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Exhibit 10.3
EXECUTION COPY
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STOCKHOLDERS AGREEMENT
by and among
DOSHER PARTNERS, L.P.
and
SP ASSOCIATES
and
HOLBERG INDUSTRIES, INC.
and
AP HOLDINGS, INC.
dated as of
March 30, 1998
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions................................................. 1
ARTICLE II
CORPORATE GOVERNANCE
Section 2.1 Composition of the Boards of Directors...................... 6
Section 2.2 Removal..................................................... 6
Section 2.3 Vacancies................................................... 7
Section 2.4 Termination of Rights and Obligations....................... 7
Section 2.5 Indemnification............................................. 7
ARTICLE III
RESTRICTIONS ON TRANSFER
Section 3.1 General..................................................... 7
Section 3.2 Legend on Shares............................................ 8
Section 3.3 Permitted Transferees....................................... 8
ARTICLE IV
RIGHT OF FIRST OFFER; PREEMPTIVE RIGHTS
Section 4.1 Right of First Offer........................................ 9
Section 4.2 Preemptive Rights........................................... 9
Section 4.3 Transactions with Affiliates................................ 11
ARTICLE V
TAG-ALONG AND DRAG-ALONG RIGHTS
Section 5.1 Tag-Along Right............................................. 11
Section 5.2 Drag-Along Right............................................ 12
ARTICLE VI
PUT AND CALL RIGHTS
Section 6.1 Put Rights and Call Rights.................................. 13
Section 6.2 Exercise of Rights.......................................... 13
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Section 6.3 Certain Limitations......................................... 14
Section 6.4 Expiration of Obligations................................... 15
Section 6.5 Certain Additional Payments................................. 15
ARTICLE VII
REGISTRATION RIGHTS
Section 7.1 Incidental Registrations.................................... 16
Section 7.2 Holdback Agreements......................................... 17
Section 7.3 Registration Procedures..................................... 17
Section 7.4 Indemnification by the Company.............................. 18
Section 7.5 Indemnification by Participating Persons.................... 19
Section 7.6 Conduct of Indemnification Proceedings...................... 20
Section 7.7 Contribution................................................ 21
Section 7.8 Participation in Public Offering............................ 22
Section 7.9 Other Indemnification....................................... 22
ARTICLE VIII
CERTAIN COVENANTS AND AGREEMENTS
Section 8.1 Confidentiality............................................. 22
Section 8.2 Indirect Action; No Inconsistent Agreements................. 23
ARTICLE IX
MISCELLANEOUS
Section 9.1 Entire Agreement; Benefit................................... 23
Section 9.2 Interpretation; Absence of Presumption...................... 24
Section 9.3 Severability................................................ 24
Section 9.4 Assignability............................................... 24
Section 9.5 Notices..................................................... 24
Section 9.6 Headings; Definitions....................................... 26
Section 9.7 Counterparts................................................ 26
Section 9.8 Specific Enforcement........................................ 26
Section 9.9 Governing Law; Jurisdiction and Forum....................... 26
Section 9.10 Community Property States................................... 27
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EXHIBITS
Exhibit A Affiliate Transactions
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STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT, dated as of March 30, 1998 (this
"Agreement"), by and among Holberg Industries, Inc., a Delaware corporation
("Holberg") and AP Holdings, Inc., a Delaware corporation ("AP Holdings"), and
Dosher Partners, L.P., a Delaware limited partnership ("Dosher", and together
with its Permitted Transferees, the "MW Parties"), and SP Associates, an
Illinois general partnership ("SP Associates" and, together with Dosher, the
"Standard Parties", and the Standard Parties together with Holberg and AP
Holdings, the "Stockholders"), and APCOA, Inc., a Delaware corporation (the
"Company").
W I T N E S S E T H :
WHEREAS, pursuant to the Combination Agreement, dated as of January
15, 1998 (the "Combination Agreement"), by and among Myron C. Warshauer ("MW"),
Stanley Warshauer, Steven A. Warshauer, Dosher, SP Parking Associates, an
Illinois general partnership, and SP Associates (together, the "Standard
Owners"), and the Company, the Company is as of the date hereof acquiring
certain interests held by the Standard Owners in return for, among other things,
the issuance of Shares to the Standard Parties; and
WHEREAS, the parties hereto desire to enter into this Agreement to
govern certain of their rights, duties and obligations after the consummation of
the transactions contemplated by the Combination Agreement;
NOW THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The following terms, as used herein, have the following
meanings:
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person. For the purpose of this definition, the term "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" shall have the meaning set forth in the first paragraph
hereof.
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"AP Holdings" shall have the meaning set forth in the first
paragraph hereof and, to the extent that AP Holdings shall have transferred any
of its Shares to any Person, shall mean AP Holdings and such Person, taken
together, and any right or action that may be taken at the election of AP
Holdings may be taken at the election of AP Holdings and such Person, as the
case may be.
"Associates" shall have the meaning set forth in the definition of
"Permitted Transferee."
"Board" shall mean the board of directors of the Company.
"Business Day" shall mean any day except a Saturday, Sunday or other
day on which commercial banks in New York City are authorized by law to close.
"Cause" shall have the meaning set forth in Section 2.2.
"Call Right" shall have the meaning set forth in Section 6.1.
"Closing Date" shall have the meaning set forth in the Combination
Agreement.
"Combination Agreement" shall have the meaning set forth in the
recitals hereto.
"Company" shall have the meaning set forth in the first paragraph
hereof.
"Confidential Information" shall have the meaning set forth in
Section 8.1.
"control" shall have the meaning set forth in the definition of
Affiliate.
"Control Transaction" shall mean a transfer in a bona fide transfer
of Shares or of shares of AP Holdings by or Holberg or any Affiliate to any
Person or group of Persons (other than to an Affiliate of Holberg or to any
Standard Party or its Permitted Transferee) in which such Person obtains (i) the
right to directly or indirectly elect a majority of the Board or (ii) a majority
of the Fully Diluted Shares at such time.
"CTC" shall have the meaning set forth in Section 9.9.
"Dosher" shall have the meaning set forth in the first paragraph
hereof.
"Dosher First Offer" shall have the meaning set forth in Section
4.1.
"Drag-Along Right" shall have the meaning set forth in Section 5.2.
"Drag-Along Rights Notice" shall have the meaning set forth in
Section 5.2.
"Employment Agreement" shall have the meaning set forth in the
Combination Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
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"First Offer Notice" shall have the meaning set forth in Section
4.1.
"First Offer Period" shall mean the period beginning on the Closing
Date and ending on the earlier of (i) the seventh anniversary of the Closing
Date, (ii) such date as MW's employment under the Employment Agreement (as
defined in the Combination Agreement) is terminated, other than by the Company
without Cause or MW for Good Reason (in accordance with the terms of the
Employment Agreement), and (iii) the consummation of an Initial Public Offering.
"Fully Diluted" shall mean, without duplication, all outstanding
Shares and all Shares issuable in respect of securities convertible into or
exercisable or exchangeable for Shares, stock appreciation rights or options,
warrants and other irrevocable rights to purchase or subscribe for Shares or
securities convertible into or exercisable or exchangeable for Shares, and any
Person shall be deemed to own such number of Shares as such Person has the right
to acquire from any other Person (including the Company).
"Good Reason" shall have the meaning set forth in the Employment
Agreement.
"Holberg" shall have the meaning set forth in the first paragraph
hereof and, to the extent that Holberg shall have transferred any of its Shares
to any Person, shall mean Holberg and such Person, taken together, and any right
or action that may be taken at the election of Holberg may be taken at the
election of Holberg and such Person, as the case may be, and shall also include,
to the extent applicable, any Subsidiary of Holberg (including AP Holdings) that
hold Shares.
"Incidental Registration" shall have the meaning set forth in
Section 7.1.
"Indemnified Party" shall have the meaning set forth in Section 7.6.
"Indemnifying Party" shall have the meaning set forth in Section
7.6.
"Initial Public Offering" shall mean any bona fide sale of Shares
(including in connection with a merger or other reorganization transaction)
pursuant to an effective registration statement under the Securities Act (other
than a registration statement on Form S-8 or any successor form), covering at
least 20% of the Fully Diluted Shares and in which gross proceeds of at least
$20 million are realized.
"Issuance Notice" shall have the meaning set forth in Section 4.2.
"Maintenance Shares" shall have the meaning set forth in Section
4.2.
"Maximum Offering Size" shall have the meaning set forth in Section
7.1.
"MW" shall have the meaning set forth in the recitals hereof.
"MW Parties" shall have the meaning set forth in the first paragraph
hereof.
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"NASD" shall have the meaning set forth in the definition of
"Registration Expenses".
"Option Notice" shall have the meaning set forth in Section 6.2.
"Option Shares" shall have the meaning set forth in Section 6.2.
"Participating Stockholder" shall have the meaning set forth in
Section 5.1.
"Participation Notice" shall have the meaning set forth in Section
5.1.
"Percentage Ownership" shall mean, with respect to any Stockholder
or any group of Stockholders at any time, (i) the number of Fully Diluted Shares
that such Stockholder or group of Stockholders owns at such time, divided by
(ii) the total number of Fully Diluted Shares at such time.
"Permitted Transferee" shall mean, (A) in the case of any natural
person, the spouse and direct descendants of such Person and the heirs,
executors, administrators, testamentary trustees, legatees or beneficiaries of
such Person's estate upon death (collectively, "Associates"), (B) any trust, the
beneficiaries of which, or any corporation, limited liability company or
partnership, the stockholders, members or general or limited partners of which,
consist solely of Standard Parties or their Associates (and only for so long as
there are no other stockholders, members or partners), or (C) in the case of any
Standard Party other than an MW Party, any other Standard Party or any Person
that is today a direct or indirect owner of any Standard Party (as such Persons
are listed on Schedule PT), in each case for so long as no change in control of
such Person shall occur.
"Person" shall mean an individual, corporation, partnership,
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Preemptive Rights" shall have the meaning set forth in Section 4.2.
"Price" shall have the meaning set forth in Section 6.2.
"Put Right" shall have the meaning set forth in Section 6.1.
"Registrable Shares" shall mean any Shares, until (i) a registration
statement covering such Shares has been declared effective by the SEC and such
securities have been disposed of pursuant to such effective registration
statement, (ii) such Shares are sold under circumstances in which all of the
applicable conditions of Rule 144 (or any similar provisions then in force)
under the Securities Act are met or such Shares may be sold pursuant to Rule
144(k), or (iii) such shares may be sold without registration under the
Securities Act and the Company has delivered a new certificate or other evidence
of ownership for such Shares not bearing the legend required pursuant to this
Agreement.
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"Registration Expenses" shall mean (i) all registration and filing
fees, (ii) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the securities registered), (iii) printing expenses, (iv)
internal expenses of the Company (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), (v) reasonable fees and disbursements of counsel for the Company and
customary fees and expenses for independent certified public accountants
retained by the Company (including expenses relating to any comfort letters or
costs associated with the delivery by independent certified public accountants
of a comfort letter or comfort letters requested in connection therewith, (vi)
the reasonable fees and expenses of any special experts retained by the Company
in connection with such registration, (vii) fees and expenses in connection with
any review of underwriting arrangements by the National Association of Shares
Dealers, Inc. (the "NASD"), including fees and expenses of any "qualified
independent underwriter," and (viii) fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but shall not include any
underwriting fees, discounts or commissions attributable to the sale of
Registrable Shares.
"Rule 144 or Rule 144A" shall mean Rule 144 and Rule 144A,
respectively (or any successor provisions) under the Securities Act.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Shares" shall mean all shares of Common Stock, par value $1.00 per
share, of the Company.
"SP Associates" shall have the meaning set forth in the first
paragraph hereof.
"Standard Director" shall have the meaning set forth in Section
2.1.
"Standard Parties" shall have the meaning set forth in the first
paragraph hereof and, to the extent such parties shall have transferred any of
their Shares to Permitted Transferees, shall mean the Standard Parties and the
Permitted Transferees of the Standard Parties, taken together, and any right or
action that may be taken at the election of the Standard Parties may be taken at
the election of the Standard Parties and such Permitted Transferees, as the case
may be.
"Standard Owners" shall have the meaning set forth in the
recitals hereto.
"Stockholders" shall have the meaning set forth in the first
paragraph hereof.
"Subscription Notice" shall have the meaning set forth in Section
4.2.
"Subscription Period" shall have the meaning set forth in Section
4.2.
"Subsidiary" shall mean, with respect to any Person, any entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of
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directors or other persons performing similar functions are at the time directly
or indirectly owned by such Person.
"Tag-Along Right" shall have the meaning set forth in Section 5.1.
"Tag-Along Rights Notice" shall have the meaning set forth in
Section 5.1.
"transfer" shall have the meaning set forth in Section 3.1.
"Underwritten Public Offering" shall mean an underwritten public
offering of Registrable Shares of the Company pursuant to an effective
registration statement under the Securities Act.
ARTICLE II
CORPORATE GOVERNANCE
Section 2.1 Composition of the Boards of Directors. Subject to
Section 2.4, and subject to the terms of the Employment Agreement as to MW's
service as a director (which the parties hereto agree to respect and give effect
to), one member of the Board (the "Standard Director") shall be designated by
the Standard Parties (other than any MW Parties) and the other members shall be
designated by Holberg. Each Stockholder entitled to vote for the election of
directors to the Board agrees that it shall vote its Shares or execute written
consents, as the case may be, and take all other necessary action (including
causing the Company to call a special meeting of stockholders) in order to
ensure that the composition of the Board is as set forth in this Section 2.1 and
as contemplated by the Employment Agreement.
Section 2.2 Removal. (a) Each Stockholder agrees that at any time
that it is then entitled to vote or execute a written consent for the removal
and/or replacement of any director of the Company, it shall not vote or execute
a written consent for any of its Shares in favor of the removal and/or
replacement of any individual who shall have been designated pursuant to Section
2.1, unless such removal and/or replacement shall be for Cause or the Person
entitled to designate such director shall have requested such removal and/or
replacement in writing.
(b) For purposes of this Section 2.2, "Cause", with respect to a
director, shall mean the (i) willful and continued failure to perform
substantially his duties with the Company as a director, (ii) willful conduct
which is or is reasonably likely to be significantly injurious to the Company
monetarily or otherwise, (iii) abuse of any illegal drug or other controlled
substance or habitual intoxication, (iv) conviction for, or guilty plea to, a
crime involving moral turpitude, or (v) conviction for, or guilty plea to, a
felony. Subject to Section 2.4, nothing contained in this Section 2.2 shall
affect the right of any Stockholder to designate a member of the Board pursuant
to Section 2.1.
Section 2.3 Vacancies. (a) If, as a result of the death, disability,
retirement, resignation, removal (with or without Cause) or otherwise there
shall exist or occur any vacancy on the Board, then the Person entitled under
Section 2.1 to designate or nominate such director
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whose death, disability, retirement, resignation or removal resulted in such
vacancy, may, subject to the provisions of Sections 2.1 and 2.4, designate
another individual to fill such capacity and serve as a director of the Company.
Each Stockholder agrees that if such Stockholder is then entitled to vote for
the election of such designee as a director of the Company, it shall vote or
execute a written consent for its Shares in order to ensure that such designee
be elected to the Board.
(b) The Board shall cause such other committees to be established as
it may determine, and the Standard Director shall be a member of each such
committee.
Section 2.4 Termination of Rights and Obligations. The right of the
Standard Parties to designate one member of the Board pursuant to this Article
II, and all related obligations contained in this Article II, shall terminate on
the earlier of (i) such date as an Initial Public Offering is consummated and
(ii) such date as the Standard Parties and their Permitted Transferees (other
than any MW Party or its Permitted Transferee) in the aggregate own 5% or less
of the total Fully Diluted Shares as of such date.
Section 2.5 Indemnification. The Company shall indemnify and hold
harmless the Standard Director in accordance with the provisions of the
Company's Certificate of Incorporation and By-Laws, copies of which are attached
hereto, and which shall not be amended other than as may be required by law so
as to limit the rights of the Standard Director without the consent of the
Standard Director.
ARTICLE III
RESTRICTIONS ON TRANSFER
Section 3.1 General. (a) Until the consummation of an Initial Public Offering,
no Standard Party may, directly or indirectly, sell, assign, transfer, grant a
participation or other interest in, pledge or otherwise dispose of ("transfer")
any Shares (or solicit any offers to buy or otherwise acquire, or to take a
pledge of, any Shares or any interest therein), except transfers permitted by
this Agreement, and any other attempted transfer shall be null and void and of
no effect for all purposes.
(b) No Stockholder may transfer any Shares at any time except in
compliance with applicable federal or state securities laws.
Section 3.2 Legend on Shares. (a) In addition to any other legend
that may be required, each certificate for Shares shall bear a legend in
substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURI-TIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE
OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS
ALSO SUBJECT TO AND THE HOLDER OF THIS SECURITY HAS OBLIGATIONS
UNDER THE STOCKHOLDERS AGREEMENT, DATED AS OF MARCH 30, 1998, COPIES
OF WHICH MAY
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BE OBTAINED UPON REQUEST FROM THE SECRETARY OF APCOA, INC."
(b) If any Shares shall cease to be Registrable Shares, the Company
shall, upon the written request of the holder thereof and such other
documentation as may be reasonably requested, issue to such holder a new
certificate evidencing such Shares without the first sentence of the legend
required by Section 3.2(a) endorsed thereon. If any Shares cease to be subject
to this Agreement, the Company shall, upon the written request of the holder
thereof and such other documentation as may be reasonably requested, issue to
such holder a new certificate evidencing such Shares without the second sentence
of the legend required by Section 3.2(a) endorsed thereon.
Section 3.3 Permitted Transferees. Notwithstanding anything in this
Agreement to the contrary, any Standard Party may at any time transfer any or
all of its Shares to one or more of its Permitted Transferees, and Holberg or AP
Holdings may at any time transfer any or all of its Shares to one or more
Persons (subject to Section 4.1), if (a) such Permitted Transferees or Persons
shall have agreed in writing to be bound by the terms of this Agreement with
respect to such Shares and (b) the transfer to such Permitted Transferees or
Persons is not in violation of applicable federal or state securities laws.
ARTICLE IV
RIGHT OF FIRST OFFER; PREEMPTIVE RIGHTS
Section 4.1 Right of First Offer. During the First Offer Period,
Holberg and/or its Affiliates (including AP Holdings) shall not engage in a
Control Transaction unless Holberg and/or its Affiliates shall first offer to
Dosher the opportunity to acquire all, but not less than all, of Holberg's
and/or its Affiliates' Shares by giving a written notice to Dosher to such
effect (a "First Offer Notice"). If within 60 days following the delivery of
such First Offer Notice, Dosher fails to deliver to Holberg a written offer to
acquire all capital stock of the Company which is not subject to any conditions
not customary for stock purchase agreements relating to acquisitions of
businesses such as the Company and which shall be irrevocable for 150 days from
delivery, and which shall specify the cash price and other material terms upon
which Dosher is prepared to make such acquisition (an "Dosher First Offer") or
Dosher delivers an Dosher First Offer to Holberg and such Dosher First Offer is
not accepted by Holberg, Holberg may enter into a definitive agreement
respecting a Control Transaction with another party without prior notice to
Dosher for 150 days after the earlier of the expiration of such 60-day period or
the delivery of the Dosher First Offer, provided that the terms of such
definitive agreement shall be more favorable to Holberg than those offered in
the Dosher First Offer and such transaction must be consummated within 180 days
after entering into a definitive agreement. If no definitive agreement is
entered into within such 150-day period or the transaction is not consummated
within 180 days after entering into a definitive agreement, the provisions of
this Section 4.1 shall apply again prior to Holberg and/or its Affiliates
engaging in a Control Transaction. Each of Holberg, the Company and any other
party to any intended transaction shall have the right, in its sole discretion,
at all times prior to consummation of the intended transaction to abandon,
rescind, annul, withdraw or
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otherwise terminate such transaction, whereupon none of Holberg, the Company nor
any other such party shall have any liability or obligation to any Person with
respect thereto. Nothing herein shall be construed to obligate Holberg, the
Company or Dosher to accept any offer or terms for, or to consummate, any
Control Transaction or other transaction.
Section 4.2 Preemptive Rights. (a) Except as provided in (d) below,
until the consummation of an Initial Public Offering, the Company shall not
issue or sell any Shares (or securities or other instruments or rights
convertible into, or exercisable or exchangeable for or to subscribe for or
purchase Shares) unless the provisions of this Section 4.2 shall have been
complied with by the Company. Prior to any such proposed issuance or sale, the
Company shall notify each Standard Party in writing (the "Issuance Notice") of
the number of Shares (or securities or other instruments convertible into, or
exercisable or exchangeable for Shares) proposed to be issued or sold, the
proposed price and the other material terms of such proposed issuance or sale.
During the period of 30 days following the date of such notice (the
"Subscription Period"), each Standard Party shall have the right to deliver to
the Company a notice (a "Subscription Notice") electing to purchase, at the
proposed issuance price and on the same terms as the proposed issuance, an
amount of Shares (or securities or other instruments convertible into, or
exercisable or exchangeable for Shares) (the "Maintenance Shares") as is
necessary for such Standard Party to maintain its Percentage Ownership as of
immediately prior to such proposed issuance ("Preemptive Rights").
(b) Any Standard Party which does not deliver to the Company a duly
completed Subscription Notice within 30 days after such Standard Party's receipt
of the Issuance Notice shall be deemed to have waived its right to purchase all
or any part of its Maintenance Shares. In any such case, the Company shall have
180 days following such deemed waiver in which to issue or sell the applicable
Shares (or securities or other instruments convertible into, or exercisable or
exchangeable for Shares) on terms not materially different from those contained
in the Issuance Notice. Promptly after any issuance or sale pursuant to this
Section 4.2(b), the Company shall notify the Standard Parties of the
consummation thereof. If the Company does not complete the issuance or sale of
Shares (or securities or other instruments convertible into, or exercisable or
exchangeable for Shares) within the 180-day period specified in this Section
4.2(b), the Company may not issue or sell such Shares (or securities or other
instruments convertible into, or exercisable or exchangeable for Shares) without
repeating the procedures in this Section 4.2.
(c) If the proposed issuance or sale of the Shares (or securities or
other instruments or rights convertible into, or exercisable or exchangeable for
or to subscribe for or purchase Shares) is consummated, each Standard Party
delivering a Subscription Notice shall purchase from the Company, and the
Company shall issue and sell to each such Standard Party, such Shares (or
securities or other instruments or rights convertible into, or exercisable or
exchangeable for or to subscribe for or purchase Shares) on such terms and at
the price set forth in the Issuance Notice. The closing of such sale(s) shall
occur, subject to the Company's receipt of necessary approvals, on the day of
consummation of the issuance or sale of such Shares (or securities or other
instruments or rights convertible into, or exercisable or exchangeable for or to
subscribe for or purchase Shares) to Persons other than the Standard Parties.
Any default in per-
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formance by any Standard Party shall relieve the Company of its obligations
under this Section 4.2 with respect to such Standard Party.
(d) The Preemptive Rights set forth above shall not apply to (i) the
issuance of Shares (or securities or other instruments or rights convertible
into, or exercisable or exchangeable for or to subscribe for or purchase Shares)
(x) upon exercise of any option, warrant, convertible or exchangeable security
or other rights to purchase or subscribe for Shares or (y) to employees,
officers, directors, consultants, contractor or similar persons of (A) the
Company or any Subsidiary or (B) any Affiliate of the Company engaged in the
parking business, (ii) securities issued pursuant to any stock split, stock
dividend or other similar stock recapitalization, (iii) the issuance of Shares
(or securities or other instruments or rights convertible into, or exercisable
or exchangeable for or to subscribe for or purchase Shares) in connection with
any public offering, (iv) the issuance of Shares (or securities or other
instruments or rights convertible into, or exercisable or exchangeable for or to
subscribe for or purchase Shares) in connection with an acquisition or financing
(but not any such issued for cash to a Person not otherwise engaging in a
related transaction), or (v) the issuance of Shares (or securities or other
instruments or rights convertible into, or exercisable or exchangeable for or to
subscribe for or purchase Shares) representing less than 4% of the Shares
outstanding as of the date of issuance. The Company shall not be under any
obligation to consummate any proposed issuance or sale of Shares (or securities
or other instruments or rights convertible into, or exercisable or exchangeable
for or to subscribe for or purchase Shares), regardless of whether it shall have
delivered an Issuance Notice pursuant to this Section 4.2.
(e) The Company shall have the right, in its sole discretion, at all
times prior to consummation of any issuance or sale to abandon, rescind, annul,
withdraw or otherwise terminate such transaction, whereupon all Preemptive
Rights in respect of such transaction pursuant to this Article shall become null
and void, and the Company shall have no liability or obligation to any Person
with respect thereto. Nothing herein shall be construed to obligate the Company
to accept any offer or terms for, or to consummate, any transaction.
Section 4.3 Transactions with Affiliates. The Company shall not
engage in any transaction with any Affiliate of the Company not a Subsidiary of
the Company, other than pursuant to agreements and arrangements set forth on
Exhibit A hereto and other than any transaction on terms no less favorable to
the Company than would be available in a transaction with an independent third
party on an arm's-length basis.
ARTICLE V
TAG-ALONG AND DRAG-ALONG RIGHTS
Section 5.1 Tag-Along Right. Holberg and/or its Affiliates
(including AP Holdings) shall not engage in (x) a Control Transaction or (y) a
sale of Shares (other than through a Control Transaction or an Underwritten
Public Offering and other than to any sale to an Affiliate of Holberg or to any
Standard Party or its Permitted Transferee) representing at least 25% of the
Shares outstanding at such time, unless it shall have offered each Standard
Party a right (a "Tag-Along Right") to participate in such transaction by
including in such transaction a number of such Stan-
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dard Party's Shares as represents the same percentage of such Standard Party's
Shares as the subject Shares of Holberg (including AP Holdings) represent of
Holberg's (including AP Holdings) Shares, as follows:
(a) Holberg shall deliver to each Standard Party a written notice (a
"Tag-Along Rights Notice") of such transaction at least 35 days prior to
consummating any such transaction setting forth all material details of the
intended transaction.
(b) Any Standard Party desiring to participate in such transaction
(a "Participating Stockholder") must deliver to Holberg, within 20 days of
receiving a Tag-Along Rights Notice, written notice (a "Participation Notice")
of Participating Stockholder's desire to participate in such transaction. Any
Standard Party which does not deliver to Holberg a Participation Notice with
respect to such Standard Party within the applicable time period shall be deemed
to have waived its right to participate in such transaction. In any such case,
Holberg shall have 180 days following the expiration of such 20-day period in
which to consummate the transaction on terms not materially more favorable to
Holberg than those contained in the Tag-Along Rights Notice. Promptly after the
consummation of any such transaction, Holberg shall notify the Standard Parties
of the consummation thereof. If Holberg does not complete the transaction within
the 180-day period specified in this Section 5.1(b), Holberg may not engage in
such transaction without repeating the procedures in this Section 5.1.
(c) Concurrently with the Tag-Along Rights Notice, Holberg shall
provide each Participating Stockholder with such information and instructions as
shall be necessary to enable such Participating Stockholder to participate in
the transaction on substantially the same terms and conditions as Holberg, and
each Participating Stockholder shall cooperate in such transaction by providing
Holberg all materials, such as executed purchase and sale agreements and stock
transfer documentation, as Holberg may reasonably request.
(d) Any material default in performance by any Standard Party shall
relieve Holberg of its obligations under this Section 5.1 with respect to such
Standard Party.
(e) Each of Holberg and any other party to any transaction shall
have the right, in its sole discretion, at all times prior to consummation of
the transaction to abandon, rescind, annul, withdraw or otherwise terminate such
transaction, whereupon all Tag-Along Rights in respect of such transaction
pursuant to this Article shall become null and void, and neither Holberg nor any
other such party shall have any liability or obligation to any Participating
Stockholder with respect thereto. If such transaction is not consummated, the
provisions of this Section 5.1 shall apply again to subsequent proposed
transactions. Nothing herein shall be construed to obligate Holberg to accept
any offer or terms for, or to consummate, any Control Transaction or other
transaction.
Section 5.2 Drag-Along Right. In the event that Holberg engages in a
Control Transaction, Holberg shall have the right (a "Drag-Along Right") to
require each Standard Party to participate in such transaction by including in
such transaction a number of such Standard Party's Shares as represents the same
percentage of such Standard Party's Shares as the subject
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Shares of Holberg (including AP Holdings) represent of Holberg's (including AP
Holdings) Shares, as follows:
(a) Holberg shall deliver to each Standard Party a written notice (a
"Drag-Along Rights Notice") of Holberg's exercise of its Drag-Along Right in
such transaction at least 30 days prior to consummating any such transaction
setting forth all material details of such transaction.
(b) Holberg shall provide each Standard Party with such information
and instructions as shall be necessary to enable such Standard Party to
participate in the intended transaction on substantially the same terms and
conditions as Holberg, and each Standard Party shall cooperate in such
transaction by providing Holberg all materials, such as executed purchase and
sale agreements and stock transfer documentation, as Holberg may reasonably
request.
(c) Holberg shall have the right, in its sole discretion, at all
times prior to consummation of the transaction to abandon, rescind, annul,
withdraw or otherwise terminate such transaction, and neither Holberg shall have
any liability or obligation to any Participating Stockholder with respect
thereto. Nothing herein shall be construed to obligate Holberg to accept any
offer or terms for, or to consummate, any Control Transaction or other
transaction.
ARTICLE VI
PUT AND CALL RIGHTS
Section 6.1 Put Rights and Call Rights. Upon and at any time
following the third anniversary of the Closing (as defined in the Combination
Agreement), at the Company's election, the Company shall have the right to
purchase from any Standard Party and such Standard Party shall be obligated to
sell (a "Call Right"), and, at any Standard Party's election, such Standard
Party shall have the right to sell to the Company and the Company shall be
obligated to purchase (a "Put Right"), any or all of the Shares held by such
Standard Party, on the terms and conditions described in this Article VI below.
Section 6.2 Exercise of Rights. (a) To exercise a Put Right or a
Call Right, the exercising party shall deliver a written notice (the "Option
Notice") to the Company or Standard Party, as applicable specifying the number
of Shares to be put or called consistent with the provisions hereof (the "Option
Shares"), the applicable aggregate Price (as of the date of the Option Notice)
and the applicable date for the consummation of the put or call, provided that
in no event shall any party be permitted to exercise a Put Right in anticipation
of or in connection with an Initial Public Offering (or in any event during a
60-day period following such time as the Company shall have given notice that it
anticipates effecting an Initial Public Offering).
(b) For purposes of this Section, the "Price" of any Share, as of
any date, shall be the quotient of (i) (I) the product of (A) 10.5 and (B) the
earnings before interest expense and interest income, taxes, depreciation and
amortization of the Company as reflected in the Company's consolidated financial
statements prepared consistently in accordance with past practice for the most
recent twelve-calendar-month period less (II) the amount of all consolidated
debt
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(including capital lease obligations, but excluding trade payables) and
preferred stock and minority interests of the Company at the end of such
twelve-calendar-month period plus (III) the amount of cash and cash equivalents
of the Company as of the end of the twelve-month period described in (I) in
excess of the amount of such cash and cash equivalents normally held by the
Company (which it is agreed shall be the amount of cash recorded on the
financial records of the Company on the last day of such 12-month period, adding
back any outstanding check balances which remain as credits in the cash accounts
on the financial records of the Company and subtracting the revenues of the
Company for the final three business days of such 12-month period for locations
that deposit and record cash into cash accounts on the financial records of the
Company), plus (IV) the net cash proceeds which would be received by the Company
as of the relevant date of determination in respect of the issuance of Shares
issuable in respect of securities convertible into or exercisable or
exchangeable for Shares, stock appreciation rights or options, warrants and
other irrevocable rights to purchase or subscribe for Shares or securities
convertible into or exercisable or exchangeable for Shares, if all such
securities, rights, options, warrants were converted, exercised or exchanged as
of such date, plus (V) the product of (A) the net operating loss of the Company
for federal income tax purposes that, pursuant to the provisions of the Internal
Revenue Code of 1986, as amended (or any successor federal tax statute) (the
"Code"), is available for carryforward at the end of the twelve-month period
described in (I) and (B) 28%, divided by the (ii) the number of Fully Diluted
Shares as of such date.
(c) The Option Notice shall be irrevocable. The closing of the
purchase of the Option Shares shall take place at the principal offices of the
Company on the 10th business day after the date of the Option Notice. At such
Closing, the Company shall deliver to the selling Standard Party, against
delivery of duly endorsed certificates representing the Option Shares, a
certified check or checks or wire transfer (as specified by the selling Standard
Party) in the amount of the applicable aggregate Price.
Section 6.3 Certain Limitations. (a) Notwithstanding anything to the
contrary contained in Section 6.2, the Company shall not be obligated to
purchase Option Shares on the date set forth in Section 6.2(c) above if (i) such
purchase would violate any covenants binding on the Company (including those
contained in debt instruments and other than those solely in favor of Holberg or
its Affiliate) or (ii) if, in the case of a Put Right, upon such purchase, the
Company would have purchased Option Shares pursuant to Put Rights representing
in any calendar year 5% or more of the Fully Diluted Shares outstanding at the
time of such purchase (however, if the consummation of a Put Right in full would
result in the Company purchasing more than such 5% in such period, the Company
shall consummate such Put Right in part up to the 5% limitation). In the event
that the Company does not consummate any purchase of Option Shares on any date
because of either of the events described in clauses (i) or (ii) of the
immediately preceding sentence, the Company (and the Standard Party owning the
applicable Option Shares) shall nonetheless be obligated to consummate such
purchase as promptly as practicable following such events no longer being
applicable, and shall pay upon such purchase the Price (as of the date of the
Option Notice) plus accumulated interest thereon at a rate equal to the lesser
of (x) 13% per annum and (y) a rate per annum that is 250 basis points in excess
of the rate on any subordinated financing that may be incurred to finance the
transactions contemplated by the Combination Agreement (compounded on a
quarterly basis) to the date of consummation of the purchase, pro-
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vided that, notwithstanding the foregoing, in the event that MW is terminated as
Chief Executive Officer of the Company without Cause (as defined in the
Employment Agreement) and the Company is thereafter not obligated to purchase
Option Shares held by any MW Party or its Permitted Transferee because of either
of the events described in clauses (i) or (ii) of the immediately preceding
sentence, Holberg shall nonetheless be obligated to consummate such purchase as
promptly as practicable. The Company shall not exercise its Call Right if it
cannot for any reason purchase the Shares on the date determined pursuant to
Section 6.2(c).
(b) Notwithstanding anything to the contrary contained in Section
6.2, no MW Party or its Permitted Transferee shall be permitted to exercise any
Put Right, and the Company shall not be permitted to exercise any Call Right
with respect to any Shares held by any MW Party or its Permitted Transferee, for
so long as MW is the Chief Executive Officer of the Company.
(c) Notwithstanding anything to the contrary contained in Section
6.2, the Company shall not be permitted to exercise any Call Right with respect
to any Shares held by any MW Party or its Permitted Transferee unless the
Company shall exercise Call Rights at such time with respect to Shares
representing at least, in the aggregate, at the lesser of (i) all Shares held by
such Persons and (ii) Shares representing at least 5% of the Shares outstanding
at the date of the Option Notice with respect to such Shares.
Section 6.4 Expiration of Obligations. The foregoing obligations
contained in this Article VI (but not any outstanding payment obligations under
this Article VI (which shall be paid in full in cash upon consummation of the
Initial Public Offering) and the obligations contained in Section 6.5) shall
terminate upon the consummation of an Initial Public Offering.
Section 6.5 Certain Additional Payments. In the event that the
Company purchases any Option Shares upon the exercise of any Call Right pursuant
to Section 6.2 and, within 18 months following such purchase of Option Shares,
the Company consummates an Initial Public Offering or Control Transaction, upon
consummation of such Initial Public Offering or Control Transaction, the Company
shall pay in cash to the Standard Parties selling such Option Shares the product
of (A) the number of Option Shares and (B) the excess, if any, of (i) the per
Share net proceeds received by the Company in such Initial Public Offering or
Control Transaction over (ii) the Price per Option Share paid by the Company in
such purchase, provided that the Company shall not be obligated to make any
payment under this Section 6.5 with respect to any Option Shares purchased from
any MW Party or its Permitted Transferee following the resignation of MW as
Chief Executive Officer of the Company other than for Good Reason or his
termination for Cause.
ARTICLE VII
REGISTRATION RIGHTS
Section 7.1 Incidental Registrations. (a) If the Company proposes to register
any Shares under the Securities Act for sale by Holberg and/or its Affiliates
(other than the Company, but including AP Holdings) in an Underwritten Public
Offering, it shall each such time, subject to
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the provisions of Section 7.1(b), give prompt written notice at least 30 days
prior to the anticipated filing date of the registration statement relating to
such registration to each Standard Party, which notice shall set forth the
rights of such Standard Party under this Section 7.1 and shall offer each
Standard Party the opportunity to include in such registration statement such
Registrable Shares as each such Standard Party may request (an "Incidental
Registration"). Upon the written request of any such Standard Party made within
15 days after the receipt of notice from the Company (which request shall
specify the number of Registrable Shares intended to be disposed of by such
Standard Party), the Company shall use its reasonable efforts to effect the
registration under the Securities Act of all Registrable Shares which the
Company has been so requested to register by such Standard Party, to the extent
requisite to permit the disposition of the Registrable Shares so to be
registered, provided that (i) all such Standard Parties requesting to be
included in the registration must sell their Registrable Shares to the
underwriters selected by Holberg on the same terms and conditions as apply to
Holberg, and (ii) if, at any time after giving written notice of its intention
to register any securities pursuant to this Section 7.1(a) and prior to the
effective date of the registration statement filed in connection with such
registration, the Company or Holberg (as applicable) shall determine for any
reason not to register or to delay registration of such Shares, the Company
shall give written notice to all such Standard Parties and, thereupon, (A) in
the case of a determination not to register, the Company shall be relieved of
its obligation to register any Registrable Shares in connection with such
registration and (B) in the case of a determination to delay such registration,
the Company shall be permitted to delay registration of any Registrable Shares
requested to be included in such Incidental Registration Statement for the same
period as the delay in registering such other Shares. The Company shall pay all
Registration Expenses in connection with each registration of Shares requested
pursuant to this Section 7.1.
(b) If the managing underwriter of such Underwritten Public Offering
advises the Company that, in its view, the amount of Registrable Shares which
the Company and/or Holberg and such Standard Parties intend to include in such
registration exceeds the largest number of Registrable Shares which can be sold
without having an adverse effect on such offering, including the price at which
such Registrable Shares can be sold (the "Maximum Offering Size"), the Company
shall include in such registration, up to the Maximum Offering Size, all
Registrable Shares requested to be included in such registration by Holberg or
any Standard Party pursuant to this Section 7.1 (allocated, if necessary for the
offering not to exceed the Maximum Offering Size, pro rata among such entities
on the basis of the relative number of Registrable Shares so requested to be
included in such registration).
Section 7.2 Holdback Agreements. Each Standard Party agrees not to
effect any public sale or distribution, including any sale pursuant to Rule 144,
or any successor provision, under the Securities Act, of any Registrable Shares,
and not to effect any such public sale or distribution of any other Shares or of
any security or right convertible into or exchangeable or exercisable for or to
subscribe for or purchase any Shares (in each case, other than as part of such
Underwritten Public Offering) during the 14 days (or such lesser period of time
as the underwriters may agree to) prior to the effective date of such
registration statement (except as part of such registration) or during the
180-day period after such effective date.
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Section 7.3 Registration Procedures. Whenever any of the Standard
Parties requests that any Registrable Shares be registered pursuant to Section
7.1 or 7.2, the Company shall, subject to the provisions of such Sections, use
its reasonable efforts to effect the registration of such Registrable Shares in
accordance with the intended method of disposition thereof as quickly as
reasonably practicable, and in connection with any such request:
(a) The Company shall as promptly as practicable prepare and file
with the SEC a registration statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of the Registrable Shares to be registered
thereunder in accordance with the intended method of distribution thereof, and
use its reasonable efforts to cause such filed registration statement to become
effective.
(b) The Company shall, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish to each
Person which is participating in a registration and each underwriter, if any, of
the Registrable Shares covered by such registration statement copies of such
registration statement as proposed to be filed, and thereafter the Company shall
furnish to each such Person and underwriter, if any, such number of copies of
such registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference therein),
the prospectus included in such registration statement (including each
preliminary prospectus and all amendments and supplements thereto) and such
other documents as such Person or underwriter may reasonably request in order to
facilitate the disposition of the Registrable Shares owned by such Person which
are covered by such registration statement.
(c) After the filing of the registration statement, the Company
shall (i) cause the related prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, (ii) comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Shares covered by such
registration statement during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
registration statement or supplement to such prospectus, and (iii) promptly
notify each Person holding Registrable Shares covered by such registration
statement of any stop order issued or threatened by the SEC and shall take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.
(d) The Company shall use its reasonable efforts to (i) register or
qualify the Registrable Shares covered by such registration statement under such
other securities or blue sky laws of such jurisdictions in the United States as
any Person holding such Registrable Shares reasonably (in light of such Person's
intended plan of distribution) requests, (ii) cause such Registrable Shares to
be registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations of the
Company, and (iii) do any and all other acts and things that may be reasonably
necessary or advisable to enable such Person to consummate the disposition of
the Registrable Shares owned by such Person, provided that the Company shall not
be required to (A) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph (d), (B)
subject itself to
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taxation in any such jurisdiction, or (C) consent to general service of process
in any such jurisdiction.
(e) The Company shall promptly notify each Person holding such
Registrable Shares covered by such registration statement, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the occurrence of an event requiring the preparation of a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Shares, such prospectus shall not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading and
promptly prepare and make available to each such Person and file with the SEC
any such supplement or amendment.
(f) The Company may require each such Person to promptly furnish in
writing to the Company such information regarding the distribution of the
Registrable Shares as the Company may from time to time reasonably request and
such other information as may be legally required in connection with such
registration.
(g) Each such Person agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
7.3(e), such Person shall forthwith discontinue disposition of Registrable
Shares pursuant to the registration statement covering such Registrable Shares
until such Person receives the copies of the supplemented or amended prospectus
contemplated by Section 7.3(e), and, if so directed by the Company, such Person
shall deliver to the Company all copies, other than any permanent file copies
then in such Person's possession, of the most recent prospectus covering such
Registrable Shares at the time of receipt of such notice.
Section 7.4 Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Person holding Registrable Shares covered by a
registration statement, its officers, directors and agents, and each Person, if
any, who controls such Person within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any and all losses,
claims, damages and liabilities caused by any untrue statement or alleged untrue
statement of a material fact contained in any registration statement or
prospectus relating to the Registrable Shares (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission so made in reliance upon and in conformity
with information furnished in writing to the Company by such Person or on such
Person's behalf expressly for use therein, provided that with respect to any
untrue statement or omission or alleged untrue statement or omission made in any
preliminary prospectus, or in any prospectus, as the case may be, the indemnity
agreement contained in this paragraph shall not apply to the extent that any
such loss, claim, damage, liability or expense results from the fact that a
current copy of the prospectus (or, in the case of a prospectus, the prospectus
as amended or supplemented) was not sent or given to the Person asserting any
such loss, claim, damage, liability or expense at or prior to the written
con-
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firmation of the sale of the Registrable Shares concerned to such Person if
the Company had provided such prospectus and it was the responsibility of such
Person to provide such Person with a current copy of the prospectus (or such
amended or supplemented prospectus, as the case may be) and such current copy of
the prospectus (or such amended or supplemented prospectus, as the case may be)
would have cured the defect giving rise to such loss, claim, damage, liability
or expense. The Company also agrees to indemnify any underwriters of the
Registrable Shares, their officers and directors and each Person who controls
such underwriters on substantially the same basis as that of the indemnification
of the Person provided in this Section 7.4.
Section 7.5 Indemnification by Participating Persons. (a) Subject to
Section 7.5(b), each Person holding Registrable Shares included in any
registration statement agrees, severally but not jointly, to indemnify and hold
harmless the Company, its officers, directors and agents and each Person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Person, but only (i) with respect
to untrue statements or omissions, or alleged untrue statements or omissions in
a registration statement (or any amendment thereto) or any prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
information furnished in writing by such Person or on such Person's behalf
expressly for use in any registration statement or prospectus relating to the
Registrable Shares, or any amendment or supplement thereto, or any preliminary
prospectus, or (ii) to the extent that any loss, claim, damage, liability or
expense results from the fact that a current copy of the prospectus (or, in the
case of a prospectus, the prospectus as amended or supplemented) was not sent or
given to the Person asserting any such loss, claim, damage, liability or expense
at or prior to the written confirmation of the sale of the Registrable Shares
concerned to such Person if it is determined that it was the responsibility of
such Person to provide such Person with a current copy of the prospectus (or
such amended or supplemented prospectus, as the case may be) and such current
copy of the prospectus (or such amended or supplemented prospectus, as the case
may be) would have cured the defect giving rise to such loss, claim, damage,
liability or expense and reasonable quantities of such prospectus (or amendments
or supplements thereto) had been timely provided to such Person by the Company.
Subject to Section 7.5(b), each such Person also agrees to indemnify and hold
harmless underwriters of the Registrable Shares, their officers and directors
and each Person who controls such underwriters on substantially the same basis
as that of the indemnification of the Company provided in this Section 7.5. As a
condition to including Registrable Shares in any registration statement filed in
accordance with this Article, the Company may require that it shall have
received an undertaking reasonably satisfactory to it from any underwriter to
indemnify and hold it harmless to the extent customarily provided by
underwriters with respect to similar securities.
(b) No Person shall be liable under Section 7.5(a) for any damage
thereunder in excess of the net proceeds realized by such Person in the sale of
the Registrable Shares of such Person.
Section 7.6 Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
this Article VII, such Person (an "Indemnified
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Party") shall promptly notify the Person against whom such indemnity may be
sought (the "Indemnifying Party") in writing and the Indemnifying Party shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Party, and shall assume the payment of all fees
and expenses, provided that the failure of any Indemnified Party to so notify
the Indemnifying Party shall not relieve the Indemnifying Party of its
obligations hereunder except to the extent that the Indemnifying Party is
prejudiced by such failure to notify. In any such proceeding, any Indemnified
Party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to the
retention of such counsel, or (ii) in the reasonable judgment of such
Indemnified Party representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) at any time for all such Indemnified Parties, and
that all such fees and expenses shall be reimbursed as they are incurred. In the
case of any such separate firm for the Indemnified Parties, such firm shall be
designated in writing by the Indemnified Parties. The Indemnifying Party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent, or if there be a final judgment for
the plaintiff, the Indemnifying Party shall indemnify and hold harmless such
Indemnified Parties from and against any and all losses, claims, damages,
liabilities and expenses (to the extent stated above) by reason of such
settlement or judgment. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Party is or could have
been a party and indemnity could have been sought hereunder by such Indemnified
Party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such proceeding.
Section 7.7 Contribution. (a) If the indemnification provided for in
this Article VII is held by a court of competent jurisdiction to be unavailable
to the Indemnified Parties in respect of any losses, claims, damages or
liabilities referred to herein, then each such Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities (i) as between the Company and the Persons holding Registrable
Shares covered by a registration statement on the one hand and the underwriters
on the other, in such proportion as is appropriate to reflect the relative
benefits received by the Company and such Persons on the one hand and the
underwriters on the other, from the offering of the Registrable Shares, or if
such allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits but also the relative
fault of the Company and such Persons on the one hand and of such underwriters
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations and (ii) as between the Company on the one hand and
each such Person on the other, in such proportion as is appropriate to reflect
the relative fault of the Company and of each such Person in connection with
such statements or omissions, as well as any other relevant equitable
considerations. The relative benefits received by the Company and such Persons
on the one hand and such underwriters on the other shall be deemed to be in the
same proportion as the total proceeds
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from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company and such Persons bear to the total
underwriting discounts and commissions received by such underwriters, in each
case as set forth in the table on the cover page of the prospectus. The relative
fault of the Company and such Persons on the one hand and of such underwriters
on the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company and such Persons or by such underwriters. The relative fault of the
Company on the one hand and of each such Person on the other shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by such party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(b) The Company and the Persons agree that it would not be just and
equitable if contribution pursuant to this Section 7.7 were determined by pro
rata allocation (even if the underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7.7, no underwriter shall be
required to contribute any amount in excess of the amount by which the
underwriting discount applicable to Registrable Shares purchased by such
underwriter in such offering exceeds the amount of any damages which such
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no Person shall be
required to contribute any amount in excess of the amount by which the net
proceeds realized on the sale of the Registrable Shares of such Person exceeds
the amount of any damages which such Person has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. Each
Person's obligation to contribute pursuant to this Section 7.7 is several in the
proportion that the proceeds of the offering received by such Person bears to
the total proceeds of the offering received by all such Persons and not joint.
Section 7.8 Participation in Public Offering. No Person may
participate in any Underwritten Public Offering hereunder unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
requested in connection with such Underwritten Public Offering.
Section 7.9 Other Indemnification. Indemnification similar to that
specified herein (with appropriate modifications) shall be given by the Company
and each Stockholder participating therein with respect to any required
registration or other qualification of securities
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under any federal or state law or regulation or governmental authority other
than the Securities Act.
ARTICLE VIII
CERTAIN COVENANTS AND AGREEMENTS
Section 8.1 Confidentiality. (a) Each Stockholder hereby agrees that
Confidential Information furnished and to be furnished to it was and shall be
made available in connection with such Stockholder's investment in the Company.
Each Stockholder agrees that it shall not use the Confidential Information in
any way to the competitive disadvantage of the Company. Each Stockholder further
acknowledges and agrees that it shall not disclose any Confidential Information
to any Person, provided that Confidential Information may be disclosed (i) to
such Stockholder's Representatives (as defined in the Combination Agreement) in
the normal course of the performance of their duties as long as such
Stockholder's Representatives are advised of the confidential nature of such
information and agree to be bound by the provisions hereof, (ii) to the extent
required by applicable law, rule or regulation (including complying with any
oral or written questions, interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process to which a
Person is subject) provided that, in the event that such Stockholder is so
required to disclose any Confidential Information, such Stockholder shall give
the Company prompt notice of such request so that the Company may seek an
appropriate protective order and if such Stockholder is nonetheless so compelled
to disclose Confidential Information, such Stockholder may disclose such
information without liability hereunder, (iii) to any Person to whom such
Stockholder is contemplating a transfer of its Shares (provided that such
transfer would not be in violation of the provisions of this Agreement and as
long as such potential transferee is advised of the confidential nature of such
information and agrees to be bound by a confidentiality agreement in form and
substance satisfactory to the Company and consistent with the provisions
hereof), or (iv) if the prior written consent of the Board shall have been
obtained. Nothing contained herein shall prevent the use of Confidential
Information in connection with the assertion or defense of any claim by or
against the Company or any Stockholder.
(b) "Confidential Information" shall mean any information concerning
the Company, its financial condition, business, operations or prospects in the
possession of or to be furnished to any Stockholder in its capacity as a
stockholder or potential stockholder of the Company or by virtue of its present
or former right to designate a director of the Company and shall also include
the identity of the owners of equity interests in the Standard Parties, provided
that the term "Confidential Information" does not include information which (i)
becomes generally available to the public other than as a result of a disclosure
by a Stockholder or its Representatives in violation of such Person's
obligations, (ii) is or was available to such Stockholder on a nonconfidential
basis prior to its disclosure to such Stockholder or its Representatives by the
Company, or (iii) was or becomes available to such Stockholder on a
non-confidential basis from a source other than the Company, provided that such
source is or was (at the time of receipt of the relevant information) not, to
the best of such Stockholder's knowledge, bound by a confidentiality agreement
with (or other confidentiality obligation to) the Company or another Person.
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Section 8.2 Indirect Action; No Inconsistent Agreements. Each party
hereto agrees not to take, or cause or permit to be taken indirectly, any action
which if taken, caused or permitted to be taken by such Person directly would
constitute a violation of this Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Entire Agreement; Benefit. This Agreement (including
agreements incorporated herein) contains the entire agreement between the
parties hereto with respect to the subject matter hereof and there are no
agreements, understandings, representations or warranties between the parties
hereto other than those set forth or referred to herein. This Agreement is not
intended to confer upon any Person not a party hereto (or their successors and
assigns permitted hereby) any rights or remedies hereunder.
Section 9.2 Interpretation; Absence of Presumption. (a) For the
purposes hereof, (i) words in the singular shall be held to include the plural
and vice versa and words of one gender shall be held to include the other gender
as the context requires, (ii) the terms "hereof," "herein," and "herewith" and
words of similar import shall, unless otherwise stated, be construed to refer to
this Agreement as a whole and not to any particular provision of this Agreement,
and Article, Section and paragraph references are to the Articles, Sections and
paragraphs to this Agreement unless otherwise specified, (iii) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless the context otherwise requires or unless
otherwise specified, (iv) the word "or" shall not be exclusive, and (v)
provisions shall apply, when appropriate, to successive events and transactions.
(b) This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted.
Section 9.3 Severability. Any provision hereof which is invalid or
unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions hereof.
Section 9.4 Assignability. This Agreement and any rights or
obligations contained herein shall not be assignable, provided that any Person
acquiring Shares who is required by the terms of this Agreement to become a
party hereto shall execute and deliver to the Company an agreement to be bound
by this Agreement and shall thenceforth be a Stockholder for purposes of this
Agreement, having such rights and obligations as are consistent with those
rights and obligations applicable to the transferor of such Shares, except as
otherwise provided in this Agreement.
(a) Amendment; Waiver; Termination. This Agreement may not be
modified or amended except by an instrument or instruments in writing signed by
the party against whom enforcement of any such modification or amendment is
sought. Either party hereto may, only by an instrument in writing, waive
compliance by the other party hereto with any term or provision
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hereof on the part of such other party hereto to be performed or complied with.
The waiver by any party hereto of a breach of any term or provision hereof shall
not be construed as a waiver of any subsequent breach.
Section 9.5 Notices. All notices and other communications hereunder
shall be sufficiently given for all purposes hereunder if in writing and
delivered personally, sent by documented overnight delivery service or, to the
extent receipt is confirmed, telecopy, telefax or other electronic transmission
service to the appropriate address or number as set forth below. Notices to
Holberg or AP Holdings or the Company shall be addressed to:
Holberg Industries, Inc.
545 Steamboat Road
Greenwich, Connecticut 06830
Attention: Chief Financial Officer
Telecopy Number: (203) 661-5756
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Adam O. Emmerich, Esq.
Telecopy Number: (212) 403-2000
or at such other address and to the attention of such other person as Holberg or
AP Holdings or the Company may designate by written notice to the Standard
Parties. Notices to the Standard Parties shall be addressed to:
Dosher Partners, L.P.,
200 East Randolph Drive, Suite 4800
Chicago, Illinois 60601
Attention: Myron C. Warshauer
Telecopy Number: (312) 240-0191
with copies to:
Standard Parking, L.P.
200 East Randolph Drive, Suite 4800
Chicago, Illinois 60601
Attention: Michael Wolf
Telecopy Number: (312) 240-0191
and
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SP Associates c/o JMB Realty Corp.
900 North Michigan Avenue, 19th Floor
Chicago, Illinois 60611
Attention: Patrick J. Meara
Telecopy Number: (312) 915-2310
and
Mayer Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Attention: Edward S. Best, Esq.
Telecopy Number: (312) 701-7711
and
Katten Muchin & Zavis
525 West Monroe Street, Suite 1600
Chicago, Illinois 60661
Attention: Howard S. Lanznar, Esq.
Telecopy Number: (312) 902-1061
or at such other address and to the attention of such other person as the
Standard Parties may designate by written notice to Holberg and AP Holdings and
the Company. In addition, any Person who becomes an Stockholder shall provide
its notices information to the Company, which shall promptly provide such
information to each other Stockholder.
Section 9.6 Headings; Definitions. The Section, Article and other
headings contained in this Agreement are inserted for convenience of reference
only and shall not affect the meaning or interpretation of this Agreement. All
capitalized terms defined herein are equally applicable to both the singular and
plural forms of such terms.
Section 9.7 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more counterparts have been signed by
each of the parties hereto and delivered to the other parties hereto. Copies of
executed counterparts transmitted by telecopy, telefax or other electronic
transmission service shall be considered original executed counterparts for
purposes of this Section, provided that receipt of copies of such counterparts
is confirmed.
Section 9.8 Specific Enforcement. Each party hereto acknowledges
that remedies at law may be inadequate to protect the other party against any
actual or threatened breach of this Agreement by the other parties and, without
prejudice to any other rights and remedies otherwise available to any party,
each party agrees to the granting of injunctive relief in any other party's
favor without proof of actual damages. In the event of litigation relating to
this Agree-
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ment, if a court of competent jurisdiction determines that this Agreement has
been breached by a party, then such party shall reimburse the other party for
costs and expenses (including, but not limited to, reasonable legal fees and
expenses) incurred in connection with all such litigation.
Section 9.9 Governing Law; Jurisdiction and Forum. (a) This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware without reference to the choice of law principles thereof.
(b) The parties hereto agree that the appropriate and exclusive
forum for any disputes between any of the parties hereto arising out of this
Agreement or the transactions contemplated hereby shall be any state or federal
court in the State of Delaware. The parties hereto further agree that no party
hereto shall bring suit with respect to any disputes arising out of this
Agreement or the transactions contemplated hereby, except as expressly set forth
below for the execution or enforcement of judgment, in any court or jurisdiction
other than the above specified court. The foregoing shall not limit the rights
of any party hereto to obtain execution of judgment in any other jurisdiction.
The parties hereto further agree, to the extent permitted by law, that a final
and unappealable judgment against any of them in any action or proceeding
contemplated above shall be conclusive and may be enforced in any other
jurisdiction within or outside the United States by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of the fact
and amount of such judgment.
(c) By the execution and delivery of this Agreement, each party
hereto (i) irrevocably designates and appoints The Corporation Trust Company
("CTC") care of CT Corporation System at its offices in Wilmington, Delaware, as
its authorized agent upon which process may be served in any action or
proceeding arising out of or relating to this Agreement, (ii) submits to the
personal jurisdiction of any state or federal court in the State of Delaware in
any such action or proceeding, and (iii) agrees that service of process upon CTC
shall be deemed in every respect effective service of process upon such person
in any such action or proceeding. Each party hereto further agrees to take any
and all actions, including the execution and filing of any and all such
documents and instruments, as may be necessary to continue such designation and
appointment of CTC in full force and effect so long as this Agreement shall be
in effect. The foregoing shall not limit the rights of any party hereto to serve
process in any other manner permitted by law.
(d) To the extent that any party hereto has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, such
person hereby irrevocably waives such immunity in respect of its obligations
with respect to this Agreement.
Section 9.10 Community Property States. Each Standard Party, if such
Standard Party is a natural person, represents that (a) such Standard Party's
spouse has duly executed the Consent of Spouse attached hereto, (b) such Consent
of Spouse was delivered along with such Standard Party's signature page hereto
and (c) such Consent of Spouse was duly authorized,
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executed and delivered by such spouse and effectively binds such spouse to the
terms set forth therein.
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IN WITNESS WHEREOF, the parties hereto have caused this Stockholders
Agreement to be duly executed as of the day and year first above written.
DOSHER PARTNERS, L.P.
By: /s/ Myron C. Warshauer
------------------------------------------
Name: Myron C. Warshauer
Title: General Partner of Dosher Partners,
L.P.
SP ASSOCIATES
By: SP MANAGERS, L.P. MANAGING PARTNER
By: STANDARD MANAGERS, INC.,
GENERAL PARTNER
By: /s/ Patrick Meara
------------------------------------------
Name: Patrick Meara
Title: Vice President
APCOA, INC.
By: /s/ Michael J. Celebrezze
------------------------------------------
Name: Michael J. Celebrezze
Title: Chief Financial Officer
HOLBERG INDUSTRIES, INC.
By: /s/ A. Petter 0stberg
------------------------------------------
Name: A. Petter 0stberg
Title: Senior Vice President, Chief Financial
Officer and Treasurer
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AP HOLDINGS, INC.
By: /s/ Michael J. Celebrezze
------------------------------------------
Name: Michael J. Celebrezze
Title: Treasurer
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Consent of Spouse
The undersigned is the spouse of one of the Standard Parties and
hereby acknowledges that he/she has read the attached Stockholders Agreement and
knows its contents. The undersigned is aware that by its provisions, his/her
spouse agrees to sell all of his/her Shares [and other securities], including
his/her community property interest therein, if any, on the occurrence of
certain events. The undersigned hereby consents to the sale, approves the
provisions of the Stockholders Agreement, and agrees that those securities and
his/her interest in them, if any, are subject to the provisions of the
Stockholders Agreement and that he/she will take no action at any time to hinder
operation of the Stockholders Agreement on those securities or his/her interest,
if any, in them, and, to the extent required, will take any further actions
necessary to effectuate the provisions of the Stockholders Agreement.
--------------------------------
[Spouse]
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Exhibit A
AFFILIATE TRANSACTIONS
The Company has certain agreements and arrangements under which it
engages, and expects in the future to continue to engage, in transactions with
Affiliates of the Company which are not Subsidiaries of the Company, as follows:
o As set forth in the Offering Memorandum (the "Offering
Memorandum") dated March 25, 1998 relating to $140,000,000 of
the Company's 9 1/4 % Senior Subordinated Noted due 2008 (the
"Notes"), a copy of which has been provided to each party to
this Agreement and which is hereby incorporated herein by
reference.
o As permitted by the provisions of the Indenture (as defined in
the Offering Memorandum) and the New Credit Facility (as
defined in the Offering Memorandum), a copy of each of which
has been provided to each party to this Agreement and which is
hereby incorporated herein by reference.
A-1