-----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, TC6iQbJpu38VfMwJX4Z6nFl/OBlP4apasydKUaArK/9GhxBwJ0vUuUUxpfgza3hj wgpAqI/LHUAxLMKbxNBMSA== 0000950131-00-003376.txt : 20000515 0000950131-00-003376.hdr.sgml : 20000515 ACCESSION NUMBER: 0000950131-00-003376 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: APCOA INC CENTRAL INDEX KEY: 0001059262 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-AUTO RENTAL & LEASING (NO DRIVERS) [7510] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-50437 FILM NUMBER: 629733 BUSINESS ADDRESS: STREET 1: 900 N. MICHIGAN AVENUE CITY: CHICAGO STATE: IL ZIP: 60611-1542 BUSINESS PHONE: 2185220700 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 Commission file number: 333-50437 APCOA/STANDARD PARKING, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 16-1171179 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 900 N. Michigan Avenue, (312) 274-2000 Chicago, Illinois 60611-1542 (Registrant's Telephone Number, (Address of Principal Executive Offices) Including Area Code) Former name, address and fiscal year, if changed since last report: Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- APCOA/STANDARD PARKING, INC. FORM 10-Q INDEX Part I. Financial Information Item 1. Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets as of March 31, 2000 and December 31, 1999.................................................................. 3 Condensed Consolidated Statements of Operations for the three months ended March 31, 2000 and March 31, 1999......................................... 4 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2000 and March 31, 1999......................................... 5 Notes to Condensed Consolidated Financial Statements................................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.. 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk............................. 12 Part II. Other Information Item 1. Legal Proceedings...................................................................... 13 Item 2. Changes in Securities and Use of Proceeds.............................................. 13 Item 3. Defaults upon Senior Securities........................................................ 13 Item 4. Submission of Matters to a Vote of Security Holders.................................... 13 Item 5. Other Information...................................................................... 13 Item 6. Exhibits and Reports on Form 8-K....................................................... 13 Signatures........................................................................................ 14 Exhibits.......................................................................................... 15
2 PART I FINANCIAL INFORMATION Item 1. Financial Statements APCOA/STANDARD PARKING, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except for share data)
March 31, 2000 December 31, 1999 ASSETS --------------- ----------------- (Unaudited) (see Note) Current assets: Cash and cash equivalents......................................................... $ 6,080 $ 5,215 Notes and accounts receivable, net................................................ 43,885 42,715 Prepaid expenses and supplies..................................................... 1,579 1,645 -------- -------- Total current assets............................................................... 51,544 49,575 Leaseholds and equipment, net...................................................... 32,263 32,659 Advances and deposits.............................................................. 1,530 2,040 Cost in excess of net assets acquired.............................................. 115,196 114,923 Intangible and other assets........................................................ 13,266 14,073 -------- -------- Total assets...................................................................... $213,799 $213,270 ======== ======== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable.................................................................. $ 28,807 $ 25,289 Accrued and other current liabilities............................................. 33,413 35,138 Current portion of long-term borrowings........................................... 1,324 1,328 -------- -------- Total current liabilities.......................................................... 63,544 61,755 Long-term borrowings, excluding current portion.................................... 169,992 166,141 Other long-term liabilities........................................................ 8,821 11,116 Redeemable preferred stock......................................................... 50,646 49,280 Common stock subject to put/call rights; 5.01 shares issued and outstanding............................................. 4,589 4,589 Common stockholders' 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........................................................ 11,422 11,422 Advances to and deposits with affiliates.......................................... (10,824) (10,553) Accumulated other comprehensive income............................................ (206) 428 Accumulated deficit............................................................... (84,186) (80,909) -------- -------- Total common stockholders' deficit................................................. (83,793) (79,611) -------- -------- Total liabilities and stockholders' deficit....................................... $213,799 $213,270 ======== ========
See Notes to Condensed Consolidated Financial Statements. Note: The balance sheet at December 31, 1999 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. 3 APCOA/STANDARD PARKING, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, unaudited)
Three Months Ended ----------------------------------- March 31, 2000 March 31, 1999 -------------- -------------- Gross customer collections............................................ $366,100 $316,600 ======== ======== Parking services revenue: Lease contracts..................................................... $ 47,431 $ 49,877 Management contracts................................................ 15,660 10,992 -------- -------- 63,091 60,869 Cost of parking services: Lease contracts.................................................. 42,640 44,019 Management contracts............................................. 6,288 3,880 -------- -------- 48,928 47,899 -------- -------- Gross profit.......................................................... 14,163 12,970 General and administrative expenses................................... 9,110 7,006 Restructuring and other special charges............................... 119 150 Depreciation and amortization......................................... 2,541 1,799 -------- -------- Operating income...................................................... 2,393 4,015 Interest expense (income): Interest expense................................................. 4,421 3,756 Interest income.................................................. (207) (161) -------- -------- 4,214 3,595 -------- -------- (Loss) income before minority interest and income taxes............... (1,821) 420 Minority interest..................................................... 73 167 Income tax expense.................................................... 17 153 -------- -------- Net (loss) income..................................................... (1,911) 100 Preferred stock dividends............................................. (1,366) (1,225) -------- -------- Net loss available for common stockholders............................ $ (3,277) $ (1,125) ======== ========
See Notes to Condensed Consolidated Financial Statements. 4 APCOA/STANDARD PARKING, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited)
Three Months Ended ------------------------------------ March 31, 2000 March 31, 1999 -------------- -------------- Operating activities: Net (loss) income..................................................... $(1,911) $ 100 Adjustments to reconcile nete (loss) income to net cash used in operations: Depreciation and amortization........................................ 2,541 1,799 Change in operating assets and liabilities, net of acquisitions......................................................... (1,244) (12,816) ------- -------- Net cash used in operating activities................................. (614) (10,917) Investing activities: Purchase of leaseholds and equipment.................................. (1,393) (2,386) Purchase of leaseholds and equipment by joint ventures...................................................... -- (159) ------- -------- Net cash used in investing activities................................. (1,393) (2,545) Financing activities: Proceeds from long-term borrowings.................................... 3,800 5,000 Payments on long-term borrowings...................................... (107) (1,080) Payments on joint venture borrowings.................................. (187) -- ------- -------- Net cash provided by financing activities............................. 3,506 3,920 Effect of exchange rate on cash and cash equivalents.................. (634) -- ------- -------- Increase (decrease) in cash and cash equivalents...................... 865 (9,542) Cash and cash equivalents at beginning of period...................... 5,215 19,183 ------- -------- Cash and cash equivalents at end of period............................ $ 6,080 $ 9,641 ======= ======== Supplemental disclosures: Cash paid during the period for: Interest............................................................. $ 7,277 $ 7,005 Taxes................................................................ 456 52
See Notes to Condensed Consolidated Financial Statements. 5 APCOA/STANDARD PARKING, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2000 (in thousands, unaudited) 1. Interim Financial Data The accompanying unaudited condensed consolidated financial statements of APCOA/Standard Parking, Inc., ("APCOA/Standard" or "the Company"), have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for a fair presentation of the financial position and results of operations have been included. Operating results for the three-month period ended March 31, 2000 are not necessarily indicative of the results that might be expected for the fiscal year ending December 31, 2000. The financial statements presented in this Report should be read in conjunction with the consolidated financial statements and footnotes thereto included in APCOA/Standard's 1999 Form 10-K filed March 30, 2000. Certain reclassifications have been made to the 1999 financial information to conform to the 2000 presentation. 2. Restructuring and Other Special Charges Included in "Restructuring and other special charges" in the accompanying condensed consolidated statements of operations are the following:
Three Months Ended -------------------------------- March 31, 2000 March 31, 1999 -------------- -------------- Incremental integration costs and other..... $119 $150 ==== ====
The integration costs relate primarily to actions to facilitate the accounting system consolidation and activities to realign, centralize and reorganize administrative and other support functions. 3. Borrowing Arrangements APCOA/Standard's $140,000 9 1/4% Senior Subordinated Notes were issued in September of 1998 and are due in March of 2008. The Notes are registered with the Securities and Exchange Commission. The Notes were exchanged for unregistered notes with substantially identical terms, which had been issued earlier in 1998 to finance the acquisition of Standard and retire certain existing indebtedness, and for general working capital purposes. In March of 1998, the Company entered into a $40,000 revolving Senior Credit Facility (the "Facility") with a group of banks. Rates of interest on borrowings against the Facility are indexed to certain key variable rates. At March 31, 2000, borrowings under the Facility aggregated $21,900 and there were letters of credit outstanding against this Facility of $1,250. The Notes and Senior Credit Facility contain covenants that limit APCOA/Standard from incurring additional indebtedness and issuing preferred stock, restrict dividend payments, limit transaction with affiliates and restrict certain other transactions. Substantially all of APCOA/Standard's net assets are restricted under these provisions and covenants (See Note 4). 6 4. Subsidiary Guarantors All of the Company's direct or indirect wholly owned domestic subsidiaries, other than inactive subsidiaries, 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 non- guarantor subsidiaries include joint ventures, wholly owned subsidiaries of the Company organized under the laws of foreign jurisdictions and inactive subsidiaries, all of which are included in the consolidated financial statements. The following is summarized combining financial information for the Company, the guarantor subsidiaries of the Company and the non-guarantor subsidiaries of the Company:
Guarantor Non-Guarantor APCOA/Standard Subsidiaries Subsidiaries Eliminations Total -------------- ------------ ------------- ------------ -------- Balance Sheet Data: - ------------------- March 31, 2000 Cash and cash equivalents............................. $ 3,300 $ 577 $ 2,203 $ -- $ 6,080 Notes and accounts receivable......................... 39,779 1,676 2,430 -- 43,885 Current assets........................................ 44,238 2,514 4,792 -- 51,544 Leaseholds and equipment, net......................... 17,522 8,892 5,849 -- 32,263 Cost in excess of net assets acquired, net............ 19,382 90,402 5,412 -- 115,196 Investment in subsidiaries............................ 103,977 -- -- (103,977) -- Total assets.......................................... 193,689 107,230 16,857 (103,977) 213,799 Accounts payable...................................... 15,125 9,348 4,334 -- 28,807 Current liabilities................................... 41,336 12,404 9,804 -- 63,544 Long-term borrowings, excluding current portion....... 164,428 185 5,379 -- 169,992 Redeemable preferred stock............................ 50,646 -- -- -- 50,646 Common stock subject to put/call rights............... 4,589 -- -- -- 4,589 Total stockholders' equity (deficit).................. (73,532) 92,564 1,152 (103,977) (83,793) Total liabilities and stockholders' equity (deficit).. 193,689 107,230 16,857 (103,977) 213,799 December 31, 1999 Cash and cash equivalents............................. 2,569 $ 1,963 683 $ -- $ 5,215 Notes and accounts receivable......................... 34,973 2,606 5,136 -- 42,715 Current assets........................................ 39,130 4,608 5,837 -- 49,575 Leaseholds and equipment, net......................... 17,204 9,263 6,192 -- 32,659 Cost in excess of net assets acquired, net............ 19,536 92,590 2,797 -- 114,923 Investment in subsidiaries............................ 102,639 -- -- (102,639) -- Total assets.......................................... 187,655 112,225 16,029 (102,639) 213,270 Accounts payable...................................... 15,860 5,962 3,467 -- 25,289 Current liabilities................................... 41,423 10,439 9,893 -- 61,755 Long-term borrowings, excluding current portion....... 160,667 371 5,103 -- 166,141 Redeemable preferred stock............................ 49,280 -- -- -- 49,280 Common stock subject to put/call rights............... 4,589 -- -- -- 4,589 Total stockholders' equity (deficit).................. (76,402) 98,889 541 (102,639) (79,611) Total liabilities and stockholders' equity (deficit).. 187,655 112,225 16,029 (102,639) 213,270 Income Statement Data: - ---------------------- Three Months Ended March 31, 2000 Parking Revenue....................................... $ 29,073 $ 23,158 $10,860 $ -- $ 63,091 Gross profit.......................................... 7,775 4,472 1,916 -- 14,163 Restructuring and other unusual costs................. 119 -- -- -- 119 Depreciation and amortization......................... 948 1,252 341 -- 2,541 Operating income...................................... 5,517 (4,547) 1,423 -- 2,393 Interest expense, net................................. 4,062 (7) 159 -- 4,214 Equity in earnings of subsidiaries.................... (3,362) -- -- 3,362 -- Net income (loss)..................................... (1,911) (4,529) 1,167 3,362 (1,911) Three Months Ended March 31, 1999 Parking Revenue....................................... $ 26,919 $ 23,644 $10,306 $ -- $ 60,869 Gross profit.......................................... 6,684 5,782 504 -- 12,970 Restructuring and other unusual costs................. 150 -- -- -- 150 Depreciation and amortization......................... 965 607 227 -- 1,799 Operating income...................................... 3,115 880 20 -- 4,015 Interest expense, net................................. 3,408 27 160 -- 3,595 Equity in earnings of subsidiaries.................... 601 -- -- (601) -- Net income (loss)..................................... 100 775 (174) (601) 100
7 APCOA/STANDARD PARKING, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Statement of Cash Flow Data: - ---------------------------- Three Months Ended March 31, 2000 Net cash provided by (used in) operating activities......... $ (748) $(1,386) $ 1,520 $ -- $ (614) Investing activities: Purchase of leaseholds and equipment................... (1,393) -- -- -- (1,393) ------- ------- ------- ---- -------- Net cash provided by (used in) investing activities......... Financing activities: Proceeds from long-term borrowings..................... 3,800 -- -- -- 3,800 Payments on long-term borrowings....................... (107) -- -- -- (107) ------- ------- ------- ---- -------- Net cash provided by (used in) financing activities......... 3,506 3,506 Effect of exchange rate changes............................. (634) -- -- -- (634) Proceeds on Joint Venture borrowings........................ (187) -- -- -- (187) Three Months Ended March 31, 1999 Net cash provided by (used in) operating activities........ $(8,984) $ (369) $(1,564) $ -- $(10,917) Investing activities: Purchase of leaseholds and equipment...................... (2,264) (122) -- -- (2,386) Purchase of leaseholds and equipment by joint ventures.................................................. -- -- (159) -- (159) Net cash used in investing activities...................... (2,264) (122) (159) -- (2,545) Financing activities: Proceeds from long-term borrowings........................ 5,000 -- -- -- 5,000 Payments on long-term borrowings.......................... (1,080) -- -- -- (1,080) Net cash provided by financing activities.................. 3,920 -- -- -- 3,920
8 PART I FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations General APCOA/Standard Parking, Inc. ("APCOA/Standard" or "the Company") operates in a single reportable segment operating parking facilities under two types of arrangements: management contracts and leases. Under a management contract, APCOA/Standard 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/Standard 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/Standard. Under lease arrangements, APCOA/Standard generally pays to the property owner either a fixed annual rental, a percentage of gross customer collections or a combination thereof. APCOA/Standard collects all revenues under lease arrangements and is responsible for most operating expenses, but it is typically not responsible for major maintenance or capital expenditures. As of March 31, 2000, APCOA/Standard operated approximately 78% of its 1,834 parking facilities under management contracts and approximately 22% under leases. Parking services revenue--leases. Lease parking services revenues consist of all gross customer collections 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/Standard 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/Standard is not responsible for major capital expenditures or property taxes. Cost of parking services--management contracts. Cost of parking services under management contracts is generally passed through to the facility owner, therefore these costs are not included in the results of operations of the Company. Several APCOA/Standard contracts, however, require APCOA/Standard to pay for certain costs that 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 office and supervisory employees. Summary of Operating Facilities The following table reflects the Company's facilities at the end of the periods indicated:
March 31, 2000 December 31, 1999 March 31, 1999 -------------- ----------------- -------------- Managed facilities....... 1,439 1,436 1,207 Leased facilities........ 395 398 447 ----- ----- ----- Total facilities......... 1,834 1,834 1,654 ===== ===== =====
The Company's strategy is to add locations in core cities where a concentration of locations improves customer service levels and operating margins. In general, contracts added as set forth in the table above followed this strategy. 9 Results of Operations Gross customer collections consist of gross receipts collected at all leased and managed properties, including unconsolidated affiliates. Gross customer collections increased $49.5 million, or 15.6%, to $366.1 million in the first quarter of 2000 compared to $316.6 million in the first quarter of 1999. This increase is attributable to the addition of 180 locations during the period. In analyzing gross margins of APCOA/Standard, it should be noted that the cost of parking services incurred in connection with the provision of management services is generally paid by the clients. Margins for lease arrangements are significantly impacted by variables other than operating performance, such as variability in parking rates in different cities and widely varying space utilization by parking facility type. The following should be read in conjunction with the Condensed Consolidated Financial Statements and notes thereto in Item 1. Three Months Ended March 31, 2000 Compared to Three Months ended March 31, 1999 Parking services revenue--leases. Lease revenue decreased $2.5 million, or 4.9% to $47.4 million in the first quarter of 2000 as compared to $49.9 million in the first quarter of 1999. This resulted from the net reduction of 52 leases through contract expirations, conversions to management contracts and the loss of one large airport contract in the second half of 1999. Parking services revenue--management contracts. Management contract revenue increased $4.7 million, or 42.5%, to $15.7 million in the first quarter of 2000 as compared to $11.0 million in the first quarter of 1999. This resulted from the net increase of 232 contracts through internal growth and 1999 acquisitions. Cost of parking services--leases. Cost of parking for leases decreased $1.4 million, or 3.1%, to $42.6 million for the first quarter of 2000 from $44.0 million in the first quarter of 1999. This decrease resulted from the reduction of 52 leases through terminations and conversions to management contracts. Gross margin for leases declined to 10.1% for the first quarter of 2000 compared to 11.7% for the first quarter of 1999. Cost of parking services--management contracts. Cost of parking for management contracts increased $2.4 million, or 62.1%, to $6.3 million for the first quarter of 2000 from $3.9 million in the first quarter of 1999. This increase resulted from the addition of a net total of 232 new contracts through internal growth and acquisitions. Gross margin for management contracts declined to 59.8% in the first quarter of 2000 compared to 64.7% for the first quarter of 1999. Most management contracts have no cost of parking services related to them as all costs are reimbursable to the Company. However, several contracts (primarily large airport properties and several urban locations) require the Company to pay for certain costs which are offset by larger management fees. The increase in cost of parking management contracts was related to the addition of several contracts of this type. General and administrative expenses. General and administrative expenses increased $2.1 million, or 30.0%, to $9.1 million for the first quarter of 2000 as compared to $7.0 million, for the first quarter of 1999. This increase resulted from costs associated with acquired companies in 1999, inflation, and investment in the Company's infrastructure. Restructuring and other special charges. The Company recorded $0.1 million of incremental integration costs in the first quarter of 2000, as compared to $0.2 million in the first quarter of 1999, relating primarily to actions to facilitate the accounting system consolidation and other support functions. Liquidity and Capital Resources As a result of day-to-day activity at the parking locations, APCOA/Standard collects significant amount of cash. Under lease contracts, this revenue is deposited into local APCOA/Standard bank accounts, 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/Standard to deposit the daily receipts into a local APCOA/Standard bank account. Others require the deposit into a client account, and some have a segregated account for the receipts and disbursements of the property. Locations with revenues deposited into the APCOA/Standard banks enable the Company to operate with a negative working capital. This negative working capital arises from the liability that is created for the amount of revenue 10 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 Senior Credit Facility, all funds held for future remittance to the clients are used to reduce the credit line until the payments are made to the clients. Locations with revenue deposited into client accounts or segregated accounts can, depending upon timing of rent or net profit distributions, result in significant amounts of cash being temporarily inaccessible to the Company for use for operating needs. Additionally, the ability to utilize cash deposited into local APCOA/Standard accounts is dependent upon the movement of that cash into the Company's corporate account. For these reasons, the Company from time to time carries significant cash balances, while utilizing its Senior Credit Facility. The Company had cash and cash equivalents of $6.1 million at March 31, 2000 compared to $5.2 million at December 31, 1999. Three Months Ended March 31, 2000 Compared to Three Months Ended March 31, 1999 Net cash used in operating activities totaled $0.6 million for the first quarter of 2000 compared to $10.9 million for the first quarter of 1999. Cash used during 2000 included a $6.5 million interest payment on the Senior Credit Facility, a $1.2 million increase in accounts receivable due to an increase in the number of locations, offset by increases in accounts payable and other liabilities of $5.0 million and a decrease in other assets of $1.3 million. Cash used during 1999 included $5.5 million for the purchase of an insurance tail policy to cover claims for all years prior to 1999 under APCOA's previous insurance program, $1.7 million for cash restructuring charges and increases in accounts receivable relating to acquired contracts and existing locations of $3.3 million. Cash used in investing activities totaled $1.4 million for the first quarter of 2000 compared to $2.5 million for the first quarter of 1999. Cash used in investing activities in the first quarter of 2000 resulted from capital purchases to secure and/or extend leased facilities and investments in management information system enhancements. Cash used in the first quarter of 1999 resulted from capital purchases including the furnishing and improvement of the Company's combined office space in Chicago, investment in management information system enhancements, and capital investments to secure and/or extend leased facilities. Cash generated from financing activities totaled $3.5 million in the first quarter of 2000. The 2000 activity included $3.8 million in borrowings from the revolving Senior Credit Facility, partially offset by repayments on long-term and joint venture borrowings of $0.3 million. The 1999 activity included $5.0 million in borrowings from the revolving Senior Credit Facility, partially offset by repayments on long-term borrowings of $1.1 million. Other Liquidity and Capital Resources Information The Company's Senior Credit Facility ("the Facility") provides for cash borrowings up to $35 million and Letters of Credit up to $5 million, at variable rates based, at the Company's option, either on LIBOR, the overnight federal funds rate, or the bank's base rate. From time to time the Company utilizes the Facility to provide readily-accessible cash for working capital purposes. The Facility includes covenants that limit the Company from incurring additional indebtedness, issuing preferred stock or paying dividends, and contains certain other restrictions. At March 31, 2000, the Company had $1.3 million of letters of credit outstanding under the Facility and borrowings against the Facility aggregated $21.9 million. The Facility was amended on March 30, 2000, with the principle changes to the agreement providing for revisions to interest rates charged on borrowings and certain financial covenants. The Company's primary capital requirements 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 Senior Credit Facility will be adequate to meet the Company's short-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 existing cash, the Company may borrow under the Senior Credit Facility, or may seek additional sources of capital including the sale or issuance of common stock. From time to time the Company utilizes the Facility to provide readily-accessible cash for working capital purposes. Year 2000 11 In prior years, the Company discussed the nature and progress of its plans to become Year 2000 ready. In late 1999, the Company completed its remediation and testing of systems. As a result of those planning and implementation efforts, the Company experienced no significant disruptions in mission critical information technology and non-information technology systems and believes those systems successfully responded to the Year 2000 date change. The Company is not aware of any material problems resulting from Year 2000 issues, with its products, its internal systems, or the products and services of third parties. The Company will continue to monitor its mission critical computer applications and those of its suppliers and vendors throughout the year 2000 to ensure that any latent Year 2000 matters that may arise are addressed promptly. Special Cautionary Notice Regarding Forward-Looking Statements This quarterly report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are intended to be covered by the safe harbors created thereby. Those statements include, but may not be limited to, the discussions of the Company's expectations concerning its future profitability, the discussion of the Company's strategic relationships, discussions about Year 2000 compliance plans, and the Company's operating and growth assumptions regarding certain matters, including anticipated cost savings, in preparation of the unaudited financial information. Investors are cautioned that forward-looking statements involve risks and uncertainties. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved. Cautionary Statements The Company continues to be subject to certain factors that could cause the Company's results to differ materially from expected and historical results (see the "Risk Factors" set forth in the Company's Registration Statement on Form S-4 (No. 333-50437) filed on April 17, 1998, as amended on June 9, 1998, July 15, 1998, August 11, 1998 and August 14, 1998 (the "Registration Statement")). Item 3. Quantitative and Qualitative Disclosures About Market Risk The Company's primary market risk exposure consists of risk related to changes in interest rates. Historically, the Company has not used derivative financial instruments for speculative or trading purposes. The Company entered into a $40 million revolving variable rate Senior Credit Facility (see Note D of the Notes to the Consolidated Financial Statements). Interest expense on such borrowing is sensitive to changes in the market rate of interest. If the Company were to borrow the entire $40 million available under the Facility, a 1% increase in the average market rate would result in an increase in the Company's annual interest expense of $0.4 million. This amount is determined by considering the impact of the hypothetical interest rates on the Company's borrowing cost, but does not consider the effects of the reduced level of overall economic activity that could exist in such an environment. Due to the uncertainty of the specific changes and their possible effects, the foregoing sensitivity analysis assumes no changes in the Company's financial structure. APCOA/Standard's indirect parent company is Holberg Industries, Inc. ("Holberg"); a privately held diversified service company located in Greenwich, Connecticut. Holberg also owns AmeriServe Food Distribution, Inc. ("AmeriServe"), one of the nation's largest food service distributors servicing quick-service and casual dining restaurants in the United States, Canada and Mexico. AmeriServe filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code on January 31, 2000. APCOA/Standard and AmeriServe are separate and distinct companies with independent sources of funding. However, the AmeriServe Chapter 11 filing is a default under certain debt instruments of Holberg. As a result of such defaults, the creditors of Holberg could take control of Holberg or its subsidiary, AP Holdings, Inc. ("Holdings"). A change in control of Holberg or Holdings would also constitute a change in control of APCOA under the APCOA/Standard debt instruments and of Holdings under its bond indenture. In the event of such a change in control of APCOA/Standard or Holdings, the terms of APCOA/Standard's senior bank credit facility and subordinated bond indenture and of Holdings' bond indenture permit the APCOA/Standard and Holdings creditors, if they believed it were in their interest to do so, to 12 call, for immediate payment under such instruments, and APCOA/Standard's or Holdings failure to pay on such terms would constitute a default thereunder. Holberg and its creditors are negotiating to restructure the debt and eliminate the defaults created as a result of the AmeriServe Chapter 11 filing. Although Holberg currently expects to complete the restructuring of the debt, and further currently expects that its creditors will not in any event seek to obtain control of Holberg or Holdings, there can be no assurance that Holberg will be successful in restructuring its debt and eliminating the existing defaults, or that Holberg's creditors will not seek to obtain control of Holberg or Holdings, and should APCOA/Standard's or Holdings' indebtedness be accelerated as a result of any action by Holberg's creditors, there is no assurance that APCOA/Standard or Holdings would have sufficient funds to satisfy such obligations. PART II OTHER INFORMATION Item 1. Legal Proceedings In the normal course of business, the Company is involved in 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. Item 2. Changes in Securities and Use of Proceeds None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit Number Description ------ ----------- 3.1 Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-4 (No. 333-50437) filed on April 17, 1998, as amended on June 9, 1998, July 15, 1998, August 11, 1998 and August 14, 1998 (the "Registration Statement")). 3.2 Amended and Restated By-Laws of the Company (incorporated by reference to Exhibit 3.2 to the Registration Statement). 4.1 Indenture, dated as of March 30, 1998, amended as of July 6, 1998, September 21, 1998 and January 12, 1999 by and among the Company, the Subsidiary Guarantors and State Street Bank and Trust Company (incorporated by reference to Exhibit 4.1 to the Registration Statement). 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). 4.7 First Amendment to Senior Credit Facility dated November 12, 1999 by and among the Company, the Lenders, and N.A. Bank One as agent for Lenders (incorporated by reference to Exhibit 4.7 of the Company's September 10, 1999 Form 10Q). 4.8 Second Amendment to the Senior Credit Facility dated March 30, 2000 by and among the Company, the Lenders and Bank One N.A., as agent for the Lenders. (corrected copy) 27.1 Financial Data Schedule. (b) Reports on Form 8-K No current report on Form 8-K was filed by the Company during the quarter ended March 31, 2000. 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized: APCOA/Standard Parking, Inc. (Registrant) May 12, 2000 By: _________________________________________________ Myron C. Warshauer Chief Executive Officer May 12, 2000 By: _________________________________________________ Theodore C. Pulkownik Executive Vice President and Chief Financial Officer 14 INDEX TO EXHIBITS Exhibit Number Description ------ ----------- 3.1 Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-4 (No. 333-50437) filed on April 17, 1998, as amended on June 9, 1998, July 15, 1998, August 11, 1998 and August 14, 1998 (the "Registration Statement")). 3.2 Amended and Restated By-Laws of the Company (incorporated by reference to Exhibit 3.2 to the Registration Statement). 4.1 Indenture, dated as of March 30, 1998, amended as of July 6, 1998, September 21, 1998 and January 12, 1999 by and among the Company, the Subsidiary Guarantors and State Street Bank and Trust Company (incorporated by reference to Exhibit 4.1 to the Registration Statement). 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). 4.7 First Amendment to Senior Credit Facility dated November 12, 1999 by and among the Company, the Lenders, and N.A. Bank One as agent for Lenders (incorporated by reference to Exhibit 4.7 of the Company's September 10, 1999 form 10Q). 4.8 Second Amendment to the Senior Credit Facility dated March 30, 2000 by and among the Company, the Lenders and Bank One N.A., as agent for the Lenders. (corrected copy) 27.1 Financial Data Schedule. 15 EX-4.8 2 SECOND AMENDMENT TO THE SENIOR CREDIT FACILITY SECOND AMENDMENT TO CREDIT AGREEMENT ------------------------------------ THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of March 30, 2000 (this "Amendment"), is among APCOA/STANDARD PARKING, INC., a Delaware corporation (the "Company"), the Lenders set forth on the signature pages hereof (collectively, the "Lenders") and BANK ONE, NA, as agent for the Lenders (in such capacity, the "Agent"). RECITALS -------- A. The Company, the Guarantors, the Agent and the Lenders are parties to a Credit Agreement dated as of March 30, 1998 (as clarified by letter agreement dated March 30, 1999, and amended by a First Amendment to Credit Agreement dated as of November 12, 1999, the "Credit Agreement"). B. The Company desires to amend the Credit Agreement, and the Agent and the Lenders are willing to do so in accordance with the terms hereof. TERMS ----- In consideration of the premises and of the mutual agreements herein contained, the parties agree as follows: ARTICLE I. AMENDMENTS. Upon fulfillment of the conditions set forth in Article III hereof, the Credit Agreement shall be amended as follows: 1.1 The definition of "Applicable Margin" in Section 1.1 shall be amended by deleting the table set forth therein and the paragraph following such table and inserting the table and paragraph set forth below in place thereof:
Applicable Margin for all Advances and fees ------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------------ Adjusted Total Debt to Adjusted Corporate LIBOR Loan and Letter Commitment Fees Adjusted EBITDA Base Rate Loan of Credit Fees Ratio - ------------------------------------------------------------------------------------------------------------------------------------ (greater than or equal to) 6.5:1.0 225 bps 350 bps 75 bps - ------------------------------------------------------------------------------------------------------------------------------------ (greater than or equal to) 6.0:1.0 but (less than) 6.50:1.0 175 bps 300 bps 62.5 bps - ------------------------------------------------------------------------------------------------------------------------------------ (greater than or equal to) 5.5:1.0 but (less than) 6.0:1.0 150 bps 275 bps 62.5 bps - ------------------------------------------------------------------------------------------------------------------------------------ (greater than or equal to) 5.0:1.0 but (less than) 5.5:1.0 125 bps 250 bps 62.5 bps - ------------------------------------------------------------------------------------------------------------------------------------ (greater than or equal to) 4.5:1.0 but (less than) 5.0:1.0 100 bps 225 bps 50 bps - ------------------------------------------------------------------------------------------------------------------------------------ (greater than or equal to) 4.5:1.0 75 bps 200 bps 50 bps - ------------------------------------------------------------------------------------------------------------------------------------
Notwithstanding anything in this Agreement to the contrary, as of the Second Amendment Effective Date the Applicable Margin shall be based on an Adjusted Total Debt to Adjusted EBITDA Ratio of greater than or equal to 6.5:1.0 pursuant to the above table until adjusted for the first time after the Second Amendment Effective Date. 1.2 The following definitions are hereby added to Section 1.1 in appropriate alphabetical order: "Second Amendment" shall mean the Second Amendment to this Agreement dated as of March 30, 2000. "Second Amendment Effective Date" shall mean the date of the Second Amendment. 1.3 Section 2.1(c) is amended by adding the following to the end thereof: "and (iii) the aggregate principal amount of Revolving Credit Loans shall not exceed $35,000,000 at any time." 1.4 Section 5.1(g) is amended by adding the following to the end thereof: "At all times on and after the date requested by the Agent in its discretion and to the extent practical as determined by the Agent, the Company and the Guarantors shall direct all clients and other account debtors to make all payments in connection with any obligations of the Company or any Guarantor directly to a lock-box account, which account shall be a non-interest bearing account over which the Agent shall have the power of application and withdrawal, and all amounts received in such lock-box account shall be applied to the Lender Indebtedness on such terms required by the Agent, and the Company and the Guarantors shall promptly execute such lock-box agreements, dominion of funds agreements and related agreements in connection therewith, each in form and substance satisfactory to the Agent. 1.5 Sections 5.2(a), (b) and (c) shall be amended and restated as follows: (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 September 29, 1999, (ii) 6.75 to 1.0 at any time from and including September 30, 1999 to and including December 31, 1999, (iii) 8.0 to 1.0 at any time from and including January 1, 2000 to and including September 30, 2000, (iv) 6.50 to 1.0 at any time from and including October 1, 2000 to and including March 30, 2001, (v) 6.35 to 1.00 at any time from and including March 31, 2001 to and including June 29, 2001, (vi) 6.20 to 1.00 at any time from and including June 30, 2001 to and including September 29, 2001, (vii) 6.00 to 1.00 at any time from and including September 30, 2001 to and including December 30, 2001, (viii) 5.80 to 1.00 at any time from and including December 31, 2001 to and including March 30, 2002 or (ix) 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) 1.5 to 1.0 as of the end of any fiscal quarter of the Company ending on or before December 31, 1999, (ii) 1.30 to 1.0 as of the end of the fiscal quarter of the Company ending March 31, 2000, (iii) 1.27 to 1.0 as of the end of each of the fiscal quarters of the Company ending June 30, 2000 and September 30, 2000, (iv) 1.45 to 1.0 as of the end of the fiscal quarter of the Company ending December 31, 2000, (v) 1.6 to 1.0 as of the end of each of the fiscal quarters of the Company ending March 31, 2001 and June 30, 2001, (vi) 1.65 to 1.0 as of the end of any fiscal quarter of the Company ending on or after September 30, 2001 but on or before March 31, 2002, or (vii) 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 -2- quarter ending on or after June 30, 1999 but on or before December 31, 1999, (iii) 0.92 to 1.0 as of the end of the fiscal quarter of the Company ending March 31, 2000, (iv) 0.91 to 1.0 as of the end of each of the fiscal quarters of the Company ending June 30, 2000 and September 30, 2000, (v) 1.05 to 1.0 as of the end of any fiscal quarter of the Company ending on or after December 31, 2000 but on or before March 31, 2002 or (vi) 1.10 to 1.0 as of the end of any fiscal quarter of the Company ending thereafter. 1.6 Section 5.2(d)(x) is amended by deleting reference therein to "14%" and substituting "5%" in place thereof. 1.7 Section 5.2(f) shall be amended and restated as follows: (f) Merger; Acquisitions; Etc. Make any Acquisition; nor merger or consolidate or amalgamate with any other Person or take any other action having a similar effect; 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, or (ii) any Acquisition completed prior to the Second Amendment Effective Date and identified on Schedule 5.2(f) hereto. 1.8 Section 5.2(g)(i) is amended by deleting reference therein to "10%" and substituting "1%" in place thereof. 1.9 Section 5.2(i) is amended by adding the following after the phrase "covenants and conditions in this Agreement" in each place such phrase appears: "without giving effect to any amendment or modification of Sections 5.2(a), (b) or (c) made at any time after the Effective Date which would make the covenants contained therein less restrictive on the Company and its Subsidiaries". 1.10 Section 5.2(j) is amended and restated as follows: (j) Investments, Loans and Advances. Purchase or otherwise acquire any Capital Stock of or other ownership interest in, or debt securities of or other evidence 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, relocation, 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 outstanding at any time, (ii) investments in Cash Equivalents, -3- (iii) investments, loans and advances in and to any existing Guarantor, (iv) 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, (v) investments, loans and advances in an aggregate amount outstanding not to exceed $1,000,000 to Affiliates of the Company (excluding, among others, Holberg and its Affiliates other than the Company or a Guarantor, and such investments, loans and advances may not be sent directly or indirectly to or for the benefit of Holberg or its Affiliates other than the Company or a Guarantor) described on Schedule 5.2(j)-2 or otherwise approved by the Agent, provided that both before and after giving effect to any such investment, loan and advance (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 investment, loan or advance is made, and (y) the aggregate amount of cash and 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 investment, 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 (vi) acquiring and owning 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). 1.11 Section 5.2(p) is amended (a) by adding the following: "without giving effect to any amendment or modification of Sections 5.2(a), (b) or (c) made at any time after the Effective Date which would make the covenants contained therein less restrictive on the Company and its Subsidiaries" after the phrase "Sections 5.2(a), (b) and (c)" appearing in Section 5.2(p) and (b) by adding the following to the end thereof: In addition to the foregoing, the Company also will not pay, or permit any Subsidiary or, to the extent the Company is able to do so, any other Affiliate, to pay, directly or indirectly, any management, consulting, investment banking, advisory or other fees or payments under any leases, any expense reimbursement or similar payments or any other payments of any kind (including, without limitation, any amounts paid or payable by the Company or any of its Subsidiaries to Holberg in respect of overhead expense allocations among members of the affiliate corporate group) to Holberg or any Affiliates thereof other than the Company or any Guarantor; provided, however, that the Company and its Subsidiaries may reimburse Holberg for any payments made by Holberg for out of pocket expenses actually incurred by the Company and which reimbursements are in the ordinary course of business and consistent with past practices. 1.12 Section 5.2(q) shall be amended by adding the following to the end thereof: "Notwithstanding anything in this Section 5.2(q) to the contrary, the Net Capital Expenditures (i) for the four consecutive fiscal quarters of the Company ending March 31, 2000 shall be allowed up to, but not in excess of, $5,638,000, (ii) for the four consecutive fiscal quarters of the Company ending June 30, 2000 shall be allowed up to, but not in excess of, $5,010,000, and (iii) for the four consecutive fiscal quarters of -4- the Company ending September 30, 2000 shall be allowed up to, but not in excess of, $5,333,000. 1.13 Schedule 5.2(j) attached hereto is substituted for Schedule 5.2(j) to the Credit Agreement and Schedule 5.2(j)-2 attached hereto is added as Schedule 5.2(j)-2 to the Credit Agreement. 1.14 The restructuring charges taken in connection with the Standard Acquisition to the extent such charges do not exceed $18,500,000 for the Calculation Period ending December 31, 1998, do not exceed $5,577,000 for the Calculation Period ending December 31, 1999, and do not exceed $700,000 for the Calculation Period ending December 31, 2000 shall be deemed "consistent with the restructuring charges identified in the Pro Forma Financial Statements" for purposes of clause I(xii)(A) of the definition of Adjusted EBITDA contained in Section 1.1 of the Credit Agreement, provided that no other restructuring charges shall be deemed "consistent with the restructuring charges identified in the Pro Forma Financial Statements" for purposes of clause I(xii)(A) of such definition of Adjusted EBITDA or for any other purpose without the prior written approval of the Required Lenders. ARTICLE II. REPRESENTATIONS AND AGREEMENTS. The Company represents and warrants to, and agrees with, the Agent and the Lenders that: 2.1 The execution, delivery and performance of this Amendment are within its powers, have been duly authorized and are not in contravention of any statute, law or regulation known to it or of any terms of its Articles of Incorporation or By-laws, or of any material agreement or undertaking to which it is a party or by which it is bound. 2.2 This Amendment is the legal, valid and binding obligations of the Company and each Guarantor enforceable against each in accordance with the respective terms thereof. 2.3 After giving effect to the amendments contained herein, the representations and warranties contained in Article IV of the Credit Agreement are true in all material respects on and as of the date hereof with the same force and effect as if made on and as of the date hereof. 2.4 After giving effect to the amendments contained herein, no Event of Default or Unmatured Default exists or has occurred and is continuing on the date hereof. 2.5 The Company and Parent have not, and will not without the prior written consent of the Lenders, consummate the Company Acquisition. 2.6 The aggregate amount of any payment, transfer or other consideration paid or otherwise transferred in any way to Holberg or any of Holberg's Affiliates (other than the Company or Guarantor), whether directly or indirectly, and whether constituting any management, consulting, investment banking, advisory or other fees or payments under any leases or any expense reimbursement or similar payments or any other payments of any kind (including, without limitation, any amounts paid or payable by the Company or any of its Subsidiaries in respect of overhead expense allocations among the members of the affiliate corporate group) or constituting any loans, advances, dividends, distributions, forgiveness of debt or other transfer of any kind to Holberg or any of Holberg's Affiliates (other than the Company or Guarantor) since September 30, 1999 is equal to $570,000. ARTICLE III. CONDITIONS OF EFFECTIVENESS. This Amendment shall become effective as of the date hereof when each of the following conditions is satisfied or waived by the Lenders: -5- 3.1 The Company, the Guarantors and the Required Lenders shall have signed this Amendment. 3.2 The Company and the Guarantors shall have delivered such resolutions, officer's certificates and legal opinions as the Agent may request. 3.3 The Company shall have paid to the Agent, for the benefit of the Lenders, an amendment fee equal to 15 basis points on the amount of the Commitment of each Lender. 3.4 The Company and the Guarantors and Firstar Bank shall have executed such agreements satisfactory to the Agent pursuant to which the Agent is granted a first priority security interest in all bank accounts of the Company and the Guarantors and such other rights with respect thereto as required by the Agent. 3.5 The Company shall have delivered to the Agent such other documents and satisfied such other conditions, if any, as requested by the Agent. ARTICLE IV. MISCELLANEOUS. 4.1 References in the Credit Agreement or in any other Loan Document to the Credit Agreement shall be deemed to be references to the Credit Agreement as amended hereby and as further amended from time to time. 4.2 The Company agrees to pay and to save the Agent harmless for the payment of all reasonable documented costs and expenses arising in connection with this Amendment, including the reasonable documented fees of counsel to the Agent in connection with preparing this Amendment and the related documents. 4.3 The Company and each Guarantor acknowledge and agree that, to the best of their knowledge, the Agent and the Lenders have fully performed all of their obligations under all documents executed in connection with the Credit Agreement. The Company and each Guarantor represent and warrant that they are not aware of any claims or causes of action against the Agent or any Lender. 4.4 The Lenders and the Agent waive the Event of Default (the "Existing Default") caused by the breach of Section 5.2(a), (b) and (j) which occurred prior to the date hereof to the extent described by the Company to the Lenders prior to the date hereof, provided that it is acknowledged and agreed that this is a one time waiver only for the Existing Default, and shall not waive any other breach at any other time of Section 5.2(a), (b) or (j) or any other term or covenant of the Credit Agreement. 4.5 Except as expressly amended hereby, the Company and each Guarantor agree that the Credit Agreement, the Notes, the Security Documents and all other documents and agreements executed by the Company in connection with the Credit Agreement in favor of the Agent or any Lender are ratified and confirmed, as amended hereby, and shall remain in full force and effect in accordance with their terms and that they are not aware of any set off, counterclaim, defense or other claim or dispute with respect to any of the foregoing. Terms used but not defined herein shall have the respective meanings ascribed thereto in the Credit Agreement. This Amendment may be signed upon any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument, and telecopied signatures shall be effective as originals. -6- IN WITNESS WHEREOF, the parties signing this Amendment have caused this Amendment to be executed and delivered as of the day and year first above written. APCOA/STANDARD PARKING, INC. By: /s/ XXXXXXXX XXXXXXXXXX ----------------------------------------- Its: EVP, CEO ---------------------------------------- BANK ONE, NA, as a Lender and as Agent, formerly known as The First National Bank of Chicago By: /s/ William J. McCaffrey ----------------------------------------- Its: William J. McCaffrey, First Vice President LASALLE BANK NATIONAL ASSOCIATION By: /s/ Mary Lou Bartlett ----------------------------------------- Its: Mary Lou Bartlett, First Vice President ---------------------------------------- -7- CONSENT AND AGREEMENT --------------------- As of the date and year first above written, each of the undersigned hereby: (a) fully consents to the terms and provisions of the above Amendment and the consummation of the transactions contemplated hereby and agrees to all terms and provisions of the above Amendment applicable to it; (b) agrees that each Guaranty and all other agreements executed by any of the undersigned in connection with the Credit Agreement or otherwise in favor of the Agent or the Lenders (collectively, the "Security Documents") are hereby ratified and confirmed and shall remain in full force and effect, and each of the undersigned acknowledges that it has no setoff, counterclaim or defense with respect to any Security Document; (c) acknowledges that its consent and agreement hereto is a condition to the Banks' obligation under this Amendment and it is in its interest and to its financial benefit to execute this consent and agreement; (d) agrees that it will not make any payment, transfer or give or transfer any other consideration in any way to Holberg or any of Holberg's Affiliates (other than the Company or a Guarantor), whether directly or indirectly, and whether constituting any management, consulting, investment banking, advisory or other fees or payments under any leases or any expense reimbursement or similar payments or any other payments of any kind (including, without limitation, any amounts paid or payable by the Company or any of its Subsidiaries in respect of overhead expense allocations among the members of the affiliate corporate group) or constituting any loans, advances, dividends, distributions, forgiveness of debt or other transfer of any kind to Holberg or any of Holberg's Affiliates (other than the Company or a Guarantor); provided, however, that the Parent may make payments or transfers to Holberg if such payments or transfers are solely from new common equity proceeds or new Indebtedness (which new Indebtedness incurred by the Parent after the Second Amendment Effective Date shall not exceed $3,000,000 in aggregate amount until the Company is in compliance with all covenants contained in the Credit Agreement without giving effect to the above Amendment or any amendment or modification thereafter and no Event of Default or Unmatured Event has occurred and is continuing) received by the Parent after the Second Amendment Effective Date from the owners of the Parent or other Persons (but not from the Company or any Guarantor, directly or indirectly) and that any such transaction could not result in the Company or any Guarantor making any additional payments or transfers of any kind to the Parent or incurring any additional obligations of any kind; and (e) the Parent agrees that it will not incur any Indebtedness in excess of $3,000,000 until after the Company is in compliance with all covenants contained in the Credit Agreement without giving effect to the above Amendment or any amendment or modification thereafter and no Event of Default or Unmatured Event has occurred and is continuing or grant any Liens on any of its assets other than in favor of the Company. A-1 AUTO PARK, INC. By:/s/ Michael J. Celebrezze ------------------------- Name: Michael J. Celebrezze Title: Vice President -8- AP HOLDINGS, INC. By:/s/ Michael J. Celebrezze ------------------------- Name: Michael J. Celebrezze Title: Treasurer -9- APCOA CAPITAL CORPORATION By:/s/ Michael J. Celebrezze ------------------------------ Name: Michael J. Celebrezze Title: Vice President APCOA-HAWAII, INC. By:/s/ Michael J. Celebrezze ------------------------------ Name: Michael J. Celebrezze Title: Vice President EVENTS PARKING CO., INC. By:/s/ Michael J. Celebrezze ------------------------------ Name: Michael J. Celebrezze Title: Treasurer HAWAII PARKING MAINTENANCE, INC. By:/s/ Michael J. Celebrezze ------------------------------ Name: Michael J. Celebrezze Title: Vice President METROPOLITAN PARKING SYSTEM, INC. By:/s/ Michael J. Celebrezze ------------------------------ Name: Michael J. Celebrezze Title: Treasurer SENTINEL PARKING CO. OF OHIO, INC. By:/s/ Michael J. Celebrezze ------------------------------ Name: Michael J. Celebrezze Title: Vice President TOWER PARKING, INC. By:/s/ Michael J. Celebrezze ------------------------------ Name: Michael J. Celebrezze Title: Vice President -10- STANDARD AUTO PARK, INC. By:/s/ Michael J. Celebrezze ------------------------------ Name: Michael J. Celebrezze Title: Vice President STANDARD PARKING CORPORATION By:/s/ Michael J. Celebrezze ------------------------------ Name: Michael J. Celebrezze Title: Vice President APCOA LASALLE PARKING, LLC By: APCOA/Standard Parking Inc. as Manager By:/s/ Michael J. Celebrezze ------------------------------ Name: Michael J. Celebrezze Title: Senior Vice President S & S PARKING, INC. By:/s/ Michael J. Celebrezze ------------------------------ Name: Michael J. Celebrezze Title: Vice President STANDARD PARKING CORPORATION, IL By:/s/ Michael J. Celebrezze ------------------------------ Name: Michael J. Celebrezze Title: Vice President CENTURY PARKING, INC. By:/s/ Michael J. Celebrezze ------------------------------ Name: Michael J. Celebrezze Title: Vice President SENTRY PARKING CORPORATION By:/s/ Michael J. Celebrezze ------------------------------ Name: Michael J. Celebrezze Title: Vice President VIRGINIA PARKING SERVICES, INC. By:/s/ Michael J. Celebrezze ------------------------------ Name: Michael J. Celebrezze Title: Vice President -11- Schedule 5.2(j) Investments, Loans, and Advances Investments existing as of the Second Amendment Effective Date in Joint Ventures in an aggregate amount of $273,200 -12- Schedule 5.2(j)-2 Permitted Affiliates Joint Ventures of the Company, provided that such Joint Ventures shall exclude Holberg, the Parent or any Person in which Holberg or the Parent has any direct or indirect interest other than solely due to any ownership interest in the Company -13- EX-27.1 3 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 6,080 0 46,008 (2,123) 0 51,544 83,986 51,723 213,799 63,413 169,992 50,646 0 1 (83,663) 213,799 63,091 63,091 48,928 48,928 11,770 0 4,421 (1,894) 17 (1,911) 0 0 0 (1,911) 0 0
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