a breach of any undertaking or agreement of such Stockholder entered into pursuant to such laws or in connection with obtaining an exemption - 10 - 11 thereunder. Each Stockholder agrees that any shares of AP Common Stock to be purchased by such Stockholder shall bear appropriate legends restricting the sale or other transfer of such stock in accordance with applicable state securities or blue sky laws. (c) No Stockholder shall grant any proxy or enter into or agree to be bound by any voting trust with respect to the AP Common Stock nor shall any Stockholder enter into any stockholder agreements or arrangements of any kind with any person with respect to the AP Common Stock inconsistent with the provisions of this Agreement (whether or not such agreements and arrangements are with other Stockholders or holders of AP Common Stock who are not parties to this Agreement), including but not limited to, agreements or arrangements with respect to the acquisition, disposition or voting of shares of AP Common Stock, nor shall any Stockholder act, for any reason, as a member of a group or in concert with any other persons in connection with the acquisition, disposition or voting of shares of AP Common Stock in any manner which is inconsistent with the provisions of this Agreement. Actions taken by the Board of Directors or any Stockholder in connection with the possible acquisition of AP as contemplated by this Agreement shall not be deemed prohibited hereunder. - 11 - 12 (d) None of the restrictions contained in this Agreement with respect to transfers of shares of AP Common Stock (other than those set forth in Sections 2.1, 2.2(a)(i), 2.2(b) and 2.4) shall apply: (i) to any transfer or assignment for nominal consideration or to any gift by (x) any Management Investor to any spouse, child, parent or grandchild of such Management Investor or (y) by any of such relatives to such Management Investor or to any one or more of such relatives, or by any Management Investor or any such relatives to a trust of which there are no principal beneficiaries other than one or more of such relatives; (ii) to any transfer to a legal representative in the event any Stockholder becomes mentally incompetent; (iii) to any transfer by will or the laws of descent; and (iv) with respect to a corporate or partnership Stockholder, to any affiliate (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) thereof (it being understood with respect to any affiliate that the later sale or other disposition of such affiliate would constitute an indirect transfer of AP Common Stock by such affiliate's controlling person, which transfer may only be made pursuant to the terms of this Agreement); provided that in each of cases (i) through (iv) each Transferee, donee or distributee (a "Permitted Transferee") - 12 - 13 agrees to take subject to and to comply with the provisions of Section 2.1 and, in the case of a transfer of AP Common Stock by a corporate or partnership Stockholder to an affiliate, or by one affiliate to another affiliate of the same controlling person, such affiliate shall agree to have its shares of common stock or instrument reflecting its partnership interest legended to note the restrictions on transfer contained in this Agreement as if they were shares of AP Common Stock. (e) A Stockholder shall be entitled to pledge such Stockholder's shares of AP Common Stock to a commercial bank, savings and loan institution or any other lending institution as security for any indebtedness of such Stockholder or AP to such lender; provided that, prior to any such pledge, the pledgee shall deliver to the Company its written agreement, in form and substance satisfactory to the Company, that such pledgee shall assume and be bound by all the terms of this Agreement. (f) No Management Stockholder shall sell, assign, pledge, encumber or otherwise transfer any shares of AP Common Stock at any time to any person or entity directly or indirectly engaged in (or affiliated with any entity directly or indirectly engaged in) the business of owning or - 13 - 14 operating parking lots or garages, unless such sale would result in a change of control subject to Section 2.4, in which event such a sale may be effected only in accordance with Section 2.4; provided that any such transfer to any institutional investor holding securities of such an entity as a passive investment therein and any such transfers pursuant to a registered public offering under the Securities Act shall not be prohibited by this Section 2.2(f). (g) The provisions of Section 2.3 of this Agreement shall not apply to transfers of shares by any Transferee unaffiliated with any Stockholder, which shares were acquired pursuant to the terms of this Agreement from a Stockholder or from a subsequent Transferee of such Stockholder; provided that any such Transferee agrees to take such shares, and any transfer of such shares by such Transferee shall be, subject to all the other provisions of this Agreement. 2.3. Transfer to Other Stockholders or to Transferees; Right of First Offer. (a) Subject to Section 2.2(a) hereof, except as provided in Sections 2.2(d), (e) and (g), any Management Stockholder (the "Selling Stockholder") who desires to sell or otherwise transfer any shares of AP Common Stock shall first give written notice (a - 14 - 15 "Seller's Notice") to AP, Holberg and the remaining Management Investors stating the Selling Stockholder's desire to make such transfer, the number of shares of AP Common Stock to be transferred (the "Offered Shares") and the price and terms pursuant to which the Selling Stockholder proposes to sell the Offered Shares (the "First Offer Terms"). (b) Upon receipt of the Seller's Notice (the "First Offer"), AP shall have the irrevocable and exclusive option to buy up to all of the Offered Shares upon the First Offer Terms; provided that AP shall not have the right to purchase any of the Offered Shares unless either: (i) AP purchases all such Offered Shares; or (ii) if AP elects to purchase less than all the Offered Shares, Holberg elects to purchase all the remaining Offered Shares pursuant to Section 2.3(c); or (iii) the Selling Stockholder consents to the purchase of less than all of the Offered Shares. AP's option under this Section 2.3(b) shall be exercisable by a written notice to the Selling Stockholder, with copies to Holberg and the remaining Management Investors, given within 15 days from the date of the Seller's Notice. (c) If AP does not exercise its option to purchase Offered Shares or if AP elects to purchase less than all the Offered Shares, then Holberg shall have the irrevo- - 15 - 16 cable and exclusive option, subject to Section 2.4, to purchase all but not less than all the Offered Shares not purchased by AP. The option of Holberg under this Section 2.3(c) shall be exercisable by written notice to the Selling Stockholder, with copies to AP and the remaining Management Investors, given within 30 days from the date of the Seller's Notice. (d) If AP and Holberg shall not exercise their options to purchase the Offered Shares upon the First Offer Terms or do not purchase all shares offered by the Selling Stockholder, then the remaining Management Investors shall have the irrevocable and exclusive option to buy all but not less than all of the Offered Shares upon the First Offer Terms. The option of the remaining Management Investors under this Section 2.3(d) shall be exercisable by a written notice to the Selling Stockholder given within 45 days from the date of the Seller's Notice. The remaining Management Investors shall be free to reallocate among themselves the right to purchase the Offered Shares described in this Section 2.3(d). In the event that the remaining Management Investors cannot agree on such allocation, the Offered Shares shall be purchased, if at all, by the remaining Management Investors, pro rata in proportion to their respective owner- - 16 - 17 ship interests (including the interests of their Permitted Transferees) in AP at the time of the Seller's Notice. (e) If the Seller's Notice shall be duly given, and if AP, Holberg and the remaining Management Investors shall not exercise their options to purchase the Offered Shares upon the First Offer Terms or do not purchase all shares offered by the Selling Stockholder, then the Selling Stockholder shall be free, for a period of 90 days from the earlier of (i) the 30th day following the date of the Seller's Notice or (ii) the date the Selling Stockholder shall have received written notice from AP, Holberg and the remaining Management Investors stating their intention not to exercise the options granted under Section 2.3(b), (c) and (d), to sell the Offered Shares to any third party Transferee upon terms equal or superior to the First Offer Terms; provided that the Transferee complies with the provisions of Section 2.1 of this Agreement. (f) If a Transferee's proposed terms of purchase for the Offered Shares are not equal or superior to the First Offer Terms, the Selling Stockholder shall not sell or otherwise transfer any of the Offered Shares unless the Selling Stockholder shall first reoffer the Offered Shares at such lesser price and/or upon such inferior terms to AP, - 17 - 18 Holberg and the remaining Management Investors by giving written notice (the "Reoffer Notice") thereto, stating the Selling Stockholder's intention to make such transfer upon such terms (the "Reoffer Terms"). AP, Holberg and the remaining Management Investors shall then have the irrevocable and exclusive option to purchase up to all of the Offered Shares upon the Reoffer Terms, exercisable in the same order of priority, proportions and manner as provided in Sections 2.3(b), (c) and (d). If AP, Holberg or the remaining Management Investors do not then purchase all the Offered Shares, such Offered Shares may be sold by the Selling Stockholder within 30 days following the earlier of (i) the 30th day from the date of the Reoffer Notice or (ii) the date on which the Selling Stockholder shall have received written notice from AP, Holberg and the remaining Management Investors stating their intention not to exercise the option granted in this Section 2.3(f), upon terms equal or superior to the Reoffer Terms; provided that the Transferee complies with the provisions of Section 2.1 of this Agreement. (g) If AP, Holberg or the remaining Management Investors do not exercise their option to purchase the Offered Shares upon the First Offer Terms or upon the Reoffer Terms, and the Selling Stockholder shall not have sold the Offered Shares to any Transferee for any reason before the - 18 - 19 expiration of the 30-day period described in Section 2.3(f)in the event of a Reoffer or, if no Reoffer Notice is given, the 90-day period described in Section 2.3(e), then the Selling Stockholder shall not sell any shares of AP Common Stock for a period of three months from the last day of such 30- or 90-day period, as the case may be and any such sale shall once again be subject to the provisions of this Section 2.3. 2.4. Sales of Control. (a) If any person or group of persons, as defined in Section 13(d)(3) of the Exchange Act, including for the purposes of this Section 2.4 as part of such person's group, Transferees pursuant to Sections 2.2(d) and (e), would become the beneficial owner, directly or indirectly, of 50% or more of the outstanding shares of AP Common Stock (such person or group of persons, but not to include Holberg or its affiliates or associates, being referred to herein as a "Control Person") as the result of a sale or other transfer of AP Common Stock by any Stockholder or Stockholders or by AP (based on one or more pending transfers or offers to purchase or to sell shares, whether or not the transfers will close or the offers will expire concurrently), including a sale or transfer of shares of AP Common Stock to AP which would result in any person or group of persons becoming a Control Person after such sale - 19 - 20 or transfer, no shares of AP Common Stock shall be sold or otherwise transferred, notwithstanding compliance by the Selling Stockholder or Stockholders with the other provisions of this Agreement and notwithstanding the fact that a particular sale or transfer may not be the sale or transfer that would make a person or group of persons a Control Person, unless the Control Person shall offer, in writing to each Stockholder (other than DNC and its transferees), to purchase all shares of AP Common Stock from all Stockholders who desire to sell, upon the same terms as such Control Person has offered to purchase shares to be sold by the Selling Stockholder or Stockholders or upon the same terms as such proposed sale or transfer of shares to AP (the "Offering Terms"); provided that two or more Stockholders owning in the aggregate 50% or more of the outstanding shares of AP Common Stock shall not be deemed to be a group of persons for the purposes of this Section 2.4 solely because such Stockholders are parties to this Agreement. (b) The Selling Stockholder or Stockholders or AP, as the case may be, shall promptly notify the Control Person that the proposed sale or transfer will be subject to the provisions of this Section 2.4. Within 30 days thereafter, the Control Person shall give written notice to each Stockholder (other than DNC and its transferees) of its of- - 20 - 21 fer to purchase all the shares of AP Common Stock each Stockholder desires to sell, such offer being referred to herein as the "Control Offer." Each Stockholder (other than DNC or its transferees) shall have 30 days from the receipt of such Control Offer in which to accept such Control Offer. No Stockholder shall sell his shares to a Control Person or to AP and AP shall not sell any shares to a Control Person or purchase any shares from any person or group of persons if such sale or purchase would result in any person or group of persons becoming a Control Person (based on one or more pending transfers or offers to purchase or to sell shares, whether or not the transfers will close or the offers expire concurrently), except in response to an offer made in compliance with this Section 2.4. (c) If, during the 30-day period specified in the second sentence of paragraph 2.4(b) above, AP or any Stockholder shall receive any offer from any person or group of persons other than the Control Person, or from the Control Person, to purchase all of the shares of AP Common Stock held by Stockholders desiring to sell shares on terms superior to the Offering Terms offered to all Stockholders by the Control Person pursuant to its initial (or any subsequent) Control Offer or by any offeror other than the Control Person which makes an offer subsequent to that of the - 21 - 22 Control Person, such offer shall be transmitted to all Stockholders (other than DNC and its transferees) and, to be valid hereunder, must state that it is open until the 30th day from the date of the Control Offer (or if there are less than five business days remaining in such period, for five business days). Unless all the Stockholders (other than DNC and its transferees) desiring to sell their shares otherwise agree, no shares may be sold or otherwise transferred to any offeror (or purchased by AP if such purchase would result in any person or group of persons becoming a Control Person) upon terms not equal or superior to the best terms offered by an offeror (including the Control Person); and no shares may be sold or otherwise transferred to any such offeror (or purchased by AP if such purchase would result in any person or group of persons becoming a Control Person) unless all shares desired to be sold are accepted in writing for purchase. (d) If any offer hereunder is made less than five business days prior to the end of the 30th day after the date of the Control Offer, such period shall be deemed extended until the expiration of five business days from the date such offer is made. If, after the expiration of all offers made under this Section 2.4 in response to a Control Offer, no sale or transfer has occurred as a result of which - 22 - 23 any person or group of persons has become a Control Person, then, if any subsequent sale or transfer is proposed and such sale or transfer would result in any person or group of persons becoming a Control Person (based on one or more pending transfers or offers to sell shares, whether or not the transfers will close or the offers expire concurrently), the provisions of this Section 2.4 shall again apply. 2.5. Merger Transactions. Notwithstanding anything contained herein to the contrary, AP may enter into any agreement to consolidate with or merge with or into any other corporation if such agreement is approved by the vote of both the Board of Directors and the holders of at least 66-2/3% of the outstanding shares of AP Common Stock; and, in such event, Sections 2.2, 2.3 and 2.4 of this Agreement shall not be applicable and all shares of AP Common Stock may be transferred for such consideration as approved by such vote of the Board of Directors and the Stockholders, provided that the AP Common Stock owned by DNC may be so transferred only in accordance with the provisions of a Put/Call Agreement, dated as of the date hereof, between DNC and AP (the "Put/Call Agreement"). 2.6. Repurchase of Common Stock Held by Management Investors. Notwithstanding any other provision of this - 23 - 24 Agreement, a Management Investor and/or such Management Investor's Permitted Transferees may (but shall not be obligated to) sell to AP, and AP may (but shall not be obligated to) purchase from a Management Investor and/or such Management Investor's Permitted Transferees, shares of AP Common Stock held by such Management Investor and/or such Management Investor's Permitted Transferees upon such terms (including price) as they may mutually agree in writing. 2.7. Certain Registration Rights. (a) In the event that AP shall file a registration statement under the Securities Act in connection with the proposed offer and sale for cash of shares of AP Common Stock (i) by it, in the case of a primary registration, or (ii) by any party to this Agreement, in the case of a secondary registration, other than in each case a registration on Form S-4 or Form S-8 promulgated under the Securities Act or any successor or similar form, AP will give written notice of its determination to DNC and each Management Investor and each of their Permitted Transferees (each one individually, a "Holder", and collectively, the "Holders"). Upon the written request of a Holder given to AP within 30 days after the mailing of any such notice by AP, AP will cause all shares of AP Common Stock which such Holder has requested to have registered to be included in such registration statement; provided, that - 24 - 25 if the managing underwriter, in the case of any underwritten public offering, determines and advises in writing that in its opinion the number of shares of AP Common Stock to be registered by AP in a primary registration, or on behalf of either any other party to this Agreement or all other Holders in a permitted secondary registration exceeds the number of shares of AP Common Stock which can be sold in such offering (the "Salable Shares"), then AP will include in such registration (i) first, the shares of AP Common Stock AP proposes to sell, in the case of a primary registration, and (ii) second, the shares of AP Common Stock to be sold by any person other than AP (including shares requested to be included in such registration pursuant to this Section 2.7(a)), reduced pro rata among such persons so that the total number of shares of AP Common Stock registered for sale will not exceed the Salable Shares. (b) In the event any Holder requests that shares of AP Common Stock be registered and sold pursuant to Section 2.7(a) above, AP and the other parties to this Agreement shall use their respective best efforts to cause such shares of AP Common Stock to be registered and sold as part of the offering which AP notified such holders of pursuant to Section 2.7(a) above, including, without limitation, filing all documents which are necessary or appropriate with - 25 - 26 the Securities and Exchange Commission and with any state securities commissions or authorities. AP shall select the underwriter of any such offering. All costs and expenses of registering any Holder's shares for sale pursuant to Section 2.7(a) above shall be borne by AP. (c) AP will indemnify and hold harmless each Holder participating in a registration pursuant to this Section 2.7 from and against any and all loss, damage, liability, cost and expense to which such Holder may become subject under the Securities Act or otherwise, insofar as such losses, damages, liabilities, costs or expenses are caused by any untrue statement or alleged untrue statement of any material fact contained in such registration statement, any prospectus contained therein or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; provided, however, that AP will not be liable in any such case to the extent that any such loss, damage, liability, cost or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in strict conformity - 26 - 27 with written information furnished by such Holder specifically for use in the preparation thereof. (d) Each Holder participating in a registration pursuant to this Section 2.7 will indemnify and hold harmless the other Holders, AP, and AP's officers, directors and each person, if any, who controls AP within the meaning of the Securities Act, from and against any and all loss, damage, liability, cost or expense to which such other Holders or AP or such officer, director or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, damages, liabilities, costs or expenses are caused by any untrue statement or alleged untrue statement of any material fact contained therein or any amendment or supplement thereto, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was so made in reliance upon and in strict conformity with written information furnished by such Holder specifically for use in the preparation thereof. - 27 - 28 (e) Promptly after receipt by an indemnified party pursuant to the provisions of Section 2.7(c) or (d) of notice of the commencement of any action involving the subject matter of the foregoing indemnity provision, such indemnified party will, if a claim therefor is to be made against the indemnifying party pursuant to the provisions of Section 2.7(c) or (d), promptly notify the indemnifying party of the commencement thereof; but the omission to so notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than hereunder. In the event such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party shall have the right to participate in, and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party; provided, however, that if the defendants in any action include both the indemnified party and the indemnifying party and there is a conflict of interest which would prevent counsel for the indemnifying party from also representing the indemnified party, the indemnified party shall have the right to select separate counsel to participate in the defense of such action on behalf of such indemnified party. After no- - 28 - 29 tice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party pursuant to the provisions of Section 2.7(c) or (d) for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation, unless (i) the indemnified party shall have employed counsel in accordance with the provisions of the preceding sentence, (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after the notice of the commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. 3. Transfer Of Shares Upon Death Or Disability. 3.1. Put to AP in Event of Death, Retirement or Disability. Subject to any financing agreements entered into in connection with the Purchase or any other instruments or agreements of APCOA or AP from time to time in effect restricting (including indirectly through restrictions of dividend payments by APCOA) or otherwise governing the repurchase or retirement of shares of AP's capital stock (the "Loan Agreements") and to applicable law, unless a call - 29 - 30 pursuant to Section 3.2 shall have been exercised by AP, upon the death, Retirement or Complete Disability of any Management Investor, at the option of such Management Investor, such Management Investor's estate, heirs or personal representative, and/or such Management Investor's Permitted Transferees (collectively, the "Holders" of such Management Investor's shares) and within 30 days of receipt by AP of a Seller's Notice from such Holders, which notice must be given within twelve months from the appointment of a personal representative or three months from the date of such Management Investor's Retirement or six months from the date of his Complete Disability, AP shall purchase from such Holders all the shares of AP Common Stock held by such Holders specified in such Seller's Notice at a purchase price determined in accordance with Section 3.3. AP shall be under no obligation to purchase such shares unless it shall have received a Seller's Notice from such Holders in accordance with this Section 3.1. 3.2. Call in Event of Death, Retirement or Disability. Unless a put granted in Section 3.1 shall have been exercised with respect to all the shares of AP Common Stock held by the Holders of any Management Investor's shares, AP shall have an exclusive and irrevocable option, for a period of three months following the appointment of a - 30 - 31 personal representative or from the date of any such Management Investor's Retirement or Complete Disability, to purchase up to all the shares of AP Common Stock held by such Holders at the price determined in accordance with Section 3.3; provided that AP may not, without the consent of any such Holder, purchase less than all the shares held by any such Holder. 3.3. Purchase Price. (a) The purchase price per share for the shares of AP Common Stock purchased pursuant to Section 3.1 or 3.2 above shall be the greatest of (i) Investment Price, (ii) Adjusted Book Value and (iii) CCO Value (as such terms are hereinafter defined). Adjusted Book Value and CCO Value shall be determined by AP using accounting principles then in effect and as applied by AP and shall be accompanied by a letter from AP's independent accountants stating that the calculations made by AP have been made in accordance with the applicable provisions of this Agreement. AP may satisfy its obligations to purchase shares upon the exercise of any put or call granted pursuant to Section 3.1 or 3.2 hereof with cash in an amount not less than the Investment Price and with Notes (as hereinafter defined) for any amount in excess of the Investment Price; provided, however, that if any portion of the cash purchase price payable for any shares purchased pursuant to Section 3.1 or 3.2 - 31 - 32 above may not be paid as a result of direct or indirect restrictions imposed by the Loan Agreements or by applicable law, such portion shall, subject to the Loan Agreements and to applicable law, be payable by the delivery of Notes in the principal amount of such portion; provided, however, that, notwithstanding any direct or indirect restrictions imposed by the Loan Agreements or by applicable law, AP and the other parties to this Agreement shall use their respective best efforts to enable AP to pay the full amount of the cash purchase price payable for any shares purchased pursuant to Section 3.1 or 3.2 above, including, without limitation, taking necessary measures to create sufficient surplus and/or to obtain the consent of any parties to the Loan Agreements, and, in any event, AP shall pay that portion of the cash purchase price payable for any shares purchased pursuant to Section 3.1 or 3.2 above which was not paid as a result of direct or indirect restrictions imposed by the Loan Agreements or by applicable law as soon as AP may pay such amount in cash without violating the terms of any Loan Agreements or any applicable law. 3.4. Certain Definitions. As used in Sections 3 and 4 of this Agreement, the following terms shall have the meanings set forth below: - 32 - 33 (a) "CCO" shall mean the cash contribution from operations for the four fiscal quarters (for which financial statements are then available) immediately preceding the date of exercise of any put or call pursuant to Section 3 or 4 of this Agreement, as certified by AP's independent public accountants for the four fiscal year quarters which constitute any fiscal year and as determined for any other period in a manner consistent with that used in making such determination for AP's most recently ended fiscal year. (b) "CCO Value" shall mean CCO times 6.84, minus the amount of debt reflected in AP's most recent quarterly or year-end consolidated financial statements, divided by the number of fully diluted shares. "Debt" referred to in the preceding sentence shall mean all indebtedness of any kind, and shall include, without limitation, (i) current maturities, any outstanding preferred stock and accrued dividends (excluding current year) thereon and any outstanding subordinated debt, but shall exclude (ii) trade payables, accrued current expenses, accrued current taxes, and accrued current interest charges, all of which are in the ordinary course of business, and shall also exclude indebtedness incurred in connection with the purchase of real - 33 - 34 estate if such purchase is unrelated to the business currently conducted by APCOA. Also for purposes of the preceding calculation, fully diluted shares shall be equal to the weighted average number of shares of AP Common Stock outstanding plus common share equivalents, computed in accordance with the methodology prescribed in Accounting Principles Board Opinion No. 15 plus vested management options to purchase AP Common Stock, plus the AP Common Stock that DNC will have the right to purchase under its warrant (the "DNC Warrant"), provided that such warrant shall only be considered outstanding if the fair market value of the AP Common Stock subject thereto exceeds the exercise price thereof. In addition, fully diluted shares as referred to in the preceding sentence shall exclude any shares of AP Common Stock which would otherwise be included under Accounting Principles Board Opinion No. 15 but which were purchased by AP either pursuant to the terms of this Agreement or from DNC but only if and to the extent indebtedness was incurred by AP in connection with the purchase of such AP Common Stock. (c) "Note" shall mean a subordinated promissory note of AP substantially in the form of Exhibit B to this Agreement. - 34 - 35 (d) "Investment Price" shall mean the price per share of AP Common Stock that such Management Investor paid for such shares. (e) "Adjusted Book Value" shall mean the book value per share of AP Common Stock, calculated by dividing (A) the sum of (x) stockholders' equity reflected in AP's most recent quarterly or year-end consolidated financial statements, plus (y) the amount, if any, of the adjustment to stockholders' equity required to reflect aggregate projected losses set forth on Schedule B to this Agreement through the date of the most recently completed fiscal year for which financial statements are available, plus (z) the total proceeds to be realized by AP upon the exercise of all outstanding dilutive stock options were such options exercised on the date of valuation and the DNC Warrant by (B) shares of AP Common Stock outstanding plus the AP Common Stock subject to the DNC Warrant (provided that such warrant shall only be considered outstanding if the fair market value of the AP Common Stock subject thereto exceeds the exercise price thereof), plus total outstanding dilutive stock options. For purposes of this calculation, stock options shall be considered dilutive if the exercise price per share is less than per - 35 - 36 share Adjusted Book Value calculated without regard to outstanding stock options. (f) "Retirement" shall mean the earlier of either (i) a Management Investor's attainment of "early retirement age" or "normal retirement age," as such terms are defined in any tax-qualified retirement plan sponsored by AP or any affiliate (as such term is defined for this purpose only in Section 414(b) of the Code) or AP in which the Management Investor participates, or (ii) the Management Investor's attainment of age 65. (g) "Complete Disability" shall mean any physical or mental impairment or disability which prevents a Management Investor from performing the duties of his occupation for a period of at least 120 days and which is expected to be of permanent duration. A determination of whether a Management Investor is disabled shall be made by two licensed physicians, one appointed by the Board of Directors of AP and one appointed by the Management Investor. In the event the two physicians are unable to agree with respect to whether the Management Investor is disabled, the determination of whether the Management Investor is disabled shall be made by a - 36 - 37 third duly licensed physician chosen by the two physicians previously appointed. (h) "Cause" shall mean either (i) a material failure by a Management Investor for some reason other than illness, injury or disability to perform his obligations as an employee of AP (including any obligations under any written employment agreement to which the Management Investor is a party), provided that the Management Investor shall have first received written notice from APCOA or AP stating with specificity the nature of such failure and the Management Investor shall not have corrected the failure cited in such notice within 30 days after his receipt thereof; or (ii) the Management Investor's commission of either any felony involving moral turpitude or any crime in the conduct of his official duties as an employee of APCOA or AP which is materially adverse to the welfare of APCOA or AP; or (iii) the Management Investor's commission of any material act of fraud against APCOA or AP or material misuse of his position for personal gain or that of any third party; or (iv) the Management Investor's taking any action (other than an error in judgment made in the ordinary course of his duties as an employee of APCOA or AP) which is materially adverse to the welfare - 37 - 38 of APCOA or AP, including, but not limited to, any material breach of any covenants in any written employment agreement to which the Management Investor is a party which concern noncompetition and nondisclosure of confidential information. (i) "Good Reason" shall mean, without the Management Investor's express written consent, the occurrence of either or both of the following: 1. a change in the duties and responsibilities of his position such that a substantial reduction occurs from the duties and responsibilities that were in effect either as of the date of this Agreement or, if later, immediately prior to the change in responsibilities; and 2. a reduction by the Company, of 15% or more, in his base salary as in effect on the date hereof, or as the same shall be increased from time to time, except a reduction consistent with salary reductions of all personnel on the exempt payroll. (j) "Termination" shall mean, when used to refer to the employment of a Management Investor, such Inves- - 38 - 39 tor's ceasing to be regularly employed by AP or a subsidiary or affiliate of AP. 4. Transfer Upon Termination Of Employment. 4.1. Put to AP in Event of Termination. Subject to the direct or indirect restrictions imposed by the Loan Agreements and to applicable law, unless a call granted pursuant to Section 4.2 shall have been exercised by AP, upon the termination of employment of any Management Investor for any reason other than death, Retirement or Complete Disability, at the option of any terminated Management Investor and/or such Management Investor's Permitted Transferees, and within three months of receipt by AP of a Seller's Notice from such Management Investor and/or such Management Investor's Permitted Transferees, AP shall purchase up to all the shares of AP Common Stock held by such Management Investor and/or such Management Investor's Permitted Transferees, at a purchase price determined in accordance with Section 4.3(a), in the event of a Termination by AP or its affiliates without Cause, or a voluntary Termination by such Management Investor with Good Reason, or a voluntary Termination by such Management Investor without Good Reason (but only on or after the third anniversary of the date of this Agreement), or in accordance with Section 4.3(b), in the event of a Termination by AP or its affiliates with Cause or - 39 - 40 a voluntary Termination by the Management Investor without Good Reason (but only if such Termination occurs prior to the third anniversary of the of this Agreement). AP shall be under no obligation to purchase such shares unless it shall have received a Seller's Notice in accordance with this Section 4.1, which Notice must be sent within 30 days from the date of termination. 4.2. Call in Event of Termination. Unless a put granted under Section 4.1 shall have been exercised with respect to all the shares of AP Common Stock held by any terminated Management Investor and/or such Management Investor's Permitted Transferees, AP shall have an exclusive and irrevocable option, for a period of 30 days following the termination of employment of any Management Investor as set forth in Section 4.1, to purchase up to all of the shares of AP Common Stock owned by such terminated Management Investor and/or such Management Investor's Permitted Transferees, at a purchase price determined in accordance with Section 4.3(a), in the event of a Termination by AP or its affiliates without Cause, or a voluntary Termination by such Management Investor with Good Reason, or a voluntary Termination by such Management Investor without Good Reason (but only or after the third anniversary of the date of this Agreement), or in accordance with Section 4.3(b), in the - 40 - 41 event of a Termination by AP or its affiliates with Cause, or a voluntary Termination by the Management Investor without Good Reason (but only if such Termination occurs prior to the third anniversary of the date of this Agreement); provided that AP may not, without the consent of such Management Investor and/or such Management Investor's Permitted Transferees, purchase less than all of the shares of AP Common Stock owned by such Management Investor and/or such Management Investor's Permitted Transferees; provided further, that, in the event a Management Investor's employment is terminated, if by AP or the Company, without Cause, or if by the Management Investor, for Good Reason, then if the purchase price for any share of AP Common Stock (assuming such share was sold to AP pursuant to this Section 4.2), determined in accordance with Section 4.3 at the end of the four calendar quarters which immediately follow the date any shares of AP Common Stock are actually sold to AP pursuant to this Section 4.2, would exceed the purchase price paid for any share actually sold to AP pursuant to this Section 4.3, the purchase price for any such share shall be increased by the amount of such excess, and such increase shall be paid to the seller of any such shares as soon as practicable following the end of such twelve-month period in the same manner as provided in Section 4.3. - 41 - 42 4.3 Purchase Price. (a) The purchase price per share for any shares of AP Common Stock shall be equal to the greater of (i) Investment Price, (ii) Adjusted Book Value and (iii) CCO Value. (b) The purchase price per share for any shares of AP Common Stock shall be, in the event of a termination with Cause, equal to the lowest of (i) Investment Price, (ii) Adjusted Book Value, and (iii) CCO Value, and, in the event of a voluntary Termination without Good Reason, Investment Price. (c) For purposes of Section 4.3(a) and 4.3(b), Adjusted Book Value and CCO Value shall be determined by AP using accounting principles then in effect and as applied by AP and shall be accompanied by a letter from AP's independent accountants stating that the calculations made by AP have been made in accordance with the applicable provisions of this Agreement. AP may satisfy its obligations to purchase shares upon the exercise of any put or call granted pursuant to Section 4.1 or 4.2 hereof with cash in an amount not less than the Investment Price and with Notes for any amount in excess of the Investment Price; provided, however, that, in the event of a Management Investor's involuntary termination of employment, if by AP or APCOA, without Cause, - 42 - 43 or if by the Management Investor, with Good Reason, AP shall satisfy its obligations to purchase shares upon the exercise of any put or call granted pursuant to Section 4.1 or Section 4.2 hereof with cash except to the extent that cash may not be paid as a result of restrictions imposed by the Loan Agreements or by applicable law. Notwithstanding any other provision of this Section 4.3, if any portion of the cash purchase price payable for any shares purchased pursuant to Section 4.1 or 4.2 may not be paid as a result of restrictions imposed by the Loan Agreements or by applicable law, such portion shall, subject to the Loan Agreements and to applicable law, be payable by the delivery of Notes in the principal amount of such portion; provided, however, that, notwithstanding any restrictions imposed by the Loan Agreements or by applicable law, AP and the other parties to this Agreement shall use their respective best efforts to enable AP to pay the full amount of the cash purchase price payable for any shares purchased pursuant to Section 4.1 or 4.2 above, including, without limitation, taking necessary measures to create sufficient surplus and/or to obtain the consent of any parties to the Loan Agreement, and, in any event, AP shall pay that portion of the cash purchase price payable for any shares purchased pursuant to Section 4.1 or 4.2 above which was not paid as a result of restrictions im- - 43 - 44 posed by the Loan Agreements or by applicable law as soon as AP may pay such amount in cash without violating the terms of any Loan Agreements or any applicable law. Notwithstanding anything in the foregoing to the contrary, in the event that a Management Investor voluntarily terminates his employment with AP or an AP affiliate without Good Reason and is paid the purchase price specified in Section 4.3(a) hereof, and a Sale of the Company or a merger involving AP or an AP affiliate occurs within three months after such termination of employment, and the Board of Directors of AP determines in good faith that such Termination was in anticipation of such Sale of the Company or merger, then the per share purchase price paid to such Management Investor for his shares of AP Common Stock, if greater than the per share consideration (as determined by the Board of Directors in good faith) paid to stockholders in such Sale of the Company or merger, shall be reduced to be equal to the per share consideration paid in such Sale of the Company or merger, and any documents or instruments (including, without limitation, any Note) which were executed in connection with the prior sale of shares of AP Common Stock by such Management Investor shall be deemed amended to give effect to the decision of the Board of Directors in such regard. - 44 - 45 4.4. Sale of the Company. (a) Each of the parties to this Agreement acknowledges that, at the time of a sale by a Management Investor and/or his Permitted Transferees of shares of AP Common Stock pursuant to Section 3 or 4 of this Agreement, there may be proposed or pending a transaction or series of transactions involving the sale of 50% or more of the outstanding shares of AP Common Stock (either to an entity, person or group of persons acting in concert or pursuant to a public offering registered under the Securities Act) or the redemption or repurchase of all the shares of AP Common Stock in connection with a sale of all or substantially all the assets of AP, or the winding up, dissolution or liquidation of AP (any such transaction or series of transactions being hereinafter referred to as a "Sale of the Company"), and that AP may have valid business reasons not to, and in any event may not be required to, disclose any such proposed or pending Sale of the Company to such Management Investor and/or his Permitted Transferees at the time of any such sale. (b) If, within 270 days from the date of a sale of shares of AP Common Stock to AP by a Management Investor and/or his Permitted Transferees pursuant to Section 3 or 4, other than such a sale from a Management Investor whose employment was terminated for Cause or who voluntarily re- - 45 - 46 signed without Good Reason, a transaction involving a Sale of the Company is effected then AP and/or the purchaser of such shares of AP Common Stock shall pay to such Management Investor and/or his Permitted Transferees the excess, if any, of the amount per share realized by AP's stockholders (other than DNC) upon such Sale of the Company over the purchase price per share paid by AP to such Management Investor and/or his Permitted Transferees pursuant to Section 3 or 4, less the interest paid on any Notes paid as consideration for such shares for the period from the date of purchase pursuant to Section 3 or 4 to the date of such Sale of the Company, for each share purchased by AP pursuant to Section 3 or 4 from such Management Investor and/or such Permitted Transferees. 4.5. Continuation of Employment. Neither this Agreement nor the ownership of AP Common Stock by a Management Investor shall confer upon any Management Investor any right to continue in the employ of APCOA or limit in any respect the right of APCOA to terminate his employment at any time. 5. Residual Rights of Management Investors to Purchase Shares. 5.1. (a) With respect to - 46 - 47 (i) any issuance by AP of AP Common Stock (the "Shares to be Issued"), other than pursuant to management stock options or pursuant to exercise of the DNC Warrant; or (ii) any issuance by AP of any security (the Securities") convertible into AP Common Stock but only if any part of the new issue is to be purchased by Holberg or any affiliate of Holberg; to any individual, corporation, partnership, association, trust or other entity or organization, including any government or political subdivision or an agency or instrumentality thereof (a "Person"), AP shall notify each Management Investor in writing of the proposed issuance, the number of Shares to be Issued or amount of Securities to be issued, the date on or about which such issuance is to be consummated and the price and other terms and conditions thereof, at least 45 days prior to the proposed date for such issuance. For a period of 30 days after a Management Investor's receipt of the notice referred to in the preceding sentence, such Management Investor shall have the option to purchase, upon the same price, terms and conditions as such Shares to be Issued or Securities are proposed to be issued to any Person, that number of such Shares to be Issued or amount of Securities as may be necessary to increase the number of shares of AP Common Stock owned by such Management Investor on a fully-diluted basis (assuming that all management op- - 47 - 48 tions were fully vested and exercised, that DNC's warrants to purchase AP Common Stock were exercised and, in the case of Securities, assuming conversion of such Securities into AP Common Stock) to provide that the percentage of all of the fully-diluted shares of AP Common Stock owned by such Management Investor immediately after the date of issuance to such Person is not less than the percentage of all of the fully-diluted shares of AP Common Stock owned by such Management Investor immediately prior to the date of issuance to such Person. If a Management Investor exercises his purchase option under this Section 5, he shall purchase such Shares to be Issued or Securities at the time of consummation of the issuance of Shares to be Issued or Securities to such Person. (b) In the event that, pursuant to Section 2 or 3 or 4 hereof, AP and/or Holberg shall purchase any shares of AP Common Stock from any Management Investor or such Management Investor's Permitted Transferees ("Reacquired Shares"), AP shall make such shares available for purchase within the twelve-month period following the date AP and/or Holberg shall have purchased such shares and on the terms set forth below to new or promoted AP or APCOA management employees (other than the Chief Executive Officer of APCOA) who are selected by the Chief Executive Officers of APCOA - 48 - 49 after consultation with the Board of Directors of AP. In addition, Holberg shall make available for purchase by an APCOA management employee 66 shares (the "Extra Shares") of AP Common Stock purchased by it pursuant to the Subscription Agreement within the twelve-month period following the initial subscription of shares thereunder. Holberg shall transfer to AP as a capital contribution such number of shares of AP Common Stock as shall be necessary to give effect to the provisions of this Section 5.1(b). Such Reacquired Shares may be purchased by any such AP or APCOA management employee at the same price and upon the same terms (including any later adjustment to the price required by Section 4.2 or 4.4 hereof) as the prior purchase by AP and/or Holberg pursuant to Section 2 or 3 or 4 hereof. Such Extra Shares may be purchased by any such AP or APCOA management employee at the same per share price paid by Holberg for such shares pursuant to the Subscription Agreement. (c) To the extent that any Reacquired Shares or Extra Shares are not sold, within the periods and to the persons required by Section 5.1(b) above, the remaining Management Investors shall have the option to purchase any such shares from AP for a period of 30 days following the expiration of such twelve--month period. The option to purchase such shares granted to the remaining Management Investors - 49 - 50 pursuant to this Section 5.1(c) shall be exercisable (i) as to Reacquired Shares, at the same price and upon the same terms as the prior purchase (including any later adjustment to the price required by Section 4.2 or 4.4 hereof) by AP and/or Holberg pursuant to Section 2 or 3 or 4 hereof and (ii) as to Extra Shares, at the same per share price paid by Holberg for such shares pursuant to the Subscription Agreement, and shall be allocated among the remaining Management Investors in such manner as they may determine. In the event that the remaining Management Investors cannot agree on such allocation, the option to purchase such shares granted by this Section 5.1(c) shall be allocated among the remaining Management Investors pro rata in accordance with their respective ownership interests (including the interests of their Permitted Transferees) in AP at the expiration of such twelve-month period. Holberg shall transfer to AP as a capital contribution such number of shares of AP Common Stock as shall be necessary to give effect to the provisions of this Section 5.1(b). The option may be exercised by the delivery of written notice to AP at any time within the 30-day period described above. - 50 - 51 6. Involuntary Transfer Of Shares. 6.1. Certain Involuntary Transfers; Seller's Notice. If a Stockholder shall involuntarily transfer directly or indirectly any or all of his shares, for any reason other than as a result of those events specified in Section 3 or 4, such Stockholder shall give written notice within 30 days of such involuntary transfer to AP and the other Stockholders, with a copy to the Transferee, stating the fact that the involuntary transfer occurred, the reason therefor, the date of the transfer, the name and address of the Transferee and the number of Shares acquired by the Transferee. 6.2. Right to Repurchase. For a period of 60 days from the date of receipt of the Seller's Notice or, failing receipt of such notice, 60 days from the date AP sends written notice to the Transferee that the transfer is deemed to be an involuntary transfer subject to repurchase under this Agreement, AP and Holberg shall have the irrevocable and exclusive option to buy all of the Offered Shares, exercisable in the same order of priority, proportion and manner as provided in Sections 2.3(a), (b) and (c), and the provisions of Sections 2.3(a), (b) and (c) shall be followed - 51 - 52 in their entirety except that the terms of purchase shall be as provided in Section 6.3. 6.3. Terms of Purchase. The terms of purchase for shares purchased pursuant to Section 6.2 shall be determined pursuant to Section 4.3 as though such shares were being purchased pursuant to Section 4.1 or 4.2. 7. Reservation Of Shares Purchased By AP. Subject to Section 5 hereof, any shares of AP Common Stock purchased by AP from a Management Investor or such Management Investor's personal representative, estate or heirs or Permitted Transferees pursuant to this Agreement shall be retired and cancelled. 8. Closing. 8.1. Closing. Any Selling Stockholder and the parties hereto who are purchasing any of the Offered Shares pursuant to this Agreement shall mutually determine a closing date (the "Closing Date") which shall not be more than five business days, subject to any applicable regulatory waiting periods, after the date upon which a purchaser shall have the right to purchase shares in accordance with this Agreement. The closing shall be held at 11:00 a.m., local - 52 - 53 time, at the offices of AP, or at such other time or place as the parties may agree. 8.2. Deliveries at Closing; Method of Payment of Purchase Price. On the Closing Date, any Selling Stockholder shall deliver certificates with appropriate transfer tax stamps affixed and with stock powers endorsed in blank, representing the shares of AP Common Stock to be purchased by the persons exercising their options hereunder each of whom shall deliver to such Stockholder, by means of certified check payable in New York Clearing House funds, his portion of the purchase price which is payable in cash and his portion of the other consideration, if any, to be paid in exchange for such shares. In addition, if the person selling shares is the personal representative of a deceased Stockholder, the personal representative shall also deliver to the purchaser or purchasers (i) copies of letters testamentary or letters of administration evidencing his appointment and qualification, (ii) a certificate issued by the Internal Revenue Service pursuant to Section 6325 of the Internal Revenue Code of 1986, as amended (the "Code"), discharging the shares being sold from liens imposed by the Code and (iii) an estate tax waiver issued by the state of the decedent's domicile. - 53 - 54 9. Miscellaneous. 9.1. Endorsement of Stock Certificates. A copy of this Agreement shall be filed with the Secretary of AP and kept with the records of AP. Each of the Stockholders hereby agrees that each outstanding certificate representing shares of AP Common Stock (other than those shares which, following the termination of this Agreement pursuant to Section 9.2 below, have not been registered under the Securities Act, which shares shall bear only the endorsement set forth in paragraph (a) below) shall bear endorsements reading substantially as followings: (a) "The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be transferred, sold or otherwise disposed of except pursuant to an effective registration statement or pursuant to an exemption from registration, under the Act." (b) "The shares represented by this certificate are subject to certain rights of the Corporation and the Stockholders of the Corporation to repurchase such shares and certain rights of the registered holder to sell such shares to the Corporation on the terms and conditions set forth in a Stockholders' Agreement dated as of April 14, 1989, a copy of which may be obtained from the Corporation or from the holder of this certificate. No transfer of such shares will be made on the books of the Corporation unless accompanied by evidence of compliance with the terms of such Agreement." - 54 - 55 Such certificate shall bear any additional endorsement which may be required for compliance with state securities or blue sky laws or as may be required under the Subscription Agreement. If, for any reason, any shares of AP Common Stock are no longer subject to the restrictions and provisions of this Agreement, AP shall promptly issue a new certificate for such shares without the restrictive endorsement set forth in paragraph (b) above upon the request of the record owner of the shares and the surrender to AP of a certificate bearing such endorsement. 9.2. Term. The provisions of this Agreement, other than Article 1, shall terminate on the date of the first to occur of any of the following events: (i) the closing of the sale of 25% or more of the shares of AP Common Stock to the public in an underwritten initial public offering pursuant to a Registration Statement under the Securities Act of 1933; or (ii) the closing of the sale of shares of AP Common Stock to any person or group of persons as a result of which any person or group of persons (other than Holberg) owns, beneficially or of record, 50% or more of the outstanding shares of AP Common Stock; or (ii) 10 years from the date of this Agreement. - 55 - 56 9.3. Injunctive Relief. It is hereby agreed and acknowledged that it will be impossible to measure in money the damages that would be suffered if the parties fail to comply with any of the obligations herein imposed on them and that in the event of any such failure, an aggrieved person will be irreparably damaged and will not have an adequate remedy at law. Any such person shall, therefore, be entitled to injunctive relief, including specific performance, to enforce such obligations, and if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law. 9.4. Notices. All notices, statements, instructions or other documents required to be given hereunder, shall be in writing and shall be given either personally, or by mailing the same in a sealed envelope, first-class mail, postage prepaid and either certified or registered, return receipt requested, addressed to AP at its principal offices and to the other parties at their addresses reflected in the stock records of AP, except that such notices to DNC shall be given to Delaware North Companies, Incorporated, 700 Delaware Avenue, Buffalo, New York 14209, attention: Law Department. Each Stockholder, by written notice given to AP in accordance with this Section 9.4 may change the address - 56 - 57 to which notices, statements, instructions or other documents are to be sent to such Stockholder. All notices, statements, instructions and other documents hereunder that are mailed shall be deemed to have been given on the date of mailing. Whenever pursuant to this Agreement any notice is required to be given by any Stockholder to any other Stockholder, such Stockholder may request from AP a list of addresses of all Stockholders of AP, which list shall be promptly furnished to such Stockholder. 9.5. Administration. In the event of any First Offer, Reoffer, or Control Offer, or the occurrence of any event with entitles any Stockholder to exercise any put or call granted herein, AP shall administer and coordinate the exercise of such put or call, including the determination, where applicable, of each participating Stockholder's proportionate share. 9.6. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties, and their respective successors and assigns. If any Transferee of any Stockholder shall acquire any shares of AP Common Stock in any manner, whether by operation of law or otherwise, such shares shall be held subject to all of the terms of this Agreement, and by taking and holding - 57 - 58 such shares such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement. 9.7. Governing Law. Regardless of the place of execution, this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be wholly performed in such State. 9.8. Headings. Paragraph headings inserted herein for convenience only and do not form a part of this Agreement. 9.9. Entire Agreement; Amendment. This Agreement contains the entire agreement among the parties hereto with respect to the transactions contemplated herein, supersedes all prior written agreements and negotiations and oral understandings, if any, and may not be amended, supplemented or discharged except by performance or by an instrument in writing signed by AP, DNC, Holberg and the Chief Executive Officer of APCOA, as authorized representative of the Management Investors, or such other authorized representative as the Management Investor shall designate in writing, and by any Stockholder or Transferee holding at least 5% of the outstanding shares of AP Common Stock. In the event of the - 58 - 59 amendment or modification of this Agreement in accordance with its terms, the Stockholders shall cause the Board of Directors of AP to meet within 30 days following such amendment, modification or termination or as soon thereafter as is practicable for the purpose of amending the Certificate of Incorporation and By-Laws of AP, as may be required as a result of such amendment or modification, and proposing such amendments to the stockholders of AP entitled to vote thereon, and such action shall be the first action to be taken at such meeting. In the event that any Stockholder or AP shall be required, as a result of the enactment, amendment or modification, subsequent to the date hereof, of any applicable law or regulation, or by the order of any governmental authority, to take any action which is inconsistent with or which would constitute a violation or breach of any terms of this Agreement, then the Stockholders and AP shall use their best efforts to negotiate an appropriate amendment or modification of, or waiver of compliance with, such terms. 9.10. Inspection. So long as this Agreement shall be in effect, this Agreement shall be made available for inspection by any stockholder of AP at the principal offices of AP. - 59 - 60 9.11. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 9.12. Gender; Number. The use of the feminine, masculine or neuter pronoun herein shall not be restrictive as to gender and shall be interpreted in all cases as the context may require. The use of the singular or plural herein shall not be restrictive as to number and shall be interpreted in all cases as the context may require. 9.13. Further Assurances. The parties to this Agreement shall execute and deliver to the appropriate persons any other documents and instruments in addition to those provided for herein that may be necessary or appropriate to give effect to the provisions of this Agreement. - 60 - 61 IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly executed on the date first written above. AP HOLDINGS, INC. By /s/ John V. Holten --------------------------- John V. Holten HOLBERG INDUSTRIES, INC. By /s/ John V. Holten --------------------------- John V. Holten By /s/ G. Walter Stuelpe, Jr. --------------------------- G. Walter Stuelpe, Jr. By /s/ James v. LaRocco --------------------------- James V. LaRocco By /s/ Michael J. Machi --------------------------- Michael J. Machi By /s/ John F. Becka --------------------------- John F. Becka By /s/ Ronald A. Kinney --------------------------- Ronald A. Kinney By /s/ Robert J. Hill --------------------------- Robert J. Hill By /s/ Kenneth J. Levine --------------------------- Kenneth J. Levine By /s/ Robert N. Sacks --------------------------- Robert N. Sacks By /s/ William J. Girgash --------------------------- William J. Girgash - 61 - 62 By /s/ Michael J. Celebrezze --------------------------- Michael J. Celebrezze DELAWARE NORTH COMPANIES, INC. By /s/ --------------------------- - 62 - EX-10.5 37 TAX SHARING AGREEMENT 1 Exhibit 10.5 TAX SHARING AGREEMENT Agreement effective as of the first day of the 1989 consolidated return year by and among Holberg Industries, Inc. ("Parent") and each of the undersigned ("Subsidiaries"): AP Holdings Inc. ("APH") APA Acquisition, Inc. ("APA") APCOA, Inc. ("APCOA") WHEREAS, the parties (hereinafter, together with any other members of the affiliated group, sometimes referred to as "Members"; or in the singular "Member") hereto are part of an affiliated group ("Affiliated Group") as defined by the Internal Revenue Code of 1986, as amended ("Code"), Section 1504; and WHEREAS, such Affiliated Group may elect to file a consolidated federal income tax return in accordance with Code Section 1501 and, if so, will be required to file consolidated income tax returns for years subsequent to such first year of consolidated filing; and WHEREAS, it is the intent and desire of the parties hereto that a method be established for allocating federal income tax liability among Members of the Affiliated Group; and to provide for the allocation and distribution of any refund arising from a carryback of net operating losses or tax credits or capital losses from subsequent taxable years. NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties hereto agree as follows: 1. A U.S. consolidated federal income tax return may be filed by Parent for the taxable year ended December 31, l989, and for each subsequent taxable year in respect of which this Agreement is in effect and for which the Affiliated Group is required or permitted to file a consolidated federal income tax return. The Parent, and each Subsidiary shall execute and file such consents, elections, and other documents that may be required or appropriate for the proper filling of such returns. 2 2. The member of the Affiliated Group agree to determine and allocate their tax liability in the following manner: (a) Each Member shall pay to Parent the amount of federal income tax that it would be required to pay on a separate return basis for the year in question; provided, however that the amount that any Member shall be obligated to pay Parent for a taxable year shall not exceed the tax liabilities of such Member on a separate return basis for all taxable years to which this Agreement applies, and for which such Member joined in the filing of a consolidated return of the Affiliated Group (including the current taxable years, computed as if it had actually filed separate returns for all such years and taking into account any net operating loss carryforward a Member would have had if it had filed a separate return for all such years. The amount of any excess tax liability which would be allocated to a Member of the Affiliated Group but for the proviso above shall be borne by Parent. (b) The "net operating loss" of a Member is the deduction which such Member would have had available if it actually filed a separate return for all years and thus would not include any portion of a Member's net operating loss sustained in a prior or subsequent year which had been absorbed by the Member in computing separate return liabilities for prior or subsequent years. Notwithstanding the preceding sentence, no benefit under this Agreement shall be granted a Member unless the net operating loss is availed of in reducing the consolidated federal income tax liability. The rules stated in the previous sentences regarding carryover net operating losses will also apply in the computation of other carryover items such as general business credits, foreign tax credits, capital losses and charitable contribution deductions. (c) In calculating any benefit from a carryback or carryover of net operating losses, adjustments shall be made to such prior or subsequent year's separate return tax liability as required under Sections 172(b) (2) and 172(d). For purposes of this calculation, the election under Section 172(b) (3) shall be made on a separate company basis. -2- 3 3. The provisions of this Agreement shall be administered by the President of Parent. 4. Each Member shall pay the Parent its allocated consolidated federal income tax liability under Section 2(a) of this Agreement and, subject to Section 2, shall be entitled to any refund of taxes generated by it. 5. The President of Parent shall have the right to assess Members their share of estimated tax payments to be made on the projected consolidated federal income tax liability for each year. Payment to the Parent shall be made after such assessment. Such Member will receive credit for such prepayments in the year-end computation under Section 2 of this Agreement. 6. If part or all of an unused consolidated net operating loss or tax credit is allocated to a Member of the Affiliated Group pursuant to Regulations Section 1.1502-79, and it is carried back or forward to a year in which such Member filed a separate income tax return or a consolidated federal income tax return with another affiliated group, any refund or reduction in tax liability arising from the carryback or carryover shall be retained by such Member. 7. If the consolidated federal income tax liability is adjusted for any taxable period, whether by means of an amended return, claim for refund, or tax audit by the Internal Revenue Service, the liability of each Member shall be recomputed under Section 2 of this Agreement to give effect to such adjustments. In the case of a refund, the Parent shall make payment to each Member for its share of the refund, determined in the same manner in Section 2 of this Agreement, within ten days after the refund is received by the Parent, and in the case of an increase in tax liability, each Member shall pay to the Parent its allocable share of such increased tax liability after receiving notice of such liability from the Parent. If any interest is to be paid or received as a result of a consolidated federal income tax deficiency or refund, such interest shall be allocated to the Members in the ratio each Member's change in consolidated federal income tax liability bears to the total change in tax liability. Any penalty shall be allocated upon such basis as the President of Parent deems just and proper in view of all applicable circumstances. -3- 4 8. This Agreement shall apply to the taxable year specified in the preamble of this Agreement, and all subsequent taxable years, unless the Members agree in writing to terminate the Agreement. Notwithstanding such termination, this Agreement shall continue in effect with respect to any payment or refunds due for all taxable periods prior to termination. 9. The Agreement shall not be assignable to any Member without the prior written consent of the others. 10. All material including, but not limited to, returns, supporting schedules, work papers, correspondence, and other documents relating to the consolidated federal income tax returns filed for a taxable year during which this Agreement was in effect shall be made available to any Member to the Agreement during regular business hours. 11. This Agreement supersedes the Tax Sharing Agreement among the parties dated April 14, 1989. -4- 5 IN WITNESS WHEREOF, the parties hereto have caused their names to be subscribed and executed by their respective authorized officers on the dates indicated, effective as of the date first written above. HOLBERG INDUSTRIES, INC. By: /s/ John V. Holten Date: April 28, 1989 ----------------------------------- -------------- AP HOLDINGS, INC. By: /s/ W Suelpe Date: April 28, 1989 ----------------------------------- -------------- APA ACQUISITION, INC.. By: /s/ W Suelpe Date: April 28, 1989 ----------------------------------- -------------- APCOA, INC.. By: /s/ W Suelpe Date: April 28, 1989 ----------------------------------- -------------- -5- 6 AMENDMENT NO. 1 TO TAX SHARING AGREEMENT AMENDMENT NO. 1 dated as of March 30, 1998 (this "Amendment") to the Tax Sharing Agreement effective as of the first day of the 1989 consolidated return year by and among Holberg Industries, Inc. ("Parent"), AP Holdings, Inc., a Delaware corporation, APA Acquisition, Inc., a Delaware corporation, and APCOA, Inc., a Delaware corporation (the "Tax Sharing Agreement"). Capitalized terms used but not defined in this Amendment shall have the meanings ascribed to them in the Tax Sharing Agreement. WHEREAS, the parties hereto desire to amend the Tax Sharing Agreement to provide for the eventuality of the possible deconsolidation of one or more of the Members from the Affiliated Group. NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties hereto agree as follows: The Tax Sharing Agreement is hereby amended to add a new Section 12 thereto, reading in its entirety as follows: "12. In the event that any Member (the "Departing Member") ceases to be a Member during any federal taxable year of the Affiliated Group beginning on or after January 1, 1997, the following provisions shall govern the relationship between the Departing Member and the other Members with respect to United States federal income taxes: (a) Except as set forth in this Section 12, this Agreement shall terminate as to the Departing Member and no further payments shall be due from or to such Departing Member under this Agreement with respect to any taxable year. (b) The Departing Member shall join in the United States consolidated federal income tax return for the taxable year of the Parent (the "Deconsolidation Year") that includes the date on which the Departing Member ceased to be a Member (the "Deconsolidation Date"). Parent and the Departing Member shall execute and file such consents, elections, and other documents as may be necessary for the Departing Member to join in such return for such the Deconsolidation Year. (c) Within 60 days after the Deconsolidation Date, the Departing Member shall pay to the Parent the amount (if any) of federal income tax that it would be required to pay on a separate return basis for the portion of the Deconsolidation Year ending on the Deconsolidation Date. In computing the amount of federal income tax that the Departing Member would be required to so pay, the provisions of Section 2 of this Agreement shall govern. 7 (d) If, after the Deconsolidation Date, the consolidated federal income tax liability of the Affiliated Group is adjusted for the Deconsolidation Year or any prior consolidated return year of the Affiliated Group, whether by means of an amended return, claim for refund, or tax audit by the Internal Revenue Service, the liability of Parent or the Departing Member, as the case may be, shall be recomputed under Section 2 of this Agreement and this Section 12 to give effect to such adjustments. A payment shall be made by Parent or the Departing Member, as appropriate, reflecting such recomputation within 10 days after the receipt by Parent of a refund or the receipt by the Departing Member of notice from the Parent of an increase in tax liability. Interest and penalties relating to any adjustment described in this Section 12(d) shall be allocated between the Departing Member and other Members in a manner consistent with Section 7 of this Agreement." -2- 8 IN WITNESS WHEREOF, the parties hereto have caused their names to be subscribed and executed by their respective authorized officers as of the date first written above. HOLBERG INDUSTRIES, INC. By: /s/ A. Petter Ostberg ---------------------------- Name: A. Petter Ostberg Title: Senior Vice President, Chief Financial Officer and Treasurer AP HOLDINGS, INC. By: /s/ Michael J. Celebrezze ---------------------------- Name: Michael J. Celebrezze Title: Treasurer APA ACQUISITION, INC. By: /s/ Michael J. Celebrezze ---------------------------- Name: Michael J. Celebrezze Title: Treasurer APCOA, INC By: /s/ Michael J. Celebrezze ---------------------------- Name: Michael J. Celebrezze Title: Treasurer -3- EX-10.6 38 EMPLOYMENT AGREEMENT 1 Exhibit 10.6 EXECUTION COPY EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT by and between APCOA, Inc., a Delaware corporation (the "Company"), and Myron C. Warshauer (the "Executive"), dated as of the 30th day of March, 1998. WHEREAS, the Executive is employed as chief executive officer of Standard Parking, L.P., a Delaware limited partnership ("Standard"); and WHEREAS, pursuant to that certain Combination Agreement (the "Transaction Agreement") dated as of January 15, 1998, by and among the Executive, Stanley Warshauer, Steven A. Warshauer, Dosher Partners, L.P., a Delaware limited partnership, SP Parking Associates, an Illinois general partnership, SP Associates, an Illinois general partnership (collectively, "Standard Owners"), and APCOA, Inc., a Delaware corporation ("APCOA"), the operations of APCOA and Standard will be combined (the "Transaction"); and WHEREAS, APCOA desires to ensure that the Company will continue to receive the benefit of the Executive's services after the Transaction, on the terms and conditions set forth below in this agreement, and the Executive desires to render such services; NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows: 1. Employment Period. The Company shall employ the Executive, and the Executive shall serve the Company, on the terms and conditions set forth in this Agreement, for the period beginning on the Closing Date (as defined in the Transaction Agreement) and ending on the Executive's 65th birthday (the "Employment Period"), unless such employment is sooner terminated as set forth below. 2. Position and Duties. During the Employment Period, the Executive shall serve as the Chief Executive Officer of the Company, responsible for all day-to-day operations of the Company, including overall supervision and control of, and responsibility for, the operation and direction of the business, under the supervision and direction of the Chairman of the Board of Directors of the Company (the "Board"). In addition, during the Employment Period, the Executive shall be appointed as a member of the Board and each committee of the Board, other than such committees that do not customarily include employee directors. During the Employment Period, all parking business of the Company and its affiliates will be conducted through, or under the control of, the Company. During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive shall devote full attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive under this Agreement, use the Executive's reasonable best efforts to carry out such responsibilities faithfully. Notwithstanding the foregoing provisions of this Section 2, during the Employment Period, the 2 Executive may engage in activities other than those required under this Agreement, such as activities involving professional, charitable, educational, religious and similar types of organizations, speaking engagements, membership on the boards of directors of other organizations (both public and private, for profit and not-for-profit), investment activities (including management of the investments listed on Schedule A hereto (hereinafter, the "Permitted Investments")) and similar activities, but only to the extent that such other activities do not materially inhibit or prohibit the performance of the Executive's duties under this Agreement or violate the provisions of Section 6 of this Agreement. 3. Compensation. (a) Base Salary. During the Employment Period, the Executive shall receive an annual base salary ("Annual Base Salary") of $600,000, payable in accordance with the normal payroll practices for executives of the Company as in effect from time to time, but in no event less often than monthly. (b) Incentive Stock Options. Within 120 days after the Closing Date, the Company shall establish a stock option or phantom stock option plan (the "Option Plan") providing for grants of actual or phantom options with respect to stock of the Company, pursuant to which it shall grant to the Executive options with respect to 0.316258 shares of the common stock of the Company, on customary terms and conditions as provided in the Option Plan. Such options shall be granted upon the establishment of the Option Plan, with a per-share exercise price based upon the "Price" as defined in the Stockholders Agreement, determined as of the date hereof. All such options shall have a term of 10 years from the date of grant. (c) Other Benefits. In addition to the foregoing, during the Employment Period, the Executive shall be entitled to the benefits (the "Listed Benefits") listed in a letter dated January 15, 1998 from the Executive to the Chairman of the Board of the Company and countersigned by the Chairman. 4. Termination of Employment. (a) Death or Disability. In the event of the Executive's death during the Employment Period, the Executive's employment with the Company shall terminate automatically. The Company, in its discretion, shall have the right to terminate the Executive's employment because of the Executive's Disability during the Employment Period. "Disability" means that (i) the Executive has been unable, after reasonable accommodation by the Company, for a period of 180 consecutive days, or for periods aggregating 180 business days in any period of twelve months, to perform a material portion of the Executive's duties under this Agreement, as a result of physical or mental illness or injury, and (ii) a physician selected by the Company or its insurers has determined that the Executive's incapacity is total and permanent. A termination of the Executive's employment by the Company for Disability shall be communicated to the Executive by written notice, and shall be effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), unless the Executive returns to full-time performance of the Executive's duties before the Disability Effective Date. (b) By the Company. In addition to termination for Disability, the Company may terminate the Executive's employment during the Employment Period for Cause or without Cause. "Cause" means (i) illegal conduct or gross misconduct by the Executive of a significant -2- 3 nature, that in either case results in material damage to the business or reputation of the Company, or (ii) any willful and continued failure by the Executive to perform his duties under this Agreement, which failure is not remedied within 10 business days after the Company gives written notice thereof to the Executive. A termination by the Company shall be effective when the Company gives written notice to the Executive of such termination, or such later date as may be specified in such notice; provided, that a termination for Cause described in clause (ii) of the preceding sentence shall not be effective before the close of the 10th business day after the date on which such notice is given. (c) Termination by the Executive. The Executive may terminate his employment voluntarily upon written notice to the Company, which termination shall be effective upon the giving of such notice. In addition, if any of the events listed in the next sentence occurs without the consent of the Executive, the Executive may terminate his employment for "Good Reason" by giving written notice to the Company within 60 days after the occurrence thereof to that effect, unless the Company shall have cured such event within 10 business days after receiving notice thereof. The events referred to in the preceding sentence are: (i) the relocation of the Executive's principal place of business outside of the central business district and northern suburbs of Chicago; (ii) a material reduction in the Executive's responsibilities; (iii) the assignment to the Executive of duties inconsistent with his position as set forth in Section 2 of this Agreement; (iv) a change in the Executive's title from that required by Section 2 of this Agreement; (v) a removal of the Executive from the Board or any committee thereof described in Section 2 (it being understood that an inability of the Executive to vote or otherwise function as a member of the Board or any such committee by reason of a conflict of interest shall not be considered removal from the Board or such committee); (vi) a requirement that the Executive report to anyone other than the Chairman of the Board; or (vii) any material breach by the Company of any other term of this Agreement; provided, that no such event shall be deemed to have occurred as a result of the engagement by the Company of additional officers, including a Vice Chairman, so long as such officers report to the Executive or have no responsibility with respect to the operations of the Company. A termination for Good Reason shall be effective at the close of business on the tenth business day after the Executive gives the Company written notice thereof. (d) Date of Termination. The "Date of Termination" means the date of the Executive's death, the Disability Effective Date, or the date on which the termination of the Executive's employment by the Company or the Executive is effective (as set forth above), as the case may be. 5. Obligations of the Company upon Termination. (a) By the Company (Other Than for Cause, Death or Disability) or by the Executive for Good Reason. If, during the Employment Period, the Company terminates the Executive's employment, other than for Cause, death or Disability, or the Executive terminates his employment for Good Reason, the Company shall (i) pay the Executive, promptly after such termination, a lump sum amount equal to the aggregate Annual Base Salary that he would have received for the remainder of the Employment Period, reduced to present value using as a discount rate the "applicable federal rate," as defined in Section 1274(d) of the Internal Revenue Code of 1986, as amended (the "Code"), and (ii) continue to provide for the same period welfare benefits to the Executive and/or the Executive's -3- 4 family, at least as favorable as those that would have been provided to them under Section 3(c) of this Agreement if the Executive's employment had continued until the end of the Employment Period; provided, that during any period when the Executive is eligible to receive such benefits under another employer-provided plan, the benefits provided by the Company under this Section 5(a) may be made secondary to those provided under such other plan. The payments provided pursuant to this Section 5(a) are intended as liquidated damages for a termination of the Executive's employment by the Company other than for Cause or Disability and shall be the sole and exclusive remedy therefor. (b) Disability. In the event the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period in accordance with Section 4(a) hereof, the Company shall pay to the Executive or the Executive's legal representative, as applicable, (i) the Executive's Annual Base Salary for the duration of the Employment Period in effect on the Date of Termination, and (ii) any other vested benefits to which the Executive is entitled, in each case to the extent not yet paid. (c) Cause; Voluntary Termination. If the Executive's employment is terminated by the Company for Cause or the Executive voluntarily terminates his employment during the Employment Period (other than for Good Reason), the Company shall pay the Executive (i) the Annual Base Salary through the Date of Termination and (ii) any other vested benefits to which the Executive is entitled, in each case to the extent not yet paid, and the Company shall have no further obligations under this Agreement (except as specifically set forth in Section 5(d) below). (d) Additional Post-Employment Benefits. In addition to the above compensation and benefits, following a termination of the Executive's employment for any reason other than by the Company for Cause, the Executive shall be entitled to receive from the Company beginning on the Date of Termination in the case of a voluntary termination by the Executive, and on the Executive's 65th birthday, in all other cases, and ending on the first to occur of the Executive's 75th birthday and the Executive's death (such ending date, the "Cutoff Date"), the following benefits: (i) $200,000 per annum, as adjusted to reflect the change, if any, in the Consumer Price Index for All Urban Consumers from the date of this Agreement through the date such payments begin and annually thereafter; (ii) an executive office and secretarial services at a mutually convenient location; and (iii) the Listed Benefits. In addition, the Executive and, following the Executive's death, the Executive's surviving spouse (if any) shall be entitled to receive medical and dental coverage from the Company for the remainder of their lives, at a cost to the Company not to exceed $10,000 (as adjusted pursuant to the next sentence) per year while they are both alive, and $5,000 per year (as adjusted pursuant to the next sentence) while only one of them survives. The dollar amounts set forth in the preceding sentence shall be increased by 10 percent as of each anniversary of the Closing Date, and the preceding sentence shall be deemed automatically amended accordingly. If the cost of such medical and dental coverage exceeds such dollar limits (as so adjusted), the Company shall continue to provide such coverage if the Executive (or his surviving spouse) so requests and pays the amount of such excess cost to the Company. In consideration of the foregoing, the Executive agrees to make himself available from the date of termination of his employment through the Cutoff Date for such consulting -4- 5 services as may reasonably be requested by the Board from time to time, such services to be of a type consistent with the Executive's expertise and experience and to be rendered at mutually agreeable times and places, not to exceed 24 hours per month. 6. Confidential Information; Noncompetition. (a) The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies and their respective businesses that the Executive obtains or obtained during the Executive's employment by the Company, Standard or any of their respective affiliated companies and their respective businesses that is not public knowledge (other than as a result of the Executive's violation of this paragraph (a) of Section 6) ("Confidential Information"). The Executive shall not communicate, divulge or disseminate Confidential Information at any time during or after the Executive's employment with the Company, except in the course of the performance of his duties hereunder or with the prior written consent of the Company or as otherwise required by law or legal process. (b) During the Noncompetition Period (as defined below), the Executive shall not, without the prior written consent of the Board, engage in or become associated with a Competitive Activity. For purposes of this paragraph (b) of Section 6: (i) the "Noncompetition Period" means the period beginning on the Closing Date and ending on the Executive's 75th birthday); (ii) a "Competitive Activity" means any business or other endeavor that engages in construction, ownership, leasing, design and/or management of parking lots, parking garages, or other parking facilities or consulting with respect thereto; and (iii) the Executive shall be considered to have become "associated with a Competitive Activity" if he becomes directly or indirectly involved as an owner, employee, officer, director, independent contractor, agent, partner, advisor, or in any other capacity calling for the rendition of the Executive's personal services, with any individual, partnership, corporation or other organization that is engaged in a Competitive Activity. Notwithstanding the foregoing, the Executive may make and retain investments during the Employment Period in not more than five percent of the equity of any entity engaged in a Competitive Activity, if such equity is listed on a national securities exchange or regularly traded in an over-the-counter market. (c) (i) Notwithstanding the foregoing, so long as the Executive complies with this Section 6(c), it shall not be considered a violation of the provisions of Section 6(b) above for the Executive (x) to own or sell the Permitted Investments at any time during the Noncompetition Period, or (y) to own or sell any interest in any other real estate ("Other Real Estate") at any time after the Employment Period for the remainder of the Noncompetition Period. The Executive shall provide to the Board reasonable advance written notice of his disposition of any Permitted Investment and of his acquisition or disposition of any interest in Other Real Estate. In addition, if any Permitted Investment or Other Real Estate includes a parking facility (a "Parking Facility"), then the Executive shall follow the procedures set forth in subsections (ii) and (iii) below. In the case of a Parking Facility in a Permitted Investment or in Other Real Estate that, in either case, is managed or leased by the Company at any time, the Executive shall follow such procedures with respect to any extension or renewal of any such management agreement or lease. In the case of a Parking Facility in Other Real Estate that is not being managed or leased by the -5- 6 Company at the time the Executive acquires an interest in the Other Real Estate, the Executive shall follow such procedures at the time he acquires the interest. (ii) In the case of any Permitted Investment or Other Real Estate controlled by the Executive or his Affiliates (as defined in Section 6(d) below), the Executive shall initiate negotiations with the Company in an attempt to determine mutually agreeable terms upon which the Company will manage or lease the Parking Facility, failing which the Company shall have a right of first refusal with respect to any management agreement or lease that may be negotiated with any independent third-party parking operator (which right of first refusal shall be exercised by the Company, if at all, by giving written notice to the Executive within seven (7) days of the Company's receipt of written notification from the Executive containing a copy of the proposed management contract or lease). (iii) In the case of any Permitted Investment or Other Real Estate not controlled by Executive, Executive shall use reasonable and good-faith efforts to cause the controlling person or entity to initiate negotiations with the Company in an attempt to determine mutually agreeable terms pursuant to which the Company would manage or lease the Parking Facility. (iv) In any negotiations pursuant to subsection (ii) or (iii) above, the Company shall be represented by a neutral expert appointed by the Board. (v) Notwithstanding anything to the contrary contained herein, it is agreed that for all purposes of Sections 6(b) and (c), the Theatre District SelfPark ("TDSP") shall not be considered as either a Permitted Investment or Other Real Estate, it being the intent of the parties to treat said Parking Facility as if the Executive had no equity or ownership interest of any kind or nature whatsoever therein. The parties further agree as follows: (1) Standard/Tremont Parking Corporation ("Tremont"), an Illinois corporation that is the lessee and operator of TDSP, and of which the Executive owns half of the issued and outstanding shares, shall not at any time be permitted to lease, manage or in any other manner operate any parking facility other than TDSP. (2) If at any time during the term of Tremont's lease of TDSP, Tremont should desire to sublease its interest therein to any third party, the Executive shall adhere to the procedures set forth in subsections (ii) or (iii) above, as the case may be, with respect to such intended sublease. (3) The Executive shall provide to the Board reasonable advance written notice of his disposition of all or any portion of his interest in TDSP or of his acquisition of any additional interest in TDSP. (d) For purposes of Section 6(c), an "Affiliate" of the Executive shall mean any member of the Executive's family (including without limitation his grandparents and all their descendants (whether natural or adoptive) and his present and former spouses), any trust a principal beneficiary of which is the Executive or any such member of the Executive's family, and any person that directly, or through one or more intermediaries, is controlled by the Executive -6- 7 and/or one or more of such members of the Executive's family and/or one or more such trusts; and a person shall be considered to "control" any other person with respect to which the first person possesses, directly or indirectly, the power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract, by the terms of any trust agreement, or otherwise). 7. Successors. (a) This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives. (b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. (c) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would have been required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean both the Company as defined above and any such successor that assumes and agrees to perform this Agreement, by operation of law or otherwise. 8. Miscellaneous. (a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Illinois without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified except by a written agreement executed by the parties hereto or their respective successors and legal representatives. (b) All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Executive: Myron C. Warshauer 1401 Waverly Highland Park, Illinois 60035 -7- 8 with a copy to: Michael K. Wolf 800 Bluff Street Glencoe, Illinois 60022 If to the Company: c/o Holberg Industries, Inc. 545 Steamboat Road Greenwich, Connecticut 06830 Attention: Chief Financial Officer Telecopy Number: (203) 661-5756 with a copy to: Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 Attention: Adam O. Emmerich, Esq. Telecopy Number: (212) 403-2000 or to such other address as either party furnishes to the other in writing in accordance with this paragraph (b) of Section 8. Notices and communications shall be effective when actually received by the addressee. (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. If any provision of this Agreement shall be held invalid or unenforceable in part, the remaining portion of such provision, together with all other provisions of this Agreement, shall remain valid and enforceable and continue in full force and effect to the fullest extent consistent with law. (d) Notwithstanding any other provision of this Agreement, the Company may withhold from amounts payable under this Agreement all federal, state, local and foreign taxes that are required to be withheld by applicable laws or regulations. (e) The Executive's or the Company's failure to insist upon strict compliance with any provision of, or to assert any right under, this Agreement shall not be deemed to be a waiver of such provision or right or of any other provision of or right under this Agreement. (f) The Executive and the Company acknowledge that this Agreement supersedes any other agreement, whether written or oral, between them concerning the subject matter hereof, including, but not limited to, the Summary of Terms of Employment Agreement. -8- 9 (g) This Agreement may be executed in several counterparts, each of which shall be deemed an original, and said counterparts shall constitute but one and the same instrument. (h) The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise. The Company shall not be entitled to set off against the amounts payable to the Executive under this Agreement any amounts earned by the Executive in other employment after termination of his employment with the Company, or any amounts which might have been earned by the Executive in other employment had he sought such other employment. (i) The Company shall indemnify the Executive and hold him harmless from liability for acts or decisions made by him while performing services for the Company and its affiliates to the greatest extent permitted by applicable law, except in the event of the Executive's gross negligence or willful misconduct. The Company shall use its reasonable efforts to obtain coverage for the Executive under any insurance obtained during the Employment Period insuring officers and directors of the Company against any such liability. To the greatest extent permitted by applicable law, the Company shall, upon receipt of any undertaking that may be required by applicable law, pay as incurred all expenses, including reasonable attorneys' fees and costs of court approved settlements, actually incurred by the Executive in connection with the defense of or settlement of any action, suit or proceeding and in connection with any appeal thereon, which has been brought against the Executive by reason of the Executive's service as an officer, director or agent of the Company or its affiliates, except in the event of the Executive's gross negligence or willful misconduct. (j) In the event that in the opinion of tax counsel selected and compensated by the Executive ("Executive's Tax Counsel"), a payment or benefit received or to be received by the Executive following his termination (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company or any person affiliated with the Company) (collectively, with the payments provided for in the foregoing provisions of this Section, the "Post-Termination Payments") would be subject (in whole or part) to the excise tax (the "Excise Tax") imposed by Section 4999 of the Code, and (b) as a result of the Excise Tax, the net amount of Post-Termination Payments retained by the Executive (taking into account the Excise Tax) would be less than the net amount of Post-Termination Payments retained by the Executive if the Post-Termination Payments were reduced or eliminated as described in this Section, then the Post-Termination Payments shall be reduced or eliminated until no portion of the Post-Termination Payments is subject to the Excise Tax, or the Post-Termination Payments are reduced to zero. For purposes of this limitation, (i) no portion of the Post-Termination Payments, the receipt or enjoyment of which the Executive shall have waived in writing prior to the date of payment, shall be taken into account, (ii) no portion of the Post-Termination Payments shall be taken into account which, in the opinion of Executive's Tax Counsel, does not constitute a "parachute payment" within the meaning of Section 280G(b)(2) of the Code, (iii) the Post-Termination Payments shall be reduced only to the extent necessary so that the Post-Termination Payments (other than those referred to in clauses (i) and (ii)) in their entirety constitute reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of -9- 10 the Code or are otherwise not subject to the Excise Tax, in the opinion of Executive's Tax Counsel, and (iv) the value of any non-cash benefit and all referred payments and benefits included in the Post-Termination Payments shall be determined by the mutual agreement of the Company and the Executive in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and, pursuant to the authorization of its Board of Directors, the Company has caused this Agreement to be executed in its name on its behalf, all as of the day and year first above written. /s/ Myron C. Warshauer ---------------------------------- Myron C. Warshauer APCOA, INC. By: /s/ Michael J. Celebrezze ---------------------------------- Name: Michael J. Celebrezze Title: Chief Financial Officer -10- 11 SCHEDULE A Permitted Investments Ownership interests, direct or indirect, in the following parking facilities: o Buckingham Plaza Condominium in Chicago o 61 W. Kinzie Street and 401 N. Clark Street in Chicago o 2 East Oak Street in Chicago. o Clark-Fullerton Car Park located at 2427 N. Clark Street in Chicago o 203 North LaSalle Street Self Park and the Theatre District Self Park in Chicago o Equity interests as shareholders of Standard/Tremont Parking Corporation, an Illinois corporation that is the lessee of the Theatre District Self-Park parking facility in Chicago. -11- EX-10.7 39 EMPLOYMENT AGREEMENT 1 Exhibit 10.7 EXECUTIVE EMPLOYMENT AGREEMENT THIS AGREEMENT is executed this 12th day of December , 1994, by and between APCOA, Inc., a Delaware corporation with offices at 25550 Chagrin Boulevard, Beachwood, Ohio 44122 (the "Company"), and G. Walter Stuelpe, Jr. of Shaker Heights, Ohio (the "Executive"). WITNESSETH: WHEREAS, the Company is engaged in the business of leasing and managing open-air parking lots and indoor garages and ramps for the purpose of parking motor vehicles on a leasehold, license, concession or management fee basis throughout the United States under agreement with municipalities, owners of properties, and/or otherwise, whether directly or through a subsidiary (the "Business of the Company"); and WHEREAS, the Executive has been employed by the Company in a management capacity for several years and, during the course of his employment, the Executive has become an experienced and valuable employee and is knowledgeable with respect to the Business of the Company, its trade secrets, customers, market areas, sources of supply and manner of doing business; and WHEREAS, the Company desires to continue to employ the Executive and the Executive desires to continue to work for the Company upon the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises hereto and the agreements and covenants hereinafter contained, the parties hereto, intending to be legally bound, mutually agree as follows: 1. Employment and Duties. The Company hereby employs the Executive to serve as its President and Chief Executive Officer, and the Executive hereby accepts employment by the Company upon the terms and conditions hereinafter set forth. In his capacity as the Company's President and Chief 2 Executive Officer, the Executive shall have overall responsibility for the conduct of the Business of the Company. The Executive shall report to the Company's Board of Directors (the "Board"). The Executive shall devote such time, attention and energies to the Business of the Company as required to discharge his obligations hereunder in a diligent and competent manner and shall not, during the term of this Agreement, engage in any other business activities that will materially interfere with the Executive's employment pursuant to this Agreement. 2. Term. (a) The term of this Agreement shall be for a period of four (4) years commencing on January 1, 1994, and ending on December 31, 1997. Unless terminated as set forth below in Section 4, this Agreement shall remain in effect for so long as the Executive is employed by the Company. (b) If this Agreement has not been terminated as set forth below in Section 4 by December 31, 1995, and neither party hereto has given notice to the other party by December 31, 1995, of the desire to have this Agreement terminate at the end of its original term (December 31, 1997), this Agreement shall continue in full force and effect for an additional one (1) year period following the end of its original term on December 31, 1997, and the same procedure mutatis mutandis shall apply in any later years and to any extended term of this Agreement. 3. Compensation and Other Benefits. For the services to be rendered by him pursuant to this Agreement, the Company agrees to provide the Executive, so long as he shall be employed by the Company, the following compensation and benefits: (a) The Executive acknowledges receipt of a bonus in the amount of $125,000 for calendar year 1993. Such bonus is in lieu of any other bonus payable to the Executive under any agreement for calendar year 1993. (b) Annual base salary at the rate set forth on Exhibit A ("Salary"), payable not less often than monthly in equal installments at the end each month. -2- 3 (c) A bonus for each calendar year, starting with 1994, in an amount determined pursuant to the formula set forth in Exhibit B. (d) The benefits provided under the plans, arrangements and policies described in Exhibit C attached hereto. (e) Such other benefits are provided the Company's senior executives generally under the Company's plans, arrangements, and policies as they may exist from time to time except to the extent comparable or greater benefits are provided to the Executive under Section 3(d) above (the plans, arrangements, and policies referred to in this Section 3(e) and Section(d) above shall be hereinafter referred to as the "Employee Plans"); and (f) Five (5) weeks of vacation annually during which time the Executive's compensation will be paid in full and all other benefits under this Agreement will continue to be provided to him. (g) The Company will reimburse the Executive for all expenses he incurs in maintaining and operating the automobile described on Exhibit C. Consistent with the Company's past practices, the Company will reimburse the Executive for all reasonable business expenses incurred by the Executive relating to the conduct of the Business of the Company. Any such expense reimbursement shall be conditioned upon the Executive presenting to the Company an itemized account of such expenses will supporting documents. Reimbursable expenses shall include reasonable and necessary expenses for entertainment, travel, meals and hotel accommodations. (h) Directors and officers liability insurance coverage but only if and to the same extent such coverage is provided to any other officer or director of the Company, and indemnification by the Company to the full extent permitted by law against liability claims arising out of his activities as an employee or director of the Company. (i) Such other emoluments as the Board may from, time to time, grant. 4. Termination of Agreement. -3- 4 (a) This Agreement shall terminate upon the death of the Executive while he is employed by the Company, and in such event: (i) the Beneficiary shall be entitled to receive the amount of the Executive's Salary prorated through the date of the Executive's death; (ii) the Beneficiary shall be entitled to receive an amount equal to the Executive's Salary at the time of his death, payable in twelve (12) equal monthly installments commencing on the first day of the month next following the Executive's death; (iii) the Beneficiary shall be entitled to receive a bonus for the calendar year in which the Executive dies in the amount determined pursuant to Section 3(c) multiplied by a fraction, the numerator of which shall be the numbers of days the Executive was employed by the Company during the calendar year, and the denominator of which shall be the number of days in the calendar year, payable in accordance with Section 3(c); (iv) the Beneficiary shall be entitled to any accrued but unpaid bonus for any prior calendar year as determined pursuant to and payable in accordance with Section 3(c); (v) the Beneficiary shall be entitled to receive any accrued but unpaid expense reimbursements; and (vi) such persons as may be entitled thereto shall receive such benefits as may be provided under terms of the Employee Plans. In addition to the benefits otherwise provided above under this Section 4(a), for a period of twelve (12) months following the Executive's death, the Executive's surviving spouse and those persons who were the Executive's dependents at the time of the Executive's death shall be entitled to receive the benefits under the Employee Plans they would have been entitled to receive had the Executive continued to live during such twelve (12) month period. -4- 5 (b) This Agreement shall terminate in the event the Executive's employment with the Company terminates because of disability (as defined below). In such event, the Executive shall be entitled to receive: (i) the amount of the Executive's Salary prorated through the date of his termination of employment; (ii) an amount equal to the Executive's Salary at the time of his termination of employment, payable in twelve (12) equal monthly installments commencing on the first day of the month next following the Executive's termination of employment; (iii) a bonus for the calendar year in which the Executive's termination of employment occurs in the amount determined pursuant to Section 39c) multiplied by a fraction, the numerator of which shall be the numbers of days the Executive was employed by the Company during the calendar year, and the denominator of which shall be the number of days in the calendar year, payable in accordance with Section 3(c); (iv) any accrued but unpaid bonus for any prior calendar year as determined pursuant to and payable in accordance with Section 3(c); (v) accrued but unpaid expense reimbursements; and (vi) such benefits as may be provided under terms of the Employee Plans. For purposes of this Agreement, "disability" shall mean any physical or mental impairment or disability which prevents the Executive from performing his duties under this Agreement for a period of at least one hundred twenty (120) days and which is expected to be of permanent duration. A determination of whether the Executive is disabled shall be made by two licensed physicians, one appointed by the Board of Directors and one appointed by the Executive. In the event the two physicians are unable to agree with respect to whether the Executive is disabled, the determination of whether the Executive is disabled shall be made by a -5- 6 third duly licensed physician chosen by the two physicians previously appointed. (c) This Agreement shall terminate thirty (30) days following the date the Executive receives notice from the Company that it desires to terminate his employment with the Company. In the event that this Agreement is terminated pursuant to the preceding sentence without Cause (as defined in Section 4(g) below), the Executive shall be entitled to receive; (i) regular periodic payments of his Salary through the date this Agreement was scheduled to terminate under Section 2 hereof as though the Executive continued to be employed by the Company, reduced by any salary or bonus he receives during such period with respect to performing any of the acts described in the second sentence of Section 6(a) hereof; (ii) to the extent not provided by a successor employer, all benefits provided under the Employee Plans for a period of twelve (12) months following the date this Agreement terminates as though the Executive continued to be employed by the Company; (iii) a bonus for the calendar year in which this Agreement terminates in an amount equal to the amount determined pursuant to Section 3(c) multiplied by a fraction, the numerator of which shall be the numbers of days the Executive was employed by the Company during the calendar year, and the denominator of which shall be the number of days in the calendar year, payable in accordance with Section 3(c); (iv) any accrued but unpaid bonus for any prior calendar year as determined pursuant to and payable in accordance with Section 3(c); (v) accrued but unpaid expense reimbursements; and (vi) such benefits as may be provided under terms of the Employee Plans. -6- 7 In the event this Agreement is terminated pursuant to the first sentence of this Section 4(c) because the Company discharges the Executive for Cause, the Executive shall be entitled to receive; (i) the amount of his Salary prorated through the date this Agreement terminates; (ii) any accrued but unpaid bonus for any calendar year which ended prior to the date this Agreement terminates as determined pursuant to and payable in accordance with Section 3(c); (iii) accrued but unpaid expense reimbursements; and (iv) such benefits as may be provided under terms of the Employee Plans. (d) This Agreement shall terminate upon the Executive's voluntary termination of his employment with the Company (for some reason other than the Executive's death or disability). In the event this Agreement is terminated pursuant to the preceding sentence, the Executive shall be entitled to receive: (i) the amount of his Salary prorated through the date this Agreement terminates; (ii) any accrued but unpaid bonus for any calendar year which ended prior to the date this Agreement terminates as determined pursuant to and payable in accordance with Section 3(c); (iii) accrued but unpaid expense reimbursements; and (iv) such benefits as may be provided under terms of the Employee Plans. (e) If during the term of this Agreement, without the Executive's consent, either; (i) the Executive's duties with the Company are materially reduced; or (ii) his Salary is reduced; or -7- 8 (iii) the Company fails to continue the Executive as a participant in any Employee Plan in which he is participating without otherwise compensating him for such loss of benefits; and the Executive terminates his employment with the Company in response thereto, then this Agreement shall be deemed to be terminated pursuant to Section 4(c) without Cause. (f) In the event the Executive's employment with the Company terminates within six (6) months following a Change of Control (as defined below) for any reason other than the Executive's death or disability, this Agreement shall be deemed to be terminated pursuant to Section 4(c) without Cause; provided, however, that the payments described in Section 4(c)(i) shall continue for a minimum period of twenty-four (24) months following the termination of this Agreement. "Change of Control" shall mean either: (i) the acquisition of beneficial ownership of fifty percent (50%) or more of the value of the Company's issued and outstanding shares of common stock of all classes by a person or group of persons under common control, whether or not such acquisition is approved by the Board; or (ii) a change in the membership of the board at any time during any twelve (12) month period such that, following such change, at least one-half (1/2) of the members of the Board were not members of the Board at the start of such twelve (12) month period but only if the election of such new members of the Board was not approved by at least two-thirds (2/3) of the Directors who were either sitting at the beginning of such twelve (12) month period or elected to the Board during such twelve (12) month period with the approval of two-thirds (2/3) of the Director who were sitting at the beginning of such twelve (12) month period. (g) "Cause" as used in this Agreement shall mean that either -8- 9 (i) the Executive materially failed for some reason other than illness, injury, or disability to perform his obligations hereunder provided that the Executive shall have first received written notice from the Company stating with specificity the nature of such failure and the Executive shall not have corrected the failure cited in such notice within thirty (30) days after his receipt thereof; or (ii) the Executive has: (a) committed either any felony involving moral turpitude or any crime in the conduct of his official duties which is materially adverse to the welfare of the Company; or (b) committed any material act of fraud against the Company, its parent or affiliates, or materially misused his position for his personal gain or that of any third party; or (c) taken any action (other than an error in judgment made in the ordinary course of his duties) materially adverse to the welfare of the Company including, but not limited to, any material breach of the covenants and conditions contained in Sections 5 and 6 hereof. (h) Notwithstanding the preceding provisions of this Section 4, the amounts payable pursuant to Section 4(a)(ii), or Section 4(b)(ii), or Section 4(c)(i) shall, at the election of the payee thereof, be paid in a single actuarially-equivalent lump-sum amount (determined using a discount rate equal to the rate for immediate annuities then promulgated by the Pension Benefit Guaranty Corporation and without discount for mortality); provided, however, that such election shall be made before the first payment is made pursuant to the applicable Section. Any amount payable pursuant to this Section 4(h) shall be paid on the date the first payment was otherwise due under the applicable Section. (i) In the event that following the termination of this Agreement the Executive is entitled to receive any payments pursuant to this Agreement and the Executive dies, any such payments shall be made to the Beneficiary. The Executive shall be free to amend, alter or change his -9- 10 beneficiary designation form (Exhibit D); provided; however, that any such amendment, alteration or change shall be made by filing a new form with the Secretary of the Company. In the event the Executive fails to designate a beneficiary, following the death of the Executive all payments of the amounts specified by this Agreement which would have been paid to the Beneficiary pursuant to this Agreement shall instead be paid to the Executive's spouse, if she survives the Executive, or, if she does not survive the Executive, to the Executive's estate. 5. Confidentiality and Disclosure of Information. (a) The Executive, during his tenure as an officer and employee of the Company, has had and will have access to, and has gained and will gain knowledge with respect to the Company's trade secrets, as they may exist from time to time, and confidential information concerning its financial statements, operations, sales and marketing activities and procedures, bidding techniques, design and construction techniques, customer lists, list of owners of parking facilities, and credit and financial data concerning such persons (in the aggregate referred to hereinafter as "Secret and Confidential Information"). The Executive acknowledges that the Secret and Confidential Information constitutes a valuable, special and unique asset of the Company as to which the Company has the right to retain and hereby does retain all of its proprietary interests. However, access to and knowledge of the Secret and Confidential Information is essential to the performance of the Executive's duties hereunder. In recognition of this fact, the Executive agrees that he will not, during or after his employment with the Company, disclose any of the Secret and Confidential Information to any person, firm, corporation, association or other entity for any reason or purpose whatsoever (except as necessary in the performance of his duties hereunder) or made use of any of the Secret and Confidential Information for his own purposes or those of another but only if with respect to any such disclosure or use there is a reasonable possibility that -10- 11 such disclosure or use could have a materially adverse effect upon the Company. The provisions contained in this Section 5(a) shall also apply to information obtained by the Executive, in the course of his employment by the Company, with respect to the Company's subsidiary and affiliated companies. (b) The Executive shall promptly disclose, grant and assign to the Company for its sole use and benefit any and all inventions, improvements, technical information and suggestions relating to the Business of the Company (in the aggregate referred to as the "Creations") which the Executive has or may conceive, develop or acquire during his employment (whether or not during the usual working hours) together with all patent applications, letters patent, copyrights and reissues thereof that may, at any time be granted for or upon any of the Creations. At all times during and after his employment, the Executive shall promptly execute any and all documents requested to vest title to any and all of the Creations in the Company and to enable it to obtain and maintain the entire right and title thereto throughout the world and render to the Company, at its expense, any and all assistance required to protect its legal rights thereto. 6. Restrictive Covenant. The Executive recognizes that, in entering into this Agreement, the Company is relying on his extensive experience, knowledge, ability and contacts in the Business of the Company. For this reason, subject to the next sentence, the Executive covenants and agrees that during the period of his employment by the Company and either: (a) if this Agreement terminates pursuant to either Section 4(b), or 4(c) with Cause, or 4(d) hereof, for a period of two (2) years immediately following the termination of this Agreement; or (b) if this Agreement terminates pursuant to Section 4(c) without Cause, for a period immediately following the termination of this Agreement which ends on the date the Executive receives the last payment of Salary under Section 4(c)(i); -11- 12 as the case may be, he shall not have any direct or indirect ownership or other financial interest in and will not, directly or indirectly, engage in, or in any manner become interested in (as principal, agent, consultant, advisor, officer, director, employee or otherwise), any business which competes with the Business of the Company in the geographic market in which the Company is then operating nor will he solicit business directly or indirectly on behalf of such competing business. The preceding sentence shall not apply to any transaction or arrangement involving the Executive to which the Company consents in writing. Nothing herein shall preclude the Executive from being a member of or serving as an officer or director of any trade association or from owning, of record or beneficially, in the aggregate up to five percent (5%) of any issue of securities of a publicly traded company. 7. Remedies. It is recognized by the Executive that a special and confidential relationship exists between the Company and the Executive because of his knowledge, expertise and judgment, and the dependence of the Company on his knowledge, expertise and judgment. The Executive agrees that the remedy at law for any breach or threatened breach of the covenants set forth in Sections 5 and 6 will be inadequate and that any breach or attempted breach would cause such immediate and permanent damage as would be irreparable and the exact amount of which would be impossible to ascertain. The Executive further agrees that in the event of any such breach or threatened breach by the Executive, in addition to any and all other legal and equitable remedies available, the Company may have any of such actions enjoined by any court authorized by law to take such action. 8. Binding Effect; Non-Assignability. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company. The performance of the Executive hereunder is personal and nonassignable. 9. Invalidity. (a) The territorial, time and other limitations contained in Sections 5 and 6 are reasonable and properly required for the adequate protection of the -12- 13 Business of the Company, and in the event that any one or more of such territorial, time or other limitation is found to be unreasonable or otherwise invalid in any jurisdiction, in whole or in part, the parties acknowledge and agree that such limitation shall remain valid in all other jurisdictions. (b) If any provision, term, clause or part thereof in this Agreement is invalid, it shall not affect the remainder of said provision, term or clause of this Agreement, but said remainder shall be binding and effective against both parties hereto. 10. Arbitration. Any disputes between the parties with respect to the meaning or interpretation of this Agreement or the amounts of any payments hereunder which cannot be settled amicably by the parties hereto shall be settled by arbitration in Cleveland, Ohio, in accordance with the rules of arbitration of the American Arbitration Association. 11. Affiliates. Any services the Executive performs for an Affiliate (as defined below) shall be deemed performed for the Company hereunder. Any transfer of the Executive's employment from the Company to an Affiliate, or from an Affiliate to the Company, or from an Affiliate to another Affiliate shall be deemed not to constitute a termination of the Executive's employment with the Company and shall not terminate this Agreement. For purposes of this Agreement, the term "Affiliate" shall mean a corporation or unincorporated trade or business that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the Company. 12. Miscellaneous. (a) This Agreement embodies the entire agreement between the parties hereto concerning the subject matter hereof. This Agreement may not be changed except by a writing signed by the party against whom enforcement thereof is sought. -13- 14 (b) This Agreement has been executed in the State of Ohio and shall be governed and interpreted in accordance with the laws of the State of Ohio. (c) All notices given hereunder shall be mailed postage paid to the address of the receiving party as first indicated above or to such other place as such party may from time to time designate by written notice hereafter. (d) The use of the feminine, masculine or neuter pronoun herein shall not be restrictive as to gender and shall be interpreted in all cases as the context may require. The use of the singular or plural herein shall not be restrictive as to number and shall be interpreted in all cases as the context may require. (e) The section headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement. IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have executed this Agreement this 12th day of December, 1994. ATTEST: APCOA, INC. (the "Company") By: - ------------------------------------ ------------------------------- WITNESS: - ------------------------------------ ------------------------------- G. Walter Stuelpe, Jr. (the "Executive") -14- 15 EXHIBIT A EXECUTIVE'S BASE SALARY
CALENDAR YEAR ANNUAL SALARY ------------- ------------- 1994 $375,000 1995 and later years Salary for the prior calendar year increased by the greater of either (a) 3% or (b) the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers for the prior calendar year, as published by the Bureau of Labor Statistics.
-15- 16 EXHIBIT B For any calendar year after 1993 the Executive's bonus under Section 3(c) of the Agreement shall be an amount determined pursuant to the following formula: 8% of (EBITDACB for the calendar year minus X), but not less than zero. For this purpose, (a) EBITDACB for any calendar year shall be the sum of the amount determined in accordance with the definition of "EBITDAC" set forth in ss.1.1 of that certain Revolving Credit Agreement As of February 24, 1994 By and Among APCOA, Inc., the First National Bank of Boston and Other Banks Listed on Schedule 1 [thereto], and the First National Bank of Boston as Agent for the Banks (the "Revolving Credit Agreement") plus all bank charges (other than interest) incurred by the Company for such calendar year, and (b) X equals 15% of the Company's Average Invested Capital (as defined below) for the calendar year. "Average Invested Capital" for any calendar year is one-half of the sum of the amounts of Invested Capital (as defined below) determined as of the last day of such calendar year and the last day of the immediately preceding calendar year. "Invested Capital" for any calendar year equals (a) plus (b) minus (c) plus or minus (d) below where: (a) equals the sum of: (i) the principal amount of the Company's cash borrowings under the Revolving Credit Agreement; (ii) the principal amount owed by the Company under that certain Note Agreement with Prudential Insurance Company of America dated March 31, 1994; (iii) the principal amount of the Company's borrowings under any other senior or subordinated credit facility (including, without limitation, any facility which replaces a facility described in (i) or (ii) above); -16- 17 (iv) the preferred stock of AP Holdings, Inc. and APCOA, Inc. issued and outstanding as of October 31, 1994, excluding accrued dividends thereon; (v) the common stock of AP Holdings, Inc. issued and outstanding and owned by Holberg Industries, Inc. as of April 14, 1989; and (vi) the additional paid-in capital of AP Holdings, Inc. as of April 14, 1989 relating to the common stock then owned by Holberg Industries, Inc.; and (b) equals the sum of: (i) the Company's cumulative amortization charges for all periods from January 1, 1994 through the end of the calendar year; and (ii) the Company's cumulative net profit, if any, for all periods from January 1, 1994 through the end of the calendar year; and (c) equals the sum of: (i) the Company's cash and cash equivalents; and (ii) the Company's cumulative net loss, if any, for all periods from January 1, 1994 through the end of the calendar year; and (d) equals the net receivable or payable balance of the Company generated in connection with advances to or from, or transactions with, other entities which are under common control with the Company; all determined in accordance with the Company's regular financial accounting procedures consistently applied. An example showing the calculations required under the formula, and using estimated Company data for calendar years 1994 and 1995 for that purpose, is attached. -17- 18 ANALYSIS OF EXHIBIT B EXPECTATIONS OF JVH
1993 1994 1995 ---- ---- ---- Funded Debt 24.9 23.0 21.0 Preferred Stock 15.0 15.0 15.0 Paid in Capital 2.8 2.8 2.8 ---- ---- ----- 42.7 40.8 38.8 Deduct: Cash 2.2 2.0 2.0 Intercompany 0.5 0.5 ---- ---- ----- 40.5 38.3 36.3 Add: Net Profit & Amortization 2.2 (2.2 + 2.6) 4.8 ---- --------------- 40.5 41.1 Avg. for the Year 40.5 40.8 15% Capital Cost 6.08 6.12 EBITDAC 6.7 7.5 8.2 ---- ----- Excess 1.42 2.08 Incentive at 8% 113.6 166.4
-18- 19 EXHIBIT C G.W. STUELPE, JR. - BENEFITS AND PERQUISITES o Provident Executive Health Insurance, providing comprehensive medical, dental and vision coverages with no out-of-pocket expense. o Group Term Life Insurance providing a flat term benefit with no cash value or loan provisions. Matching Group Accidental Death and Dismemberment coverage. o Business travel Accident Insurance providing coverage for accidents occurring during the course of business. o Personal Accident Insurance offering full 24-hour accident protection, on or off the job. o Group Long-Term Disability Insurance. o Individual Long-Term Disability Insurance supplementing the Group coverage. o 401(k) Savings and Retirement/401(k) Wraparound Plans allowing for tax-sheltered long-term savings. o Continued coverage under the Supplemental Pension Plan as amended effective September 1, 1993. o Continued participation in the Apcoa, Inc. Retirement Plan for Key Executive Officers, as adopted by the Company on April 14, 1989. o The Executive will be provided with a leased automobile chosen by the Executive; provided, that the Company's lease payments shall not exceed $780 per month. o The Company shall pay all initiation fees, periodic dues and capital charges with respect to the Executive's maintaining a membership in one country club in the Cleveland area chosen by the Executive. o The Company shall pay all initiation fees, periodic dues, and capital charges relating to the Executive's maintaining membership in two business/luncheon clubs of the Executive's choice in the Cleveland area. -19- 20 EXHIBIT D DESIGNATION OF BENEFICIARY On __________, 1994, I, the undersigned, entered into an Executive Employment Agreement with APCOA, Inc. Pursuant to the terms of said Agreement, I have the right to designate a beneficiary to receive, in the event of my death, certain payments pursuant to said Agreement. I therefore, exercise this right and designate _______________ to receive any such payments if (s)he survives me, but if __________________ does not survive me, I designate ____________________. Any and all previous designations of beneficiary made by me are hereby revoked and I hereby reserve the right to revoke this designation of beneficiary. ------------------------------------- Dated: G. Walter Stuelpe, Jr. ---------------------------- Receipt of this Designation of Beneficiary form is acknowledged by the undersigned Secretary of APCOA, Inc. APCOA, INC. By: ---------------------------------- , Secretary Dated: ---------------------------- -20- 21 MEMORANDUM DATE: July 12, 1996 TO: J. Holten FROM: W. Stuelpe SUBJECT: Sand Hills KeyCorp, along with its senior officers and most of the heads of companies in Cleveland (including our major clients), are involved with a new project called "Sand Hills Golf Club". It will open in 1996 and they would like to add my name to the roster of business leaders that are on board. It would cost $4,000 now, with an additional $10,500 when they call. Obviously, it is hard to say no. If you agree, please approve and return. APPROVED: - --------------------------- John V. Holten Date: ---------------------- -21- 22 DATE: December 16, 1994 TO: John Holten FROM: Walter Stuelpe CC: SUBJECT: CONFIDENTIAL This is just a brief note to say thank you for finalizing my new Employment Agreement. Even though it took longer than either of us expected, I consider this an indication of your continued support. Separately, I would like to ask that you approve a membership in a club in Columbus Ohio known as Double Eagle. A 21 year client of APCOA's, and a major business leader in Columbus, Jim Petropoulos, "strongly" suggested that I join this exclusive club for the top 10 businessmen in Columbus and 100 business leaders from around the country. It is a great opportunity to cultivate business in Columbus as well as entertain clients at a very unique and exclusive facility (especially John Burns of Sterling who very much would like to be a member). Because it is an out-of-town membership, the cost is only $10,000 - comparable to a business or university club (which is provided for in Exhibit C of my contract). Therefore, I am requesting your approval to substitute Double Eagle for a second business club - as set out in the agreement. Once again, thanks for your commitment and please know that I agree with your business strategy for 1998 and will make every effort to implement it. Enclosure -22- 23 EXHIBIT C It is agreed that Walter Stuelpe may substitute membership in Double Eagle for a business club as provided for in Exhibit C of his employment agreement. APPROVED: --------------------------- John V. Holten -23- 24 EXECUTIVE EMPLOYMENT AGREEMENT THIS AGREEMENT is executed this 14th day of April , 1989, by and between APCOA, Inc., a Delaware corporation with offices at 25550 Chagrin Boulevard, Beachwood, Ohio 44122 (the "Company"), and G. Walter Stuelpe, Jr. of Shaker Heights, Ohio (the "Executive"). WITNESSETH: WHEREAS, the Company is engaged in the business of leasing and managing open-air parking lots and indoor garages and ramps for the purpose of parking motor vehicles on a leasehold, license, concession or management fee basis throughout the United States under agreement with municipalities, owners of properties, and/or otherwise, whether directly or through a subsidiary (the "Business of the Company"); and WHEREAS, the Executive has been employed by the Company in a management capacity for several years and, during the course of his employment, the Executive has become an experienced and valuable employee and is knowledgeable with respect to the Business of the Company, its trade secrets, customers, market areas, sources of supply and manner of doing business; and WHEREAS, the Company desires to continue to employ the Executive and the Executive desires to continue to work for the Company upon the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises hereto and the agreements and covenants hereinafter contained, the parties hereto, intending to be legally bound, mutually agree as follows: 1. Employment and Duties. The Company hereby employs the Executive to serve as its President and Chief Executive Officer, and the Executive hereby accepts employment by the Company upon the -24- 25 terms and conditions hereinafter set forth. In his capacity as the Company's President and Chief Executive Officer, the Executive shall have overall responsibility for the conduct of the Business of the Company. The Executive shall report to the Company's Board of Directors. The Executive shall devote his entire time, attention and energies to the Business of the Company, and, except as otherwise contemplated, shall not, during the term of this Agreement, engage in any other business activities that will interfere with the Executive's employment pursuant to this Agreement. 2. Term. (a) The term of this Agreement shall be for a period of five (5) years commencing on March 1, 1989, and ending on February 28, 1994. Unless terminated as set forth below in Section 4, this Agreement shall remain in effect for so long as the Executive is employed by the Company. (b) If this Agreement has not been terminated as set forth below in Section 4 prior to January 1, 1994, and neither party hereto has given notice to the other party by January 1, 1994, of its desire to have this Agreement terminate at the end of its original term (February 28, 1994), this Agreement shall continue in full force and effect for an additional one year period following the end of its original term on February 28, 1994, and the same procedure shall apply mutatis mutandis to any extended term of this Agreement with respect to periods ending on the last day of February in any year after 1994. 3. Compensation and Other Benefits. For the services to be rendered by him pursuant to this Agreement, the Company agrees to provide the Executive, so long as he shall be employed by the Company, the following compensation and benefits: (a) A bonus of $50,000 payable in a single lump-sum no later than six (6) months after the date of this Agreement. Notwithstanding any other terms of this Agreement, such bonus shall be payable to the Executive (or, if the -25- 26 Executive dies before payment is made, to a beneficiary designated by the Executive on a form prescribed by the Company (see Exhibit E attached hereto), the "Beneficiary") in all events and shall be in addition to all other amounts payable under this Agreement. (b) Annual salary at the rate set forth on Exhibit A ("Salary"), payable not less often than monthly in equal installments at the end of each month. (c) A bonus for each fiscal year in an amount determined pursuant to the provisions of Exhibit B hereof. (d) Group health and welfare coverage, other fringe benefits such as are enjoyed by senior executives of the Company generally, and the fringe benefits set forth in Exhibit C hereof. (e) Five (5) weeks of vacation annually during which time the Executive's compensation will be paid in full and all other benefits under this Agreement will continue to be provided to him (f) The Company will furnish the Executive with an automobile and will reimburse the Executive for all associated maintenance and operating expenses. The Company will reimburse the Executive for all reasonable business expenses incurred by the Executive relating to the conduct of the Business of the Company. Any such expense reimbursement shall be conditioned upon the Executive presenting to the Company an itemized account of such expenses with supporting documents. Reimbursable expenses shall include reasonable and necessary expenses for entertainment, travel, meals and hotel accommodations. (g) Benefits provided under the APCOA, Inc. Retirement Plan For Key Executive Officers (a copy of which is attached hereto as Exhibit D). -26- 27 Except as otherwise provided herein, the Company's obligation to provide any benefits to the Executive under the APCOA, Inc. Retirement Plan For Key Executive Officers shall be in addition to, and not in lieu of, any obligations the Company may have to provide the Executive with remuneration and other benefits under this Agreement. 4. Termination of Agreement. (a) This Agreement shall terminate upon the death of the Executive. Upon the Executive's death, the Executive's Beneficiary shall be entitled to receive: (i) the amount of the Executive's Salary through the date of his death; (ii) the amount determined under Section 3(c) hereof for the Company's fiscal year in which the Executive's death occurs, equitably prorated to reflect the fact that the Executive performed services for only a part of such fiscal year; and (iii) an amount equal to the annual Salary which the Company was paying to the Executive at the time of his death, payable in twelve (12) equal monthly installments commencing on the first day of the month next following the Executive's death. In addition to the benefits otherwise provided above under this subsection (a), for a period of twelve (12) months following the Executive's death, the Executive's surviving spouse and those persons who were the Executive's dependents at the time of the Executive's death shall be entitled to receive such benefits under any fringe benefit arrangement (including, without limitation, group health and welfare coverage) which covered the Executive at the time of his death as though the Executive had continued to live during such twelve (12) month period. (b) This Agreement shall terminate in the event of the Executive's termination of employment because of disability (as defined below). In such event, the Executive shall be entitled to receive: -27- 28 (i) the amount of the Executive's Salary through the date of his termination of employment; (ii) the amount determined under Section 3(c) hereof for the Company's fiscal year in which the Executive's termination of employment occurs, equitably prorated to reflect the fact that the Executive performed services for only a part of such fiscal year; and (iii) his Salary for a period of twelve (12) months following his termination of employment. For purposes of this Agreement, "disability" shall mean any physical or mental impairment or disability which prevents the Executive from performing his duties under this Agreement for a period of at least one hundred twenty (120) days and which is expected to be of permanent duration. A determination of whether the Executive is disabled shall be made by two licensed physicians, one appointed by the Board of Directors and one appointed by the Executive. In the event the two physicians are unable to agree with respect to whether the Executive is disabled, the determination of whether the Executive is disabled shall be made by a third duly licensed physician chosen by the two physicians previously appointed. (c) This Agreement shall terminate thirty (30) days following the date the Executive receives notice from the Company that it desires to terminate this Agreement. In the event that this Agreement is terminated pursuant to the preceding sentence and without cause (as defined in subsection(f) below), the Executive shall be entitled to receive; (i) the amount of his Salary through the date this Agreement was scheduled to terminate under Section 2 hereof, reduced by any salary or bonus he receives during such period with respect to performing any of the acts described in the second sentence of Section 6(a) hereof; -28- 29 (ii) the amount determined under Section 3(c) hereof for the Company's fiscal year in which this Agreement terminates equitably prorated to reflect the fact that the Executive performed services for only a part of such fiscal year; and (iii) to the extent not provided by a successor employer, all fringe benefits provided under Section 3(d) of this Agreement for a period of twelve (12) months following the date this Agreement terminates. In the event this Agreement is terminated pursuant to the first sentence of this subsection (c) because the Company discharges the Executive for cause (as defined in subsection (f) below), the Executive shall be entitled to receive only his Salary through the date of his termination of employment. (d) In the event of the termination of this Agreement because of the Executive's voluntary termination of employment for some reason other than death or disability, the Executive shall be entitled to receive only his Salary through the date of his termination of employment. (e) If during the term of this Agreement, without the Executive's consent, either (i) the Executive's duties with the Company are materially reduced; or (ii) his Salary payable under Section 3(b) hereof is reduced; or (iii) the benefit programs set forth in Section 3 above in which the Executive participates are materially modified in a manner detrimental to the Executive; then the Executive's employment with the Company shall be deemed to have been terminated pursuant to Section 4(c) hereof without cause. (f) "Cause" as used in this Agreement shall mean that either (i) the Executive materially failed for some reason other than illness, injury, or disability to perform his obligations hereunder provided that -29- 30 the Executive shall have first received written notice from the Company stating with specificity the nature of such failure and the Executive shall not have corrected the failure cited in such notice within thirty (30) days after his receipt thereof; or (ii) the Executive has: (a) committed either any felony involving moral turpitude or any crime in the conduct of his official duties which is materially adverse to the welfare of the Company; or (b) committed any material act of fraud against the Company, its parent or affiliates, or materially misused his position for his personal gain or that of any third party; or (c) taken any action (other than an error in judgment made in the ordinary course of his duties) materially adverse to the welfare of the Company including, but not limited to, any material breach of the covenants and conditions contained in Sections 5 and 6 hereof. (g) In the event that following the termination of this Agreement the Executive is entitled to receive any payments pursuant to this Agreement and the Executive dies, any such payments shall be made to the beneficiary designated by the Executive on a form prescribed by the Company (see Exhibit E attached hereto). The Executive shall be free to amend, alter or change such form, provided, however, that any such amendment, alteration or change shall be made by filing a new form with the Secretary of the Company. In the event the Executive fails to designate a beneficiary, following the death of the Executive all payments of the amounts specified by this Agreement which would have been paid to the Executive's designated beneficiary pursuant to this Agreement shall instead be paid to the Executive's spouse, if she survives the Executive, or, if she does not survive the Executive, to the Executive's estate. 5. Confidentiality and Disclosure of Information. (a) The Executive, during his tenure as an officer and employee of the Company, has had and will have access to, and has gained and will gain -30- 31 knowledge with respect to the Company's trade secrets, as they may exist from time to time, and confidential information concerning its financial statements, operations, sales and marketing activities and procedures, bidding techniques, design and construction techniques, customer lists, list of owners of parking facilities, and credit and financial data concerning such persons (in the aggregate referred to hereinafter as "Secret and Confidential Information"). The Executive acknowledges that the Secret and Confidential Information constitutes a valuable, special and unique asset of the Company as to which the Company has the right to retain and hereby does retain all of its proprietary interests. However, access to and knowledge of the Secret and Confidential Information is essential to the performance of the Executive's duties hereunder. In recognition of this fact, the Executive agrees that he will not, during or after his employment with the Company, disclose any of the Secret and Confidential Information to any person, firm, corporation, association or other entity for any reason or purpose whatsoever (except as necessary in the performance of his duties hereunder) or make use of any of the Secret and Confidential Information for his own purposes or those of another but only if with respect to any such disclosure or use there is a reasonable possibility that such disclosure or use could have a materially adverse effect upon the Company. The provisions contained in this subsection(a) shall also apply to information obtained by the Executive, in the course of his employment by the Company, with respect to the Company's subsidiary and affiliated companies. (a) The Executive shall promptly disclose, grant and assign to the Company for its sole use and benefit any and all inventions, improvements, technical information and suggestions relating to the Business of the Company (in the aggregate referred to as the "Creations") which the Executive has or may conceive, develop or acquire during his employment (whether or not during the usual working hours) together with all patent applications, -31- 32 letters patent, copyrights and reissues thereof that may, at any time be granted for or upon any of the Creations. At all times during and after his employment, the Executive shall promptly executive any and all documents requested to vest title to any and all of the Creations in the Company and to enable it to obtain and maintain the entire right and title thereto throughout the world and render to the Company, at its expense, any and all assistance required to protect its legal rights thereto. 6. Restrictive Covenant. The Executive recognizes that, in entering into this Agreement, the Company is relying on his extensive experience, knowledge, ability and contacts in the Business of the Company. For this reason, subject to the next sentence, the Executive covenants and agrees that during the period of his employment by the Company and, if this Agreement terminates pursuant to either Section 4(b), of 4(c) with cause, or 4(d) hereof, for a period of one (1) year immediately following the termination of this Agreement, he shall not have any direct or indirect ownership or other financial interest in and will not, directly or indirectly, engage in, or in any manner become interested in (as principal, agent, consultant, advisor, officer, director, employee or otherwise), any business which competes with the Business of the Company in the geographic market in which the Company is then operating nor will he solicit business directly or indirectly on behalf of such competing business. The preceding sentence shall not apply to any transaction or arrangement involving the Executive to which the Company consents in writing. Nothing herein shall preclude the Executive from being a member of or serving as an officer or director of any trade association or from owning, of record or beneficially, in the aggregate up to five percent (5%) of any issue of securities of a publicly traded company. 7. Remedies. It is recognized by the Executive that a special and confidential relationship exists between the Company and the Executive because of his knowledge, expertise and judgment, and the dependence of the Company on his knowledge, expertise and judgment. The Executive agrees that the remedy at law for any breach or threatened breach of the covenants set forth in Sections 5 and 6 will be inadequate and that any breach or attempted breach would cause such -32- 33 immediate and permanent damage as would be irreparable and the exact amount of which would be impossible to ascertain. The Executive further agrees that in the event of any such breach or threatened breach by the Executive, in addition to any and all other legal and equitable remedies available, the Company may have any of such actions enjoined by any court authorized by law to take such action. 8. Binding Effect; Non-Assignability. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company. The performance of the Executive hereunder is personal and nonassignable. 9. Invalidity. (c) The territorial, time and other limitations contained in Sections 5 and 6 are reasonable and properly required for the adequate protection of the Business of the Company, and in the event that any one or more of such territorial, time or other limitation is found to be unreasonable or otherwise invalid in any jurisdiction, in whole or in part, the parties acknowledge and agree that such limitation shall remain valid in all other jurisdictions. (d) If any provision, term, clause or part thereof in this Agreement is invalid, it shall not affect the remainder of said provision, term or clause of this Agreement, but said remainder shall be binding and effective against both parties hereto. 10. Arbitration. Any disputes between the parties with respect to the meaning or interpretation of this Agreement or the amounts of any payments hereunder which cannot be settled amicably by the parties hereto shall be settled by arbitration in Cleveland, Ohio, in accordance with the rules of arbitration of the American Arbitration Association. 11. Miscellaneous. (e) This Agreement embodies the entire agreement between the parties hereto concerning the subject matter hereof. This Agreement may not be changed -33- 34 except by a writing signed by the party against whom enforcement thereof is sought. (f) This Agreement has been executed in the State of Ohio and shall be governed and interpreted in accordance with the laws of the State of Ohio. (g) All notices given hereunder shall be mailed postage paid to the address of the receiving party as first indicated above or to such other place as such party may from time to time designate by written notice hereafter. (h) The use of the feminine, masculine or neuter pronoun herein shall not be restrictive as to gender and shall be interpreted in all cases as the context may require. The use of the singular or plural herein shall not be restrictive as to number and shall be interpreted in all cases as the context may require. (i) The section headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement. -34- 35 IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have executed this Agreement this 14th day of April, 1989. APCOA, INC. (the "Company") ATTEST: /s/ By: /s/ - -------------------------------- ------------------------------------ Chairman WITNESS: /s/ /s/ - -------------------------------- ---------------------------------------- G. Walter Stuelpe, Jr. (the "Executive") -35- 36 EXHIBIT A EXECUTIVE'S BASE SALARY
Period Annual Salary - ---------------------------------------- ------------- April 14, 1989, through April 13, 1990 $225,000 April 14, 1990, through April 13, 1991 235,000 April 14, 1991, through April 13, 1992 250,000 April 14, 1992, through April 13, 1993 265,000 April 14, 1993, through April 13, 1994 280,000
37 EXHIBIT B The Executive's bonus for any fiscal year of the Company (commencing with calendar year 1989) shall be the sum of the amounts determined under I, II and III below. I. An amount for any fiscal year of the Company determined as follows: (1) Begin with "Earnings Before Income Taxes" as shown on the Consolidated Statement of Earnings in the Company's certified financial statements. (2) Add to (1) above the following: (a) all depreciation and amortization charges shown on the Consolidated Statement of Changes in Financial Position in the Company's certified financial statements; and (b) all interest expense shown on the Consolidated Statement of Earnings in the Company's certified financial statements; and (c) any amount of short-term incentive compensation accrued and deducted in determining Earnings Before Income Taxes in (1) above; and (d) any intercompany charges accrued and deducted in determining from Earnings Before Income Taxes in (1) above. (3) Twenty percent (20%) of the aggregate of the "Purchase of Property, Property Rights and Equipment" amounts shown on the Consolidated Statement of Changes in Financial Position in the Company's certified financial statement for the current year and each of the previous four years shall be subtracted from the amount determined under (2) above. (4) The "Floor Amount" for the year as set forth on the attached Schedule of Floor Amounts shall be subtracted from the amount determined under (3) above. (5) The amount determined under (4) above shall be multiplied by 6%. II. An additional amount based on the Executive's achievement of specific management goals set by the Board of Directors, which amount shall not exceed 13-1/3% of the amount determined under I above. III. An additional amount determined in the discretion of the Board of Directors, which amount shall not exceed 20% of the amount determined under I above. 38 Schedule of Floor Amounts
Floor Amount Year (in thousands) ---- -------------- 1989 $3,776 1990 4,834 1991 5,669 1992 6,198 1993 6,975 1994 7,885
-2- 39 EXHIBIT C G.W. STUELPE BENEFITS AND PERQUISITES I. HEALTH INSURANCE - Provident Plan II - Family A. Comprehensive Medical Covers medical expenses for treatment or diagnosis, subject to Customary and Reasonable schedule, Second Surgical Opinions and Pre-Admission Certification programs. There is an annual deductible of $100 per individual, $200 per family, before co-insurance is paid at 80/20%. An annual out-of-pocket maximum of $500 per individual, $1,000 per family, is then applied, after which 100% insurance is payable for the remainder of the calendar year. B. Dental 1. Provides up to $1,000 per individual per calendar year for dental services. Benefits are subject to $50 per individual annual deductible, then become payable as follows: a. 100% for preventive; b. 80% for restorative; c. 50% for complex. 2. Dependent orthodontic services are also paid at a 50% rate to a separate $1,000 lifetime maximum per dependent. C. Vision 1. A schedule of benefits for vision is provided once per year as follows: a. Vision Exam -- $30.00 b. Lenses______ -- $20.00 to $30.00 each c. Frames______ -- $40.00 D. Executive Medical Reimbursement The executive level of Plan II provides for 100% payment of all medical, dental and vision expenses submitted. This includes payment of deductibles, co-insurance balances and expenses above and beyond the base plan limits described in A, B and C above. 40 * APCOA'S EXPENSE IS $285/MO...$3,420/YR. II. LIFE INSURANCE - North American Life A. This plan provides Term Life and Accidental Death and Dismemberment coverages of $225,000 for the executive. * APCOA'S EXPENSE IS $74.93/MO...$899.16/YR. III. LONG-TERM DISABILITY - North American Life A. This program provides monthly benefit payments of up to 66-2/3% (or 70% all sources) of base monthly income after 90 days of disability due to illness or injury. 1. The executive's current benefit would be $5,000 per month, the maximum benefit allowable. * APCOA'S EXPENSE IS $42/MO...$504/YR. IV. BUSINESS TRAVEL ACCIDENT. - Insurance Company of North America A. This plan provides accidental death dismemberment coverage while the executive travels on APCOA business. * The expense of this plan is not calculated individually. It is part of a total annual premium paid for all employees covered. V. 24-HOUR PERSONAL ACCIDENT - Insurance Company of North America A. This program provides around-the-clock accidental death and dismemberment coverage for the executive and his eligible family dependents as follows: 1. $250,000 -- W. Stuelpe (100%) 2. $100,000 -- Mrs. Stuelpe (40%) 3. $ 12,500 -- Each Dependent Child (5%) B. If the executive becomes eligible for benefits paid under Business Travel Accident portion of policy, benefits are not payable under the Personal Accident Policy. * APCOA'S EXPENSE IS $18.75/MO...$225/YR. VI. 401(K) SAVINGS & RETIREMENT PLAN A. Under this program the executive is contributing 6% of earnings on a pre-tax basis. His maximum contribution per year is $7,627 for 1989 - this amount will be adjusted in future years for changes in the cost of living. -2- 41 B. APCOA is contributing $.25 for every dollar contributed by the executive. Maximum APCOA contributions for 1989 is $1,907. * APCOA'S EXPENSE IS (MAX)...25% of the Executive's contributions. VII. DEFERRED COMP./EXECUTIVE RETIREMENT A. This program provides $200,000 Life Insurance. B. At retirement, this program will provide a benefit of $2,936.50 per month for 240 months. C. The current cash value of this policy is $5,676. * APCOA'S EXPENSE IS...$2,500/YR. VIII. LEASED CAR A. 1988 Buick Park Avenue, currently valued at $16,578 (as of 11/30/88). (Replacement is due in July, 1991.) B. Due to the personal nature of this benefit, the cost of the automobile insurance coverage required by the Executive cannot be ascertained. C. All maintenance and gas expenses for the leased car are reimbursed to the Executive. * APCOA'S LEASE EXPENSE IS $543.42/MO...$6,521.04/YR. IX. COUNTRY CLUB MEMBERSHIP A. Mr. Stuelpe is a member of Mayfield Country Club. APCOA shall reimburse the monthly membership fees and capital charges, totaling $272.20 per month and $3,266.40 per year. Business-related entertainment charges incurred by the Executive in using Mayfield Country Club are also reimbursed by APCOA. -3- 42 X. DOWNTOWN CLUB MEMBERSHIP The Executive is a member of The Union Club in downtown Cleveland. APCOA shall reimburse the Executive for his club dues (currently $390 per quarter, $1,560 per year). Business-related entertainment expenses incurred by the Executive in using The Union Club shall be reimbursed by APCOA. -4- EX-10.8 40 EMPLOYMENT AGREEMENT 1 Exhibit 10.8 EXECUTIVE EMPLOYMENT AGREEMENT THIS AGREEMENT is executed as of the 1st day of July, 1995 by and between APCOA, INC., a Delaware corporation with offices at 25550 Chagrin Boulevard, Beachwood, Ohio 44122 (the "Company"), and JAMES V. LaROCCO (the "Executive"). W I T N E S S E T H: WHEREAS, the Company is engaged in the business of operating and managing open air parking lots and indoor garages and ramps for the purpose of parking motor vehicles on a leasehold, license, concession or management fee basis through the United States under agreement with municipalities, owners of properties, and/or otherwise (the "Business of the Company"); and WHEREAS, the Executive has been employed by the Company in a management capacity for several years and during the course of his employment, the Executive has become an experienced and valuable employee and is knowledgeable with respect to the Business of the Company, its trade secrets, customers, market areas, sources of supply and manner of doing business; and WHEREAS, the Company desires to continue to employ the Executive and the Executive desires to continue to work for the Company upon the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises hereto and the agreements and covenants hereinafter contained, the parties hereto, intending to be legally bound, mutually agree as follows: 2 1. Employment and Duties. The Company hereby employs the Executive to serve as Executive Vice President and Chief Operating Officer of the Company (or under such title as the Chief Executive Officer may hereafter assign to him). The Executive hereby accepts employment upon the terms and conditions hereinafter set forth. The Executive shall be responsible for operations of the Company as set forth and prescribed by Company operating procedure and policy, corporate standards, and contractual guidelines. He shall report to the President and Chief Executive Officer and perform such duties as may be reasonably assigned to him by such officer. The Executive agrees to comply in all material respects with the Standards of Conduct set forth in Exhibit A hereof ("Standards of Conduct"). The Executive shall devote his entire time, attention and energies to the Business of the Company, and shall not, during the term of this Agreement, engage in any other business activities that will interfere with the Executive's employment pursuant to this Agreement. 2. Term. (a) The term of this Agreement shall be for a period three (3) years commencing on July 1, 1995 and ending on June 30, 1998. (b) If this Agreement has not been terminated as set forth below in Section 4 prior to June 30, 1998, and neither party hereto has given written notice to the other party by April 30, 1998 of its desire to have this Agreement terminate at the end of its original term (June 30, 1998), this Agreement shall continue in full force and effect for an additional one-year period following the end of its original term on June 30, 1998, and the -2- 3 same procedure shall apply mutatis mutandis to any extended term of this Agreement with respect to periods ending on June 30 in any year after 1998. 3. Compensation and Other Benefits. For the services to be rendered by him pursuant to this Agreement, the Company agrees to provide the Executive, so long as he shall be employed by the Company, the following compensation and benefits: (a) Salary at the rate of not less than $165,000.00 per annum ("Base Salary"), payable not less often than monthly in equal installments at the end of each month. The Base Salary figure shall be reviewed annually and may be increased at the sole discretion of the Chief Executive Officer. Any such increase in the Base Salary shall be deemed for all purposes hereunder to be an amendment to this Agreement and this Agreement as so amended shall remain in effect until otherwise terminated as provided herein. (b) Such bonuses as the Executive may have earned under the Executive Bonus Plan set forth in Exhibit B hereof. (c) Group health and welfare coverages, often fringe benefits such as are enjoyed by senior executives of the Company generally, and such other emoluments and fringe benefits as shall be determined by the Company from time to time. (d) Four (4) weeks of vacation annually during which time the Executive's compensation will be paid in full and all other benefits under this Agreement shall continue to be provided to him. (e) The Company will furnish the Executive with an automobile, will provide appropriate insurance coverage for such automobile, and will reimburse the Executive for -3- 4 all gasoline and maintenance costs relating to such automobile. Any such reimbursement shall be conditioned upon the Executive presenting to the Company, in accordance with applicable Company policies and procedures, an itemized account concerning his use of the automobile and distinguishing between use in connection with the Business of the Company and otherwise. (f) The Company will reimburse the Executive for reasonable business expenses incurred by the Executive relating to the conduct of the Business of the Company. Any such expense reimbursement shall be conditioned upon the Executive presenting to the Company, in accordance with applicable Company policies and procedures, an itemized account of such expenses with supporting documents. Reimbursable expenses shall include reasonable and necessary expenses for entertainment, travel, meals and hotel accommodations. (g) The Executive shall be provided with directors and officers liability insurance coverage to the same extent as the other Directors and/or senior officers of the Company, and shall be indemnified by the Company to the full extent permitted by law against liability claims arising out of his activities as an employee of the Company or a member of the Board. (h) The Company will provide a Supplemental Pension Plan as described in Exhibit C. 4. Termination of Agreement. -4- 5 (a) This Agreement shall terminate upon the death of the Executive. Upon the Executive's death, a beneficiary (the "Beneficiary") designated by the Executive as prescribed in Section 12 shall be entitled to receive: (i) the amount of the Executive's Base Salary through the date of his death; (ii) any accrued but unpaid amount under Section 3(b) and the amount determined under Section 3(b) hereof for the Company's fiscal year in which the Executive's death occurs as though the Executive had survived and continued to work for the Company pursuant to this Agreement through the end of such fiscal year, payable at the time prescribed in Exhibit B; and (iii) an aggregate amount equal to the sum of (A) the annual Base Salary at the time of the Executive's death, and (B) $9,600.00 (which represents the estimated annual value of the Executive's right to use of an automobile provided by the Company and related benefits described in Section 3(e) hereof), payable in twelve (12) equal monthly installments commencing on the first day of the month next following the Executive's death. In addition, for a period of twelve (12) months following the Executive's death, (a) the Company shall continue to provide the benefits under Section 3(c) to such persons who would have been entitled to such benefits had the Executive survived and continued to be employed by the Company hereunder for such twelve (12) month period. -5- 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 has continued to work for the Company pursuant to this Agreement through the end of such fiscal year, payable at the time prescribed in Exhibit B; and (iii) an aggregate amount equal to the sum of (A) the annual Base Salary at the time of the Executive's disability and (B) $9,600.00 (which represents the estimated annual value of the Executive's right to use of an automobile provided by the Company and related benefits described in Section 3(e) hereof), payable in twelve (12) equal monthly installments commencing on the first day of the month next following the Executive's termination of employment; provided, however, that such payments shall be reduced by any amounts payable to the Executive under any disability benefit program (whether or not insured) maintained by the Company. In addition, for a period of twelve (12) months following the Executive's termination of employment because of disability, the Company shall continue to provide the benefits under Section 3(c) to such persons (including the Executive) who would have been -6- 7 entitled to such benefits had the Executive continued to be employed by the Company for such twelve (12) month period. For purposes of this Agreement, "disability" shall mean any physical or mental impairment or disability which prevents the Executive from performing his duties under this Agreement for a period of at least one hundred twenty (120) days and which is expected to be of permanent duration. A determination of whether the Executive is disabled shall be made by two licensed physicians, one appointed by the Board of Directors and one appointed by the Executive. In the event the two physicians are unable to agree with respect to whether the Executive is disabled, the determination of whether the Executive is disabled shall be made by a third duly licensed physician chosen by the two physicians previously appointed. (c) This Agreement shall terminate sixty (60) days following the date the Executive receives notice from the Company that it desires to terminate this Agreement. In the event that this Agreement is terminated pursuant to the preceding sentence and without Cause (as defined in subsection (e) below), the Executive shall be entitled to receive: (i) an aggregate amount equal to the greater of either (A) the Annual Base Salary at the time this Agreement terminates or (B) the aggregate amount payable to the Executive under the Company's Severance Benefit Policy, payable in twelve (12) equal monthly installments commencing on the first day of the month coinciding with or next following the date this Agreement terminates; (ii) any accrued but unpaid amount under Section 3(b) payable at the time prescribed in Exhibit B; -7- 8 (iii) not later than the 15th day of the fourth month following the close of the Company's fiscal year in which this Agreement terminates, an amount equal to the amount determined under Section 3(b) hereof for the Company's fiscal year in which this Agreement terminates (the "Termination Bonus"), determined as though the Executive continued to be employed by the Company through the end of such fiscal year, multiplied by a fraction, the numerator of which equals the number of days remaining in such fiscal year following the date this Agreement terminates plus 365, and the denominator of which equals 365; (iv) in the event this Agreement was scheduled to terminate under Section 2 hereof after the first anniversary of the date this Agreement terminates under this Section 4(c), then during the period commencing on the first anniversary of the date this Agreement terminates under this Section 4(c) and ending on the last day of the month in which occurs the date this Agreement was scheduled to terminate under Section 2 hereof, the Executive shall be entitled to receive each month, commencing with the month which coincides with or next follows the first anniversary of the date this Agreement terminates, an amount equal to the sum of (a) one-twelfth (1/12) of his annual Base Salary plus (b) one-twelfth (1/12) of the Termination Bonus, reduced by any salary or bonus he receives in any such month with respect to performing any of the acts described in the second sentence of Section 6(a) hereof; (v) for a period of twelve months following the Executive's termination of employment, the Company shall continue to provide the benefits -8- 9 under Sections 3(c) and 3(e) to such persons (including the Executive) who would have been entitled to such benefits had the Executive continued to be employed by the Company for such twelve-month period but only to the extent provided by a successor employer; provided, however, that any accounting the Executive is required to provide to the Company under Section 3(e) need not distinguish between the use of the automobile in connection with the Business of the Company and other use. In the event this Agreement is terminated pursuant to the first sentence of this subsection (c) because the Company discharges the Executive for Cause (as defined in subsection (e) below), the Executive shall be entitled to receive only his Base Salary through the date of his termination of employment and the Company will have no further obligation to Executive under this Agreement or otherwise. (d) In the event of the termination of this Agreement because of the Executive's voluntary termination of employment for some reason other than death or disability, the Executive shall be entitled to receive only his Base Salary through the date of his termination of employment and the Company will have no further obligations to Executive under this Agreement or otherwise. (e) "Cause" as used in this Agreement shall mean that either: (i) in the judgment of the Board of Directors of the Company, ascertained by a majority vote, the Executive has materially failed for some reason other than illness, injury, or disability to perform his obligations hereunder; or -9- 10 (ii) the Executive has: (a) committed either any felony involving moral turpitude or any crime in the conduct of his official duties which is materially adverse to the welfare of the Company; or (b) committed any material act of fraud against the Company, its parent or affiliates, or materially misused his position for his personal gain or that of any third party; or (c) taken any action (other than an error judgment made in the ordinary course of his duties) materially adverse to the welfare of the Company, including, but not limited to, any violation of the Standards of Conduct attached hereto or any breach of the covenants and conditions contained in Sections 5 and 6 hereof. 5. Confidentiality and Disclosure of Information. (a) The Executive, during his tenure as an officer and employee of the Company, has had and will have access to, and has gained and will gain knowledge with respect to the Company's trade secrets, private and secret processes, as they may exist from time to time, and confidential information concerning its financial statements and operations conducted by the Company, its sales and marketing activities and procedures, its bidding techniques, its design and construction techniques, its customer list of owners of parking facilities or credit and financial data concerning such customers or potential customers (in the aggregate referred to hereinafter as "Secret and Confidential Information"). The Executive acknowledges that such information constitutes a valuable, special and unique asset of the Company as to which the Company has the right to retain and hereby does retain all of its proprietary interests. However, access to and knowledge of such Secret and Confidential Information is essential to the performance of the Executive's services for the Company. In recognition of this fact, the Executive agrees -10- 11 that he will not, during or after his employment with the Company, disclose any of such Secret and Confidential Information to any person, firm, corporation, association or other entity for any reason or purposes whatsoever or make use of any such Secret and Confidential Information for his own purposes or those of another. The provisions contained in this subsection (a) shall also apply to information obtained by the Executive in the course of his employment by the Company with respect to the Company's subsidiary and affiliated companies. (b) The Executive shall promptly disclose, grant and assign to the Company for its sole use and benefit any and all inventions, improvements, technical information and suggestions relating to the Business of the Company (in the aggregate referred to as the "Creations") which the Executive has or may conceive, develop or acquire during his employment (whether or not during the usual working hours) together with all patent applications, letters patent, copyrights and reissues thereof that may, at any time, be granted for or upon any of the Creations. At all times during and after his employment, the Executive shall promptly execute any and all documents requested to vest title to any and all of the Creations in the Company and to enable it to obtain and maintain the entire right and title thereto throughout the world and render to the Company, at its expenses, any and all assistance required to protect its legal rights thereto. 6. Restrictive Covenant. (a) The Executive recognizes that the Company is relying on its extensive experience, knowledge, ability and contacts in the Business of the Company in entering into this Agreement. For this reason, the Executive covenants and agrees that during the -11- 12 period of his employment by the Company and, if his Agreement terminates pursuant to either Section 4(b), or 4(c) with Cause, or 4(d) hereof, for a period of one year immediately following the termination of this Agreement he shall not have any direct or indirect ownership or other financial interest in, or in any manner become interested in (as principal, agent, consultant, advisor, officer, director, employee or otherwise), any business which competes with the Business of the Company in the geographic market in which the Company is then operating, or solicit business directly or indirectly on behalf of such competing business. Nothing herein shall preclude the Executive from being a member of or servicing as an officer or director of any trade association or from owning, of record or beneficially, in the aggregate up to five percent (5%) of any issue of securities of a publicly traded company. (b) Notwithstanding anything to the contrary set forth in Section 13(b) hereof, any dispute between the parties with respect to the interpretation or enforceability of Section 6(a) hereof (Restrictive Covenant) as it applies to a termination for Cause under Section 4(c) hereof or any dispute with respect to any amount payable under Section 4(c)(iv) hereof which cannot be settled amicably by the parties hereto shall be settled by final and binding arbitration in Cleveland, Ohio in accordance with the rules of arbitration of the American Arbitration Association. 7. Remedies. It is recognized by the Executive that a special and confidential relationship exists between the Company and the Executive because of his knowledge, expertise and judgment and the dependency of the Company on his knowledge, expertise and judgment. The Executive -12- 13 agrees that the remedy at law for any breach or unthreatened breach of the covenants set forth in Sections 5 and 6 will be inadequate and that any breach or attempted breach would cause such immediate and permanent damage as would be irreparable and the exact amount of which would be impossible to ascertain. The Executive further agrees that in the event of any such breach or threatened breach by the Executive, in addition to any and all other legal and equitable remedies available, the Company may have any such actions enjoined by any court authorized by law to take such action. 8. Physical Examination. The Executive shall undergo an annual physical examination. The cost of such physical examination shall be borne by the Company. A written report of the results of such physical shall be submitted to the Chief Executive Officer of the Company. 9. Assignment. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company. The performance of the Executive hereunder is personal and nonassignable. 10. Invalidity. (a) The territorial, time and other limitations contained in Sections 5 and 6 are reasonable and properly required for the adequate protection of the Business of the Company, and in the event that anyone or more of such territorial, time or other limitation is found to be unreasonable or otherwise invalid in any jurisdiction, in whole or in part, the parties acknowledge agree that such limitation shall remain and be valid in all other jurisdictions. -13- 14 (b) If any provision, term, clause or part thereof in this Agreement is valid, it shall not affect the remainder of said provision, term or clause of this Agreement, but said remainder shall be binding and effective against both parties hereto. 11. Representations and Warranties of the Parties. (a) The Company represents and warrants to the Executive that (i) the Company is a corporation duly organized and validly existing and in good standing under the laws of the State of Delaware; and (ii) the Company has the power and authority to enter into and carry out this Agreement, and there exists no contractual or other restriction upon its so doing. (b) The Executive represents and warrants to the Company that there exists no contractual or other restriction upon his entering into and carrying out this Agreement. 12. Post-Mortem Payments; Designation of Beneficiary. In the event that, following the termination of the Executive's employment with the Company, the Executive is entitled to receive any payments pursuant to this Agreement and the Executive dies, such payments shall be made to the Executive's beneficiary designated hereunder. At any time after the execution of this Agreement, the Executive may prepare, execute, and file with the Secretary of the Company a copy of the Designation of Beneficiary form attached to this Agreement as Exhibit D. The Executive shall thereafter be free to amend, alter or change such form; provided, however, that any such amendment, alteration or change shall be made by filing a new Designation of Beneficiary form with the Secretary of the Company. In the event the Executive fails to designate a beneficiary, following the death of the Executive all payments of the amounts specified by this Agreement which would have been paid -14- 15 to the Executive's designated beneficiary pursuant to this Agreement shall instead be paid to the Executive's spouse, if any, if she survives the Executive or, if there is no spouse or she does not survive the Executive, to the Executive's estate. 13. Miscellaneous. (a) This Agreement, including its attachments, contains the entire agreement between the parties and incorporates and supersedes any and all prior discussions or agreements the parties may have had with respect to the terms of the Executive's employment with the Company. This Agreement may be not be changed orally, but only by a writing signed by each of the parties. The terms or covenants of this Agreement may be waived only by a written instrument specifically referring to this Agreement and executed by the party waiving compliance. The failure of a party at any time, or from time to time, to require performance of any of the other party's obligations under this Agreement shall in no manner affect the waiving party's right to enforce any provisions of this Agreement at a subsequent time, and the waiver by any party of any right arising out of any breach by the other party shall not be construed as a waiver of any right arising out of any subsequent breach. (b) This Agreement has been executed in the State of Ohio and shall be governed and interpreted in accordance with the laws of the State of Ohio without regard to conflict of law provisions. Except as set forth in Section 6(b) hereof, any disputes between the parties which cannot be settled amicably shall be subject to the jurisdiction of the courts of Ohio. -15- 16 (c) Any notices required under this Agreement shall be in writing and effective when received by the other party. Notices to the Executive shall be addressed to him at his then current mailing address on file at the Company. Notices to the Company shall be addressed to the Secretary of the Company at the Company's headquarters. (d) The use of the feminine, masculine or neuter pronoun herein shall not be restrictive as to gender and shall be interpreted in all cases as the context may require. The use of the singular or plural herein shall not be restrictive as to number and shall be interpreted in all cases as the context may require. (e) The Company may withhold from any amounts payable to the Executive, the Executive's beneficiary designated hereunder, or any other person, all amounts necessary to satisfy the requirements of any state or federal statute including, without limitation, the requirements of the United States Internal Revenue Code. IN WITNESS WHEREOF, the parties hereto, tending to be legally bound, have executed this Agreement this 19th day of October, 1995. ATTEST: APCOA, INC. (The "Company") /s/ BY: /s/ G.W. Stuelpe - -------------------------------- ------------------------------------ G.W. STUELPE, President and Chief Executive Officer -16- 17 WITNESS: /s/ BY: /s/ James V. LaRocco - -------------------------------- ------------------------------------ JAMES V. LaROCCO (the "Executive") -17- 18 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 -18- 19 exercise of sound ethical business judgment should not be in any manner limited by any relationship, any activity or any practice. The Company recognizes and respects the individual's right to engage in outside activities. However, the Company reserves the right to determine when these activities create a conflict of interest. All conduct of the individual must conform to the best interests of the Company and its Affiliates. 3. Reciprocity. Because of the nature and variety of the business engaged in by the Company and its Affiliates, certain legal problems could arise with respect to purchases made by the Company or its Affiliates if such purchases are conditioned upon suppliers' purchasing products and/or services sold by the Company or its Affiliates. Conversely, similar legal problems could arise if customers were to condition their purchases from the Company or its Affiliates upon a reciprocal purchase of products or services from them. This practice, commonly referred to as "reciprocity," is prohibited by various federal and state laws. It is the policy of the Company that the Company and its Affiliates comply with all applicable federal, state and local laws. The guidelines set forth below have been designed to ensure full compliance with such laws. These guidelines apply to all personnel having purchase or sales responsibilities. The executives of the Company and its Affiliates should disseminate these guidelines to appropriate employees and agents and require adherence thereto. 4. Purchase/Sales Guidelines. The following guidelines with respect to purchases and sales made by the Company or its Affiliates apply to all employees and agents of the Company or its Affiliates: -19- 20 (a) No employee or agent of the Company or its Affiliates having purchasing responsibilities or duties shall purchase any products or services from, or enter into or adhere to any contract, agreement or the condition or understanding that purchases made by him on behalf of the Company or its Affiliates will be based or conditioned upon any sales to such supplier by the Company or its Affiliates. (b) No employee or agent of the Company or its Affiliates having sales responsibilities or duties shall on behalf of the Company or its Affiliates sell products or services to, or enter into or adhere to any contract, agreement or understanding with any actual or potential customer on the condition or understanding that any purchase by the Company or its Affiliates from such customer will be based or conditioned upon any sales of the Company or its Affiliates to such customer. (c) No employee or agent of the Company or its Affiliates shall issue to personnel with primary purchasing responsibility any lists, notices, or other data identifying customers and their purchases from the Company or its Affiliates or specifying or recommending that purchases be made by the Company or its Affiliates from any of such customers. (d) No employee or agent of the Company or its Affiliates shall issue to personnel with primary sales responsibilities any lists, notices or other data pertaining to purchases made by the Company or its Affiliates from particular suppliers. (e) No employee or agent of the Company or its Affiliates shall prepare or maintain statistical computations which compare purchases from suppliers who supply products or services to the Company or its Affiliates. -20- 21 (f) No employee or agent of the Company or its Affiliates shall: (i) Communicate to any actual or potential seller or supplier of the Company or its Affiliates that preference will be given to the purchase of such seller's products or services based upon sales by the Company or its Affiliates to such supplier. (ii) Compare or exchange statistical data with any such seller or supplier to facilitate any relationship of mutual purchases and sales between such seller or supplier and the Company or its Affiliates. (iii) Communicate to any such seller or supplier the fact that the Company or its Affiliates have made any purchases from such seller or supplier for the purpose of inducing a purchase by such seller or supplier. (iv) Direct or recommend that the Company or its Affiliates purchase products or services from any seller or supplier for the purpose of reciprocating purchases made by, or promoting sales to, such seller or supplier. (v) Agree with any seller or supplier that such seller or supplier will purchase products or services from the Company or its Affiliates in order to reciprocate purchases made by the Company or its Affiliates from such supplier. 5. Standards of Business Ethics. To determine if a specific interest creates a conflict with the interests of the Company or its Affiliates, or if a specific interest creates a conflict with interests of the Company or its Affiliates, or if a specific practice violates an ethical standard is more difficult without judging the immediate circumstances involved. Moral and legal standards are relative measurements of proper behavior. Therefore, the Company can only set forth -21- 22 specific examples that may limit an individual's ability ethically and/or legally to perform his or her duties for the Company or its Affiliates. Such examples include: (a) Having any position or interest in any other business enterprise operated for a profit which would or could reasonably be supposed to conflict with the proper performance of the employee's duties or responsibilities, or which might tend to restrict the employee's independence of judgment with respect to a transaction between the Company or its Affiliates and such other business enterprise. (b) Seeking to, accepting, offering or providing either directly or indirectly from or to any individual, partnership, association, corporation or other business entity or representative thereof, doing or seeking to do business with the Company or its Affiliates the following: loans (except with bank or other financial institutions), services, payments, vacation or pleasure trips, or any gifts to more than nominal value, or gifts of money in any amount. (c) Benefiting personally from any purchase of any goods or services of any nature by the Company or its Affiliates, or deriving personal gain from actions taken or associations made in any capacity as an employee of the Company or its Affiliates. (d) Directly or indirectly acquiring as an investment, any stock of any corporation engaged in the concession business or any business in competition or doing business with the Company or its Affiliates, with the exception of nominal stock-holdings in publicly held corporations. -22- 23 (e) Disclosing to a third party any information or data regarding the financial status, decisions or plans of the Company or its Affiliates which might be prejudicial to the interests of the Company or its Affiliates, without first obtaining proper authorization. (f) Misusing one's position with the Company or its Affiliates or knowledge of the affairs of the Company or its Affiliates for personal gain or benefit. (g) Acquiring securities or other property (such as real estate) which the Company or its Affiliates have a present or potential interest in acquiring. (h) Carrying on of the business of the Company or its Affiliates with a firm in which the employee or near relative of the employee has an appreciable ownership interest, without disclosing the relationship and obtaining Company approval. (i) Engaging in practices or procedures which violate any laws, rules or regulations applying to the conduct of the business of the Company or its Affiliates or licenses held by the Company or its Affiliates, including violation of any antitrust laws. (j) Contributing funds or property of the Company or its Affiliates for political contribution purposes, in violation of local, state or federal laws. (k) Using or permitting others to use the services of the employees of the Company or its Affiliates or materials or equipment of the Company or its Affiliates for personal use or gain. (l) Condoning or failing to report to appropriate Company authority the activities of any other officer or employee of the Company or its Affiliates which violate the principles set forth in this policy statement. -23- 24 (m) Any other and all business practices which are construed or accepted by the general business community as unethical or in violation of law. 6. Obligations of Directors, Officers and Employees. Employment by or association with the Company or its Affiliates carries with it the responsibility to be constantly aware of the importance of ethical conduct. The individual must disqualify himself from taking part, or exerting influence, in any transaction in which his own interests may conflict with the best interests of the Company or its Affiliates. Interests which might otherwise be questionable may be entirely proper if accompanied by a full advance disclosure which affords an opportunity for prior approval or disapproval. The obligation to make such disclosure rests upon the individual. All disclosures should be directed through normal communication procedures to the Company's General Counsel at Company Headquarters. Upon disclosure, the Company recognizes that there may be many borderline situations, and it does not intend to be unreasonable in considering these cases, giving recognition to the attendant circumstances. Should disclosure by an individual indicate the possibility of a conflict of interest, the individual will be given a reasonable time to remedy the situation. From time to time questions may arise with respect to this Company policy for which it is appropriate to consult with legal counsel. It is the responsibility of each officer and employee to recognize these situations and seek legal advice. Such advice may be obtained by contacting the Company's General Counsel at Company Headquarters. It is never a mistake to consult with counsel when in doubt with respect to the legality of a proposed course of action. -24- 25 7. Compliance with Antitrust Laws. It is the policy of the Company to comply with all applicable federal and state antitrust laws, including trade regulation laws, and it is expected that all of the officers and employees of the Company or its Affiliates will likewise comply. The failure to comply with applicable antitrust laws may subject the Company or its Affiliates and/or the individuals involved to criminal and civil penalties, including substantial fines and imprisonment, treble damage liability, injunctions or other court orders adversely affecting the operation of the business of the Company or its Affiliates, and the high cost of defending an antitrust case. The Company's General Counsel at Company Headquarters coordinates the handling of the legal affairs of the Company or its Affiliates. His staff is always available for consultation with respect to compliance with the antitrust laws. In addition, special legal counsel will be furnished, if required. No officer or employee of the Company or its Affiliates is authorized to take any action which the Company's General Counsel has previously advised would constitute a violation of the antitrust laws. To the extent it is legally able to do so, the Company shall be prepared to accept and/or defend any individual who has acted in good faith upon the advice of the Company's General Counsel, but who nevertheless has become involved in antitrust proceedings in the course of his employment by the Company or its Affiliates. Any individual who has violated the antitrust laws or is convicted of so doing shall be subject to appropriate disciplinary action, including dismissal, if such individual acted without seeking the advice of the Company's General Counsel or acted contrary to his advice. -25- 26 (a) Rules to Follow. Many of the questions arising under the antitrust laws must be resolved in the context of a particular fact situation. However, there are a number of clearly established rules of conduct which must be observed by all officers and employees of the Company or its Affiliates in all circumstances in order to assure that the Company or its Affiliates and the individuals involved are in full compliance with the antitrust laws. Set out below are a number of these rules and several other guidelines with respect to the application of the antitrust laws to the activities of the Company or its Affiliates: (i) No officer or employee of the Company or its Affiliates shall enter into, or attempt to enter into, any understanding, agreement, plan or arrangement, whether formal or informal, written or oral, express or implied, with any competitor in regard to prices, discounts, terms or conditions of or refusing to deal with any actual or potential customers or suppliers of the Company or its Affiliates. (ii) No officer or employee of the Company or its Affiliates shall give to or accept from a competitor, in written or oral form, or discuss with a competitor, any information concerning prices, terms or conditions of sale, or other competitive information except where: (a) the information or discussion is relevant and necessary to a bona fide existing or prospective customer or supplier relationship between the Company or its Affiliates and such competitor or supplier, or (b) the Company's General Counsel advised in writing that such -26- 27 conduct or discussions would be proper because there would be no reasonable basis for asserting a violation of the antitrust laws. 8. Implementation Procedure. It is difficult to define all situations and circumstances with precision in a policy. If there are nay questions at any time on present or future interpretations of this policy or the propriety of any conduct, employees of the Company or its Affiliates are requested to consult with the Company's General Counsel at Company Headquarters to make sure of the propriety of the action contemplated. In matters of antitrust and other specialized areas, the Company retains outside counsel who can be consulted as the need arises. The services of outside counsel may be obtained by making your request to the Company's General Counsel at Company Headquarters. -27- 28 EXHIBIT B EXECUTIVE BONUS PLAN JAMES V. LaROCCO No later than April 15 following the end of each calendar year during the term of this Executive Employment Agreement, the Executive shall be entitled to receive a bonus of up to 40% of the Base Salary paid to the Executive during such calendar year. Eligibility for bonus shall be based solely on the following criteria and up to the following percentages of Base Salary for each such criterion:
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
-28- 29 EXHIBIT C SUPPLEMENTAL PENSION PLAN IN CONSIDERATION of the mutual promises contained herein, it is agreed by the Executive and the Company as follows: 1. The Executive may retire from active employment at any time after he reaches ages 65. 2. Upon retirement, the Company shall provide the Executive with a retirement benefit of 240 equal consecutive monthly payments of $4,166.67. The first monthly payment shall be made on the first day of the month coinciding with or next following the date of the Executive's retirement. 3. In the event the Executive dies after commencement of payments under paragraph 2 hereof, but before he received the number of monthly installments set forth therein, the Company shall pay the remainder of said monthly installments to the executive's designated beneficiary hereunder. For purposes of this provision, the executive's designated beneficiary hereunder is Cindi LaRocco. Executive shall have the right to change such beneficiary at anytime hereafter, either prior to or after retirement, by notifying the Company in writing of such change. 4. If the executive shall die prior to age 65 while in the active employment of the Company, the Company shall pay the Executive's designated beneficiary an aggregate of $491,000 in 60 equal monthly installments of $8,183.33. The first installment shall be paid on the first day of the month following the month in which the Executive dies. 5. This Plan is part of a certain Executive Employment Agreement (the "Employment Agreement") dated July 1, 1995. Nothing herein shall prevent the Company from -1 30 terminating the Employment for "cause" in accordance with the terms thereof, and in which event this Plan shall be terminated and void in all respects and neither party shall have any further responsibility for satisfying any obligations that may have otherwise arisen hereunder. However, should the Executive's employment terminate prior to retirement for any reason, other than for "cause," resignation, disability or death, the Insurance Policy shall be transferred by the Company to the Executive within thirty days after such termination, and the full value of the Insurance Policy and its full cash surrender value shall become the sole property of the Executive to do with as he sees fit. In the event of the Executive's resignation which is not associated with termination for "cause" or for disability, the Company shall cancel the Insurance Policy and provide the Executive with the cash surrender value according to the following schedule:
After five (5) full years' service = 25% After ten (10) full years' service = 50% After fifteen (15) full years' service = 75% After twenty (20) full years' service = 100%
In the event of permanent disability the Company will continue to pay the premiums on the full value of the Insurance Policy for twelve months following the Executives' termination because of such disability in accordance with Section 4(b) of the Employment Agreement and after twelve months to transfer the full value of the Insurance Policy to the Executive within thirty days. The full value of the Insurance Policy and its full cash current value shall become the sole property of the Executive to do with as he sees fit, and the Company 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. -2- 31 6. For so long as Executive is receiving payments hereunder, Executive agrees that Sections 5, 6 and 7 of the Employment Agreement shall remain in full force and effect. 7. Nothing in this Plan shall prevent Executive from receiving, in addition to any amounts he may be entitled to under the Plan, any amounts which may be distributable to him at any time under any pension plan, profit sharing or other incentive compensation or similar plan of the Company now if effect or which may hereafter be adopted. 8. This Plan shall be binding upon the Executive, his heirs, executors, administrators and assigns, and on the Company, its successors and assigns. The rights of Executive hereunder shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge. 9. This Plan may be altered, changed, amended or terminated only by writing signed by the party to be bound thereby. 10. This document has been executed in the State of Ohio and shall be interpreted in accordance with the laws of that State without regard to conflict of law provisions. 11. This document contains the entire agreement between the parties with respect to the subject matter hereof, supersedes any and all prior discussions or agreements the parties may have had with respect thereto (including any prior Supplemental Pension Plan). -3- 32 EXHIBIT D TO EXECUTIVE EMPLOYMENT AGREEMENT DESIGNATION OF BENEFICIARY Effective July 1, 1995, I, the undersigned, entered into an Executive Employment Agreement with APCOA, INC. Pursuant to the terms of said Agreement, I have the right to designate a beneficiary to receive, in the event of my death, certain payments pursuant to said Agreement. I, therefore, exercise this right and designate Cindi LaRocco to receive any such payments if (s)he survives me, but if Cindi LaRocco does not survive me, I designate Estate. Any and all previous designations of beneficiary made by me are hereby revoked, and I hereby reserve the right to revoke this designation of beneficiary. /s/ James V. LaRocco ------------------------------------ JAMES V. LaROCCO Date: 10/19/95 -------- Receipt of this Designation of Beneficiary form is acknowledged by the undersigned Secretary of APCOA, INC. APCOA, INC. By: /s/ James C. Burdett -------------------------------- Assistant Secretary Date: 10/19/95 -------- -29- EX-10.9 41 EMPLOYMENT AGREEMENT 1 Exhibit 10.9 MANAGEMENT EMPLOYMENT AGREEMENT AGREEMENT dated as of April 1, 1996 by and between APCOA, Inc., a Delaware Company with offices at 800 Superior Avenue, Cleveland, Ohio 44122 ("Company"), and Trevor R. Van Horn ("Employee"). WHEREAS, the Company is engaged in the business of operating and managing open air parking lots and indoor garages and ramps for the purpose of parking motor vehicles on a leasehold, license, concession or management fee basis throughout the United States under agreement with municipalities, owners of properties, and/or otherwise (the "Business of the Company"). WHEREAS, Employee is being offered employment by the Company in a management capacity. During the course of his employment, the Employee will become knowledgeable with respect to the Business of the Company, its trade secrets, customers, market areas, sources of supply, and its manner of doing business. WHEREAS, the Company desires to employ Employee and Employee desires to work for the Company upon the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the premises hereto and the agreements and covenants hereinafter contained, the parties hereto, intending to be legally bound, mutually agree as follows: 1. EMPLOYMENT AND DUTIES The Company hereby employs Employee to serve as Corporate Vice President, Airport Properties (or under such title as the Company may hereafter assign to him). The Employee hereby accepts employment upon the terms and conditions hereinafter set forth. He shall report to the President and Chief Executive Officer or any other officer of the Company assigned to him by such officer. The Employee will have responsibility for the Airport Properties Group. The Employee shall devote his entire time, attention and energies to the Business of the Company, and shall not, during the term of this Agreement, engage in any other business activities that will interfere with the Employee's employment pursuant to this Agreement. The Employee agrees to comply in all material respects with the "Standards of Conduct" as set forth in Exhibit A. 2. TERM (a) The term of this Agreement shall be for a period of two years (and thereafter until terminated by either party in the manner set forth in Section 2(b) below) commencing as of the date set forth above, (unless Employee dies, or becomes incapacitated and unable to perform the duties set forth in Section 1 hereof and it is determined by the Company in its sole discretion that termination is necessary for the good of the Company) or the Employee is terminated for 2 cause pursuant to Section 7 hereof. In the event of death, incapacity or termination pursuant to Section 7 hereof, all rights of the Employee to receive compensation and benefits (except to the extent then accrued or vested) shall end as of the date of such event. (b) Unless terminated (for any reason described above) this Agreement shall remain in effect for so long as Employee is an employee of the Company. After the initial two (2) year period, either party shall have the right to terminate this Agreement by giving the other party thirty (30) days prior written notice of intent to do so. Notwithstanding any such termination, Sections 5 and 6 of this Agreement shall remain in full force and effect. 3. COMPENSATION For the services to be rendered by him pursuant to this Agreement, the Company agrees to pay to Employee, so long as he shall be employed hereunder, the following compensation: (a) Salary at the rate of not less than $135,000 per year, Base Salary ("Salary"), payable in 26 equal installments. The salary shall be reviewed at least annually and any adjustments shall be at the sole discretion of the President and Chief Executive Officer. (b) Company agrees to pay the Employee a bonus as set forth and outlined in Exhibit B hereto attached. (c) Benefits as outlined in Exhibit C attached. (d) Company automobile as well as reimbursement for gasoline and maintenance. Insurance for that automobile will be provided by the Company. (e) Employee is eligible for three (3) week vacation in 1996 and four (4) weeks vacation beginning January 1, 1997. 4. AUTHORIZED EXPENSES The Company will reimburse the Employee for reasonable business expenses on the presentation by the Employee, from time to time, of an itemized account of such expenses with documentary supporting materials. Such expenses shall include reasonable and necessary expenses for entertainment, travel, meals, and hotel accommodations. 5. CONFIDENTIALITY AND DISCLOSURE OF INFORMATION The Employee, during his tenure as an employee of the Company, will have access to, and will gain knowledge with respect to the Company's trade secrets, private and confidential information concerning its financial statements and operations conducted by the Company, its sales and marketing activities and procedures, its bidding techniques, its design and construction techniques, its customer list of owners of parking facilities or credit and financial data concerning such customers or potential customers (in the aggregate hereinafter as "Secret and Confidential Information"). The Employee acknowledges that such information constitute a -2- 3 valuable, special and unique asset of the Company as to which the Company has the right to retain and hereby does retain all of its proprietary interests. However, access to and knowledge of such Secret and Confidential Information are essential to the performance of the Employee's services for the Company. In recognition of this fact, the Employee agrees that he will not, during or after his employment with the Company, disclose any of such Secret and Confidential Information to any person, firm, corporation, association of other entity for any reason or purpose whatsoever, except as necessary in the performance of his duties as an Employee of the Company or make use of any such Secret and Confidential Information for his own purposes or those of another. 6. RESTRICTIVE COVENANT (a) The Employee recognizes that the Company is relying on his extensive experience, knowledge, ability and contacts in the Business engaged in by the Company in entering into this Agreement. For this reason, Employee covenants and agrees that during the period of his employment by the Company, and for a period of one year immediately following such employment, (except in the event the Company elects to terminate this Agreement or any extension thereof pursuant to the Section 2(b) in which case Section 6(b) shall be in effect) he shall not have any direct or indirect ownership or other financial interest in and will not directly or indirectly engage in, or in any manner become interested in (as principal, agent, consultant, advisor, officer, director, employee or otherwise) any business which competes with the Business of the Company in the geographic territory in which the Employee is then operating nor will he solicit business directly or indirectly on behalf of such competing business. In addition, as part of the consideration required of him under this Agreement, Employee shall not, while in the employment of the Company, and for a period of two (2) years thereafter either: (1) hire or otherwise induce any employee or employees of the Company or any of its subsidiaries, to leave or terminate such employment, or (2) employ, assist in employing or otherwise associate in business with any such employee of the Company or any of its subsidiaries. Further, as part of the consideration required of him under this Agreement, Employee agrees that he will not at any time, either during his employment with the Company or after cessation thereof divulge to any person, firm or company any information received by him during the course of his employment relating to or affecting the business of the Company, including, but not specifically limited to, information relating to any contracts, statistics, methods, costs or revenues, and all of such information shall be kept confidential and not in any way be revealed to anyone without the express written consent of the Company. Employee understands that the breach or the threatened breach of any of the covenants contained herein to which Employee has agreed will result in irreparable injury to the Company and agrees that the Company may, in addition to its remedies at law in any such event, seek and obtain a court injunction restraining the breach of said covenants or any of them. -3- 4 (b) In the event that the Company elects to terminate this Agreement, or any extension thereof under Section 2(b) hereof, the Company shall have the right to require Employee to abide by the covenant described herein for a period of up to one year immediately following such termination date. In such event, Employee covenants and agrees that for the non-competitive period described above, he shall not have any direct or indirect ownership or other financial interest in and will not directly or indirectly engage in, or in any manner become interested in (as principal, agent, consultant, advisor, officer, director, employee or otherwise) any business which competes with the Business of the Company in the geographic territory in which the Employee is then operating nor will he solicit business, directly or indirectly on behalf of such competing business. 7. TERMINATION The Company shall have the right to terminate this Agreement for cause immediately and without any further liability to employee if, in the judgment of the Executive Vice President and Chief Operating Officer: (a) Employee has failed or materially neglected to perform his obligations hereunder; or (b) Employee has: (i) committed any crime involving moral turpitude or any crime in the conduct of his official duties; (ii) committed any material act of fraud against the Company, its parent or affiliates, or materially misused his position for his personal gain or that of any third party; or (iii) committed any act materially adverse to the welfare of the Company. In the event this Agreement is terminated, pursuant to this Section, Sections 5 and 6 shall remain in full force and effect. However, the one year term period described in Section 5(a) shall commence as of the date of termination. 8. INVALIDITY The territorial, time and other limitations contained in Sections 5 and 6 are reasonable and properly required for the adequate protection of the Business and affairs of the Company, and in the event that any one or more of such territorial, time or other limitation is found to be unreasonable by a court of competent jurisdiction, the Company agrees to submit to the reduction of the said territorial, time or other limitation under such sections is found to be unreasonable or otherwise invalid in any jurisdiction, in whole or in part, the parties acknowledge and agree that such limitation shall remain and be valid in all other jurisdictions. If provision, term, clause or part thereof of this Agreement is invalid, it shall not affect the remainder of said provision, term or clause of this Agreement, but said remainder shall be binding and effective against both parties hereto. -4- 5 9. MISCELLANEOUS This Agreement embodies the whole agreement between the parties hereto concerning the subject matter hereof. This Agreement may not be changed except by a writing signed by the party against whom enforcement thereof is sought. This Agreement has been executed in the State of Ohio and shall be governed and interpreted in accordance with the laws of the State of Ohio. All notices given hereunder shall be mailed postage paid to the address of the receiving party as first indicated above or to such other place as such party may from time to time designate by written notice hereafter. IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have executed this Agreement this 1 day of April, 1996. ATTEST: APCOA, Inc. - ------------------------ By: /s/ Michael J. Machi ------------------------------- Michael J. Machi Senior Vice President Administration WITNESS: - ------------------------ By: /s/ Trevor R. Van Horn ------------------------------- Trevor R. Van Horn -5- 6 EXHIBIT A GUIDELINES STANDARDS OF CONDUCT 1. Standards of Conduct and Business Ethics. The Board of Directors of APCOA, Inc. has adopted a Corporate policy for itself and its subsidiary and affiliated companies regarding Standards of Conduct and Business Ethics, in order to provide Directors, Officers and employees with a guide of conduct in fulfilling their responsibilities to the public, and the corporation. As no policy statement can cover the total range of daily activities, it is recognized that questions of compliance will arise. Such questions should be directed through normal communications procedures to the General Counsel at Corporate Headquarters. Your attention is also specifically called to the fact that disregard of sections of this policy could result in your dismissal as an employee as well as the imposition of civil and criminal penalties against the Company and you personally. All personnel are requested to read this policy and conform to the principles stated herein. 2. Policy. It is the policy of the Company that its directors, officers and employees shall regulate their activities so as to avoid loss or embarrassment to the Company. Either by implication or in reality, the objective exercise of sound ethical business judgment should not be in any manner limited by any relationship, any activity or any practice. The Company recognizes and respects the individual's right to engage in outside activities. However, the Company reserves the right to determine when these activities create a conflict of interest. All conduct of the individual must conform to the best interests of the Company 3. Reciprocity. Because of the nature and variety of the business engaged in by companies directly or indirectly controlled by APCOA, Inc., certain legal problems could arise with respect to purchases made by APCOA, Inc. if such purchases are conditioned upon our suppliers' purchasing products and/or services sold by APCOA, Inc. Conversely, similar legal problems could arise if our customers were to condition our sales to them upon purchase of products or services from them. This practice, commonly referred to as "reciprocity," is prohibited by various federal and state laws. It is the policy of APCOA, Inc. that APCOA, Inc. comply with all applicable federal, state and local laws. The Guidelines set forth below have been designated to ensure full compliance with such laws. These Guidelines apply to all personnel having purchase or sales responsibilities. The Executives of APCOA, Inc. should disseminate these Guidelines to appropriate employees and agents and require adherence thereto. -1- 7 4. Purchase/Sales Guidelines. The following guidelines with respect to purchases and sales made by companies owned or controlled directly or indirectly by APCOA, Inc. apply to all employees and agents of such companies. (a) No employee or agent of APCOA, Inc. having purchasing responsibilities or duties shall purchase any products or services from, or enter into or adhere to any contract, agreement or the condition or understanding that purchases made by him will be based or conditioned upon any sales to such supplier by APCOA, Inc. (b) No employee or agent of APCOA, Inc. having sales responsibilities or duties shall sell products or services to, or enter into or adhere to any contract agreement or understanding that any purchase by APCOA, Inc. from such customer will be based or conditioned upon any sales of APCOA, Inc. to such customer. (c) No employee or agent of APCOA, Inc. shall issue to personnel with primary purchasing responsibility any lists, notices, or other data identifying customers and their purchases made by APCOA, Inc. from any of such customers. (d) No employee or agent of APCOA, Inc. shall issue to personnel with primary sales responsibilities any lists, notices or other data pertaining to purchases made by APCOA, Inc. from particular suppliers. (e) No employee or agent of APCOA, Inc. shall prepare or maintain statistical compilations which compare purchases from suppliers who supply products or services to APCOA, Inc. to such suppliers. (f) No employee or agent of APCOA, Inc. shall: 1. Communicate to any actual or potential seller or supplier of APCOA, Inc. that preference will be given to the purchase of such seller's products or services based upon sales by APCOA, Inc. to such supplier. 2. Compare or exchange statistical data with any such seller or supplier to facilitate any relationship of mutual purchases and sales between such seller or supplier and APCOA, Inc. 3. Communicate to any such seller or supplier the fact that APCOA, Inc. has made any purchases from such seller or supplier for the purpose of inducing a purchase by such seller or supplier. 4. Direct or recommend that APCOA, Inc. purchase products or services from any seller or supplier for the purpose of reciprocating purchases made by, or promoting sales to, such seller or supplier. -2- 8 5. Agree with any seller or supplier that such seller or supplier will purchase products or services from APCOA, Inc. in order to reciprocate purchases made by APCOA, Inc. from such supplier. 5. Standards of Business Ethics. To determine if a specific interest creates a conflict with Company interests or if a specific practice violates an ethical standard is most difficult without judging the immediate relative circumstances involved. Moral and legal standards are relative measurements or proper behavior. Therefore, the Company can only set forth specific examples that may limit an individual's ability ethically and/or legally to perform his or her duties for the Company. Such examples include: (a) Having any position or interest in any other business enterprise operated for a profit which would or could reasonably be supposed to conflict with the proper performance of the employee's duties or responsibilities, or which might tend to restrict the employee's independence of judgment with respect to a transaction between the Company and such other business enterprise. (b) Seeking to, accepting, offering or providing either directly from or to any individual, partnership, association, corporation or other business entity or representative thereof, doing or seeking to do business with the Company, or any of its affiliates the following: loans (except with banks or other financial institutions), services, payments, vacation or pleasures trips, or any gifts to more than nominal value, or gifts of money in any amount. (c) Benefiting personally from any purchase of any goods or services of any mature by the Company or its affiliates, or deriving personal gain from actions taken or associations made in any capacity as an employee of the Company. (d) Directly or indirectly acquiring as an investment, any stock of any company engaged in the parking business or any business in competition or doing business with APCOA, Inc. and its affiliates which might be prejudicial to the interest of the Company, without first obtaining proper authorization. (e) Revealing to a third party, any information or data regarding the financial status, decisions or plans of the Company or any of its affiliates which might be prejudicial to the interest of the Company, without first obtaining proper authorization. (f) Misusing one's position with the Company or knowledge of Company affairs for outside gains. (g) Acquiring securities or other property (such as real estate) which the Company itself has a present or potential interest in acquiring. -3- 9 (h) Carrying on of Company business with a firm in which the employee or near relative of the employee has an appreciable ownership or interest, without divulging the relationship and obtaining Company approval. (i) Engaging in practices or procedures which violate any laws, rules or regulations applying to the conduct of the Company's businesses and licenses held by the Company, including violation of any antitrust laws. (j) Contributing corporate funds or property for political contribution purposes, in violation of local, state or federal laws. (k) Using or permitting others to use the services of Company materials or equipment for personal use or gain. (l) Condoning or failing to report to appropriate Company authority the activities of any other officer or employee of the Company which violate the principles set forth in this policy statement. (m) Any other and all business practices which are construed or accepted by the general business community as unethical or in violation of law. 6. Obligation of Directors, Officers and Employees. Employment by, or association with the Company carries with it the responsibility to be constantly aware of the importance of ethical conduct. The individual must disqualify himself from taking part, or exerting influence in any transaction in which his own interest may conflict with the best interest of the Company. Interests who might otherwise be questionable may be entirely proper if accompanied by a full advance disclosure which affords an opportunity for prior approval or disapproval. The obligation to make such disclosure rests upon the individual. All disclosures should be directed through normal communication procedures to the General Counsel at Corporate Headquarters. Upon disclosure, the Company recognizes that there may be many borderline situations and it does not intend to be unreasonable in considering these cases giving recognition to the attendant circumstances. Should disclosure by an individual indicate the possibility of a conflict of interest, the individual will be given a reasonable time to remedy the situation. From time to time questions may arise with respect to this Company policy for which it is appropriate to consult with legal counsel. It is the responsibility of each officer and employee to recognize these situations and seek legal advice. Such advice may be obtained by contacting the General Counsel at Corporate Headquarters. It is never a mistake to consult with counsel when in doubt with respect to the legality of a proposed course of action. -4- 10 7. Compliance with Antitrust Laws. It is the policy of the Company to comply with all applicable federal and state antitrust laws, including trade regulation laws, and it is expected that all of the Company's officers and employees will likewise comply. The failure to comply with applicable antitrust laws may subject the Company and/or the individuals involved to criminal and civil penalties, including substantial fines and imprisonment, travel damage liability, injunctions or other court orders adversely affecting the operation of the Company's business, and the high cost of defending an antitrust case. The General Counsel at Corporate Headquarters coordinates the handling of the Company's legal affairs. His staff is always available for consultation with respect to compliance with the antitrust laws. In addition, special legal counsel will be furnished, if required. No officer or employee is authorized to take any action which the General Counsel has advised would constitute a violation of the antitrust laws. To the extent it is legally able to do so, the Company shall be prepared to assist and/or defend any individual who has acted good faith upon the advice of the General Counsel, but who nevertheless has become involved in antitrust proceedings in the course of his employment. Any individual who has violated the antitrust laws or is convicted of so doing shall be subject to appropriate disciplinary action, including dismissal, if such individual acted without seeking the advice of the General Counsel or acted contrary to his advice. a. Rules to Follow. Many of the questions arising under the antitrust laws must be resolved in the context of a particular fact situation. However, there are a number of clearly established rules of conduct which must be observed by all officers and employees in all circumstances, in order to assure that the Company and the individuals involved are in full compliance with the antitrust laws. Set out below are a number of these rules and several other guidelines with respect to the application of the antitrust laws to the activities of the Company: 1. No officer or employee shall enter into, or attempt to enter into, an understanding, agreement, plan or arrangement, whether formal or informal, written or oral, express or implied, with any competitor in regard to prices, discounts, terms or conditions of or refusing to deal with any actual or potential customers or suppliers. 2. No officer or employee shall give to or accept from a competitor, in written or oral form, or discuss with a competitor, any information concerning prices, terms or conditions of sale, or other competitor information except where: (a) the information or discussion is relevant and necessary to a bona fide existing or prospective customer supplier relationship between the Company and such competitor, or (b) the General Counsel advised in writ- -5- 11 ing that the conduct or discussions would be proper because there would be no reasonable basis for inferring a violation of the antitrust laws. 8. Implementation Procedures. It is difficult to define all situations and circumstances with precision in a policy. If there are any questions at any time on present or future interpretations of this policy or the propriety of any conduct, employees are requested to consult with the General Counsel at Corporate headquarters to make sure of the propriety of the action contemplated. In matters of antitrust and other specialized areas, the Company retains outside counsel, who can be consulted as the need arises. The services of outside counsel may be obtained by making your request to the General Counsel at Corporate Headquarters. -6- 12 EXHIBIT B EXECUTIVE BONUS PLAN Trevor R. Van Horn No later than April 15, following the end of each calendar year during the term of this Executive Employment Agreement, the Executive shall be entitled to receive a bonus. 1. In 1996 the bonus will be a pro-rata share of up to 30% of the base salary paid to the Executive during the calendar year. 2. In 1997 the bonus will be up to 35% of the base salary paid to the Executive during such the calendar year. Eligibility for bonus shall be based solely on the following criteria and up to the following percentages of Base Salary of each such criterion:
1996 1997 - ---- ---- 15% 20% - Achievement of Airport Properties annual Financial Plan. This portion of the bonus shall be based upon the percentage of achievement of the annual Airport Properties Financial Plan in the event the annual Financial Plan is not achieved in full. 5% 5% - Achievement of specific management goal set by the President of the Company at the beginning of such year. 10% 10% - At the sole discretion of the President of the Company. - ------------ 30% 35% - Maximum Bonus
13 EXHIBIT C BENEFIT PACKAGE The following company paid benefits will begin the first day of the month following 90 days of employment: 1. Life Insurance: Life Insurance and matching Accidental Death and Dismemberment coverage in the amount of 1x annual salary rounded up to the next highest thousandth. 2. Long Term Disability: Long Term Disability coverage trough UNUM Life Insurance Company which provides 66% of pre-disability monthly income up to a benefit of $5,000 per month. 3. 24-Hour Personal Accident: Additional Accidental Death and Dismemberment coverage in the amount of $180,000 for employee and family, if applicable. 4. Health Insurance: Medical coverage through Aetna Health Plans for employee and family, if applicable, included in Executive Medical Reimbursement Program. 5. Immediately eligible to participate in the 401(K) wraparound plan for Senior Executives. 6. After one year of service, at the next January or July Open Enrollment, enrollment into the 401 (K) Savings Plan will be available. This Plan allows for the contributions, to be made, via payroll deduction, up to 15% of salary (pre-tax), of which the first 6% will be matched $.35 per $1.00 by APCOA. These monies are invested among five different funds at Society Bank. EX-10.10 42 EMPLOYMENT AGREEMENT 1 Exhibit 10.10 EXECUTIVE EMPLOYMENT AGREEMENT THIS AGREEMENT is executed as of the 11th day of December, 1995 by and between APCOA, INC., a Delaware corporation, with offices at 25550 Chagrin Boulevard, Beachwood, Ohio 44122 (the "Company") and HERBERT W. ANDERSON (the "Executive"). W I T N E S S E T H: WHEREAS, the Company is engaged in the business of operating and managing open air parking lots and indoor garages and ramps for the purpose of parking motor vehicles on a leasehold, license, concession or management fee basis through the United States under agreement with municipalities, owners of properties and/or otherwise (the "Business of the Company"); and WHEREAS, the Executive has been employed by the Company in a management capacity for several years and during the course of his employment, the Executive has become an experienced and valuable employee and is knowledgeable with respect to the Business of the Company, its trade secrets, customers, market areas, sources of supply and manner of doing business; and WHEREAS, the Company desires to continue to employ the Executive and the Executive desires to continue to work for the Company upon the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises hereto and the agreements and covenants hereinafter contained, the parties hereto, intending to be legally bound, mutually agree as follows: 1. Employment and Duties. The Company hereby employs the Executive to serve as Corporate Vice President Urban Properties (or under such title as the Chief Executive Officer may hereafter assign to him). 2 The Executive hereby accepts employment upon the terms and conditions hereinafter set forth. The Executive shall be responsible for the Urban Properties Division of the Company. He shall report to the President and Chief Executive Officer and perform such duties as may be reasonably assigned to him by such officer. The Executive agrees to comply in all material respects with the Standards of Conduct set forth in Exhibit A hereof ("Standards of Conduct"). The Executive shall devote his entire time, attention and energies to the Business of the Company, and shall not, during the term of this Agreement, engage in any other business activities that will interfere with the Executive's employment pursuant to this Agreement. 2. Term. (a) The term of this Agreement shall be for a period commencing on December 11, 1995 and ending on June 30, 1998. (b) If this Agreement has not been terminated as set forth below in Section 4 prior to June 30, 1998, and neither party hereto has given written notice to the other party by April 30, 1998 of its desire to have this Agreement terminate at the end of its original term (June 30, 1998), this Agreement shall continue in full force and effect for an additional one-year period following the end of its original term on June 30, 1998, and the same procedure shall apply mutatis mutandis to any extended term of this Agreement with respect to periods ending on June 30 in any year after 1998. 3. Compensation and Other Benefits. For the services to be rendered by him pursuant to this Agreement, the Company agrees to provide the Executive, so long as he shall be employed by the Company, the following compensation and benefits: -2- 3 (a) Salary ("Base Salary") at the rate of not less than $112,500.00 per annum through June 30, 1996 and $125,000.00 per annum thereafter, payable not less often than monthly in equal installments at the end of each month. The Base Salary figure shall be reviewed annually and may be increased at the sole discretion of the Chief Executive Officer. Any such increase in the Base Salary shall be deemed for all purposes hereunder to be an amendment to this Agreement, and this Agreement as so amended shall remain in effect until otherwise terminated as provided herein. (b) Such bonuses as the Executive may have earned under the Executive Bonus Plan set forth in Exhibit 3 hereof. (c) Group health and welfare coverages, other fringe benefits such as are enjoyed by senior executives of the Company generally, and such other emoluments and fringe benefits as shall be determined by the Company from time to time. (d) Four (4) weeks of vacation annually during which time the Executive's compensation will be paid in full and all other benefits under this Agreement shall continue to be provided to him. (e) The Company will furnish the Executive with an automobile, will provide appropriate insurance coverage for such automobile, and will reimburse the Executive for all gasoline and maintenance costs relating to such automobile. Any such reimbursement shall be conditioned upon the Executive presenting to the Company, in accordance with applicable Company policies and procedures, an itemized account concerning his use of the automobile and distinguishing between use in connection with the Business of the Company and otherwise. -3- 4 (f) The Company will reimburse the Executive for reasonable business expenses incurred by the Executive relating to the conduct of the Business of the Company. Any such expense reimbursement shall be conditioned upon the Executive presenting to the Company, in accordance with the applicable Company policies and procedures, an itemized account of such expenses with supporting documents. Reimbursable expenses shall include reasonable and necessary expenses for entertainment, travel, meals and hotel accommodations. (g) The Executive shall be provided with directors and officers liability insurance coverage to the same extent as the other Directors and/or senior officers of the Company, and shall be indemnified by the Company to the full extent permitted by law against liability claims arising out of his activities as an employee of the Company or a member of the Board. (h) The Company will provide a Supplemental Pension Plan as described in Exhibit C. 4. Termination of Agreement. (a) This Agreement shall terminate upon the death of the Executive. Upon the Executive's death, a beneficiary (the "Beneficiary") designated by the Executive as prescribed in Section 12 shall be entitled to receive: (i) the amount of the Executive's Base Salary through the date of his death; (ii) any accrued but unpaid amount under Section 3(b) and the amount determined under Section 3(b) hereof for the Company's fiscal year in which the Executive's death occurs as though the Executive had survived and continued to -4- 5 work for the Company pursuant to this Agreement through the end of such fiscal year, payable at the time prescribed in Exhibit B; and (iii) an aggregate amount equal to the sum of (A) the annual Base Salary at the time of the Executive's death and (B) $9,600.00 (which represents the estimated annual value of the Executive's right to use of an automobile provided by the Company and related benefits described in Section 3(e) hereof), payable in twelve (12) equal monthly installments commencing on the first day of the month next following the Executive's death. In addition, for a period of twelve (12) months following the Executive's death, (a) the Company shall continue to provide the benefits under Section 3(c) to such persons who would have been entitled to such benefits had the Executive survived and continued to be employed by the Company hereunder for such twelve (12) month period. (b) This Agreement shall terminate in the event of the Executive's termination of employment because of disability (as defined below). In such event, the Executive shall be entitled to receive: (i) the amount of the Executive's Base Salary through the date of his termination of employment; (ii) any accrued but unpaid amount under Section 3(b) and the amount determined under Section 3(b) hereof for the Company's fiscal year in which the Executive's disability occurs as though the Executive had continued to work for the Company pursuant to this Agreement through the end of such fiscal year, payable at the time prescribed in Exhibit B; and -5- 6 (iii) an aggregate amount equal to the sum of (A) the annual Base Salary at the time of the Executive's disability and (B) $9,600.00 (which represents the estimated annual value of the Executive's right to use of an automobile provided by the Company and related benefits described in Section 3(e) hereof), payable in twelve (12) equal monthly installments commencing on the first day of the month next following the Executive's termination of employment; provided, however, that such payments shall be reduced by any amounts payable to the Executive under any disability benefit program (whether or not insured) maintained by the Company. In addition, for a period of twelve (12) months following the Executive's termination of employment because of disability, the Company shall continue to provide the benefits under Section 3(c) to such persons (including the Executive) who would have been entitled to such benefits had the Executive continued to be employed by the Company for such twelve (12) month period. For purposes of this Agreement, "disability" shall mean any physical or mental impairment or disability which prevents the Executive from performing his duties under this Agreement for a period of at least one hundred twenty (120) days and which is expected to be of permanent duration. A determination of whether the Executive is disabled shall be made by two licensed physicians, one appointed by the Board of Directors and one appointed by the Executive. In the event the two physicians are unable to agree with respect to whether the Executive is disabled, the determination of whether the Executive is disabled shall be made by a third duly licensed physician chosen by the two physicians previously appointed. (c) This Agreement shall terminate sixty (60) days following the date the Executive receives notice from the Company that it desires to terminate this Agreement. -6- 7 In the event that this Agreement is terminated pursuant to the preceding sentence and without Cause (as defined in subsection (e) below), the Executive shall be entitled to receive: (i) an aggregate amount equal to the greater of either (A) the Annual Base Salary at the time this Agreement terminates or (B) the aggregate amount payable to the Executive under the Company's Severance Benefit Policy, payable in twelve (12) equal monthly installments commencing on the first day of the month coinciding with or next following the date this Agreement terminates; (ii) any accrued but unpaid amount under Section 3(b) payable at the time prescribed in Exhibit B; (iii) not later than the 15th day of the fourth month following the close of the Company's fiscal year in which this Agreement terminates, an amount equal to the amount determined under Section 3(b) hereof for the Company's fiscal year in which this Agreement terminates (the "Termination Bonus"), determined as though the Executive continued to be employed by the Company through the end of such fiscal year, multiplied by a fraction, the numerator of which equals the number of days remaining in such fiscal year following the date this Agreement terminates plus 365, and the denominator of which equals 365; (iv) in the event this Agreement was scheduled to terminate under Section 2 hereof after the first anniversary of the date this Agreement terminates under this Section 4(c), then during the period commencing on the first anniversary of the date this Agreement terminates under this Section 4(c) and ending on the last day of the month in which occurs the date this Agreement was scheduled to terminate under -7- 8 Section 2 hereof, the Executive shall be entitled to receive each month, commencing with the month which coincides with or next follows the first anniversary of the date this Agreement terminates, an amount equal to the sum of (a) one-twelfth (1/12) of his annual Base Salary plus (b) one-twelfth (1/12) of the Termination Bonus, reduced by any salary or bonus he receives in any such month with respect to performing any of the acts described in the second sentence of Section 6(a) hereof; (v) for a period of twelve months following the Executive's termination of employment, the Company shall continue to provide the benefits under Sections 3(c) and 3(e) to such persons (including the Executive) who would have been entitled to such benefits had the Executive continued to be employed by the Company for such twelve-month period but only to the extent not provided by a successor employer; provided, however, that any accounting the Executive is required to provide to the Company under Section 3(e) need not distinguish between the use of the automobile in connection with the Business of the Company and other use. In the event this Agreement is terminated pursuant to the first sentence of this subsection (c) because the Company discharges the Executive for Cause (as defined in subsection (e) below), the Executive shall be entitled to receive only his Base Salary through the date of his termination of employment and the Company will have no further obligation to Executive under this Agreement or otherwise. (d) In the event of the termination of this Agreement because of the Executive's voluntary termination of employment for some reason other than death or disability, the -8- 9 Executive shall be entitled to receive only his Base Salary through the date of his termination of employment and the Company will have no further obligations to the Executive under this Agreement or otherwise. (e) "Cause" as used in this Agreement shall mean that either: (i) in the judgment of the Board of Directors of the Company, ascertained by majority vote, the Executive has materially failed for some reason other than illness, injury, or disability to perform his obligations hereunder; or (ii) the Executive has: (a) committed either any felony involving moral turpitude or any crime in the conduct of his official duties which is materially adverse to the welfare of the Company; or (b) committed any material act of fraud against the Company, its parent or affiliates, or materially misused his position for his personal gain or that of any third party; or (c) taken any action (other than an error in judgment made in the ordinary course of his duties) materially adverse to the welfare of the Company, including, but not limited to, any violation of the Standards of Conduct attached hereto or any breach of the covenants and conditions contained in Sections 5 and 6 hereof. 5. Confidentiality and Disclosure of Information. (a) The Executive, during his tenure as an officer and employee of the Company, has had and will have access to, and has gained and will gain knowledge with respect to the Company's trade secrets, private and secret processes, as they may exist from time to time, and confidential information concerning its financial statements and operations conducted by the Company, its sales and marketing activities and procedures, its bidding techniques, its design and construction techniques, its customer list of owners of parking -9- 10 facilities or credit and financial data concerning such customers or potential customers (in the aggregate referred to hereinafter as "Secret and Confidential Information"). The Executive acknowledges that such information constitutes a valuable, special and unique asset of the Company as to which the Company has the right to retain and hereby does retain all of its proprietary interests. However, access to and knowledge of such Secret and Confidential Information is essential to the performance of the Executive's services for the Company. In recognition of this fact, the Executive agrees that he will not, during or after his employment with the Company, disclose any of such Secret and Confidential Information to any person, firm, corporation, association or other entity for any reason or purposes whatsoever or make use of any such Secret and Confidential Information for his own purposes or those of another. The provisions contained in this subsection (a) shall also apply to information obtained by the Executive in the course of his employment by the Company with respect to the Company's subsidiary and affiliated companies. (b) The Executive shall promptly disclose, grant and assign to the Company for its sole use and benefit any and all inventions, improvements, technical information and suggestions relating to the Business of the Company (in the aggregate referred to as the "Creations") which the Executive has or may conceive, develop or acquire during his employment (whether or not during the usual working hours) together with all patent applications, letters patent, copyrights and reissues thereof that may, at any time, be granted for or upon any of the Creations. At all times during and after his employment, the Executive shall promptly execute any and all documents requested to vest title to any and all of the Creations in the Company and to enable it to obtain and maintain the entire -10- 11 right and title thereto throughout the world and render to the Company, at its expenses, any and all assistance required to protect it legal rights thereto. 6. Restrictive Covenant. (a) The Executive recognizes that the Company is relying on its extensive experience, knowledge, ability and contacts in the Business of the Company in entering into this Agreement. For this reason, the Executive covenants and agrees that during the period of his employment by the Company and, if his agreement terminates pursuant to either Section 4(b) or 4(c) with Cause, or 4(d) hereof, for a period of one year immediately following the termination of this Agreement he shall not have any direct or indirect ownership or other financial interest in, or in any manner become interested in (as principal, agent, consultant, advisor, officer, director, employee or otherwise), any business which competes with the Business of the Company in the geographic market in which the Company is then operating, or solicit business directly or indirectly on behalf of such competing business. Nothing herein shall preclude the Executive from being a member of or serving as an officer or director of any trade association or from owning, of record or beneficially, in the aggregate up to five percent (5%) of any issue of securities of a publicly traded company. (b) Notwithstanding anything to the contrary set forth in Section 13(b) hereof, any dispute between the parties with respect to the interpretation or enforceability of Section 6(a) hereof (Restrictive Covenant) as it applies to a termination for Cause under Section 4(c) hereof or any dispute with respect to any amount payable under Section 4(c)(iv) hereof which cannot be settled amicably by the parties hereto shall be settled by -11- 12 final and binding arbitration in Cleveland, Ohio in accordance with the rules of arbitration of the American Arbitration Association. 7. Remedies. It is recognized by the Executive that a special and confidential relationship exists between the Company and the Executive because of his knowledge, expertise and judgment and the dependency of the Company on his knowledge, expertise and judgment. The Executive agrees that the remedy at law for any breach or unthreatened breach of the covenants set forth in Sections 5 and 6 will be inadequate and that any breach or attempted breach would cause such immediate and permanent damage as would be irreparable and the exact amount of which would be impossible to ascertain. The Executive further agrees that in the event of any such breach or threatened breach by the Executive, in addition to any and all other legal and equitable remedies available, the Company may have any of such actions enjoined by any court authorized by law to take such action. 8. Physical Examination. The Executive shall undergo an annual physical examination. The cost of such physical examination shall be borne by the Company. A written report of the results of such physical shall be submitted to the Chief Executive Officer of the Company. 9. Assignment. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company. The performance of the Executive hereunder is personal and nonassignable. -12- 13 10. Invalidity. (a) The territorial, time and other limitations contained in Sections 5 and 6 are reasonable and properly required for the adequate protection of the Business of the Company, and in the event that any one or more of such territorial, time or other limitation is found to be unreasonable or otherwise invalid in any jurisdiction, in whole or in part, the parties acknowledge and agree that such limitation shall remain and be valid in all other jurisdictions. (b) If any provision, term, clause or part thereof in this Agreement is invalid, it shall not affect the remainder of said provision, term or clause of this Agreement, but said remainder shall be binding and effective against both parties hereto. 11. Representations and Warranties of the Parties. (a) The Company represents and warrants to the Executive that (i) the Company is a corporation duly organized and validly existing and in good standing under the laws of the State of Delaware; and (ii) the Company has the power and authority to enter into and carry out this Agreement, and there exists no contractual or other restriction upon its so doing. (b) The Executive represents and warrants to the Company that there exists no contractual or other restriction upon his entering into and carrying out this Agreement. 12. Post-Mortem Payments; Designation of Beneficiary. In the event that, following the termination of the Executive's employment with the Company, the Executive is entitled to receive any payments pursuant to this Agreement and the Executive dies, such payments shall be made to the Executive's beneficiary designated hereunder. At any time after the execution of this Agreement, the Executive may prepare, -13- 14 execute, and file with the Secretary of the Company a copy of the Designation of Beneficiary form attached to this Agreement as Exhibit D. The Executive shall thereafter be free to amend, alter or change such form; provided, however, that any such amendment, alteration or change shall be made by filing a new Designation or Beneficiary form with the Secretary of the Company. In the event the Executive fails to designate a beneficiary, following the death of the Executive all payments of the amounts specified by this Agreement which would have been paid to the Executive's designated beneficiary pursuant to this Agreement shall instead by paid to the Executive's spouse, if any, if she survives the Executive or, if there is no spouse or she does not survive the Executive, to the Executive's estate. 13. Miscellaneous. (a) This Agreement, including its attachments, contains the entire agreement between the parties and incorporates and supersedes any and all prior discussions or agreements the parties may have had with respect to the terms of the Executive's employment with the Company. This Agreement may not be changed orally, but only by a writing signed by each of the parties. The terms or covenants of this Agreement may be waived only by a written instrument specifically referring to this Agreement and executed by the party at any time, or from time to time, to require performance of any of the other party's obligations under this Agreement shall in no manner affect the waiving party's right to enforce any provisions of this Agreement at a subsequent time, and the waiver by any party of any right arising out of any breach by the other party shall not be construed as a waiver of any right arising out of any subsequent breach. (b) This Agreement has been executed in the State of Ohio and shall be governed and interpreted in accordance with the laws of the State of Ohio without regard to conflict -14- 15 of law provisions. Except as set forth in Section 6(b) hereof, any disputes between parties which cannot be settled amicably shall be subject to the jurisdiction of the courts of Ohio. (c) Any notices required under this Agreement shall be in writing and effective when received by the other party. Notices to the Executive shall be addressed to him at his then current mailing address on file at the Company. Notices to the Company shall be addressed to the Secretary of the Company at the Company's headquarters. (d) The use of the feminine, masculine or neuter pronoun herein shall not be restrictive as to gender and shall be interpreted in all cases as the context may require. The use of the singular or plural herein shall not be restrictive as to number and shall be interpreted in all cases as the context may require. (e) The Company may withhold from any amounts payable to the Executive, the Executive's beneficiary designated hereunder, or any other person, all amounts necessary to satisfy the requirements of any state or federal statute including, without limitation, the requirements of the United States Internal Revenue Code. -15- 16 IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have executed this Agreement this 21 day of June, 1996. ATTEST: APCOA, INC. (the "Company") /s/ BY: /s/ Michael J. Machi - --------------------------------- ------------------------------ MICHAEL J. MACHI Senior Vice President Administration WITNESS: /s/ /s/ Herbert W. Anderson - --------------------------------- --------------------------------- HERBERT W. ANDERSON (the "Executive") -16- 17 EXHIBIT A GUIDELINES 1. Standards of Conduct and Business Ethics. The Board of Directors of Apcoa, Inc., a Delaware corporation (the "Company"), has adopted a corporate policy for itself and all other corporations, entities, or persons that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company ("Affiliates") regarding Standards of Conduct and Business Ethics, in order to provide directors, officers and employees of the Company or its Affiliates with guidelines to assist them in fulfilling their responsibilities to the public, the stockholders and the Company. This policy is equally applicable to all of the foreign operations of the Company or its Affiliates except where modified by specific foreign laws and regulations. As no policy statement can cover the total range of daily activities, it is recognized that questions of compliance will arise. Such questions should be directed through normal communications procedures to the Company's General Counsel at Company Headquarters. Your attention is also specifically directed to the fact that disregard of sections of this policy could result in your dismissal as an employee as well as the imposition of civil and criminal penalties against the Company or its Affiliates and you personally. All personnel are requested to read this policy and conform to the principles stated therein. 2. Policy. It is the policy of the Company that the directors, officers and employees of the Company or its Affiliates shall conduct their activities so as to avoid loss or embarrassment to the Company or its Affiliates. Either by implication or in reality, the objective exercise of -17- 18 sound ethical business judgment should not be in any manner limited by any relationship, any activity or any practice. The Company recognizes and respects the individual's right to engage in outside activities. However, the Company reserves the right to determine when these activities create a conflict of interest. All conduct of the individual must conform to the best interests of the Company and its Affiliates. 3. Reciprocity. Because of the nature and variety of the business engaged in by the Company and its Affiliates, certain legal problems could arise with respect to purchases made by the Company or its Affiliates if such purchases are conditioned upon suppliers' purchasing products and/or services sold by the Company or its Affiliates. Conversely, similar legal problems could arise if customers were to condition their purchases from the Company or its Affiliates upon a reciprocal purchase of products or services from them. This practice, commonly referred to as "reciprocity," is prohibited by various federal and state laws. It is the policy of the Company that the Company and its Affiliates comply with all applicable federal, state and local laws. The guidelines set forth below have been designed to ensure full compliance with such laws. These guidelines apply to all personnel having purchase or sales responsibilities. The executives of the Company and its Affiliates should disseminate these guidelines to appropriate employees and agents and require adherence thereto. 4. Purchase/Sales Guidelines. The following guidelines with respect to purchases and sales made by the Company or its Affiliates apply to all employees and agents of the Company or its Affiliates: (a) No employee or agent of the Company or its Affiliates having purchasing responsibilities or duties shall purchase any products or services from, or enter into or -18- 19 adhere to any contract, agreement or the condition or understating that purchases made by him on behalf of the Company or its Affiliates will be based or conditioned upon any sales to such supplier by the Company or its Affiliates. (b) No employee or agent of the Company or its Affiliates having sales responsibilities or duties shall on behalf of the Company or its Affiliates sell products or services to, or enter into or adhere to any contract, agreement or understanding with any actual or potential customer on the condition or understanding that any purchase by the Company or its Affiliates from such customer will be based or conditioned upon any sales of the Company or its Affiliates to such customer. (c) No employee or agent of the Company or its Affiliates shall issue to personnel with primary purchasing responsibility any lists, notices, or other data identifying customers and their purchases from the Company or its Affiliates or specifying or recommending that purchases by made by the Company or its Affiliates from any of such customers. (d) No employee or agent of the Company or its Affiliates shall issue to personnel with primary sales responsibilities any lists, notices or other data pertaining to purchases made by the Company or its Affiliates from particular suppliers. (e) No employee or agent of the Company or its Affiliates shall prepare or maintain statistical computations which compare purchases from suppliers who supply products or services to the Company or its Affiliates. (f) No employee or agent of the Company or its Affiliates shall: (i) Communicate to any actual or potential seller or supplier of the Company or its Affiliates that preference will be given to the purchase of such -19- 20 seller's products or services based upon sales by the Company or its Affiliates to such supplier. (ii) Compare or exchange statistical data with any such seller or supplier to facilitate any relationship of mutual purchases and sales between such seller or supplier and the Company or its Affiliates. (iii) Communicate to any such seller or supplier the fact that the Company or its Affiliates have made any purchases from such seller or supplier for the purpose of inducing a purchase by such seller or supplier. (iv) Direct or recommend that the Company or its Affiliates purchase products or services from any seller or supplier for the purpose of reciprocating purchases made by, or promoting sales to, such seller or supplier. (v) Agree with any seller or supplier that such seller or supplier will purchase products or services from the Company or its Affiliates in order to reciprocate purchases made by the Company or its Affiliates from such supplier. 5. Standards of Business Ethics. To determine if a specific interest creates a conflict with the interests of the Company or its Affiliates, or if a specific interest creates a conflict with interests of the Company or its Affiliates, or if a specific practice violates an ethical standard is more difficult without judging the immediate circumstances involved. Moral and legal standards are relative measurements of proper behavior. Therefore, the Company can only set forth specific examples that may limit an individual's ability ethically and/or legally to perform his or her duties for the Company or its Affiliates. Such examples include: (a) Having any position or interest in any other business enterprise operated for a profit which would or could reasonably be supposed to conflict with the proper -20- 21 performance of the employee's duties or responsibilities, or which might tend to restrict the employee's independence of judgment with respect to a transaction between the Company or its Affiliates and such other business enterprise. (b) Seeking to, accepting, offering or providing either directly or indirectly from or to any individual, partnership, association, corporation or other business entity or representative thereof, doing or seeking to do business with the Company or its Affiliates the following: loans (except with banks or other financial institutions), services, payments, vacation or pleasure trips, or any gifts to more than nominal value, or gifts of money in any amount. (c) Benefiting personally from any purchase of any goods or services of any nature by the Company or its Affiliates, or deriving personal gain from actions taken or associations made in any capacity as an employee of the Company or its Affiliates. (d) Directly or indirectly acquiring as an investment, any stock of any corporation engaged in the concession business or any business in competition or doing business with the Company or its Affiliates, with the exception of nominal stock-holdings in publicly held corporations. (e) Disclosing to a third party any information or data regarding the financial status, decisions or plans of the Company or its Affiliates which might be prejudicial to the interests of the Company or its Affiliates, without first obtaining proper authorization. (f) Misusing one's position with the Company or its Affiliates or knowledge of the affairs of the Company or its Affiliates for personal gain or benefit. (g) Acquiring securities or other property (such as real estate) which the Company or its Affiliates have a present or potential interest in acquiring. -21- 22 (h) Carrying on of the business of the Company or its Affiliates with a firm in which the employee or near relative of the employee has an appreciable ownership interest, without disclosing the relationship and obtaining Company approval. (i) Engaging in practices or procedures which violate any laws, rules or regulations applying to the conduct of the business of the Company or its Affiliates or licenses held by the Company or its Affiliates, including violation of any antitrust laws. (j) Contributing funds or property of the Company or its Affiliates for political contribution purposes, in violation of local, state or federal laws. (k) Using or permitting others to use the services of the employees of the Company or its Affiliates or materials or equipment of the Company or its Affiliates for personal use or gain. (l) Condoning or failing to report to appropriate Company authority the activities of any other officer or employee of the Company or its Affiliates which violate the principles set forth in this policy statement. (m) Any other and all business practices which are construed or accepted by the general business community as unethical or in violation of law. 6. Obligations of Directors, Officers and Employees. Employment by or association with the Company or its Affiliates carries with it the responsibility to be constantly aware of the importance of ethical conduct. The individual must disqualify himself from taking part, or exerting influence, in any transaction in which his own interests may conflict with the best interests of the Company or its Affiliates. Interests which might otherwise be questionable may be entirely proper if accompanied by a full advance disclosure which affords an opportunity for prior approval or disapproval. The -22- 23 obligation to make such disclosure rests upon the individual. All disclosures should be directed through normal communication procedures to the Company's General Counsel at Company Headquarters. Upon disclosure, the Company recognizes that there may be many borderline situations, and it does not intend to be unreasonable in considering these cases, giving recognition to the attendant circumstances. Should disclosure by an individual indicate the possibility of a conflict of interest, the individual will be given a reasonable time to remedy the situation. From time to time questions may arise with respect to this Company policy for which it is appropriate to consult with legal counsel. It is the responsibility of each officer and employee to recognize these situations and seek legal advice. Such advice may be obtained by contacting the Company's General Counsel at Company Headquarters. It is never a mistake to consult with counsel when in doubt with respect to the legality of a proposed course of action. 7. Compliance with Antitrust Laws. It is the policy of the Company to comply with all applicable federal and state antitrust laws, including trade regulation laws, and it is expected that all of the officers and employees of the Company or its Affiliates will likewise comply. The failure to comply with applicable antitrust laws may subject the Company or its Affiliates and/or the individuals involved to criminal and civil penalties, including substantial fines and imprisonment, treble damage liability, injunctions of other court orders adversely affecting the operation of the business of the Company or its Affiliates, and the high cost of defending an antitrust case. The Company's General Counsel at Company Headquarters coordinates the handling of the legal affairs of the Company or its Affiliates. His staff is always available for consultation -23- 24 with respect to compliance with the antitrust laws. In addition, special legal counsel will be furnished, if required. No officer or employee of the Company or its Affiliates is authorized to take any action which the Company's General Counsel has previously advised would constitute a violation of the antitrust laws. To the extent it is legally able to do so, the Company shall be prepared to accept and/or defend any individual who has acted in good faith upon the advice of the Company's General Counsel, but who nevertheless has become involved in antitrust proceedings in the course of his employment by the Company or its Affiliates. Any individual who has violated the antitrust laws or is convicted of so doing shall be subject to appropriate disciplinary action, including dismissal, if such individual acted without seeking the advice of the Company's General Counsel or acted contrary to his advice. (a) Rules to Follow. Many of the questions arising under the antitrust laws must be resolved in the context of a particular fact situation. However, there are a number of clearly established rules of conduct which must be observed by all officers and employees of the Company or its Affiliates in all circumstances in order to assure that the Company or its Affiliates and the individuals involved are in full compliance with the antitrust laws. Set out below are a number of these rules and several other guidelines with respect to the application of the antitrust laws to the activities of the Company or its Affiliates: (i) No officer or employee of the Company or its Affiliates shall enter into, or attempt to enter into, any understanding, agreement, plan or arrangement, whether formal or informal, written or oral, express or implied, with any competitor -24- 25 in regard to prices, discounts, terms or conditions of or refusing to deal with any actual or potential customers or suppliers of the Company or its Affiliates. (ii) No officer or employee of the Company or its Affiliates shall give to or accept from a competitor, in written or oral form, or discuss with a competitor, any information concerning prices, terms or conditions of sale, or other competitive information except where: (a) the information or discussion is relevant and necessary to a bona fide existing or prospective customer or supplier relationship between the Company or its Affiliates and such competitor or supplier, or (b) the Company's General Counsel advised in writing that such conduct or discussions would be proper because there would be no reasonable basis for asserting a violation of the antitrust laws. 8. Implementation Procedure. It is difficult to define all situations and circumstances with precision in a policy. If there are any questions at any time on present or future interpretations of this policy or the propriety of any conduct, employees of the Company or its Affiliates are requested to consult with the Company's General Counsel at Company Headquarters to make sure of the propriety of the action contemplated. In matters of antitrust and other specialized areas, the Company retains outside counsel who can be consulted as the need arises. The services of outside counsel may be obtained by making your request to the Company's General Counsel at Company Headquarters. -25- 26 EXHIBIT B EXECUTIVE BONUS PLAN HERBERT W. ANDERSON No later than April 15 following the end of each calendar year commencing with 1996 during the term of this Executive Employment Agreement, the Executive shall be entitled to receive a bonus of up to 40% of the Base Salary paid to the Executive during such calendar year. Eligibility for bonus shall be based solely on the following criteria and up to the following percentages of Base Salary for each such criterion: 20%- Achievement of the Company's annual Financial Plan. This portion of the bonus shall be prorated based upon the percentage of achievement of the annual Financial Plan in the event the annual Financial Plan is not achieved in full. 10%- Achievement of specific management goal set by the President of the company at the beginning of such year. 10%- At the sole discretion of the President of the Company. - ---- 40% Maximum Bonus -26- 27 EXHIBIT C SUPPLEMENTAL PENSION PLAN IN CONSIDERATION of the mutual promises contained herein, it is agreed by the Executive and the Company as follows: 1. The Executive may retire from active employment at any time after he reaches age 65. 2. Upon retirement, the Company shall provide the Executive with a retirement benefit of 240 equal consecutive monthly payments of $4,166.67. The first monthly payment shall be made on the first day of the month coinciding with or next following the date of the Executive's retirement. 3. In the event the Executive dies after commencement of payments under paragraph 2 hereof, but before he received the number of monthly installments set forth therein, the Company shall pay the remainder of said monthly installments to the executive's designated beneficiary hereunder. For purposes of this provision, the executive's designated beneficiary hereunder is Jane Anderson. Executive shall have the right to change such beneficiary at any time hereafter, either prior to or after retirement, by notifying the Company in writing of such change. 4. If the executive shall die prior to age 65 while in the active employment of the Company, the Company shall pay the Executive's designated beneficiary an aggregate of $368,210 in 60 equal monthly installments of $6,136.83. The first installment shall be paid on the first day of the month following the month in which the Executive dies. 1 28 5. This Plan is part of a certain Executive Employment Agreement (the "Employment Agreement") dated December 11, 1995. Nothing herein shall prevent the Company from terminating the Employment for "cause" in accordance with the terms thereof, and in which event this Plan shall be terminated and void in all respects and neither party shall have any further responsibility for satisfying any obligations that may have otherwise arisen hereunder. However, should the Executive's employment terminate prior to retirement for any reason, other than for "cause," resignation, disability or death, the Insurance Policy shall be transferred by the Company to the Executive within thirty days after such termination, and the full value of the Insurance Policy and its full cash surrender value shall become the sole property of the Executive to do with as he sees fit. In the event of the Executive's resignation which is not associated with termination for "cause" or for disability, the Company shall cancel the Insurance Policy and provide the Executive with the cash surrender value according to the following schedule: After five (5) full years' service = 25% After ten (10) full years' service = 50% After fifteen (15) full years' service = 75% After twenty (20) full years' service = 100% In the event of permanent disability the Company will continue to pay the premiums on the full value of the Insurance Policy for twelve months following the Executives' termination because of such disability in accordance with Section 4(b) of the Employment Agreement and after twelve months to transfer the full value of the Insurance Policy to the Executive within thirty days. The full value of the Insurance Policy and its full cash current value shall become the sole property of the Executive to do with as he sees fit, and the Company 2 29 shall have no further responsibility to fulfill any terms of the Plan or to continue to pay premiums on the Insurance Policy after the transfer of the Insurance Policy has been completed. 6. For so long as Executive is receiving payments hereunder, Executive agrees that Sections 5, 6 and 7 of the Employment Agreement shall remain in full force and effect. 7. Nothing in this Plan shall prevent Executive from receiving, in addition to any amounts he may be entitled to under the Plan, any amounts which may be distributable to him at any time under any pension plan, profit sharing or other incentive compensation or similar plan of the Company now in effect or which may hereafter be adopted. 8. This Plan shall be binding upon the Executive, his heirs, executors, administrators and assigns, and on the Company, its successors and assigns. The rights of Executive hereunder shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge. 9. This Plan may be altered, changed, amended or terminated only by writing signed by the party to be bound thereby. 10. This document has been executed in the State of Ohio and shall be interpreted in accordance with the laws of that State without regard to conflict of law provisions. 11. This document contains the entire agreement between the parties with respect to the subject matter hereof, supersedes any all prior discussions or agreements the parties may have had with respect thereto (including any prior Supplemental Pension Plan). 3 30 EXHIBIT D TO EXECUTIVE EMPLOYMENT AGREEMENT DESIGNATION OF BENEFICIARY Effective December 11, 1995, I, the undersigned, entered into an Executive Employment Agreement with APCOA, INC. Pursuant to the terms of said Agreement, I have the right to designate a beneficiary to receive, in the event of my death, certain payments pursuant to said Agreement. I, therefore, exercise this right and designate my wife, JANE ANDERSON, to receive any such payments if she survives me, but if she does not survive me, I designate my estate. Any and all previous designations of beneficiary made by me are hereby revoked, and I hereby reserve the right to revoke this designation of beneficiary. /s/ Herbert W. Anderson -------------------------------- HERBERT W. ANDERSON Date: 21 June 96 --------------------- ------------------------------------ Receipt of this Designation of Beneficiary form is acknowledged by the undersigned Secretary of APCOA, INC. APCOA, INC. By: /s/ ----------------------------- Secretary Date: 21 June 96 ---------------------- EX-10.11 43 EMPLOYMENT AGREEMENT 1 Exhibit 10.11 EMPLOYMENT AGREEMENT AGREEMENT by and between APCOA, Inc., a Delaware corporation (the "Company"), and Michael Celebrezze (the "Executive"), dated as of the 30th day of March, 1998. WHEREAS, pursuant to that certain Combination Agreement (the "Transaction Agreement") dated as of January 15, 1998, by and among Myron C. Warshauer, Stanley Warshauer, Steven A. Warshauer, Dosher Partners, L.P., SP Parking Associates and the Company, the operations of the Company and Standard Parking, L.P. will be combined (the "Transaction"); and WHEREAS, the Board of Directors of the Company (the "Board") has determined that it is in the best interests of the Company and its shareholders to ensure that the Company will continue to receive the benefit of the Executive's services after the Transaction, on the terms and conditions set forth below in this Agreement, and the Executive desires to serve the Company in accordance with such terms and conditions; NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 1. Employment Period. The Company shall employ the Executive, and the Executive shall serve the Company, on the terms and conditions set forth in this Agreement, for the period beginning on the closing date of the Transaction (the "Effective Date") and ending on the third anniversary thereof (the "Employment Period"), provided, however, that commencing on the third anniversary of the Effective Date and thereafter on each annual anniversary of such date (each annual anniversary thereof shall hereinafter be referred to as the "Renewal Date"), unless previously terminated, the Employment Period shall be automatically extended so as to terminate two years from the Renewal Date, unless 180 days prior to the Renewal Date the Company or the 2 Executive shall terminate this Agreement by giving notice to the other party that the Employment Period shall not be so extended (a "Notice of Nonrenewal"). 2. Position and Duties. During the Employment Period, the Executive shall serve as Senior Vice President/Chief Financial Officer of the Company, with the duties, authority and responsibilities as are commensurate with such position and as are customarily associated with such position. Executive shall report directly to the Chief Executive Officer or the President of the Company. During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive shall devote full attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive under this Agreement, use the Executive's reasonable best efforts to carry out such responsibilities faithfully and efficiently. The Executive shall not, during the term of this Agreement, engage in any other business activities that will interfere with the Executive's employment pursuant to this Agreement. During the Employment Period, the Executive's services shall be performed primarily in Chicago, Illinois. 3. Compensation. (a) Base Salary. During the Employment Period, the Executive shall receive an annual base salary of $180,000 (the "Annual Base Salary"), payable in accordance with the Company's normal payroll practices for executives as in effect from time to time. Such Annual Base Salary shall be subject to review annually in accordance with the Company's review policies and practices for executives as in effect at the time of any such review. (b) Bonus. For each calendar year ending during the Employment Period, the Executive shall be eligible to receive an annual bonus (the "Annual Bonus"), based upon the -2- 3 terms and conditions of an annual bonus program to be established by the Company. Any such annual bonus program shall provide that the Executive's target bonus ("Target Annual Bonus") will be at least 35% of the Annual Base Salary, with the actual amount of the Annual Bonus determined in accordance with the terms of the annual bonus program. Notwithstanding the foregoing sentence, for the 1998 calendar year, the Executive's Annual Bonus shall not be less than 35% of the Annual Base Salary. (c) Phantom Equity and Stock Plans. During the 1998 calendar year, the Company shall adopt an equity incentive plan or program (the "Equity Plan") in which certain of the Company's key executives will be eligible to participate. During the Employment Period, the Executive shall be entitled to participate in the Equity Plan from and after the effective date thereof, in accordance with the terms and conditions of such plan. Benefits available to Executive under the terms of such Equity Plan shall be no less than the benefits available to peer executives. Furthermore, Executive shall participate in any stock awards or stock options ("stock plan") to the same extent and on the same terms as are available to peer executives. For purposes of this Agreement, the term "peer executives" shall refer to executive vice presidents of Company, which term shall not include executive vice presidents of any subsidiary companies or affiliates. (d) Housing Differential Loan. Following the Effective Date and contingent upon the Executive's execution of a promissory note (substantially in the form attached hereto as Exhibit A), the Executive shall to receive a $250,000 loan from the Company with a term of three years (the "Loan"), which shall bear interest at the Applicable Federal Rate compounded annually. The principal shall be disbursed to Executive upon his submission of a written purchase offer for a residence in the vicinity of Chicago, Illinois. The principal amount of the -3- 4 Loan and the interest thereon shall be payable in cash on an annual basis in three equal installments, on each of the first, second and third anniversaries of the Effective Date (each such anniversary referred to herein as an "Annual Payment Date"); provided, however, that if the Executive remains in the continual employment of the Company as of each Annual Payment Date, one-third of the principal balance of the initial Loan and the accrued interest thereon (as of such Annual Payment Date) shall be forgiven by the Company, and such forgiven amount shall be treated as additional compensation to the Executive in the year of such forgiveness. Prior to the end of any calendar year in which the Company forgives a portion of the Loan, the Company shall make the Executive whole for the federal, state and local income tax consequences of such forgiveness. In the event the Executive's employment hereunder is terminated for "Cause" or the Executive terminates his employment without Good Reason, as defined below, the Executive shall be obligated to repay the remaining principal balance of the Loan and any accrued and unpaid interest thereon in accordance with the original terms of the Loan; provided, however, that if the Date of Termination does not coincide with an Annual Payment Date, the repayment of the principal balance of the Loan and the accrued interest thereon for the year of termination shall be pro-rated in respect of the portion of such short year that commences on the date of the Date of Termination and ends on the next following Annual Payment Date, and the portion of the pro-rated principal balance of the Loan and the interest thereon with respect to the period commencing on the Annual Payment Date prior to the Date of Termination and ending on the Date of Termination shall be forgiven, and the Company shall, prior to the end of the calendar year in which the Date of Termination occurs, make the Executive whole for any income tax consequences to the Executive with respect to such forgiven amount. In the even that -4- 5 Executive's employment hereunder is terminated for any other reason by the Company without Cause, including a termination on account of death or Disability, or in the event Executive terminates his employment with Good Reason, as defined below, the remaining principal balance and any accrued and unpaid interest shall be forgiven, and prior to the end of the calendar year in which such forgiveness occurs, the Company shall make the Executive whole for any tax consequences to the Executive with respect to such forgiven amount. (e) Other Benefits. In addition to the foregoing, during the Employment Period: (i) the Executive shall be entitled to participate in savings, retirement, and fringe benefit plans, practices, policies and programs of the Company as in effect from time to time, on the same terms and conditions as those applicable to peer executives; (ii) the Executive shall be entitled to four weeks of annual vacation, to be taken in accordance with the Company's vacation policy as in effect from time to time; (iii) the Executive shall be entitled to participate in an automobile program in accordance with the terms and conditions of the Company's automobile program as may be in effect from time to time; and (iv) the Executive and the Executive's family shall be eligible for participation in, and shall receive all benefits under medical, disability and other welfare benefit plans, practices, policies and programs provided by the Company, as in effect from time to time, on the same terms and conditions as those applicable to peer executives, provided that Executive's benefits under this Agreement shall be substantially similar to the benefits available to him and his family under the Executive Employment Agreement, dated April 1, 1995, as thereafter modified, or, if such benefits are not provided, the Company shall Executive a monetary benefit sufficient to allow Executive to acquire personally replacement coverage for himself or for his family, as applicable. -5- 6 4. Termination of Employment. (a) Death or Disability. In the event of the Executive's death during the Employment Period, the Executive's employment with the Company shall terminate automatically. The Company, in its discretion, shall have the right to terminate the Executive's employment because of the Executive's Disability during the Employment Period. For purposes of this Agreement, "Disability" shall mean the absence of the Executive from the Executive's duties with the Company on a full-time basis for 180 consecutive business days, or for periods aggregating 180 business days in any period of twelve months, as a result of incapacity due to mental or physical illness or injury which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative. A termination of the Executive's employment by the Company for Disability shall be communicated to the Executive by written notice, and shall be effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), unless the Executive returns to full-time performance of the Executive's duties before the Disability Effective Date. (b) By the Company. In addition to termination for Disability, the Company may terminate the Executive's employment during the Employment Period for Cause or with Cause. "Cause" means: (i) the continued and willful or deliberate failure of the Executive substantially to perform the Executive's duties under this Agreement (other than as a result of physical or mental illness or injury), or (ii) illegal conduct or gross misconduct by the Executive, in either case that is willful and results in material damage to the business or reputation of the Company or its affiliated companies, or (iii) the breach of a fiduciary duty owed to the Company or its affiliated companies, that is willful and results in material damage -6- 7 to the business or reputation of the Company, including, without limitation, a failure to comply with Section 6 hereof. Upon the occurrence of events constituting Cause as defined in this paragraph (b), the Company shall give the Executive advance notice of any such termination for Cause and shall provide the Executive with a reasonable opportunity to cure. Such termination shall be effective only upon a vote of the Board of Directors following a hearing before the Board on the issue of Cause of which Executive is given reasonable notice. (c) Voluntarily by the Executive. The Executive may terminate his employment by giving written notice thereof to the Company. (d) Date of Termination. The "Date of Termination" means the date of the Executive's death, the Disability Effective Date, the date on which the termination of the Executive's employment by the Company, for Cause as set forth in notice from the Company is effective, the date that notice of termination is provided to Executive from Company of a termination of Executive's employment by the Company other than for Cause or Disability, or the date on which the Executive gives the Company notice of a termination of employment, as the case may be. 5. Obligations of the Company Upon Termination. (a) By the Company Other Than for Cause or Disability. If, during the Employment Period, the Company terminates the Executive's employment, other than for Cause or Disability, the Company shall, for the duration of the Employment Period as in effect immediately before the Date of Termination (as such Employment Period is extended at the next Renewal Date if the Date of Termination occurs during the 180 days preceding a Renewal Date and no Notice of Nonrenewal has been given), continue to pay the Executive the Annual Base Salary and the Annual Bonus through the end of -7- 8 such Employment Period, as and when such amounts would be paid in accordance with Sections 3(a) and (b) above; provided, these payments shall not be subject to offset by any other employer-provided compensation, and that the amount of any Annual Bonus(es) so paid shall equal the Target Annual Bonus. The Company shall also continue to provide for the same period welfare benefits to the Executive and the Executive's family, at least as favorable as those that would have been provided to them under clause (e)(iv) of Section 3 of this Agreement if the Executive's employment had continued until the end of the Employment Period, provided, that during any period when the Executive is eligible to receive such benefits under another employer-provided plan, the benefits provided by the Company under this Section 5(a) may be made secondary to those provided under such other plan. (b) Death. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, the Company shall make, within 30 days after the Date of Termination, a lump-sum cash payment to the Executive's estate equal to the sum of (i) the Executive's Annual Base Salary through the end of the calendar month in which death occurs, (ii) any earned and unpaid Annual Bonus for any calendar year ended prior to the Date of Termination and a pro-rated Target Bonus for services to the Date of Termination, (iii) any accrued but unpaid vacation pay and (iv) any other vested benefits to which the Executive is entitled, in each case to the extent not yet paid. (c) Disability. In the event the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period in accordance with Section 4(a) hereof, the Company shall pay to the Executive or the Executive's legal representative, as applicable, (i) the Executive's Annual Base Salary for the duration of the Employment Period in effect immediately before the Date of Termination (as such Employment Period is extended at -8- 9 the next renewal Date if the Date of Termination occurs during the 180 days preceding a Renewal Date and no Notice of Nonrenewal has been given), provided that any such payments made to the Executive shall be reduced by the sum of the amounts, if any, payable to the Executive under any disability benefit plans of the Company or under the Social Security disability insurance program, (ii) any earned and unpaid Annual Bonus for any calendar year ended prior to the Date of Termination and a pro-rated Target Bonus for services to the Date of Termination, and (iii) any other vested benefits to which the Executive is entitled, in each case to the extent not yet paid. (d) Cause; Voluntary Termination and Termination with Good Reason. If the Executive's employment is terminated by the Company for Cause or the Executive voluntarily terminates his employment during the Employment Period, the Company shall pay the Executive (i) the Annual Base Salary through the Date of Termination (ii) a pro-rated bonus through the Date of Termination, and (iii) any other vested benefits to which the Executive is entitled, in each case to the extent not yet paid, and the Company shall have no further obligations to the Executive under this Agreement. If the Executive terminates his employment during the Employment Period with Good Reason, the Company shall pay Executive the amounts and benefits described in Section 5(a) above in connection with a termination by Company for reason other than Cause or Disability; provided that the Annual Base Salary, Target Bonus, and benefit continuation period in the event of a termination by Executive for Good Reason shall be two years from the date of such termination; and provided that the Annual Base Salary amount for purposes of such payments shall be the amount of the Annual Base Salary in effect immediately before the occurrence of Good Reason for Termination. For purposes of this Agreement, "Good Reason" for the Executive to terminate his employment shall exist following: -9- 10 (i) a reduction in Executive's Annual Base Salary; (ii) any change that results in Executive no longer reporting to the CEO or President of the Company, a reduction in his duties and responsibilities, or title, or other diminishment of Executive's status within the Company; (iii) any change in Executive's duties and responsibilities that requires him to relocate his residence outside of the Chicago, Illinois vicinity; (iv) A Change of Control of the Company as that term is defined in the March 25, 1998 Offering Memorandum for APCOA, Inc. Senior Subordinated Notes. 6. Confidential Information; Noncompetition. (a) The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies and their respective businesses that the Executive obtains or obtained during the Executive's employment by the Company or any of its affiliated companies and their respective businesses and that is not public knowledge (other than as a result of the Executive's violation of this paragraph (a) of Section 6) ("Confidential Information"). The Executive shall not communicate, divulge or disseminate Confidential Information at any time during or after the Executive's employment with the Company, except with the prior written consent of the Company or as otherwise required by law or legal process. As used in this Agreement, the term "affiliated companies" shall include any company controlled by, controlling or under common control with the Company. (b) During the Noncompetition Period (as defined below), the Executive shall not, without the prior written consent of the Chief Executive Officer of the Company, engage in or become associated with a Competitive Activity. For purposes of this paragraph (b) of Section 6, the following terms shall have the following meanings: (i) the "Noncompetition Period" -10- 11 means the period during which the Executive is employed by the Company and the one-year period following the termination of the Executive's employment by the Company for any reason; (ii) a "Competitive Activity" means any business or other endeavor that engages in the operation and management of open air parking lots and indoor garages and ramps for the purpose of parking motor vehicles on a leasehold, license, concession or management fee basis in any county of any state in the United States in which the Company or any of its affiliated companies is then conducting, or is in the process of developing prospects to conduct, business; (iii) the Executive shall be considered to have become "associated with a Competitive Activity" if he becomes directly or indirectly involved as an owner, employee, officer, director, independent contractor, agent, partner, advisor, or in any other capacity calling for the rendition of the Executive's personal services, with any individual, partnership, corporation or other organization that is engaged in a Competitive Activity. Notwithstanding the foregoing, the Executive may make and retain investments during the Noncompetition Period in not more than five percent of the equity of any entity engaged in a Competitive Activity, if such equity is listed on a national securities exchange or regularly traded in an over-the-counter market. (c) In the event of a breach or threatened breach of this Section 6, the Executive agrees that the Company shall be entitled to injunctive relief in a court of appropriate jurisdiction to remedy any such breach or threatened breach, and the Executive acknowledges that damages would be inadequate and insufficient. (d) Any termination of the Executive's employment or of this Agreement shall have no effect on the continuing operation of this Section 6. 7. Successors. (a) This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by the Executive otherwise than by will -11- 12 or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives. (b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. (c) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would have been required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean both the Company as defined above and any such successor that assumes and agrees to perform this Agreement, by operation of law or otherwise. 8. Miscellaneous. (a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified except by a written agreement executed by the parties hereto or their respective successors and legal representatives. (b) All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Executive: Michael J. Celebrezze 7960 Jill Drive Sagamore Hills, Ohio 44067 -12- 13 If to the Company: APCOA, Inc. 1000 McDonald Investment Center 800 Superior Avenue, E. Cleveland, Ohio 44114 Attention: G. Walter Stuelpe, Jr. or to such other address as either party furnishes to the other in writing in accordance with this paragraph (b) of Section 8. Notices and communications shall be effective when actually received by the addressee. (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. If any provision of this Agreement shall be held invalid or unenforceable in part, the remaining portion of such provision, together with all other provisions of this Agreement, shall remain valid and enforceable and continue in full force and effect to the fullest extent consistent with law. (d) Notwithstanding any other provision of this Agreement, the Company may withhold from amounts payable under this Agreement all federal, state, local and foreign taxes that are required to be withheld by applicable laws or regulations. (e) The Executive's or the Company's failure to insist upon strict compliance with any provision of, or to assert any right under, this Agreement shall not be deemed to be a waiver of such provision or right or of any other provision of or right under this Agreement. (f) The Executive and the Company acknowledge that this Agreement supersedes any other agreement, whether written or oral, between them concerning the subject matter hereof. -13- 14 (g) This Agreement may be executed in several counterparts, each of which shall be deemed an original, and said counterparts shall constitute but one and the same instrument. -14- 15 IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and, pursuant to the authorization of its Board of Directors, the Company has caused this Agreement to be executed in its name on its behalf, all as of the day and year first above written. /s/ Michael Celebrezze ------------------------------------ Michael Celebrezze APCOA, INC. /s/ G. Walter Stuelpe, Jr. ------------------------------------ By: G. Walter Stuelpe, Jr. Title: President -15- 16 EXHIBIT C SUPPLEMENTAL PENSION PLAN IN CONSIDERATION of the mutual promises contained herein, it is agreed by the Executive and the Company as follows: 1. The Executive may retire from active employment at any time after he reaches age 65. 2. Upon retirement, the Company shall provide the Executive with a retirement benefit of 240 equal consecutive monthly payments of $4,166.67. The first monthly payment shall be made on the first day of the month coinciding with or next following the date of the Executive's retirement. 3. In the event the Executive dies after commencement of payments under paragraph 2 hereof, but before he received the number of monthly installments set forth therein, the Company shall pay the remainder of said monthly installments to the Executive's designated beneficiary hereunder. For purposes of this provision, the Executive's designated beneficiary hereunder is ______________. Executive shall have the right to change such beneficiary at anytime hereafter, either prior to or after retirement, by notifying the Company in writing of such change. 4. If the Executive shall die prior to age 65 while in the active, employment of the Company, the Company shall pay- the Executive's designated beneficiary an aggregate of Five Hundred Twenty-Five Thousand Dollars ($525,00.O0) in sixty (60) equal monthly installments of Eight Thousand Seven Hundred Fifty Dollars ($8,750.00). The first installment shall be paid on the first day of the month following the month in which the Executive dies. 17 5. This Plan is part of a certain Executive Employment Agreement (the "Employment Agreement") effective as of April 1, 1995. Nothing herein shall prevent the Company from terminating the Employment Agreement for "cause," or the Executive from resigning in accordance with the terms thereof, and in either event this Plan shall be terminated and void in all respects and neither party shall have any further responsibility for satisfying any obligations that may have otherwise arisen hereunder. However, should the Executive's employment terminate prior to retirement for any reason, other than for "cause," resignation, disability or death, any policy of insurance on the Executive's life owned by the Company (the "Insurance Policy") shall be transferred by the Company to the Executive within thirty (30) days after such termination, and the Insurance Policy and its full cash surrender value shall become the sole property of the Executive to do with as he sees fit. In the event of permanent disability the Company will continue to pay the premiums on the full value of the Insurance Policy for twelve (12) months following the Executives' termination because of such disability in accordance with paragraph 4(b) (iii) of the Employment Agreement, and after twelve (12) months transfer the full value of the Insurance Policy to the Executive within thirty (30) days. The Insurance Policy and its full cash surrender value shall become the sole property of the Executive to do with as he sees fit, and the Company shall have no further responsibility to fulfill any terms of the Plan or to continue to pay premiums on the Insurance Policy after the transfer of the Insurance Policy has been completed. 6. For so long as Executive is receiving payments hereunder, Executive agrees that Sections 5, 6 and 7 of the Employment Agreement shall remain in full force and effect. 7. Nothing in this Plan shall prevent Executive from receiving, in addition to any amounts he may be entitled to under the Plan, any amounts which may be distributable to -2- 18 him at any time under any pension plan, profit sharing or other incentive compensation or similar plan of the Company now in effect or which may hereafter be adopted. 8. This Plan shall be binding upon the Executive, his heirs, executors, administrators and assigns, and on the Company, its successors and assigns. The rights of Executive hereunder shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge. 9. This Plan may be altered, changed, amended or terminated only by a writing signed by the party to be bound thereby. 10. This document has been executed in the State of Ohio and shall be interpreted in accordance with the laws of that State without regard to conflict of law provisions. -3- 19 IN WITNESS WHEREOF, the parties hereto have caused this Plan to be executed this 5th day of June ,1995. Attest: APCOA, Inc. (the "Company") /s/ By: /s/ - -------------------------------- -------------------------------- /s/ Michael J. Celebrezze -------------------------------- Michael J. Celebrezze (the "Executive") -4- 20 Michael J. Celebrezze 7960 Jill Drive Sagamore Hills, Ohio 44067 April 6, 1998 Mr. G. Walter Stuelpe, Jr., President APCOA, Inc. McDonald Investment Center 800 Superior Avenue, E. Cleveland, Ohio 44114-2601 Dear Walter: At your suggestion, I am writing to document our understanding about the term of my employment, and to the extent necessary, to amend the Employment Agreement dated March 30, 1998. Also at your suggestion, I am attaching the Illustration of our agreement regarding payments at termination. It is my understanding, based on our discussions, specifically our discussion on February 12, 1998, that I will be given the opportunity to maintain my position with the Company for at least five years following the relocation to Chicago. The Employment Agreement addresses what compensation will be paid to me if I leave employment for "Good Reason" at any time, but the Agreement does not fully address what compensation should be paid to me if my employment is terminated for reasons other than Cause , or if my contract is allowed to expire, before the agreed five-year period. To address these contingencies more adequately, we have agreed that if my employment is terminated by the Company any time before the third anniversary of the Employment Agreement for any reason, other than a termination for Cause , or if the Company gives notice of its intention not to renew the Employment Agreement for an additional two-year term beginning on the third anniversary of the Employment Agreement, I will be paid my Annual Base Salary and the Target Bonus for the remaining balance of the initial three-year term, if any, and for an additional two years. These payments would not be subject to offset for any compensation I may receive from another employer. In addition, my welfare and employee benefits will continue for the same period (secondary to other employer-provided benefits, if applicable) or their monetary equivalent will be paid. I understand that this does not guarantee me work for a full five years, but it does provide an economic equivalent if I am not retained for that period. Absent this letter agreement, I am not assured of the benefit of a five-year term, so I appreciate the opportunity to set forth our agreement in this letter. If this letter is consistent with your understanding, please sign the letter in your capacity as President of the Company and return a copy to me. Thank you. Very truly yours, /s/Michael J. Celebrezze Michael J. Celebrezze Agreed: APOCA, Inc. /s/ G. Walter Stuelpe, Jr. - ----------------------------------- G. Walter Stuelpe, Jr., President EX-10.12 44 EMPLOYMENT AGREEMENT 1 Exhibit 10.12 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of March 26, 1998, is by and between Standard Parking, L.P., a Delaware limited partnership (the "Company"), and Michael K. Wolf (the "Executive"). WHEREAS, prior to the date hereof, the Executive has been employed by the Company and the Company desires to have Executive continue in its employ; and WHEREAS, pursuant to that certain Combination Agreement, dated as of January 15, 1998, between, among others, APCOA, Inc., a Delaware corporation ("APCOA"), the Company and the equity holders of the Company, all of the equity interests of the Company are being sold to APCOA; and WHEREAS, the Company understands that APCOA intends to continue in the business of operating private and public parking facilities for itself, its affiliates (including the Company and its affiliates) and others, and as a consultant and/or manager for parking facilities operated by others throughout the United States (APCOA, its subsidiaries and affiliates (including the Company and its subsidiaries and affiliates), and any other APCOA-controlled businesses engaged in parking garage management (in each case including their predecessors or successors) are referred to hereinafter as the "Parking Companies"); and WHEREAS, the general partner of the Company has determined that it is in the best interest of the Company to continue to employ the Executive as an Executive Vice President and General Counsel, and the Executive desires to continue to serve the Company in that capacity; and 2 WHEREAS, the Company desires to continue to employ the Executive and the Executive desires to continue to work for the Company on the terms and conditions set forth herein. NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 1. Employment Period. The Company shall employ the Executive, and the Executive shall serve the Company, on the terms and conditions set forth in this Agreement, for the period beginning March 26, 1998 (the "Effective Date") and ending on the third anniversary hereof (the "Employment Period"), provided, however, that commencing on the date two years after the Effective Date and on each annual anniversary of such date (each annual anniversary thereof shall hereinafter be referred to as the "Renewal Date"), unless previously terminated, the Employment Period shall be automatically extended so as to terminate two years from the Renewal Date, so that there is always between one and two years remaining in the Employment Period, unless 90 days prior to the Renewal Date the Company or the Executive shall terminate this Agreement by giving notice to the other party that the Employment Period shall not be so extended (a "Notice of Nonrenewal"). Notwithstanding any such termination, Section 6 of this Agreement shall remain in full force and effect. 2. Position and Duties. During the Employment Period, the Executive shall serve as an Executive Vice President and General Counsel, with the duties and responsibilities currently associated with such position. During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive shall devote full attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive under this Agreement, use the Executive's reasonable best efforts to carry out such responsibilities faithfully -2- 3 and efficiently. The Executive shall not, during the term of this Agreement, engage in any other business activities that will interfere with the Executive's employment pursuant to this Agreement. During the Employment Period, the Executive's services shall be performed primarily in Chicago, Illinois. 3. Compensation. (a) Base Salary. During the Employment Period, the Executive shall receive an annual base salary ("Annual Base Salary") of no less than $376,400, payable in accordance with the normal payroll practices for executives of the Company as in effect from time to time (but no less frequently than monthly). Such Annual Base Salary shall be subject to review annually in accordance with the review policies and practices for executives of the Company as in effect at the time of any such review. (b) Bonus. For each calendar year ending during the Employment Period, the Executive shall be eligible to receive an annual bonus (the "Annual Bonus"), based upon the terms and conditions of an annual bonus program to be established by the Company. Any such annual bonus program shall provide that the Executive's target bonus ("Target Annual Bonus") will be a percentage of the Annual Base Salary mutually agreed upon by the Company and Executive. (c) Equity Plan. In the event the Company adopts an equity incentive plan or program (the "Equity Plan") for its key executives, the Executive shall be entitled to participate in the Equity Plan from and after the effective date thereof in accordance with the terms and conditions of such plan. (d) Other Benefits. In addition to the foregoing, during the Employment Period: (i) the Executive shall be entitled to participate in savings, retirement, and fringe benefit plans, -3- 4 practices, policies and programs of the Company as in effect from time to time, on the same terms and conditions as those applicable to peer executives; (ii) the Executive shall be entitled to four weeks of annual vacation, to be taken in accordance with the vacation policy as in effect from time to time; and (iii) the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in, and shall receive all benefits under medical, dental, disability and other welfare benefit plans, practices, policies and programs provided by the Company, as in effect from time to time, on the same terms and conditions as those applicable to peer executives. (e) Executive shall be reimbursed by the Company for business expenses incurred on behalf of the Parking Companies in accordance with the policies and practices of the Company as in effect from time to time. 4. Termination of Employment. (a) Death or Disability. In the event of the Executive's death during the Employment Period, the Executive's employment with the Company shall terminate automatically. The Company, in its discretion, shall have the right to terminate the Executive's employment because of the Executive's Disability during the Employment Period. "Disability" means that (i) the Executive has been unable, for a period of 180 consecutive days, or for periods aggregating 180 business days in any period of twelve months, to perform the Executive's duties under this Agreement, as a result of physical or mental illness or injury, and (ii) a physician selected by the Company or its insurers has determined that the Executive's incapacity is total and permanent. A termination of the Executive's employment by the Company for Disability shall be communicated to the Executive by written notice, and shall be effective on the 30th day after receipt of such notice by the Executive (the "Disability -4- 5 Effective Date") unless the Executive returns to full-time performance of the Executive's duties before the Disability Effective Date. (b) By the Company. In addition to termination for Disability, the Company may terminate the Executive's employment during the Employment Period for Cause or without Cause. "Cause" means: (i) the continued and willful or deliberate failure of the Executive substantially to perform the Executive's duties, or to comply with the Executive's obligations, under this Agreement (other than as a result of physical or mental illness or injury), or (ii) illegal conduct or gross misconduct by the Executive, in either case that is willful and results in material damage to the business or reputation of the Company. Upon the occurrence of events constituting Cause as defined in subsection (i) of this paragraph (b), the Company shall give the Executive advance notice of any such termination for Cause and shall provide the Executive with a reasonable opportunity to cure. (c) Voluntarily by the Executive. The Executive may terminate his employment by giving written notice thereof to the Company. (d) Date of Termination. The "Date of Termination" means the date of the Executive's death, the Disability Effective Date, the date on which the termination of the Executive's employment by the Company for Cause as set forth in notice from the Company is effective, or the date on which the Executive gives the Company notice of a termination of employment, as the case may be. After the Executive's termination occurs for any reason, in addition to any other obligations hereunder, the Company shall pay the Executive: -5- 6 (i) the Executive's Annual Base Salary for the period ending with the Date of Termination; (ii) payment for unused vacation days accrued for the year in which the Executive's termination occurs, as determined in accordance with the Company policy as in effect from time to time; and (iii) any other payments or benefits to be provided to the Executive by the Company pursuant to any employee benefit plans or arrangements adopted by the Company, to the extent such amounts are due from the Company. Except as may otherwise be expressly provided to the contrary in this Agreement, nothing in this Agreement shall be construed as requiring Executive to be treated as employed by the Company for purposes of any employee benefit plan following the Date of Termination. 5. Additional Obligations of the Company upon Termination. (a) By the Company Other Than for Cause, Death or Disability: If, during the Employment Period, the Company terminates the Executive's employment, other than for Cause, death or Disability, but excluding any termination of employment at the end of the Employment Period (whether or not as a result of a Notice of Nonrenewal by the Company), the Company shall, for the remainder of the Employment Period as in effect immediately before the Date of Termination, continue to pay the Executive the Annual Base Salary and Annual Bonus(es) through the end of the then-current Employment Period, as and when such amounts would be paid in accordance with Sections 3(a) and (b) above; provided, that the amount of each of the Annual Bonus(es) so paid shall equal the Target Annual Bonus. The Company shall also continue to provide for the same period welfare benefits to the Executive and/or the Executive's family, at least as favorable as those that would -6- 7 have been provided to them under clause (d)(iv) of Section 3 of this Agreement if the Executive's employment had continued until the end of the Employment Period; provided, that during any period when the Executive is eligible to receive such benefits under another employer-provided plan, the benefits provided by the Company under this Section 5(a) may be made secondary to those provided under such other plan. The payments provided pursuant to this Section 5(a) are intended as liquidated damages for a termination of the Executive's employment by the Company other than for Cause or Disability and shall be the sole and exclusive remedy therefor. (b) Death. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, the Company shall make, within 30 days after the Date of Termination, a lump-sum cash payment to the Executive's estate equal to the sum of (i) the Executive's Annual Base Salary through the end of the calendar month in which death occurs, (ii) any earned and unpaid Annual Bonus for any calendar year ended prior to the Date of Termination, (iii) any accrued but unpaid vacation pay and (iv) any other vested benefits to which the Executive is entitled, in each case to the extent not yet paid. (c) Disability. In the event the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period in accordance with Section 4(a) hereof, the Company shall pay to the Executive or the Executive's legal representative, as applicable, (i) the Executive's Annual Base Salary for the duration of the Employment Period in effect on the Date of Termination, provided that any such payments made to the Executive shall be reduced by the sum of the amounts, if any, payable to the Executive under any disability benefit plans of the Company or under the Social Security disability insurance program, (ii) any earned and unpaid -7- 8 Annual Bonus for any calendar year ended prior to the Date of Termination and (iii) any other vested benefits to which the Executive is entitled, in each case to the extent not yet paid. (d) Cause: Voluntary Termination. If the Executive's employment is terminated by the Company for Cause or the Executive voluntarily terminates his employment during the Employment Period, the Company shall pay the Executive only those amounts specified in Section 5(d), in each case to the extent not yet paid, and the Company shall have no further obligations under this Agreement. (e) Termination After a Change in Control. (i) If Executive is terminated by the Company during the three-year period following a Change in Control (as defined in Section 5(f) below) for any reason other than Cause, then Executive shall be entitled to the following: (A) During the longer of (i) the 18-month period following his termination and (ii) the remainder of the Employment Period in effect at the date of termination, and except to the extent prohibited under the terms of any applicable insurance policy, he shall continue to be covered under the Company's welfare benefit plans to the same extent and on the same terms as those benefits are provided to the Company's active employees. (B) He shall receive from the Company an amount (the "Severance Pay") equal to the greater of (i) one and one-half times the sum of (x) the Executive's current Annual Base Salary plus (y) the amount of any bonus paid to Executive in the preceding twelve months and (ii) the Annual Base Salary and Annual Bonuses through the end of the then current Employment Period (provided, that the amount of each of the Annual Bonuses so paid shall equal the Target Annual Bonus). The Severance Pay amount shall be paid (a) if clause (i) in the previous sentence applies, over the 18-month period -8- 9 commencing on the date Executive's employment terminates, in equal monthly or more frequent installments in accordance with the Company's payroll schedule or (b) if clause (ii) in the previous sentence applies, as and when such amounts would be paid in accordance with Sections 3(a) and (b) above. The Company's obligation to provide welfare benefit coverage and make severance payments under this Section 5(e) shall cease with respect to periods after the earlier to occur of the date of Executive's death, or the date, if any, of the breach by Executive of the provisions of Section 6. (ii) If Executive terminates his employment hereunder voluntarily following a Change in Control, then Executive shall not be entitled to Severance Pay; provided, however, that if Executive terminates his employment for Good Reason (as defined below) during the three-year period following a Change in Control, such termination shall not be considered a voluntary termination by Executive and Executive shall be treated as if he had been terminated by the Company pursuant to paragraph (i) of this Section 5(e) above. "Good Reason" means, in the event of or following a Change in Control: (A) without the express written consent of the Executive, (1) the assignment to the Executive of duties inconsistent in any substantial respect with the Executive's position, authority or responsibilities as held, exercised and assigned during the ninety (90) day period immediately preceding the Change in Control, or (2) any other substantial adverse change in such position (including titles, authority or responsibilities) or significant reduction in salary, unless in either case the change is warranted by an objective evaluation of Executive's performance or is related to a bona fide company restructuring; -9- 10 (B) any failure by the Company to comply with any of the provisions of this Agreement, other than an insubstantial and inadvertent failure remedied by the Company promptly after receipt of notice thereof given by the Executive; or (C) the Company requires or otherwise takes such action as would reasonably require the Executive's relocation. (f) For purposes of this Agreement, the term "Change in Control" shall mean the first to occur of the date Myron C. Warshauer either (i) no longer serves as Chief Executive Officer of the Company or (ii) no longer retains, for whatever reason, primary responsibility for the daily management of the Company and the ability to implement his management decisions with respect to the Company. (g) In the event that it shall be necessary for Executive to engage in litigation in connection with the enforcement of his rights under paragraphs (i) and (ii) of Section 5(e), he shall be entitled to recover from the Company the reasonable attorney's fees and other costs incurred in such legal action, in addition to any other relief to which he may be entitled; provided, however, that Executive ultimately prevails in such litigation. 6. Protection of the Company Assets (Confidentiality, Non-Competition and Other Matters). (a) Executive recognizes and acknowledges that the acquisition and operation of, and the providing of consulting services for, parking facilities is a unique enterprise and that there are relatively few firms engaged in these businesses in the primary areas in which the Parking Companies operate. Executive further recognizes and acknowledges that as a result of his employment with the Parking Companies, Executive has had and will continue to have access to confidential information and trade secrets of the Parking Companies that constitute proprietary -10- 11 information that the Parking Companies are entitled to protect, which information constitutes special and unique assets of the Parking Companies, including, but not limited to, (i) information relating to the Parking Companies' manner and methods of doing business, including, but not limited to, strategies for negotiating leases and management agreements; (ii) the identity of the Parking Companies' clients, customers, lessors and locations, and the identity of any individuals or entities having an equity or other economic interest in any of the Parking Companies to the extent such identity has not otherwise been voluntarily disclosed by any of the Parking Companies; (iii) the specific confidential terms of management agreements, leases or other business agreements, including, but not limited to, the duration of, and the fees, rent or other payments due thereunder; (iv) the identities of beneficiaries under land trusts; (v) the business, developments, activities or systems of the Parking Companies, including, but not limited to, any marketing or customer service oriented programs in the development stages or not otherwise known to the general public; (vi) information concerning the business affairs of any individual or firm doing business with the Parking Companies; (vii) financial data and the operating expense structure pertaining to any parking facility owned, operated, leased or managed by the Parking Companies or for which the Parking Companies have or are providing consulting services; and (viii) other confidential information and trade secrets relating to the operation of the Company's business (the matters described in this sentence hereafter referred to as the "Trade Secrets"). (b) Confidentiality. With respect to Trade Secrets, and except as may be required by the lawful order of a court of competent jurisdiction, the Executive agrees that he shall: -11- 12 (i) hold all Trade Secrets in strict confidence and not publish or otherwise disclose any portion thereof to any person whatsoever except with the prior written consent of the Parking Companies; (ii) use all reasonable precautions to assure that the Trade Secrets are properly protected and kept from unauthorized persons; (iii) make no use of any Trade Secrets except as is required in the performance of his duties for the Parking Companies; and (iv) upon termination of his employment with the Parking Companies, whether voluntary or involuntary and regardless of the reason or cause, or upon the request of the Parking Companies, promptly return to the Parking Companies any and all documents, and other things relating to the Trade Secrets, all of which are and shall remain the sole property of the Parking Companies. The term "documents" as used in the preceding sentence shall mean all forms of written or recorded information and shall include, but not be limited to, all accounts, budgets, compilations, computer records (including, but not limited to, computer, programs, software, disks, diskettes or any other electronic or magnetic storage media), contracts, correspondence, data, diagrams, drawings, financial statements, memoranda, microfilm or microfiche, notes, notebooks, marketing or other plans, printed materials, records and reports, as well as any and all copies, reproductions or summaries thereof. Notwithstanding the above, nothing contained herein shall restrict Executive from using, at any time after his termination of employment with the Company, information which is in the public domain or knowledge acquired during the course of his employment with the Company which is -12- 13 generally known to persons of his experience in other companies in the same industry (c) Assignment of Intellectual Property Rights. The Executive agrees to assign to the Company any and all intellectual property rights including patents, trademarks, copyright and business plans or systems developed, authored or conceived by the Executive while so employed and relating to the business of the Parking Companies, and the Executive agrees to cooperate with the Company's attorneys to perfect ownership rights thereof in the Company or any one or more of the Parking Companies. This agreement does not apply to an invention for which no equipment, supplies, facility or trade secret information of the Parking Companies was used and which was developed entirely on the Executive's own time, unless (i) the invention relates either to the business of the Parking Companies or to actual or demonstrably anticipated research or development of the Parking Companies, or (ii) the invention results from any work performed by the Executive for the Parking Companies. (d) Covenants Not to Compete. The Executive agrees that while he is employed by the Company and for a period of two (2) years after the date on which such employment terminates (or eighteen (18) months after the date such employment terminates if such termination follows a Change in Control), the Executive shall not, directly or indirectly: (i) have an ownership interest in (other than ownership of 5% or less of the outstanding stock of any entity listed on the New York or American Stock Exchange or included in the National Association of Securities Dealers Automated Quotation System) any corporation, firm, joint venture, partnership, proprietorship, or other entity or association which manages, owns or operates a parking facility that is competitive with the business of the Parking Companies in any of the metropolitan areas in which, as of -13- 14 the time Executive's employment terminates, the Parking Companies own, manage and/or operate one or more parking facilities (hereinafter the "Metropolitan Areas"); (ii) become employed by, work for, consult with, or assist any person, corporation, firm, joint venture, partnership, proprietorship, or any other entity or association that is engaged in a business which is competitive with the business of the Parking Companies in the Chicago metropolitan area or in any of the other Metropolitan Areas in which the Executive has been responsible for performing supervisory or other services on behalf of any of the Parking Companies within the three (3) years immediately preceding the termination of his employment; (iii) contact or solicit business from any client or customer of the Parking Companies or from any person who is responsible for referring or who regularly refers business to the Parking Companies; or (iv) take any action to recruit or to assist in the recruiting or solicitation for employment of any officer, employee or representative of the Parking Companies. It is not the intention of the Parking Companies to interfere with the employment opportunities of former employees except in those situations, described above, in which such employment would conflict with the legitimate interests of the Parking Companies. If the Executive, after the termination of his employment hereunder, has any question regarding the applicability of the above provisions to a potential employment opportunity, the Executive acknowledges that it is his responsibility to contact the Company so that the Company may inform the Executive of its position with respect to such opportunity. -14- 15 (e) Remedies. The Executive acknowledges that the Parking Companies would be irreparably injured by a violation of the covenants of this Section 6 and agrees that the Company, or any one or more of the Parking Companies, in addition to any other remedies available to it or them for such breach or threatened breach, shall be entitled to a preliminary injunction, temporary restraining order, or other equivalent relief, restraining the Executive from any actual or threatened breach of any of the provisions of this Section 6. If a bond is required to be posted in order for the Company or any one or more of the Parking Companies to secure an injunction or other equitable remedy, the parties agree that said bond need not exceed a nominal sum. This Section shall be applicable regardless of the reason for the Executive's termination of employment, and independent of any alleged action or alleged breach of any provision hereby by the Company. If at any time any of the provisions of this Section 6 shall be determined to be invalid or unenforceable by reason of being vague or unreasonable as to duration, area, scope of activity or otherwise, then this Section 6 shall be considered divisible (with the other provisions to remain in full force and effect) and the invalid or unenforceable provisions shall become and be deemed to be immediately amended to include only such time, area, scope of activity and other restrictions, as shall be determined to be reasonable and enforceable by the court or other body having jurisdiction over the matter, and the Executive expressly agrees that this Agreement, as so amended, shall be valid and binding as though any invalid or unenforceable provision had not been included herein. 7. Successors. (a) This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by the Executive otherwise than by will -15- 16 or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. (c) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would have been required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean both the Company as defined above and any such successor that assumes and agrees to perform this Agreement, by operation of law or otherwise. 8. Miscellaneous. (a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Illinois without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified except by a written agreement executed by the parties hereto or their respective successors and legal representatives. (b) All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: -16- 17 If to the Executive: Michael K. Wolf 800 Bluff Street Glencoe, Illinois 60022 If to the Company: Standard Parking, L.P. 200 East Randolph Street Suite 4800 Chicago, Illinois 60601 Attention: Chief Executive Officer with a copy to: Holberg Industries, Inc. 545 Steamboat Road Greenwich, Connecticut 06830 Attention: Chief Financial Officer or to such other address as either party furnishes to the other in writing in accordance with this paragraph (b) of Section 8. Notices and communications shall be effective when actually received by the addressee. (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. If any provision of this Agreement shall be held invalid or unenforceable in part, the remaining portion of such provision, together with all other provisions of this Agreement, shall remain valid and enforceable and continue in full force and effect to the fullest extent consistent with law. (d) Notwithstanding any other provision of this Agreement, the Company may withhold from amounts payable under this Agreement all federal, state, local and foreign taxes that are required to be withheld by applicable laws or regulations. -17- 18 (e) The Executive's or the Company's failure to insist upon strict compliance with any provision of, or to assert any right under, this Agreement shall not be deemed to be a waiver of such provision or right or of any other provision of or right under this Agreement. (f) The Executive and the Company acknowledge that this Agreement supersedes any other agreement, whether written or oral, between them concerning the subject matter hereof, including, but not limited to, any written or oral employment agreement between the Company and the Executive. (g) This Agreement may be executed in several counterparts, each of which shall be deemed an original, and said counterparts shall constitute but one and the same instrument. IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and, pursuant to the authorization of its general partner, the Company has caused this Agreement to be executed in its name on its behalf, all as of the day and year first above written. /s/ Michael K. Wolf ----------------------------- MICHAEL K. WOLF STANDARD PARKING, L.P. By: Standard Parking Corporation Its: General Partner By: /s/ Myron C. Warshauer ----------------------------- Its: President ----------------------------- EX-10.13 45 DEFERRED COMPENSATION AGREEMENT 1 Exhibit 10.13 FIRST AMENDMENT TO DEFERRED COMPENSATION AGREEMENT This First Amendment to Deferred Compensation Agreement is made as of the 23rd day of March, 1998 by and between STANDARD PARKING, L.P., a Delaware limited partnership (the "Company") and MICHAEL K. WOLF (the "Employee"). RECITALS A. The Company and Employee have previously entered into a certain Deferred Compensation Agreement dated as of April 15, 1996 ("DCA") to provide certain additional compensation to the Employee if the Employee continues his employment with the Company until his retirement or earlier death. B. Control of the Company will change by reason of the consummation (the "Closing") of the transaction contemplated by that certain Combination Agreement dated as of January 15, 1998 by and between APCOA, Inc., a Delaware corporation ("APCOA"), on the one hand, and Myron C. Warshauer, Stanley Warshauer, Steven A. Warshauer, Dosher Partners, L.P., SP Associates and SP Parking Associates, on the other hand. C. The parties desire to amend certain provisions of the DCA as hereinafter set forth. NOW, THEREFORE, in consideration of the recitals, the mutual promises and undertakings hereinafter set forth, the sum of Ten Dollars in hand paid, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. The following is hereby substituted in lieu of the definition of "Change in Control" contained in paragraph 1(e) of the DCA: (e) "Change in Control" shall mean the first to occur of (i) the date on which Warshauer ceases to be the Chief Executive Officer of the Company and of APCOA, Inc., a Delaware corporation ("APCOA"), or (ii) the date on which Warshauer no longer retains, for whatever reason, primary responsibility for the daily management of, and the ability to implement his management decisions with respect to, the Company and APCOA." 2. Except to the extent expressly modified above, the DCA is hereby ratified and confirmed in all respects. 2 IN WITNESS WHEREOF, the parties have executed this First Amendment as of the day and year first above written. STANDARD PARKING, L.P., a Delaware limited partnership By: Standard Parking Corporation By: /s/ Myron C. Warshauer /s/ Michael K. Wolf -------------------------------- ------------------------------------ President Michael K. Wolf 3 DEFERRED COMPENSATION AGREEMENT This Agreement is made and entered into as of April 15, 1996 by and between Standard Parking L.P., a Delaware limited partnership (the "Company"), and Michael K. Wolf (the "Employee"). RECITALS A. The Company regards the Employee as important to the long-term growth and profitability of the Company and has determined that it would be to the advantage and interest of the Company to provide certain additional compensation to the Employee if the Employee continues his employment with the Company until his retirement or earlier death. B. The Employee wishes to be assured that he or his family will be entitled to a certain amount of additional compensation for some definite period of time from and after his retirement from active service with the Company, whether by reason of his death or otherwise. C. The parties hereto wish to provide the terms and conditions upon which the Company shall pay such additional compensation to the Employee or his family after his retirement or death. CLAUSES Now, therefore, in consideration of the premises and of the mutual promises contained herein, the parties hereto agree as follows: 4 1. Definitions. (a) "Actuarial Assumptions" means the mortality assumptions reflected in the UP 84 Mortality Table and a discount rate of six percent (6%) per annum. (b) "Annual Retirement Benefit" means an amount equal to $150,000 per annum which, subject to the conditions set forth herein, is to be paid by the Company to the Employee during the period described in Section 2 hereof. (c) "Beneficiary" means the person or persons last designated by the Employee as the intended beneficiary or beneficiaries of his Death Benefit, all such designations to be made in writing on forms approved by or acceptable to the Company. In the absence of any valid written designation by the Employee, the Beneficiary shall be the Employee's spouse, if his spouse survives him and was living in the same residence with the Employee immediately before his death, or otherwise shall be the Employee's estate. (d) "Cause" means (i) the Employee knowingly and willfully engages in or manifests his intent to engage in conduct which is demonstrably and materially injurious to the Company or its affiliates, monetarily or otherwise; or (ii) the Employee engages in egregious misconduct involving serious moral turpitude to the extent that, in the reasonable -2- 5 judgment of the Company, the Employee's credibility and reputation no longer conform to the standard of the Company's executives. (e) "Change in Control" means the occurrence of any one of the following: (i) the Corporation fails to control the day-to-day operations of the Company, whether the loss of control is due to its removal or resignation as general partner, the admission of one or more other general partners having equal or greater voting rights respecting the Company's operations, or otherwise; provided, however, that the foregoing shall not constitute a Change in Control if Warshauer, directly or indirectly through one or more Controlled Entities, possesses more than 50% of the voting rights in the Company or its general partners; (ii) Warshauer (or members of his family or trusts created for any of their benefit) owns less than a majority of the Corporation's voting stock; provided, however, that the foregoing shall not constitute a Change in Control if Warshauer, directly or indirectly through one or more Controlled Entities, possesses more than 50% of the voting rights in the Company or its general partners; or (iii) Warshauer ceases for any reason (including, without limitation, by reason of his death, disability, resignation or retirement) to serve as the Corporation's president or chief executive officer or as the general partner, manager, president or chief executive officer of the Company or of any entity that serves as the Company's general partner. (f) "Code" means the Internal Revenue Code of 1986, as amended. -3- 6 (g) "Commencement Date" means the first day of the third month following the Retirement Date. (h) "Computation Date" means the September 1 nearest to the date of the Employee's death. (i) "Controlled Entity" means any corporation, partnership, limited liability company, trust or other entity that Warshauer, members of his family or trusts for the benefit of Warshauer or members of his family controls by virtue of possessing more than 50% of the voting power of the stock, general partnership interests, membership interests or other ownership interests in the entity or by virtue of serving as a trustee having more than 50% of the voting rights of all trustees of the trust. (j) "Corporation" means Standard Parking Corporation, the general partner of the Company. (k) "Death Benefit" means the amount set forth on the attached Exhibit B opposite the calendar year during which the Employee's death occurs, reduced by the date of death value of all Retirement Benefits (or Third Party Benefits following a Qualifying Termination of Employment) previously paid to the Employee, if any, using an assumed interest rate of 6% per annum from the date of each such payment, and, following a Qualifying Termination of Employment, further reduced by the amount of any Third Party Death Benefit. -4- 7 (l) "Disabled" or "Disability" means that the Employee is not able to perform substantially all of the duties of his regular occupation with the Company, except that after the first full twenty-four (24) months of such disability, it means that the Employee is not able to perform substantially all of the duties of his occupation with the Company or any other occupation for which he is or becomes fitted by education, training or experience. The determination of whether the Employee is Disabled shall be made by the Company and shall be final and binding upon the Employee. (m) "ERISA" means the Employee Income and Security Act of 1974, as amended. (n) "Qualifying Disability Period" means the time during which the Employee is Disabled, but only if the Employee's Disability first occurs while the Employee is in the employ of the Company on a full time basis. (o) "Qualifying Termination of Employment" means (i) the Company's termination of the Employee's employment without Cause; or (ii) the termination of the Employee's employment by the Company or by the Employee for any reason, but only after a Change in Control. (p) "Retirement Benefits" means the aggregate of all of the Annual Retirement Benefit payments due to the Employee for the period described in Section 2 hereof. -5- 8 (q) "Retirement Date" means the date on which the Employee attains age sixty-five (65). (r) "Substantial Compensation" means the sum of $300,000 (as adjusted below) or more per year received by the Employee in the form of wages, salary, cash bonus, fees for services rendered, commissions, expense allowances under a nonaccountable plan, self-employment income, cash distributions from an S corporation that employs the Employee or cash distributions from a partnership other than the Company or a limited liability company that employs the Employee or for which the Employee performs personal services on a regular basis, or any other distributions relating to the performance of personal services by the Employee, made by any entity other than the Company which employs the Employee or for or in connection with which the Employee performs personal services on a regular basis. The $300,000 figure set forth above shall be adjusted each year to reflect the increase from May 1990 to the date of computation in the Consumer Price Index, Chicago, Illinois, Urban Wage Earners, prepared by the Bureau of Labor Statistics of the U.S. Department of Labor. (s) "Third Party Benefit" means any benefit payable to the Employee, by a person, firm or entity other than the Company or its affiliates, pursuant to any employee pension plan within the meaning of Section 3(2) of ERISA, deferred compensation arrangement, golden parachute payments, plan -6- 9 described in Section 403(a), 403(b) or 408(k) of the Code, excess benefit plan, supplemental retirement plan or any other type of retirement or employment termination benefit plan, regardless of whether or not the Employee actually receives such benefit and disregarding any forfeiture of such benefit by reason of the termination of the employment of or the relationship with the Employee and any discretionary termination of such benefit by the obligor or sponsor of the benefit. If any such benefit terminates by reason of forfeiture, discretionary termination by the obligor or sponsor of the benefit or for any other reason and the Employee becomes entitled to receive a similar benefit from the same or a different obligor or sponsor, then such similar benefit shall constitute a Third Party Benefit only to the extent that it exceeds the terminated benefit. (t) "Third Party Annual Retirement Benefit" means the annual payment which will amortize the accrued value, as of the Employee's Retirement Date, of all Third Party Benefits over a period of 15 years with interest at 6% per annum. For the purposes hereof, such accrued value of a Third Party Benefit shall be determined in accordance with the following: (i) in the case of a Third Party Benefit under a defined benefit plan, the present value of the Employee's accrued benefit under the plan at his Retirement Date (the "PVAB") which shall be determined in accordance with the actuarial assumptions stated in such plan (or, if none are stated in the plan, in accordance with the Actuarial Assumptions); (ii) in the case of a Third -7- 10 Party Benefit under a defined contribution plan or under a plan described in Section 408(k) of the Code, the Employee's account balance ("Account Balance") in the plan at his Retirement Date (excluding any portion thereof attributable to his own contributions and any earnings thereon); (iii) in the case of a Third Party Benefit under a plan described in Section 403(a) or 403(b) of the Code, the present value as of the Retirement Date of the annuity payments payable to the Employee under the plan if he retired on the Retirement Date (the "Annuity Value"), determined in accordance with the actuarial assumptions stated in the plan (or, if none are stated in the plan, in accordance with the Actuarial Assumptions); and (iv) in the case of a Third Party Benefit under an excess benefit plan (as defined in Section 3(36) of ERISA) or a supplemental executive retirement plan the benefits of which are calculated by reference to the amount of benefits available under a defined benefit plan or a defined contribution plan, the present value as of the Retirement Date of the amounts payable to the Employee under the plan if he retired on the Retirement Date (the "Excess Value"), determined in accordance with the actuarial assumptions stated in the plan (or, if none are stated in the plan, in accordance with the Actuarial Assumptions). (u) "Third Party Death Benefit" means any death benefit payable to the Employee's Beneficiary, following and by reason of the death of the Employee, by a person, firm or entity other than the Company or its -8- 11 affiliates or pursuant to any life insurance policy on the Employee's life to the extent such death benefit is attributable to premiums paid by such person, firm or entity, regardless of whether or not the Employee's Beneficiary actually receives such death benefit and disregarding any forfeitures of such death benefit by reason of termination of the employment of or the relationship with the Employee and any discretionary termination of such Benefit by the obligor or sponsor of the death benefit. If any such death benefit terminates by reason of forfeiture, discretionary termination by the obligor or sponsor of the death benefit or for any other reason, and the Employee's Beneficiary becomes entitled to receive a similar death benefit from the same or different obligor or sponsor, then such similar death benefit shall constitute a Third Party Death Benefit only to the extent that it exceeds the terminated death benefit. (v) "Warshauer" means Myron C. Warshauer. 2. Retirement Benefits. (a) Except as otherwise provided herein, the Company agrees to pay to the Employee, as additional compensation, an Annual Retirement Benefit on the Commencement Date and on each anniversary of the Commencement Date until the first to occur of (i) fifteen (15) such annual payments having been made or (ii) the Employee's death. Notwithstanding the foregoing, the Employee will not be entitled to any Retirement Benefits unless the Employee remains in the employ of the Company on a full-time basis without any break or interruption in -9- 12 service (disregarding for this purpose a termination of employment that constitutes a Qualifying Termination of Employment or a break or interruption in service during a Qualifying Disability Period) from the date hereof to the Retirement Date. (b) Notwithstanding anything to the contrary set forth in Section 2(a), the Company's obligation to pay Retirement Benefits shall continue after a Qualifying Termination of Employment, but thereafter shall be terminated or reduced as hereinafter set forth. If, in any calendar year after a Qualifying Termination of Employment, the Employee receives Substantial Compensation, then the Employee shall not be entitled to any Retirement Benefits provided under this Agreement and all of the Company's obligations hereunder shall immediately lapse and terminate. If, at any time after a Qualifying Termination of Employment, the Employee receives or becomes contractually entitled to receive any Third Party Benefits, then the Annual Retirement Benefit shall be reduced dollar for dollar by the amount of any Third Party Annual Retirement Benefits that the Employee is entitled to receive in any year that an Annual Retirement Benefit is payable hereunder. 3. Death Benefit. (a) Except as otherwise provided herein, upon the death of the Employee either prior to or after the Retirement Date but prior to payment to him of all of the Retirement Benefits to which he is or may become entitled under Section 2, the Company agrees to pay to the Employee's Beneficiary, as additional compensation to the Employee, an amount equal to the Death Benefit. Notwithstanding the foregoing, the Death Benefit will be payable if and only if the Employee has been in the employ of the Company on a full-time basis without any break or interruption in service (disregarding for this purpose a termination of employment that -10- 13 constitutes a Qualifying Termination of Employment or a break or interruption in service during a Qualifying Disability Period) from the date hereof to the earlier of (a) his Retirement Date or (b) the date of his death. The Death Benefit will be paid to the Beneficiary no later than ninety (90) days after the death of the Employee. No Death Benefit will be payable if the Employee has received payment of all of the Retirement Benefits to which the Employee is entitled under Section 2. (b) Notwithstanding anything to the contrary set forth in Section 3(a), the Company's obligation to pay the Death Benefit shall continue after a Qualifying Termination of Employment, but thereafter shall be terminated or reduced as hereinafter set forth. If, in any calendar year after a Qualifying Termination of Employment, the Employee receives Substantial Compensation, then the Employee shall not be entitled to the Death Benefit provided under this Agreement and all of the Company's obligations hereunder shall immediately lapse and terminate. If, at any time after a Qualifying Termination of Employment, the Employee's estate receives or becomes contractually obligated to receive any Third Party Death Benefits, then the Death Benefit shall be reduced dollar for dollar by the amount of any Third Party Death Benefits that the Employee's estate is entitled to receive. 4. Termination of Employment. Except as otherwise set forth in this Agreement, the Company's obligations under Section 2 and Section 3 are conditioned upon the continuous employment of Employee by the Company (or by one of its partners or affiliates) until the earlier of his death or his Retirement Date. If the Employee's employment is terminated prior to the Retirement Date for any reason whatsoever, except as a result of the Employee's Disability, and the termination does not constitute a Qualifying Termination of Employment, -11- 14 then the Employee shall not be entitled to any Retirement Benefits or the Death Benefit provided under this Agreement and all of the Company's obligations hereunder shall immediately lapse and terminate. If the Employee's termination of employment constitutes a Qualifying Termination of Employment, the Employee shall be entitled to the Retirement Benefits and/or the Death Benefit on the terms and subject to the conditions set forth herein. If the Employee's employment is terminated on account of his Disability, the Employee shall be entitled to the Retirement Benefits and/or the Death Benefit on the terms and subject to the conditions set forth herein, but only if his Disability continues until the earlier of (a) his Retirement Date, (b) his death or (c) the date on which he is re-employed by the Company in substantially the same capacity and performing substantially all of the duties of his employment as at the time the Disability began. 5. Verification of Compensation. If a Qualifying Termination of Employment occurs, the Employee or his estate shall, no less often than annually and within one hundred twenty (120) days following the end of each applicable calendar year, provide information to the Company sufficient to verify (a) whether the Employee has received Substantial Compensation during the preceding calendar year and (b) the amount of any Third Party Benefits or Third Party Death Benefits that the Employee or his estate received during the preceding calendar year or that the Employee or his estate is entitled to receive in the future. Without limiting the generality of the foregoing, the Employee shall provide the following items to the Company: (i) annual federal income tax returns for the preceding calendar year or any fiscal year ending in the preceding calendar year, including all Forms -12- 15 W-2 and all Forms K-1 (or its equivalent) showing the profits, losses and cash distributions from every partnership, S corporation and limited liability company in which the Employee owns an interest; and (ii) copies of any plan or agreement providing for the payment to the Employee of any Third Party Benefits or Third Party Death Benefits, including but not limited to all contracts, agreements, deferred compensation plans, pension or profit sharing plans and summary plan descriptions, life insurance policies and other documents that may provide for the payment, or the terms upon which payment will or may be made, of Third Party Death Benefits or Third Party Death Benefits. If the Employee fails or refuses to provide the foregoing information to the Company after a Qualifying Termination of Employment and the Employee fails to cure such default within fifteen (15) days following notice of such default having been given to the Employee, then the Employee shall not be entitled to any Retirement Benefits or Death Benefit for which provision is made in this Agreement and all of the Company's obligations hereunder shall immediately lapse and terminate. In the event that notice of such default has been given to the Employee with respect to three (3) or more calendar years, then no notice of any such default thereafter shall be required to be given to the Employee and any such default as of thereafter shall be deemed to terminate the Employee's entitlement to any such Retirement Benefits or Death Benefit without notice or any cure period. 6. Designation of Beneficiary. The Employee may designate a Beneficiary of his Death Benefit by completing, signing and delivering to the Company a Designation of -13- 16 Beneficiary form in form and substance as set forth in Exhibit A attached hereto. The Employee may change his Beneficiary at any time by completing, signing and delivering to the Company a new Designation of Beneficiary form. 7. Tax Withholding. The Company shall report the full amount of the Retirement Benefits as compensation to the Employee in the year in which such amounts are paid or as the Company may otherwise determine is required by law. Such amounts will be reflected on the Form W-2 issued to the Employee and will be subject to withholding for federal, state and local income and employment taxes as determined by the Company. 8. Assignment. Neither the Employee nor his Beneficiary shall have any power or right to transfer, assign, anticipate, pledge, hypothecate or otherwise encumber any part or all of the amounts payable under this Agreement, nor shall such amounts be subject to attachment, garnishment, levy, execution or other legal or equitable process by any creditor of the Employee or his Beneficiary, and no such benefit shall be transferable by operation of law in the event of bankruptcy, insolvency or death of the Employee or any Beneficiary. Any such attempted assignment, transfer or encumbrance shall be null and void and shall terminate the Company's obligations under this Agreement and the Company shall thereupon have no further liability to the Employee or his Beneficiary. 9. Unfunded Arrangement. It is the intention of the parties that this Agreement shall constitute an unfunded and unsecured arrangement maintained for the purpose of providing deferred compensation for a select member of the Company's management and/or a highly compensated employee for purposes of Title I of ERISA and for federal income tax purposes. Any and all reserves, investments, insurance policies or other assets that may be set -14- 17 aside or purchased by the Company to fund its obligations hereunder shall belong solely to the Company and neither the Employee nor his Beneficiary shall have any rights, claims or interest therein. The Company's obligations hereunder shall be payable solely from the assets of the Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, shall (a) require the Company to set aside any reserves or other assets to fund its obligations hereunder or (b) create, or be construed to create, a trust of any kind. There is no guaranty that the Company's assets will be sufficient to pay the benefits contained herein. The Employee agrees that no general or limited partner, employee or agent of the Company (and no officer, director, employee, agent or shareholder of the Company's general partner) shall be liable for any obligation of the Company or any loss or claim incurred by the Employee in connection with this Agreement. The Employee hereby releases the Company's general partner or general partners, whether now serving or that may hereafter become admitted as a general partner, from any and all liability to pay the Company's obligations under this Agreement or to contribute or advance funds to the Company to enable it to satisfy such liability. 10. Subject to Claims of Creditors. Payments to be made to the Employee or his Beneficiary shall be made from assets which, for all purposes, shall continue to be a part of the general assets of the Company, and no person shall have, by virtue of the provisions of this Agreement, any interest in, preferred claim on or beneficial interest in any of the Company's assets. The rights of the Employee and his Beneficiary to receive payments from the Company under the provisions hereof shall be a mere unsecured contractual right and shall be no greater than the right of any unsecured general creditor of the Company. -15- 18 11. No Prior Rights. This Agreement is not a contract of employment and neither this Agreement nor any action taken hereunder shall be construed as giving the Employee any right to be retained in the employ of the Company or any of its partners or affiliates nor limit the right of the Company to discharge the Employee. This Agreement provides solely for additional compensation for the Employee's services, payable after the termination of his employment with the Company and is not intended to be an employment contract. 12. Integration. This Agreement sets forth the entire agreement between the parties with respect to the matters described herein and all prior discussions and negotiations between them with respect to this subject matter are hereby merged into this Agreement. This Agreement supersedes any and all previous agreements between the parties or between the Employee and the general partner of the Company, written or oral, relating to the subject matter hereof. 13. Amendments. This Agreement may not be amended, altered or modified, except by a written instrument signed by the parties hereto, or their respective successors or assigns, and may not be otherwise terminated except as provided herein. 14. Successors. This Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, and the Employee and his successors, assigns, heirs, executors, administrators and beneficiaries. 15. Notices. Any notice, consent or demand required or permitted to be given under the provisions of this Agreement shall be in writing, and shall be signed by the party giving or making the same. If such notice, consent or demand is mailed to a party hereto, it shall be sent by United States certified mail, return receipt requested, postage prepaid, addressed to the -16- 19 Company at its principal office or to the Employee at his last known residence address as shown on the records of the Company. The date of receipt shall be deemed the date of notice, consent or demand. 16. Attorney's Fees. If any action at law or in equity, or any arbitration proceeding, is brought to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which he may be entitled. 17. Illinois Law. This Agreement, and the rights of the parties hereunder, shall be governed by and construed in accordance with the laws of the State of Illinois. Both parties hereby consent to the exclusive jurisdiction of any state or federal court located within Cook County, Illinois, which is the location of the Company's principal office, and agree that any litigation or other proceeding instituted hereunder shall be brought in such county and state. The parties waive any objection they may have based on improper venue or forum non conveniens to the conduct of any proceeding instituted in Cook County, Illinois. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above. -17- 20 Company: STANDARD PARKING L.P., a Delaware limited partnership By: Standard Parking Corporation, its general partner By: /s/ --------------------------------- Name: Myron C. Warshauer Title: President Employee: /s/ --------------------------------------- Name: Michael K. Wolf -18- 21 EXHIBIT A DESIGNATION OF BENEFICIARY TO: General Partner Standard Parking L.P. In accordance with the provisions of the Deferred Compensation Agreement dated as of , 1996 (the "Agreement"), I hereby designate, subject to the conditions stated below, the following as my beneficiary(ies) hereby revoking all prior designations, if any, made by me: Primary Beneficiary(ies) 1. ------------------------------------------------------------------------- Name and address ---------------------------- ------------------------------------- Relationship Soc. Sec. No. 2. ------------------------------------------------------------------------- Name and address ---------------------------- ------------------------------------- Relationship Soc. Sec. No. Secondary Beneficiary(ies) in the event no beneficiary designated above survives me: 1. ------------------------------------------------------------------------- Name and address ---------------------------- ------------------------------------- Relationship Soc. Sec. No. 2. ------------------------------------------------------------------------- Name and address ---------------------------- ------------------------------------- Relationship Soc. Sec. No. Conditions: These designations shall be effective with respect to my entire interest, if any, under the Agreement, payable to me following my death. -19- 22 Unless otherwise provided on the face of this designation, any payment to be made pursuant to this designation: (a) shall be paid in equal shares to such of the primary beneficiaries who survive me, or (b) if no primary beneficiaries shall survive me, such payment shall be made in equal shares to such of the secondary beneficiaries who survive me. Any beneficiary who fails to survive me by at least 10 days shall be deemed to have predeceased me. I reserve the right to change my beneficiary(ies) by filing another designation. This designation is subject to the terms of the Agreement. ------------------------------------------- Name of Employee (Please print) ------------------------------------------- Signature of Employee ------------------------------------------- Date Received on the ______________ day of ____________________, 19______ By: ----------------------------- -20- 23 EXHIBIT B SCHEDULE OF DEATH BENEFITS
Amount of Year of Death Death Benefit - ------------- ------------- 1996-1998 725,000 1999-2001 775,000 2002-2004 850,000 2005-2007 950,000 2008-2010 1,150,000 2011-2013 1,275,000 2014 or after 1,400,000*
*To be reduced as set forth in Section 1(k) of Agreement -21- EX-10.14 46 COMPANY RETIREMENT PLAN 1 Exhibit 10.14 APCOA, INC. RETIREMENT PLAN FOR KEY EXECUTIVE OFFICERS Effective Date: April 14, 1989 2 TABLE OF CONTENTS ARTICLE NO. ----------- PURPOSE I DEFINITIONS II ADMINISTRATION III ELIGIBILITY IV MONTHLY ACCRUED BENEFITS V ELIGIBILITY FOR RETIREMENT BENEFITS VI FORMS OF RETIREMENT BENEFITS VII AMOUNT OF RETIREMENT BENEFITS VIII DEATH BENEFITS IX AMENDMENT AND TERMINATION X MISCELLANEOUS XI 3 ARTICLE I PURPOSE 1.1 The Apcoa, Inc. Retirement Plan For Key Executive Officers is adopted as of April 14, 1989, to provide retirement income and other related benefits to certain executive officers of Apcoa, Inc. (the "Company"). 1-1 4 ARTICLE II DEFINITIONS Unless the context otherwise indicates, the following terms shall have the meanings set forth below whenever used in this Plan: 2.1 The words "Actual Equivalent" shall mean the benefit having the same value as the benefit which the actuarial equivalent replaces. Except as otherwise provided in this Plan, the actuarial equivalents shall be determined under (a) mortality rates based upon the 1951 Group Annuity Table projected with Scale C to 1975 for Participants, and upon the 1951 Group Annuity Table projected with Scale C to 1975 set back five years for spouses; and (b) an interest rate of 7% provided, however, that in computing the lump sum actuarial equivalent of a Participant's Monthly Accrued Benefit for purposes of Section 7.4 hereof, the interest rate used shall not be less than the rate used by the Pension Benefit Guaranty Corporation to value immediate annuities for plans terminating as of the proposed Benefit Commencement Date. 2.2 The word "Affiliate" shall mean any other corporation which is, within the meaning of 26 U.S.C. ss. 1563(a), a member of a controlled group of corporations which includes the Company provided that, in making such determination, "50 percent" shall be substituted for "80 percent" wherever "80 percent" appears in 26 U.S.C. ss. 1563(a). 2.3 The word "Age" shall mean a person's actual attained age. 2.4 The words "Average Monthly Compensation" shall mean the total of a Participant's Compensation determined for the five (5) consecutive Plan Years (or the number of Plan Years during which the Participant received compensation, if that number is less 2-1 5 than five (5)) which ended prior to the earlier of his Termination of Employment or his Normal Retirement Date, during which said total was highest, divided by a number equal to the number of months the Participant was employed by the Company during such consecutive Plan Years. 2.5 The word "Beneficiary" shall mean any person who receives or is designated to receive payment of any benefit under the terms of the Plan on the death of a Participant. 2.6 The words "Benefit Commencement Date" shall mean the date upon which the retirement benefits of a Participant shall commence under the terms of the Plan. 2.7 The word "Board" shall mean the Company's duly elected Board of Directors as constituted at any time. 2.8 The word "Company" shall mean Apcoa, Inc., a Delaware corporation, or any corporation which assumes the obligations of Apcoa, Inc. under the Plan. 2.9 The word "Compensation" shall mean the total remuneration paid by the Company to a Participant for services rendered to the Company including salaries, commissions, overtime and bonuses, whether discretionary or not, and amounts received by the Participant from the Short-Term Incentive Compensation Pool, but shall not include any extra benefits such as payment by the Company of hospitalization, group insurance, expense reimbursement, or other special benefits or any amounts realized upon exercise or cancellation of any Stock Options or any other compensation income resulting from a grant of, or transaction in, stock of the Company or its Affiliates or the making of an election under Sec- 2-2 6 tion 83(b) of the Internal Revenue Code of 1986, as amended, with respect to stock of the Company or its Affiliates. A Participant's Compensation for any Plan Year shall consist of the compensation actually paid to the Participant during the Plan Year. 2.10 The words "Continuous Employment" shall mean any period (including periods prior to April 14, 1989, the effective date of the Plan) during which a Participant is an employee of the Company and/or any Affiliate and shall include any authorized leave of absence. 2.11 The word "Control" shall mean ownership of shares of a corporation's stock which, directly or indirectly, gives the owner a greater than fifty percent (50%) voting interest. 2.12 The word "Disability" shall mean any physical or mental impairment or disability which prevents a Participant from performing the duties of his occupation for a period of at least one hundred twenty (120) days and which is expected to be of permanent duration. A determination of whether a Participant is disabled shall be made by two licensed physicians, one appointed by the Board and one appointed by the Participant. In the event the two physicians are unable to agree with respect to whether the Participant is disabled, the determination of whether the Participant is disabled shall be made by a third duly licensed physician chosen by the two physicians previously appointed. Notwithstanding the preceding provisions of this Section 2.12, a determination with respect to a Participant's Disability under any employment agreement between the Participant and the Company shall be dispositive with respect to determining his Disability for purposes of the Plan. 2-3 7 2.13 The words "Monthly Accrued Benefit" shall mean an amount determined with respect to a Participant in accordance with the provisions of Article V hereof. 2.14 The words "Normal Retirement Date" shall mean for each Participant the first day of the month coinciding with or next following the day he attains Age sixty-five (65). 2.15 The word "Participant" shall mean any individual designated by the Board to participate in the Plan pursuant to Article IV of the Plan. 2.16 The word "Plan" shall mean this instrument as originally executed and as it may be later amended. 2.17 The words "Plan Year" shall mean the calendar year. 2.18 The words "Termination of Employment" shall mean the severance of a Participant's employment relationship with the Company and all Affiliates. 2-4 8 ARTICLE III ELIGIBILITY AND PARTICIPATION 3.1 The Board shall administer and interpret the Plan. All decisions of the Board shall be final, conclusive and binding upon all affected persons, and any person participating in the Plan thereby agrees to accept as final, conclusive and binding the decisions of the Board. No member of the Board shall be liable for any action or determination made with respect to the Plan and the Company and/or any Affiliate shall indemnify the members of the Board, individually and collectively, against any and all losses, costs of expenses which may be incurred by them, individually or collectively, in connection with their administering the Plan. 3.2 The Board may by appropriate resolution delegate to one of its members or a committee the authority to exercise any of its powers in administering and interpreting the Plan. 3-1 9 ARTICLE IV ELIGIBILITY 4.1 The persons eligible to participate in the Plan shall be only those persons who are or who become key executive officers of the Company. While all such key executive officers are eligible to be considered for participation, the Board shall have the sole and exclusive right to determine those key executive officers who will be selected from time to time to participate under the Plan. The Board shall inform any key executive officer who is chosen to participate in the Plan. 4-1 10 ARTICLE V MONTHLY ACCRUED BENEFIT 5.1 The Monthly Accrued Benefit of a Participant whose Termination of Employment is on or after his Normal Retirement Date shall be an amount equal to fifty percent (50%) of the Participant's Average Monthly Compensation. 5.2 The Monthly Accrued Benefit of a Participant whose Termination of Employment is prior to his Normal Retirement Date and after he has completed at least five (5) years of Continuous Employment shall be an amount equal to (a) multiplied by (b) below where: (a) equals fifty percent (50%) of his Average Monthly Compensation; and (b) equals a fraction, the numerator of which shall be the number of years (to the nearest one-twelfth (1/12) year) of the Participant's Continuous Employment at the date of his Termination of Employment, and the denominator of which shall be the number of years (to the nearest one-twelfth (1/12) year) of the Participant's Continuous Employment he would have had if he had continued to be employed by the Company until his Normal Retirement Date. 5-1 11 ARTICLE VI ELIGIBILITY FOR RETIREMENT BENEFITS 6.1 A Participant whose Termination of Employment is for some reason other than death and on or after his Normal Retirement Date shall be eligible to receive a retirement benefit commencing on the first day of the month coinciding with or next following his Termination of Employment, in such form as is provided in Article VII hereof, and in the amount provided in Article VIII. 6.2 A Participant whose Termination of Employment is for some reason other than death and on or after his completion of ten (10) years of Continuous Employment and his attainment of Age fifty-five (55) but prior to his Normal Retirement Date shall be eligible to retire and receive a retirement benefit commencing on the first day of any month after his date of early retirement but not later than his Normal Retirement Date, as he shall select, in such form as is provided in Article VII hereof, and in the amount provided in Article VIII. 6.3 A Participant whose Termination of Employment is for some reason other than death or Disability and after he has completed at least five (5) years of Continuous Employment and before he is eligible for an early retirement benefit shall be eligible for a vested deferred retirement benefit commencing on his Normal Retirement Date or, if he has completed ten (10) years of Continuous Employment, commencing on the first day of any month after his attainment of Age fifty-five (55) but not later than his Normal Retirement Date as he shall select. Such Participant's retirement benefit shall be paid in such form as is provided in Article VII hereof, and in the amount provided in Article VIII. 6-1 12 6.4 A Participant whose Termination of Employment is by reason of his Disability before his Normal Retirement Date shall be eligible for a disability retirement benefit commencing on the first day of the month coinciding with or next following the later of his date of disability retirement or the date the Board determines that he is Disabled, in such form as is provided in Article VII, and in the amount provided in Article VIII. 6.5 A Participant whose Termination of Employment is for some reason other than death or under circumstances described in Section 6.1, 6.2, 6.3 or 6.4 shall not be entitled to any retirement benefit. 6-2 13 ARTICLE VII FORMS OF RETIREMENT BENEFITS 7.1 The normal form of retirement benefits payable to a Participant who is eligible therefor pursuant to Article V hereof shall be the Life Annuity Form (Form 1 described in Section 7.4 hereof). 7.2 A Participant shall, prior to his Benefit Commencement Date, submit to the Board satisfactory evidence of his Age and, if he is married, satisfactory evidence of his marriage and the Age of his spouse. 7.3 In lieu of receiving his retirement benefits in accordance with the normal form set forth in Section 7.1 above, a participant who is eligible to receive retirement benefits pursuant to Article VI hereof may elect to receive his retirement benefits on the basis of any other form of retirement benefits described in Section 7.4 hereof. Any election of another form of retirement benefits provided for in the Plan may be made by a Participant at any time prior to his Benefit Commencement Date. Such election shall be on a form prescribed for the purpose by the Board, shall be signed by the Participant, and shall name the Beneficiary of such Participant if he shall have selected Form 3. Such election shall be deemed to be made when it is received by the Board. 7.4 The form of retirement benefits under the Plan are as follows: Form 1. Life Annuity Form. A Participant who receives payment of his retirement benefits under the Life Annuity Form shall receive retirement benefit payments during his life. No retirement benefits shall be payable after the death of the Participant. 7-1 14 Form 2. Spouse's Annuity Form. A Participant who receives payment of his retirement benefits under the Spouse's Annuity Form shall receive reduced retirement benefit payments during his life with the provision that after his death 50% of his monthly retirement benefit shall continue during the life of (and shall be paid to) the person who was his spouse on the date of his election of a form of retirement benefits. Form 3. Life-Ten Year Certain Form. A Participant who receives payment of his retirement benefits under the Life-Ten Year Certain Form shall receive reduced retirement benefit payments during his life, with the provision that, in the event the Participant shall die before he shall have received retirement benefit payments for a period of one hundred twenty (120) months, after his death his monthly retirement benefit shall continue to be paid for the remainder of said one hundred twenty (120) month period to such Beneficiary as he shall have selected. Form 4. Lump Sum Form. A Participant who receives payment of his retirement benefits under the Lump Sum Form shall receive a single lump sum payment upon the date his retirement benefits would otherwise have commenced under the Plan. 7.5 The forms of retirement benefits described in Section 7.4 hereof shall be subject to the following conditions: (i) Retirement benefits shall be paid monthly on the first day of the month unless the Participant receives his retirement benefits under Form 4. (ii) Retirement benefits which are payable during the life of any person shall commence on the date specified in the Plan, if such person is then living, and shall end with the payment made as of the first day of the month during which such person shall die. 7-2 15 (iii) Regardless of the form of retirement benefits under which a Participant was going to receive payment, if a Participant shall die prior to his Benefit Commencement Date, no retirement benefits shall be payable to the spouse or Beneficiary of the Participant under this Article VI. (iv) If any Participant shall die after he shall be receiving retirement benefits pursuant to some Form other than Form 1 or Form 4, his Beneficiary shall receive such payment or series of payments, if any, provided for under such Form commencing on the first day of the month next following the month during which the participant shall have died (or as soon thereafter as is practicable). No death benefits shall be payable on behalf of a Participant who has received payment of his benefits under Form 1 or Form 4. (v) If any Participant was to have received retirement benefits under Form 2 and his spouse shall die prior to his Benefit Commencement Date, then the Participant shall receive his retirement benefits under Form 1 unless, prior to his Benefit Commencement Date, he remarries. (vi) If any Participant shall be receiving retirement benefits under Form 2 and his spouse shall die after his Benefit Commencement Date, but prior to the death of the Participant, such Participant shall continue to receive the monthly retirement benefits payable under Form 2 and no payments of retirement benefits shall be made after the subsequent death of the Participant. (vii) If a Participant shall be receiving or entitled to receive retirement benefits under Form 3 and his Beneficiary shall die, the Participant may designate a successor Beneficiary to receive the benefits, if any, which may be payable after the death of the Participant. (viii) If any amounts shall be payable pursuant to Form 3 after the death of both the Participant and his Beneficiary, such payments shall be made to the executor or administrator of the estate of the second to die of the Participant and his Beneficiary at the time otherwise specified in this Article VI for payment thereof. 7.6 Subject to Section 7.3 above, any Participant may at any time prior to his Benefit Commencement Date, (i) revoke an election previously made under Section 7.3 by notice which complies with the procedures described in Section 7.3 duly filed with 7-3 16 the Board, in which event the Participant shall be treated the same as though his optional election had not been filed; or (ii) change his election from one to another of the forms described in Section 7.4 and/or change the Beneficiary previously designated under Form 3 by notice and designation which complies with the procedure described in Section 7.3 and is duly filed with the Board. 7.7 Anything contained in this Article VI to the contrary notwithstanding, if after the retirement of a Participant, the amount of retirement benefit which would have been payable to him under the Plan is subject to any deduction, change, offset or correction under the Plan, then the amount payable to such Participant and/or his Beneficiary shall be adjusted to reflect any such deduction, change, offset or correction. 7-4 17 ARTICLE VIII AMOUNT OF RETIREMENT BENEFITS 8.1 The monthly retirement benefit payable to a Participant who is eligible therefor pursuant to Article VI hereof, whose retirement benefit commences on or after his Normal Retirement Date, and is payable under Form 1 in accordance with Article VII hereof shall be equal to his Monthly Accrued Benefit. 8.2 The monthly retirement benefit payable to a Participant who is eligible therefor pursuant to Article VI hereof and whose retirement benefit is payable under a form of retirement benefit described in Article VII other than Form 1 shall be such amount so that his retirement benefits are the Actuarial Equivalent of the retirement benefits which he would have received if his retirement benefit had been payable under Form 1. 8.3 The monthly retirement benefit payable to a Participant who is eligible therefor pursuant to Article VI hereof and whose retirement benefit commences prior to his Normal Retirement Date shall be equal to the amount he would have received at his Normal Retirement Date reduced by five-ninths of one percent (5.9%) for each full month by which the commencement of payment of the Participant's retirement benefits precedes his Normal Retirement Date. 8.4 The retirement benefit payable to a Participant who is eligible therefor pursuant to Article VI hereof and whose retirement benefit is payable under Form 4 described in Section 7.4 shall be an amount that is the Actuarial Equivalent of the monthly retirement 8-1 18 benefit which he would have received under Section 8.1 hereof if his retirement benefit had commenced on his Normal Retirement Date and been payable under Form 1. 8.5 Notwithstanding any other provision of the Plan, the amount payable to a Participant under this Plan shall be reduced by the Actuarial Equivalent of the employer-funded benefit payable to the Participant under any tax-qualified retirement plan maintained by the Company. For purposes of the preceding sentence, any benefit payable to the Participant which is attributable to the Participant's salary reduction contributions under a qualified cash or deferred arrangement described in Internal Revenue Code Section 401(k) shall not be considered an employer-funded benefit. 8-2 19 ARTICLE IX DEATH BENEFITS 9.1 In the event of the death of a Participant on or after his Benefit Commencement Date, there shall be paid to his Beneficiary the death benefit, if any, provided under the form of benefit under which such Participant was receiving retirement benefits, as set forth in Article VII hereof. 9.2 If a Participant dies either (a) before his Termination of Employment, and on or after his Normal Retirement Date; or (b) before his Termination of Employment, if he had completed at least five (5) years of Continuous Employment; or (c) after his Termination of Employment but prior to his Benefit Commencement Date, if he had completed at least five (5) years of Continuous Employment; there shall be paid to the deceased Participant's surviving spouse an amount equal to the Actuarial Equivalent of the amount such surviving spouse would have been entitled to receive if the deceased Participant had commenced to receive retirement benefits under the Plan on the date of his death under Form 2 described in Section 7.4 hereof. 9.3 Death benefits payable pursuant to Section 9.2 above shall be paid to the surviving spouse in the form of a single lump sum payment. Payment of death benefits under Section 9.2 above shall be made as soon as reasonably possible after the death of the Participant. 9-1 20 ARTICLE X AMENDMENT AND TERMINATION 10.1 Subject to any contractual restrictions that may otherwise exist, the Board may, in its discretion, amend or terminate the Plan, and the Board shall direct that all documents necessary to put such amendment into full force and effect be prepared and executed. 10.2 Notwithstanding any other provision of the Plan, with respect to the amount of a Participant's Monthly Accrued Benefit as of the date of any amendment to the Plan, the provisions of the Plan shall not be subject to amendment. 10-1 21 ARTICLE XI MISCELLANEOUS 11.1 A Participant's claim to benefits under this Plan and the right to receive amounts under this Plan are nontransferable as security for a loan or otherwise by any means, either voluntarily or by operation of law. 11.2 In the event that any provision of the Plan is determined by any judicial, quasijudicial or administrative body to be void or unenforceable for any reason, all other provisions of the Plan shall remain in full force and effect as if such void or unenforceable provision had never been a part of the Plan. 11.3 The singular herein shall include the plural, or vice versa, wherever the context so requires. 11.4 A pronoun in the masculine, feminine, or neuter gender shall be deemed, where appropriate, to include also the masculine, feminine or neuter gender. 11.5 If the Board shall find that any person to whom any amount is payable under the Plan is unable to care for his affairs because of illness or accident, or is a minor, any payment due (unless a prior claim therefor shall have been made by a duly appointed guardian, committee or other legal representative) may be made to such person's spouse, child, parent, or brother or sister, or to any person deemed by the Board to have incurred expenses for such person otherwise entitled to payment, in such manner and proportions as the Board may determine. 11-1 22 11.6 The Plan shall be construed in accordance with, and governed by, the laws of the State of Delaware. 11.7 Any person's right to receive any amounts under this Plan shall be an unsecured and unfunded obligation of the Company. IN WITNESS WHEREOF, APCOA, INC., by its officer duly authorized, has executed this instrument this __________ day of ________________, 1989, effective for all purposes as of April 14, 1989. APCOA, INC. By: /s/ ---------------------------------- Its: /s/ ---------------------------------- 11-2 23 EXHIBIT E DESIGNATION OF BENEFICIARY On April 14, 1989, I, the undersigned, entered into an Executive Employment Agreement with APCOA, Inc. Pursuant to the terms of said Agreement, I have the right to designate a beneficiary to receive, in the event of my death, certain payments pursuant to said Agreement. I, therefore, exercise this right and designate Judith Stuelpe to receive any such payments if (s)he survives me, but if Judith Stuelpe does not survive me, I designate Tyson and Casey Stuelpe. Any and all previous designations of beneficiary made by me are hereby revoked and I hereby reserve the right to revoke this designation of beneficiary. /s/ G. Walter Stuelpe, Jr. ----------------------------- G. Walter Stuelpe, Jr. Dated: 4/14/89 Receipt of this Designation of Beneficiary form is acknowledged by the undersigned Secretary of APCOA, Inc. APOCA, INC. By: /s/ ---------------------------------- , Secretary Dated: 4/14/89 11-3 24 SUPPLEMENTAL PENSION PLAN IN CONSIDERATION of the mutual promises contained herein, it is agreed by the Executive and the Company as follows: 1. The Executive may retire from active employment at any time after he reaches ages 65. 2. Upon retirement, the Company shall provide the Executive with a retirement benefit of 240 equal consecutive monthly payments of $4,166.67. The first monthly payment shall be made on the first day of the month coinciding with or next following the date of the Executive's retirement. 3. In the event the Executive dies after commencement of payments under paragraph 2 hereof, but before he received the number of monthly installments set forth therein, the Company shall pay the remainder of said monthly installments to the executive's designated beneficiary hereunder. For purposes of this provision, the executive's designated beneficiary hereunder is Judith Stuelpe. Executive shall have the right to change such beneficiary at anytime hereafter, either prior to or after retirement, by notifying the Company in writing of such change. 4. If the executive shall die prior to age 65 while in the active employment of the Company, the Company shall pay the Executive's designated beneficiary an aggregate of $482,000 in 60 equal monthly installments of $8,033.33. The first installment shall be paid on the first day of the month following the month in which the Executive dies. 1 25 5. This Plan is part of a certain Executive Employment Agreement (the "Employment Agreement") dated April 14, 1989. Nothing herein shall prevent the Company from terminating the Employment for "cause" in accordance with the terms thereof, and in which event this Plan shall be terminated and void in all respects and neither party shall have any further responsibility for satisfying any obligations that may have otherwise arisen hereunder. However, should the Executive's employment terminate prior to retirement for any reason, other than for "cause," resignation, disability or death, the Insurance Policy shall be transferred by the Company to the Executive within thirty days after such termination, and the full value of the Insurance Policy and its full cash surrender value shall become the sole property of the Executive to do with as he sees fit. In the event of the Executive's resignation which is not associated with termination for "cause" or for disability, the Company shall cancel the Insurance Policy and provide the Executive with the cash surrender value according to the following schedule:
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%
2 26 In the event of permanent disability the Company will continue to pay the premiums on the full value of the Insurance Policy for twelve months following the Executives' termination because of such disability in accordance with Section 4(b) of the Employment Agreement and after twelve months to transfer the full value of the Insurance Policy to the Executive within thirty days. The full value of the Insurance Policy and its full cash current value shall become the sole property of the Executive to do with as he sees fit, and the Company shall have further responsibility to fulfill any terms of the Plan or to continue to pay premiums on the Insurance Policy after the transfer of the Insurance Policy has been completed. 6. For so long as Executive is receiving payments hereunder, Executive agrees that Sections 5, 6 and 7 of the Employment Agreement shall remain in full force and effect. 7. Nothing in this Plan shall prevent Executive from receiving, in addition to any amounts he may be entitled to under the Plan, any amounts which may be distributable to him at any time under any pension plans, profit sharing or other incentive compensation or similar plan of the Company now if effect or which may hereafter be adopted. 8. This Plan shall be binding upon the Executive, his heirs, executors, administrators and assigns, and on the Company, its successors and assigns. The rights of Executive hereunder shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge. 3 27 9. This Plan may be altered, changed, amended or terminated only by writing signed by the party to be bound thereby. 10. This document has been executed in the State of Ohio and shall be interpreted in accordance with the laws of that State without regard to conflict of law provisions. 11. This document contains the entire agreement between the parties with respect to the subject matter hereof, supersedes any all prior discussions or agreements the parties may have had with respect thereto (including any prior Supplemental Pension Plan). 4 EX-10.15 47 CONSULTING AGREEMENT 1 Exhibit 10.15 EXECUTION COPY CONSULTING AGREEMENT CONSULTING AGREEMENT by and between APCOA, Inc., a Delaware corporation (the "Company") and Sidney Warshauer (the "Consultant"), dated as of the 30th day of March, 1998. WHEREAS, pursuant to that certain Combination Agreement (the "Transaction Agreement") dated as of January 15, 1998, by and among Myron C. Warshauer, the Consultant, Steven A. Warshauer, Dosher Partners, L.P., a Delaware limited partnership, SP Parking Associates, an Illinois general partnership, SP Associates, an Illinois general partnership, and APCOA, Inc., a Delaware corporation ("APCOA"), the operations of APCOA and Standard will be combined (the "Transaction"); and WHEREAS, APCOA desires to ensure that the Company will continue to receive the benefit of the Consultant's consulting services after the Transaction, on the terms and conditions set forth below in this Agreement, and the Consultant desires to render such services; NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows: 1. Consulting Period. The Consultant shall make himself available to render consulting services, on the terms and conditions set forth in this Agreement, for the period beginning on the Closing Date (as defined in the Transaction Agreement) and ending on the date of the Consultant's death (the "Consulting Period"). This Agreement shall not be terminable by the Company for any reason other than the death of the Consultant or a breach by the Consultant of the provisions of Section 4 or Section 5 hereof. 2. Consulting Services. During the Consulting Period, the Consultant shall render such services as may be requested from time to time by the Board and/or the Chief Executive Officer of the Company. The Consultant's services and the time spent rendering such services shall be consistent with the Consultant's practices and experience during the five years preceding the Closing Date. 3. Consulting Fee; Office. In consideration of the foregoing, during the Consulting Period, the Company shall (i) pay the Consultant a consulting fee of $552,000 per annum, payable monthly in arrears, (ii) provide the Consultant with the perquisites set forth in a letter dated January 15, 1998 from Myron C. Warshauer to John V. Holten, and (iii) for so long as Myron C. Warshauer is employed by or serving as a consultant to the Company, provide the Consultant with an office at the same location as the principal business office occupied by Myron C. Warshauer. 4. Confidential Information. During the Consulting Period and at all times thereafter, the Consultant shall not disclose to anyone who is not employed by the Company or by an affiliate or to any employee of the Company or an affiliate who, to the knowledge of the 2 Consultant, is not authorized to receive such information, any confidential information of the Company and any confidential information relating to the Company's former or present customers or potential customers of which the Consultant became aware during his employment by the Company or of which he becomes aware during the Consulting Period. The Consultant shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies and their respective businesses that the Consultant obtained during his employment by the Company or any of its affiliated companies or that he obtains during the Consulting Period and that is not public knowledge (other than as a result of the Consultant's violation of this Section 4) ("Confidential Information"). The Consultant shall not communicate, divulge or disseminate Confidential Information at any time during or after the Consulting Period, except with the prior written consent of the Company or as otherwise required by law or legal process. 5. Noncompetition. During the Consulting Period, the Consultant shall not, without the prior written consent of the Board, engage in or become associated with a Competitive Activity. For purposes of this paragraph (b) of Section 6: (i) a "Competitive Activity" means any business or other endeavor that engages in construction, ownership, leasing, design and/or management of parking lots, parking garages, or other parking facilities or consulting with respect thereto; and (ii) the Consultant shall be considered to have become "associated with a Competitive Activity" if he becomes directly or indirectly involved as an owner, employee, officer, director, independent contractor, agent, partner, advisor, or in any other capacity calling for the rendition of the Consultant's personal services, with any individual, partnership, corporation or other organization that is engaged in a Competitive Activity. Notwithstanding the foregoing, the Consultant may make and retain investments during the Consulting Period in not more than five percent of the equity of any entity engaged in a Competitive Activity, if such equity is listed on a national securities exchange or regularly traded in an over-the-counter market. 6. Successors. (a) This Agreement is personal to the Consultant and, without the prior written consent of the Company, shall not be assignable by the Consultant otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Consultant's legal representatives. (b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. 7. Miscellaneous. (a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Illinois without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified except by a written agreement executed by the parties hereto or their respective successors and legal representatives. (b) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. -2- 3 (c) The Consultant acknowledges that his services hereunder are to be rendered as an independent contractor, and that he is solely responsible for the payment of all Federal, state, local and foreign taxes that are required by applicable laws or regulations to be paid with respect to the Consulting Fee. (d) The Consultant and the Company acknowledge that this Agreement supersedes any other agreement between them concerning the subject matter hereof. -3- 4 IN WITNESS WHEREOF, the Consultant has hereunto set his hand and, pursuant to the authorization of its Board of Directors, the Company has caused this Agreement to be executed in its name on its behalf, all as of the day and year first above written. /s/ Sidney Warshauer -------------------------------------------- Sidney Warshauer APCOA, INC. By: /s/ Michael J. Celebrezze ---------------------------------------- Name: Michael J. Celebrezze Title: Chief Financial Officer -4- EX-12.1 48 STATEMENTS RE COMPUTATION OF RATIOS 1 EXHIBIT 12.1 APCOA, INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (AMOUNTS IN THOUSANDS, EXCEPT RATIO DATA)
YEAR ENDED DECEMBER 31, ------------------------------------------------- PRO FORMA 1993 1994 1995 1996 1997 1997 ------- ------- ------- ------ ------ --------- Income (loss) before income taxes and minority interest... $(4,037) $(2,880) $(2,273) $1,469 $2,320 $(2,326) Fixed charges................... 2,966 3,129 4,216 4,261 4,611 24,648 ------- ------- ------- ------ ------ ------- Earnings........................ $(1,071) $ 249 $ 1,943 $5,730 $6,931 $22,322 ======= ======= ======= ====== ====== ======= Interest expense................ $ 2,084 $ 2,437 $ 3,101 $3,409 $3,713 $14,225 Amortization of deferred financing costs............... 361 198 574 228 180 720 Interest portion of rent expense....................... 521 494 541 624 718 9,703 ------- ------- ------- ------ ------ ------- Fixed charges................... $ 2,966 $ 3,129 $ 4,216 $4,261 $4,611 $24,648 ======= ======= ======= ====== ====== ======= Ratio of earnings to fixed charges....................... Note 1 Note 1 Note 1 1.3x 1.5x Note 1 ======= ======= ======= ====== ====== =======
- --------------- Note 1: Earnings were inadequate to cover fixed charges by $4,037, $2,880, $2,273 and $2,326 for the years ended December 31, 1993, 1994 and 1995 and the pro forma year ended December 31, 1997, respectively. EX-23.1 49 CONSENT OF ERNST & YOUNG LLP 1 EXHIBIT 23.1 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the references to our firm under the captions "Experts" and "Selected Historical Financial Data of APCOA" and to the use of our reports dated February 3, 1998, in the Registration Statement (Form S-4) and related Prospectus of APCOA, Inc. for the registration of $140,000,000 of 9 1/4% Senior Subordinated Notes. Cleveland, Ohio ERNST & YOUNG LLP April 13, 1998 EX-23.2 50 CONSENT OF ALTSCHULER, MELVOIN AND GLASSER LLP 1 EXHIBIT 23.2 CONSENT OF ALTSCHULER, MELVOIN AND GLASSER LLP, INDEPENDENT AUDITORS We consent to the references to our firm under the captions "Experts" and "Selected Historical Financial Data of Standard" and to the use of our reports dated February 3, 1998, in the Registration Statement (Form S-4) and related Prospectus of APCOA, Inc. for the registration of $140,000,000 of 9 1/4% Senior Subordinated Notes. ALTSCHULER, MELVOIN AND GLASSER LLP Chicago, Illinois April 13, 1998 EX-25.1 51 STATEMENT OF ELIGIBILITY 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM T-1 --------- STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE Check if an Application to Determine Eligibility of a Trustee Pursuant to Section 305(b)(2) __ STATE STREET BANK AND TRUST COMPANY (Exact name of trustee as specified in its charter) Massachusetts 04-1867445 (Jurisdiction of incorporation or (I.R.S. Employer organization if not a U.S. national bank) Identification No.) 225 Franklin Street, Boston, Massachusetts 02110 (Address of principal executive offices) (Zip Code) John R. Towers, Esq. Executive Vice President and General Counsel 225 Franklin Street, Boston, Massachusetts 02110 (617) 654-3253 (Name, address and telephone number of agent for service) APCOA, INC. (Exact name of obligor as specified in its charter) DELAWARE 16-1171179 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 800 SUPERIOR AVENUE CLEVELAND, OH 44114-2601 (Address of principal executive offices) (Zip Code) 9 1/4 % NEW SENIOR SUBORDINATED NOTES DUE 2008 (Title of indenture securities) 2 GENERAL ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO WHICH IT IS SUBJECT. Department of Banking and Insurance of The Commonwealth of Massachusetts, 100 Cambridge Street, Boston, Massachusetts. Board of Governors of the Federal Reserve System, Washington, D.C., Federal Deposit Insurance Corporation, Washington, D.C. (b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Trustee is authorized to exercise corporate trust powers. ITEM 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. The obligor is not an affiliate of the trustee or of its parent, State Street Corporation. (See note on page 2.) ITEM 3. THROUGH ITEM 15. NOT APPLICABLE. ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF ELIGIBILITY. 1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN EFFECT. A copy of the Articles of Association of the trustee, as now in effect, is on file with the Securities and Exchange Commission as Exhibit 1 to Amendment No. 1 to the Statement of Eligibility and Qualification of Trustee (Form T-1) filed with the Registration Statement of Morse Shoe, Inc. (File No. 22-17940) and is incorporated herein by reference thereto. 2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION. A copy of a Statement from the Commissioner of Banks of Massachusetts that no certificate of authority for the trustee to commence business was necessary or issued is on file with the Securities and Exchange Commission as Exhibit 2 to Amendment No. 1 to the Statement of Eligibility and Qualification of Trustee (Form T-1) filed with the Registration Statement of Morse Shoe, Inc. (File No. 22-17940) and is incorporated herein by reference thereto. 3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE DOCUMENTS SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE. A copy of the authorization of the trustee to exercise corporate trust powers is on file with the Securities and Exchange Commission as Exhibit 3 to Amendment No. 1 to the Statement of Eligibility and Qualification of Trustee (Form T-1) filed with the Registration Statement of Morse Shoe, Inc. (File No. 22-17940) and is incorporated herein by reference thereto. 4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS CORRESPONDING THERETO. A copy of the by-laws of the trustee, as now in effect, is on file with the Securities and Exchange Commission as Exhibit 4 to the Statement of Eligibility and Qualification of Trustee (Form T-1) filed with the Registration Statement of Eastern Edison Company (File No. 33-37823) and is incorporated herein by reference thereto. 1 3 5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS IN DEFAULT. Not applicable. 6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY SECTION 321(B) OF THE ACT. The consent of the trustee required by Section 321(b) of the Act is annexed hereto as Exhibit 6 and made a part hereof. 7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING AUTHORITY. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority is annexed hereto as Exhibit 7 and made a part hereof. NOTES In answering any item of this Statement of Eligibility which relates to matters peculiarly within the knowledge of the obligor or any underwriter for the obligor, the trustee has relied upon information furnished to it by the obligor and the underwriters, and the trustee disclaims responsibility for the accuracy or completeness of such information. The answer furnished to Item 2. of this statement will be amended, if necessary, to reflect any facts which differ from those stated and which would have been required to be stated if known at the date hereof. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, State Street Bank and Trust Company, a corporation organized and existing under the laws of The Commonwealth of Massachusetts, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Hartford and The State of Connecticut, on the 16RD OF APRIL 1998 STATE STREET BANK AND TRUST COMPANY By: /s/ MICHAEL M. HOPKINS NAME MICHAEL M. HOPKINS TITLE VICE PRESIDENT 2 4 EXHIBIT 6 CONSENT OF THE TRUSTEE Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of 1939, as amended, in connection with the proposed issuance by APCOA, INC. of its 9 1/4 % NEW SENIOR SUBORDINATED NOTES DUE 2008, we hereby consent that reports of examination by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. STATE STREET BANK AND TRUST COMPANY By: /s/MICHAEL M. HOPKINS NAME MICHAEL M. HOPKINS TITLE VICE PRESIDENT DATED: APRIL 16, 1998 3 5 EXHIBIT 7 Consolidated Report of Condition of State Street Bank and Trust Company, Massachusetts and foreign and domestic subsidiaries, a state banking institution organized and operating under the banking laws of this commonwealth and a member of the Federal Reserve System, at the close of business September 30, 1997, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act and in accordance with a call made by the Commissioner of Banks under General Laws, Chapter 172, Section 22(a).
Thousands of ASSETS Dollars Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ..................... 1,380,475 Interest-bearing balances .............................................. 8,821,855 Securities .................................................................. 10,461,989 Federal funds sold and securities purchased under agreements to resell in domestic offices of the bank and its Edge subsidiary ........................ 6,085,138 Loans and lease financing receivables: Loans and leases, net of unearned income .............. 5,597,831 Allowance for loan and lease losses ................... 79,416 Allocated transfer risk reserve ....................... 0 Loans and leases, net of unearned income and allowances ................ 5,518,415 Assets held in trading accounts ............................................. 917,895 Premises and fixed assets ................................................... 390,028 Other real estate owned ..................................................... 779 Investments in unconsolidated subsidiaries .................................. 34,278 Customers' liability to this bank on acceptances outstanding ................ 83,470 Intangible assets ........................................................... 227,659 Other assets ................................................................ 1,969,514 ----------- Total assets ................................................................ 35,891,495 =========== LIABILITIES Deposits: In domestic offices ................................................... 8,095,559 Noninterest-bearing ............................. 5,962,025 Interest-bearing ................................ 2,133,534 In foreign offices and Edge subsidiary ................................ 14,399,173 Noninterest-bearing ................................ 86,798 Interest-bearing ............................... 14,312,375 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge subsidiary ..................... 7,660,881 Demand notes issued to the U.S. Treasury and Trading Liabilities ............ 1,107,552 Other borrowed money ........................................................ 589,733 Subordinated notes and debentures ........................................... 0 Bank's liability on acceptances executed and outstanding .................... 85,600 Other liabilities ........................................................... 1,830,593 Total liabilities ........................................................... 33,769,091 ----------- EQUITY CAPITAL Perpetual preferred stock and related surplus ............................... 0 Common stock ................................................................ 29,931 Surplus ..................................................................... 437,183 Undivided profits and capital reserves/Net unrealized holding gains (losses) 1,660,158 Cumulative foreign currency translation adjustments ......................... (4,868) Total equity capital ........................................................ 2,122,404 ----------- Total liabilities and equity capital ........................................ 35,891,495 ===========
4 6 I, Rex S. Schuette, Senior Vice President and Comptroller of the above named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Rex S. Schuette We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. David A. Spina Marshall N. Carter Truman S. Casner 5 EX-27.1 52 FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 This schedule contains summary financial information extracted from the Consolidated Financial Statements of the Company for each of the three years in the period ended December 31, 1997 and is qualified in its entirety by reference to such financial statements. 1 US DOLLARS YEAR YEAR YEAR DEC-31-1995 DEC-31-1996 DEC-31-1997 JAN-01-1995 JAN-01-1996 JAN-01-1997 DEC-31-1995 DEC-31-1996 DEC-31-1997 1 1 1 0 2,532,000 3,332,000 0 0 0 0 10,556,000 14,249,000 0 (315,000) (443,000) 0 0 0 0 14,116,000 18,254,000 0 56,582,000 55,715,000 0 (44,906,000) (43,375,000) 0 52,823,000 59,095,000 0 33,571,000 35,313,000 0 32,129,000 34,181,000 0 7,841,000 8,728,000 0 0 0 0 1,000 1,000 0 (23,232,000) (22,260,000) 0 52,823,000 59,095,000 141,540,000 135,752,000 115,676,000 141,540,000 135,752,000 115,676,000 120,215,000 113,501,000 92,818,000 120,215,000 113,501,000 92,818,000 20,893,000 17,905,000 17,295,000 0 0 0 3,101,000 3,409,000 3,713,000 (2,273,000) 1,469,000 2,320,000 240,000 106,000 140,000 (3,117,000) 939,000 1,859,000 0 0 0 0 0 0 0 0 0 (3,117,000) 939,000 1,859,000 0 0 0 0 0 0
EX-99.1 53 FORM OF LETTER OF TRANSMITTAL 1 LETTER OF TRANSMITTAL APCOA, INC. OFFER TO EXCHANGE ALL OUTSTANDING 9 1/4% SENIOR SUBORDINATED NOTES DUE 2008 FOR 9 1/4% NEW SENIOR SUBORDINATED NOTES DUE 2008 THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON , 1998, UNLESS THE OFFER IS EXTENDED STATE STREET BANK AND TRUST COMPANY (the "Exchange Agent") 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
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONES LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. The undersigned hereby acknowledges receipt of the Prospectus dated , 1998 (the "Prospectus") of APCOA, Inc. (the "Company") and this Letter of Transmittal, which together constitute the Company's offer (the "Exchange Offer") to exchange $1,000 principal amount of its 9 1/4% New Senior Subordinated Notes due 2008 (the "New Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a Registration Statement of which the Prospectus is a part, for each $1,000 principal amount of its outstanding 9 1/4% Senior Subordinated Notes due 2008 (the "Notes"), respectively. The term "Expiration Date" shall mean 12:00 midnight, New York City time, on , 1998, unless the Company, in its reasonable judgment, extends the Exchange Offer, in which case the term shall mean the latest date and time to which the Exchange Offer is extended. Capitalized terms used but not defined herein have the meaning given to them in the Prospectus. YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT. List on the next page the Notes to which this Letter of Transmittal relates. If the space indicated is inadequate, the Certificate or Registration Numbers and Principal Amounts should be listed on a separately signed schedule affixed hereto. 2 - -------------------------------------------------------------------------------- DESCRIPTION OF SENIOR SUBORDINATED NOTES TENDERED HEREBY - --------------------------------------------------------------------------------------------------------------------------------- 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 - ---------------------------------------------------------------------------------------------------------------------------------
* Need not be completed by Book-entry Holders. ** Unless otherwise indicated, the Holder will be deemed to have tendered the full aggregate principal amount represented by such Notes. All tenders must be in integral multiples of $1,000. - -------------------------------------------------------------------------------- This Letter of Transmittal is to be used (i) if certificates of Notes are to be forwarded herewith, (ii) if delivery of Notes is to be made by book-entry transfer to an account maintained by the Exchange Agent at The Depository Trust Company, (the "Depository") pursuant to the procedures set forth in "The Exchange Offer -- Procedures for Tendering Notes" in the Prospectus or (iii) tender of the Notes is to be made according to the guaranteed delivery procedures described in the Prospectus under the caption "The Exchange Offer -- Guaranteed Delivery Procedures." See Instruction 2. Delivery of documents to a book-entry transfer facility does not constitute delivery to the Exchange Agent. The term "Holder" with respect to the Exchange Offer means any person in whose name Notes are registered on the books of the Company or any other person who has obtained a properly completed bond power from the registered holder. The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. Holders who wish to tender their Notes must complete this letter in its entirety. [ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE DEPOSITORY AND COMPLETE THE FOLLOWING: Name of Tendering Institution [ ] The Depository Trust Company Account Number Transaction Code Number Holders whose Notes are not immediately available or who cannot deliver their Notes and all other documents required hereby to the Exchange Agent on or prior to the Expiration Date must tender their Notes according to the guaranteed delivery procedure set forth in the Prospectus under the caption "The Exchange Offer -- Guaranteed Delivery Procedures." See Instruction 2. 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 4 PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Company the principal amount of the Notes indicated above. Subject to, and effective upon, the acceptance for exchange of such Notes tendered hereby, the undersigned hereby exchanges, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to such Notes as are being tendered hereby, including all rights to accrued and unpaid interest thereon as of the Expiration Date. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent the true and lawful agent and attorney-in-fact of the undersigned (with full knowledge that said Exchange Agent acts as the agent of the Company in connection with the Exchange Offer) to cause the Notes to be assigned, transferred and exchanged. The undersigned represents and warrants that it has full power and authority to tender, exchange, assign and transfer the Notes and to acquire New Notes issuable upon the exchange of such tendered Notes, and that when the same are accepted for exchange, the Company will acquire good and unencumbered title to the tendered Notes, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim. The undersigned represents to the Company that (i) the New Notes acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such New Notes, whether or not such person is the undersigned, and (ii) neither the undersigned nor any such other person has an arrangement or understanding with any person to participate in the distribution of such New Notes. If the undersigned or the person receiving the New Notes covered hereby is a broker-dealer that is receiving the New Notes for its own account in exchange for Notes that were acquired as a result of market-making activities or other trading activities, the undersigned acknowledges that it or such other person will deliver a prospectus in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. The undersigned and any such other person acknowledge that, if they are participating in the Exchange Offer for the purpose of distributing the New Notes, (i) they cannot rely on the position of the staff of the Securities and Exchange Commission enunciated in Exxon Capital Holdings Corporation (available April 13, 1989), Morgan Stanley & Co., Inc. (available June 5, 1991) or similar no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with the resale transaction and (ii) failure to comply with such requirements in such instance could result in the undersigned or any such other person incurring liability under the Securities Act for which such persons are not indemnified by the Company. If the undersigned or the person receiving the New Notes covered by this letter is an affiliate (as defined under Rule 405 of the Securities Act) of the Company, the undersigned represents to the Company that the undersigned understands and acknowledges that such New Notes may not be offered for resale, resold or otherwise transferred by the undersigned or such other person without registration under the Securities Act or an exemption therefrom. The undersigned also warrants that it will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the exchange, assignment and transfer of tendered Notes or transfer ownership of such Notes on the account books maintained by a book-entry transfer facility. The undersigned further agrees that acceptance of any tendered Notes by the Company and the issuance of New Notes in exchange therefor shall constitute performance in full by the Company of its obligations under the Registration Rights Agreement and that the Company shall have no further obligations or liabilities thereunder for the registration of the Notes or the New Notes. The Exchange Offer is subject to certain conditions set forth in the Prospectus under the caption "The Exchange Offer -- Conditions." The undersigned recognizes that as a result of these conditions (which may be waived, in whole or in part, by the Company), as more particularly set forth in the Prospectus, the Company may not be required to exchange any of the Notes tendered hereby and, in such event, the Notes not exchanged will be returned to the undersigned at the address shown below the signature of the undersigned. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Tendered Notes may be withdrawn at any time prior to the Expiration Date. 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). 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: - --------------------------------- 7 PAYOR'S NAME: APCOA, INC. THIS SUBSTITUTE FORM W-9 MUST BE COMPLETED AND SIGNED Please provide your social security number or other taxpayer identification number on the following Substitute Form W-9 and certify therein that you are subject to backup withholding. - ------------------------------------------------------------------------------------------------------------------------------------ SUBSTITUTE Part 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT Social security number FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW ---------------------------------- OR ---------------------------------- Employer identification number ------------------------------------------------------------------------------------------------ Part 2 -- Check the box if you are NOT subject to backup withholding under the provisions Department of the Treasury of Section 3406(A)(1)(C) of the Internal Revenue Code because (1) you are exempt from Internal Revenue Service backup withholding, (2) you have not been notified that you are subject to backup withholding as a result of failure to report all interest or dividends or (3) the Internal Revenue Service has notified you that you are no longer subject to backup withholding. [ ] ------------------------------------------------------------------------------------------------ PAYER'S REQUEST FOR TAXPAYER CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT THE Part 3 - IDENTIFICATION NUMBER (TIN) INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE. SIGNATURE: DATE: ------------------------- -------------------- Awaiting TIN [ ] - ------------------------------------------------------------------------------------------------------------------------------------
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. - -------------------------------------------------------- ----------------------------------------------------- Signature Date
8 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES. All physically delivered Notes or confirmation of any book-entry transfer to the Exchange Agent's account at a book-entry transfer facility of Notes tendered by book-entry transfer, as well as a properly completed and duly executed copy of this Letter of Transmittal or facsimile thereof, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at any of its addresses set forth herein on or prior to the Expiration Date (as defined in the Prospectus). The method of delivery of this Letter of Transmittal, the Notes and any other required documents is at the election and risk of the Holder, and except as otherwise provided below, the delivery will be deemed made only when actually received by the Exchange Agent. If such delivery is by mail, it is suggested that registered mail with return receipt requested, properly insured, be used. No alternative, conditional, irregular or contingent tenders will be accepted. All tendering Holders, by execution of this Letter of Transmittal (or facsimile thereof), shall waive any right to receive notice of the acceptance of the Notes for exchange. Delivery to an address other than as set forth herein, or instructions via a facsimile number other than the ones set forth herein, will not constitute a valid delivery. 2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their Notes, but whose Notes are not immediately available and thus cannot deliver their Notes, the Letter of Transmittal or any other required documents to the Exchange Agent (or comply with the procedures for book-entry transfer) prior to the Expiration Date, may effect a tender if: (a) the tender is made through a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution"); (b) prior to the Expiration Date, the Exchange Agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the Holder, the certificate number(s) of such Notes and the principal amount of Notes tendered, stating that the tender is being made thereby and guaranteeing that, within three New York Stock Exchange trading days after the Expiration Date, the Letter of Transmittal (or facsimile thereof), together with the Notes (or a confirmation of book-entry transfer of such Notes into the Exchange Agent's account at the Depository) and any other documents required by the Letter of Transmittal, will be deposited by the Eligible Institution with the Exchange Agent; and (c) such properly completed and executed Letter of Transmittal (or facsimile thereof), as well as all tendered Notes in proper form for transfer (or a confirmation of book-entry transfer of such Notes into the Exchange Agent's account at the Depository) and all other documents required by the Letter of Transmittal, are received by the Exchange Agent within three New York Stock Exchange trading days after the Expiration Date. Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be sent to Holders who wish to tender their Notes according to the guaranteed delivery procedures set forth above. Any Holder who wishes to tender Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery relating to such Notes prior to the Expiration Date. Failure to complete the guaranteed delivery procedures outlined above will not, of itself, affect the validity or effect a revocation of any Letter of Transmittal form properly completed and executed by a Holder who attempted to use the guaranteed delivery procedures. 3. PARTIAL TENDERS; WITHDRAWALS. If less than the entire principal amount of Notes evidenced by a submitted certificate is tendered, the tendering Holder should fill in the principal amount tendered in the column entitled "Principal Amount Tendered" of the box entitled "Description of Notes Tendered Hereby." A newly issued Note for the principal amount of Notes submitted but not tendered will be sent to such Holder as soon as practicable after the Expiration Date. All Notes delivered to the Exchange Agent will be deemed to have been tendered in full unless otherwise indicated. 9 Notes tendered pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date, after which tenders of Notes are irrevocable. To be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Exchange Agent. Any such notice of withdrawal must (i) specify the name of the person having deposited the Notes to be withdrawn (the "Depositor"), (ii) identify the Notes to be withdrawn (including the registration number(s) and principal amount of such Notes, or, in the case of Notes transferred by book-entry transfer, the name and number of the account at the Depository to be credited), (iii) be signed by the Holder in the same manner as the original signature on this Letter of Transmittal (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the Trustee with respect to the Notes register the transfer of such Notes into the name of the person withdrawing the tender and (iv) specify the name in which any such notes are to be registered, if different from that of the Depositor. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company, whose determination shall be final and binding on all parties. Any Notes so withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offer and no Exchange Notes will be issued with respect thereto unless the Notes so withdrawn are validly retendered. Any Notes which have been tendered but which are not accepted for exchange, will be returned to the Holder thereof without cost to such Holder as soon as practicable after withdrawal, rejection of tender or termination of Exchange Offer. 4. SIGNATURE ON THIS LETTER OF TRANSMITTAL; WRITTEN INSTRUMENTS AND ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the registered Holder(s) of the Notes tendered hereby, the signature must correspond with the name(s) as written on the face of the certificates without alternation or enlargement or any change whatsoever. If this Letter of Transmittal is signed by a participant in the Depository, the signature must correspond with the name as it appears on the security position listing as the owner of the Notes. If any of the Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If a number of Notes registered in different names are tendered, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations of Notes. Signatures on this Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an Eligible Institution unless the Notes tendered hereby are tendered (i) by a registered Holder who has not completed the box entitled "Special Registration Instructions" or "Special Delivery Instructions" on the Letter of Transmittal or (ii) for the account of an Eligible Institution. If this Letter of Transmittal is signed by the registered Holder or Holders of Notes (which term, for the purposes described herein, shall include a participant in the Depository whose name appears on a security listing as the owner of the Notes) listed and tendered hereby, no endorsements of the tendered Notes or separate written instruments of transfer or exchange are required. In any other case, the registered Holder (or acting Holder) must either properly endorse the Notes or transmit properly completed bond powers with this Letter of Transmittal (in either case, executed exactly as the name(s) of the registered Holder(s) appear(s) on the Notes, and, with respect to a participant in the Depository whose name appears on a security position listing as the owner of Notes, exactly as the name of the participant appears on such security position listing), with the signature on the Notes or bond power guaranteed by an Eligible Institution (except where the Notes are tendered for the account of an Eligible Institution). If this Letter of Transmittal, any certificates or separate written instruments of transfer or exchange are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Company, proper evidence satisfactory to the Company of their authority so to act must be submitted. 5. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS. Tendering Holders should indicate, in the applicable box, the name and address (or account at the Depository) in which the New Notes or substitute Notes for principal amounts not tendered or not accepted for exchange are to be issued (or deposited), if different from the names and addresses or accounts of the person signing this Letter of Transmittal. In the case of issuance in a different name, the employer identification number or social security number of the person named must also be indicated and the tendering Holder should complete the applicable box. If no instructions are given, the New Notes (and any Notes not tendered or not accepted) will be issued in the name of and sent to the acting Holder of the Notes or deposited at such Holder's account at the Depository. 10 6. TRANSFER TAXES. The Company shall pay all transfer taxes, if any, applicable to the transfer and exchange of Notes to it or its order pursuant to the Exchange Offer. If a transfer tax is imposed for any other reason other than the transfer and exchange of Notes to the Company or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered Holder or any other person) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exception therefrom is not submitted herewith, the amount of such transfer taxes will be collected from the tendering Holder by the Exchange Agent. Except as provided in this Instruction 6, it will not be necessary for transfer stamps to be affixed to the Notes listed in this Letter of Transmittal. 7. WAIVER OF CONDITIONS. The Company reserves the right, in its reasonable judgment, to waive, in whole or in part, any of the conditions to the Exchange Offer set forth in the Prospectus. 8. MUTILATED, LOST, STOLEN OR DESTROYED NOTES. Any Holder whose Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions. 9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the procedure for tendering as well as requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent at the address and telephone number(s) set forth above. In addition, all questions relating to the Exchange Offer, as well as requests for assistance or additional copies of the Prospectus and this Letter of Transmittal, may be directed to APCOA, Inc., 800 Superior Avenue, Cleveland, Ohio 44114-2601, telephone (216) 522-0700; Attention: Robert N. Sacks. 10. VALIDITY AND FORM. All questions as to the validity, form, eligibility (including time of receipt), acceptance of tendered Notes and withdrawal of tendered Notes will be determined by the Company in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Notes not properly tendered or any Notes the Company's acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right, in its reasonable judgment, to waive any defects, irregularities or conditions of tender as to particular Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in this Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Notes must be cured within such time as the Company shall determine. Although the Company intends to notify Holders of defects or irregularities with respect to tenders of Notes, neither the Company, the Exchange Agent nor any other person shall incur any liability for failure to give such notification. Tenders of Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering Holder as soon as practicable following the Expiration Date. 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. EX-99.2 54 GUIDELINES FOR CERTIFICATION OF TAX ID 1 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.--Social Security numbers have nine digits separated by two hyphens: e.g., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: e.g., 00-0000000. The table below will help determine the number to give the payer.
- ------------------------------------------------------------ GIVE THE FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY NUMBER OF-- - ------------------------------------------------------------ 1. An individual's account The individual 2. Two or more individuals (joint The actual owner of account) the account or, if combined funds, any one of the individuals(1) 3. Husband and wife (joint account) The actual owner of the account or, if joint funds, either person(1) 4. Custodian account of a minor The minor(2) (Uniform Gift to Minors Act) 5. Adult and minor (joint account) The adult or, if the minor is the only contributor, the minor(1) 6. Account in the name of guardian or The ward, minor, or committee for a designated ward, incompetent minor, or incompetent person person(3) 7. a. The usual revocable savings The grantor- trust account (grantor is also trustee(1) trustee) b. So-called trust account that is The actual owner(1) not a legal or valid trust under State law 8. Sole proprietorship account The owner(4) - ------------------------------------------------------------ GIVE THE EMPLOYER FOR THIS TYPE OF ACCOUNT: IDENTIFICATION NUMBER OF-- - ------------------------------------------------------------ 9. A valid trust, estate, or pension Legal entity (Do trust not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)(5) 10. Corporate account The corporation 11. Religious, charitable, or The organization educational organization account 12. Partnership account held in the The partnership name of the business 13. Association, club, or other tax- The organization exempt organization 14. A broker or registered nominee The broker or nominee 15. Account with the Department of The public entity Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments - ------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (4) Show the name of the owner. You may also enter your business or "doing business as" name. Furnish the owner's social security number or the employer identification number of the sole proprietorship. (5) List first and circle the name of the legal trust, estate, or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. 2 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you do not have a taxpayer identification number or you do not know your number, obtain Form SS-5, Application for a Social Security Number Card (for individuals), or Form SS-4, Application for Employer Identification Number (for businesses and all other entities), at an office of the Social Security Administration or the Internal Revenue Service. To complete Substitute Form W-9, if you do not have a taxpayer identification number, write "Applied For" in the space for the taxpayer identification number in Part I, sign and date the Form, and give it to the requester. Generally, you will then have 60 days to obtain a taxpayer identification number and furnish it to the requester. If the requester does not receive your taxpayer identification number within 60 days, backup withholding, if applicable, will begin and will continue until you furnish your taxpayer identification number to the requester. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on ALL payments include the following: - A corporation. - A financial institution. - An organization exempt from tax under section 501(a), or an individual retirement plan, or a custodial account under section 403(b)(7). - The United States or any agency or instrumentality thereof. - A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. - A foreign government or a political subdivision, agency or instrumentality thereof. - An international organization or any agency or instrumentality thereof. - A registered dealer in securities or commodities registered in the United States or a possession of the United States. - A real estate investment trust. - A common trust fund operated by a bank under section 584(a). - An entity registered at all times during the tax year under the Investment Company Act of 1940. - A foreign central bank of issue. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: - Payments to nonresident aliens subject to withholding under section 1441. - Payments to partnerships not engaged in a trade or business in the United States and which have at least one nonresident partner. - Payments of patronage dividends where the amount received is not paid in money. - Payments made by certain foreign organizations. - Payments made to a nominee. Payments of interest not generally subject to backup withholding include the following: - Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if (i) this interest is $600 or more, (ii) the interest is paid in the course of the payer's trade or business and (iii) you have not provided your correct taxpayer identification number to the payer. - Payments of tax-exempt interest (including exempt-interest dividends under section 852). - Payments described in section 6049(b)(5) to nonresident aliens. - Payments on tax-free covenant bonds under section 1451. - Payments made by certain foreign organizations. - Payments made to a nominee. EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE A SUBSTITUTE FORM W-9 TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER. Certain payments other than interest, dividends, and patronage dividends that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A. PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividends, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividends, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail to furnish your correct taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE STATEMENTS WITH RESPECT TO WITHHOLDING.--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--If you falsify certifications or affirmations, you are subject to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE Unless otherwise noted herein, all references to section numbers or to regulations are references to the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder. EX-99.3 55 FORM OF NOTICE OF GUARANTEED DELIVERY 1 NOTICE OF GUARANTEED DELIVERY FOR TENDER OF 9 1/4% SENIOR SUBORDINATED NOTES DUE 2008 (INCLUDING THOSE IN BOOK-ENTRY FORM) OF APCOA, INC. This form or one substantially equivalent hereto must be used to accept the Exchange Offer of APCOA, Inc. (the "Company") made pursuant to the Prospectus, dated , 1998 (the "Prospectus"), if certificates for the outstanding 9 1/4% Senior Subordinated Notes Due 2008 of the Company (the "Notes") are not immediately available or if the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Exchange Agent prior to 12:00 midnight, New York time, on the Expiration Date of the Exchange Offer. Such form may be delivered or transmitted by telegram, telex, facsimile transmission, mail or hand delivery to State Street Bank and Trust Company (the "Exchange Agent") as set forth below. In addition, in order to utilize the guaranteed delivery procedure to tender Notes pursuant to the Exchange Offer, a completed, signed and dated Letter of Transmittal (or facsimile thereof) must also be received by the Exchange Agent prior to 12:00 midnight, New York City time, on the Expiration Date. Capitalized terms not defined herein are defined in the Prospectus. STATE STREET BANK AND TRUST COMPANY, EXCHANGE AGENT 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
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. 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 X - ------------------------------------------------------------ ------------------------------------ - ------------------------------------------------------------ ------------------------------------ Signature(s) of Owner(s) Date or Authorized Signatory
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.
Please print name(s) and address(es) Name(s): ------------------------------------------------------------ ------------------------------------------------------------ ------------------------------------------------------------ ------------------------------------------------------------ Capacity: ------------------------------------------------------------ ------------------------------------------------------------ Address(es): ------------------------------------------------------------ ------------------------------------------------------------ Account Number: ------------------------------------------------------------
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. Name of Firm: AUTHORIZED SIGNATURE Address: Name: (Please Type or Print) Title: Zip Code Area Code and Date: Telephone Number:
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. -----END PRIVACY-ENHANCED MESSAGE-----